Online Retail Delivery Charges

Ian Blackford Excerpts

Tuesday 8th September 2015 Commons Chamber

[Gavin Robinson]

I thought I had stepped out of place there and that I had done something wrong.

I am grateful for the opportunity to raise an important consumer issue that affects individuals’ rights across the United Kingdom, but most particularly in Northern Ireland, the Isle of Man, the Channel Islands and the highlands and islands of Scotland. I am indebted to Kellin McCloskey in the Gallery from the Consumer Council for Northern Ireland and David Moyes of Consumer Advice Scotland for all their hard work on this issue. I thank the Minister this evening for being prepared to respond and recognise that on this issue, a continued and concerted effort is required to effect the changes necessary to bring a level playing field to consumers right across the United Kingdom.

On 30 June, I put a question to the Secretary of State for Business, Innovation and Skills:

“Has the Secretary of State had an opportunity to consider last week’s report from the Northern Ireland Consumer Council, which highlights the barriers to online consumers getting postage to Northern Ireland, the islands or the highlands of the United Kingdom? What steps can the Secretary of State take to create, dare I say it, a ‘one nation’ consumer market where the inhibitors and the barriers are removed once and for all?”

In response, I was delighted to hear from the Secretary of State:

“I have not yet had an opportunity to look at the report, but now that the hon. Gentleman has mentioned it, I shall certainly do so, and I shall then be able to respond to him on the issue that he has raised. He may be interested to know, however, that just today it was reported that consumer confidence throughout the United Kingdom had hit a 15-year high, which means that the Government’s long-term economic plan is working.”—[Official Report, 30 June 2015; Vol. 597, c. 1336.]

I am delighted that consumer confidence was at a 15-year high, but I suspect the following figures I seek to rely on from the Consumer Council for Northern Ireland’s report are just not as encouraging to read.

When a constituent of mine contacted me about an online purchase, he explained how initially delighted he was to read that not only had he found a good deal online from a reputable site, but that delivery was advertised as “Free in the UK”. It was only at the final pay page that he discovered that the free delivery he had been promised was for mainland UK only, and that to proceed with the purchase he was required to pay an additional £5.99. Unclear as to whether this was an isolated issue, another constituent who works in east Belfast explained that he had faced a similar problem. Using eBay on this occasion, the inducement of free UK postage and packaging was quickly withdrawn when he supplied his postcode. To proceed with the purchase, he had to phone the retailer directly and agree a fee of £14, representing an additional 10% of the item cost.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

I am grateful to the hon. Gentleman for giving way and for securing this most important debate. As he rightly said, it affects constituencies right across the United Kingdom and certainly in the highlands of Scotland.

I note that a survey from Citizens Advice Scotland, published today, shows that average delivery prices across the UK have increased from £4.99 to £5.01 over the past three years—a decline in prices in real terms—yet over the same time the average highland surcharge over and above that has increased form £12.10 to £14.23. When we consider that online shopping is 15% of the retail market in the UK, consumers in rural areas are facing a massive increased cost to participate in this growing market. Does the hon. Gentleman agree that the Government must protect consumers in rural areas from being exploited, and that, it is a first step, via a division of the universal service obligation, to take into account the growing importance of parcel delivery in the modern world?

[Gavin Robinson]

Of course I agree with the hon. Gentleman. Perhaps uniquely in my short experience in the Chamber, this Adjournment debate has struck some interest from the more peripheral parts of the United Kingdom. I do not wish to be mean or unkind, but it is important that I do not accept interventions from across the Chamber, to give me the opportunity to put forward my points. I should note that the hon. Member for Romford (Andrew Rosindell), the chairman of the all-party group on the Isle of Man and the all-party group on the Channel Islands, has taken a keen interest in this issue. I am grateful to Members from across the Chamber who have highlighted the importance of this matter.

The Consumer Council for Northern Ireland, following its survey, indicated that 33% of online retailers applied a delivery exclusion to Northern Ireland. That can include higher delivery costs, longer delivery times or a refusal to offer a service at all. Other peripheral areas of the UK face high exclusion rates: 42% in the Channel Islands, 38% in the Isle of Man and 31% in the Scottish highlands and islands. Regrettably, and astoundingly, the figure for Northern Ireland as a whole stands at 33%. That is in stark contrast with the rest of the UK: 3% for the entirety of Scotland and Wales and only 1% for the entirety of England. Half of all online retailers in the UK fail to offer the same delivery options across the country, 17% refuse to deliver at all, 20% apply higher costs and 18% take much longer to deliver. The average one-off cost is £10 when free delivery is withdrawn, so while free UK postage and packaging is advertised, £10 is the average additional cost levied on a Northern Ireland consumer. An additional £2.71 is sought when the standard price for delivery is unavailable.

It is easy to try and give a reason for this. I will not use the vocabulary contained in this tweet, but this evening, when I announced that this Adjournment debate had been accepted and that we had the opportunity to raise this issue in Parliament, I got a rather caustic reply saying, “Well, of course it’s more expensive. You live on an island. What do you expect?” Of course, that goes some way to explaining the nature of the issues, but it does not answer or resolve the frustration facing consumers.

Unlike for letters, there is no universal regulated service for parcels. Standard delivery operators prefer to offer their services in densely populated and urban areas, and in offering retailers a contract price, they limit their own costs, and of course no one is forced to proceed with their purchase, should they not find the terms attractive.