Universal Postal Service

Debate between Iain McKenzie and Alan Reid

Thursday 17th July 2014 Commons Chamber

[Mr Reid]

I certainly agree with my hon. Friend. The universal service is so important for the country that I hope that any reviews or inquiries will be given a high priority and be conducted as quickly as possible, whether they are being carried out by Ofcom or the Competition and Markets Authority.

As I was saying, Royal Mail has pointed out that it has to meet all the targets that are set by Ofcom and publish its performance against those targets quarterly and annually. However, its competitors do not have to meet or publish any targets, other than the figures on complaints. Ofcom should use its powers to set targets for all operators and compel them to meet them. That would provide transparency and allow consumers to make an informed choice between operators.

[Mr McKenzie]

I fully accept what the hon. Gentleman says about the need for a level playing field. Does he accept that companies might want to produce information on targets to show that they have a process of continuous improvement and that they are providing a good-quality service?

[Mr Reid]

The hon. Gentleman is perfectly correct. A company that has any ethos at all will want to demonstrate that it is doing a good job. I therefore do not see how rival operators could possibly object to such a proposal.

In an e-mail that it sent me, Royal Mail alleged that TNT has dumped and misdelivered mail. We heard interventions from two London Members earlier who said that they had evidence of that happening in their constituencies. That backs up the need for the publication of performance statistics. Such statistics would show if mail is not being delivered and is disappearing from the system.

Ofcom has stated that before the end of next year, it will commence a review of the impact of end-to-end competition to assess any potential threat to the provision of the universal service. I do not think that it should wait until the end of next year. It should commence the review now because this is such an important service. That would be in the interests not just of Royal Mail and the consumer, but of rival operators. It is in everybody’s interests to know as soon as possible what conditions Ofcom will impose on mail delivery companies. I can see an operator such as TNT complaining if, in two years’ time, conditions are imposed on it that it was not told about before it made the investment. I see no advantage in waiting another 17 months before beginning the review.

My hon. Friend the Member for West Aberdeenshire and Kincardine pointed out that we have been here before with Postcomm, which seemed to prioritise competition over protecting the USO. Ofcom’s most important legal duty is to preserve the USO. That was written into the 2011 Act by a Liberal Democrat Minister. I expect Ofcom to do everything possible to protect the USO. I believe that that means holding a review now. I see no purpose that will be served by waiting another 17 months. If Royal Mail is crying wolf, there is no harm in having the review now, because it will show that. However, if Royal Mail is correct in its concerns, having a review now is essential.

The universal service is essential to rural communities such as Argyll and Bute. Thanks to a Liberal Democrat Minister, the law protects the universal service. Ofcom has a duty to ensure that that legal protection is delivered. As long as Ofcom carries out its duties properly, the USO will be sustainable. However, I believe that Ofcom must carry out the review now.