Postal Services Bill

Lord Laird Excerpts

Wednesday 6th April 2011 Lords Chamber

I believe that this amendment would strengthen the Bill by ensuring that Ofcom consults fully with key user groups. Organisations representing pensioners, small businesses, disabled people's organisations and rural areas should be an integral part of the review process so that their views inform the decisions Ofcom takes. I hope that the Government will support the obligation to consult contained in this amendment. It would give added legitimacy to the decisions of the regulator, which in the last analysis should be accountable to the public it serves.

[Lord Laird]

My Lords, I have two amendments in this grouping. I propose, with the permission of your Lordships, to refer first to Amendment 24L. The purpose of this amendment is simple; by delaying the ability of Ofcom to review the universal postal service, the current minimum requirements of the universal postal service will be protected for six years.

It is not my intention to go over a lot of the information so excellently put on the record today by the noble Viscount, Lord Tenby, so I shall try to be brief. The universal postal service is a part of life for small businesses, rural communities, pensioners and others who value the six days a week, one price goes anywhere service.

As noble Lords have already said, the universal postal service and the post office network are part of our nation’s infrastructure and must be protected following the privatisation of Royal Mail. By moving this amendment, I wish to ensure that the current levels of service we enjoy are maintained for six years. The British public do not want to see their service watered down. I believe that guaranteeing the service for six years, while not ideal, offers sufficient compromise for the Government to accept without discouraging any potential new provider of the postal service.

Let us be under no illusions; our postal service is a national treasure. While the financial difficulties it has faced in recent years have led to a need for significant investment from the private sector, this should not be at a cost to the public, as is often the case with privatisation. If this House allows the universal service to be unprotected, the most vulnerable in our society will see increased prices and reduced services. This is not acceptable.

With your Lordships’ permission, I turn to Amendment 24M. I believe that this amendment, and others like it, reflects deeper concerns about the impact that the privatisation of Royal Mail will have on services in our communities, particularly in rural areas. Noble Lords have set out in Committee a number of worries that they have about the lack of commitment from the Government to use this Bill to ensure that postal services are continued at a level that users currently enjoy. There is also a worry about the effect that this privatisation will have on the network of post offices, which are so essential to rural communities across the United Kingdom.

I am instinctively nervous about this privatisation. I am not against privatisation per se but I believe that in this case the test of whether a transfer of ownership is successful is if those who need the service most see it improve. So far more questions have been asked than answered about the long-term future of postal services in rural areas, which in reality are never going to be anything other than a cash drain on Royal Mail. These concerns have been rejected by the Minister, who prefers to hand over responsibility for the maintenance of the universal postal service obligation to a regulator, whose remit is to promote competition to ensure that it reflects the reasonable needs of users.

This amendment aims to slow down any attempt by the regulator to denude the service that users in rural areas enjoy. As the noble Viscount has already pointed out, Northern Ireland, Scotland and Wales have similar characteristics in that the majority of their populations live in towns and cities and there is a substantial land mass that is sparsely populated. I ask the Minister of the day to report to Parliament on the impact of any review of the universal postal service on those areas to ensure that the people who rely on the postal service are not the first to suffer in the new age of Royal Mail commercialisation. That is why I have tabled these amendments.

[Lord Stevenson of Balmacara]

My Lords, in responding to the last two groups of amendments, the noble Lord, Lord De Mauley, said that the Government would consider strengthening the protection for the maintenance of the current universal service. We welcome that, and thank him. This group of amendments, as we have just heard, contains a number of rather interesting suggestions for how the Government might go about that.

Clause 33(5) would permit the Secretary of State to amend the minimum requirements of the universal postal service provided for in Clause 30, which, as we are well aware, provides a mail service six days a week at affordable, uniform prices throughout the United Kingdom. Under Clause 33(7)(a), such an order would be subject to an affirmative resolution procedure. Amendment 24LZA would delete Clause 33(5) in its current guise and ensure that the European Communities Act 1972, which would otherwise permit the Secretary of State to alter the minimum requirements for the universal service through the negative resolution procedure, cannot be used to reduce the universal service.

The Government have stated that the protection of the universal service is at the centre of the Bill and in particular underpins the privatisation proposed for Royal Mail. On Second Reading in this House, the Minister emphasised this, saying:

“The purpose of the Bill is to secure the future of the universal service. The Government are committed to the existing service—six days a week collection and delivery of letters, at uniform and affordable prices, for all the United Kingdom's 28 million addresses. This is at the heart of our legislation. We have no intention of downgrading the minimum requirements of the universal service”.

She continued:

“Crucially, this Bill gives both Houses of Parliament a say in whether the universal service can be amended in the future”.—[Official Report, 16/2/11; col. 776-77.]

Our concern is that although the Government say that they have no intention of downgrading the minimum requirements of the universal service and, indeed, have repeated that intention today, the Bill brings in a procedure for the amendment of the universal service not previously contemplated in legislation. This seems to be a bit of a problem, which we should address. Our amendment seeks to ensure that any amendment of the minimum universal service requirements can take place only as a result of primary legislation and not through an order brought in by the Secretary of State.

The Delegated Powers and Regulatory Reform Committee expressed concern at the way in which Clause 33(5) contains a significant power that would allow the Secretary of State to alter the minimum requirements for a universal postal service set out in Clause 30. It is worth quoting a little more of this passage in full:

“Clause 29(1) requires OFCOM by order (subject to no Parliamentary procedure) to set out the services which a universal postal service should provide. Clause 29(2) requires the service to include, as a minimum, the services set out in clause 30”.

We have touched on that before. It continues:

“The order by OFCOM cannot alter the minimum requirements”.

That is a very important safeguard. The committee then says that,

“clause 33 provides a power for OFCOM to review the extent to which the minimum requirements reflect the needs of users of postal services. If OFCOM carry out a review (and they may be directed by the Secretary of State to do so) the Secretary of State may then, by order subject to affirmative procedure, amend clause 30. The Secretary of State is not constrained necessarily to follow any conclusions of the review”.

The committee makes no recommendation on Clause 33(5), but draws it to the attention of the House as a significant power that would allow the Secretary of State to alter the minimum requirements for the universal postal service set out in Clause 30. We will come on to some elements of this in later amendments, but I want to pick out a particular aspect.

--- Later in debate ---

Moved by

[Lord Laird]

24P: Clause 34, page 19, line 40, at end insert—
“( ) Prior to a sale or transfer of a Post Office company, an agreement must be secured to guarantee the Inter-Business Agreement between Post Office Limited and each of the universal service providers for a period of not less than 15 years.”

--- Later in debate ---

[Lord Laird]

The post office network is part of the fabric of rural life. In Northern Ireland, as elsewhere, the local post office is so much more than a retail outlet. We all have access to big shopping centres to which we drive, sometimes for many miles, to do the weekly shopping. But the local post office plugs gaps and helps the wheels of the local economy to run smoothly.

The two businesses, Post Office Ltd and Royal Mail, are strongly linked. I am surprised that the Government are using this Bill to sever that link, but we have been reassured that they will continue to operate a business agreement so that local post offices can receive the vital revenue stream for the work they do for Royal Mail. However, the very act of separating Post Office Ltd and Royal Mail undermines the potential value of that relationship to local post offices.

My amendment seeks to guarantee that local post offices are able to plan and operate their businesses safe in the knowledge that they will continue to receive the custom from Royal Mail that helps them survive as small businesses. It seeks to make that agreement binding in law for 15 years, a reasonable period during which the remaining network of post offices will have time to establish themselves. I beg to move.

--- Later in debate ---

[Earl Attlee]

My Lords, I remind the Committee that the amendment was moved by the noble Lord, Lord Laird.

[Lord Laird]

My Lords, I thank the Minister and all noble Lords who took part in the debate. I was particularly interested in the remarks of the noble Lord, Lord Skelmersdale. I will consider these matters carefully and may return to them on a different occasion but I propose to withdraw the amendment at this stage.

Amendment 24P withdrawn