Oral Answers to Questions

Jo Swinson Excerpts

Thursday 12th February 2015 Commons Chamber

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

4. What steps he plans to take to safeguard the universal service obligation for the delivery of mail.

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

The universal service obligation is not an optional extra—it is a fundamental duty enshrined in law and only Parliament could change that. In addition, it is the responsibility of the postal regulator, Ofcom, to ensure services are available throughout the UK at an affordable and uniform price, six days a week.

[Michael Connarty]

I thank the Minister for that reply, but is it not time that we looked at how Ofcom carries out its remit, possibly through a judicial review of that remit? Ofcom has been dragged reluctantly to review the actions of the cherry-pickers such as Whistl, which wants to pick mail up in the 8% of the UK’s geographical area that covers 42% of the mail thereby undermining the ability of Royal Mail to deliver, yet Ofcom attacked the standard of wages and conditions of the Royal Mail workers rather than deal with the problem of cherry-picking of the universal service obligation, which could be irrecoverably damaged.

[Jo Swinson]

There is agreement on both sides about the importance of the universal service obligation, and I do not think there is any evidence that the regulator is failing to fulfil its duty. It looked in detail at the case the Royal Mail put forward last summer and concluded that the market is operating as it should at the moment. It is committed to a further review later this year, and is also looking at the issue of access pricing. These issues are continually under consideration because the USO is so important.

[Ian Murray (Edinburgh South) (Lab)]

I am disappointed that you did not tell the House the middle names of this Minister, Mr Speaker, but perhaps we can look forward to that later.

It is nearly 18 months since the botched privatisation of Royal Mail. There are reports almost weekly of its being under pressure from the impact of Amazon’s increased use of its own delivery network, and from rivals which are cherry-picking the most profitable services. As the Minister has just said, Ofcom recently concluded that other firms did not have to match Royal Mail’s costly standards in the delivery of the universal service obligation. Given that Labour warned time and again that privatisation would ultimately threaten the USO, and given that the National Federation of SubPostmasters called it a “reckless gamble”, will the Minister look again at the USO, and give a cast-iron guarantee that it will be secure under this Government?

[Jo Swinson]

This Government have already given that cast-iron guarantee by legislating for it in the Postal Services Act 2011. Parliament has set it very firmly in stone. Unless the hon. Gentleman thinks that any future Labour Government would be minded to change the position, I hope that Members on both sides of the House can feel confident that the universal service obligation is secure.

As I said earlier, Ofcom, the regulator, has significant powers to obtain information from other operators in the market. It monitors operators’ plans regularly, and looks at the information every month. Operators must also inform the regulator of their future plans. That will remain under review, and a formal review will take place later this year. I think that what I have said should reassure the House that the universal service obligation is here to stay.

[Mr Andrew Turner (Isle of Wight) (Con)]

Will the Minister help me by explaining why postal collections that used to take place at 4 pm now take place at 9 am?

[Jo Swinson]

That is obviously a slightly different issue from the USO, but I can tell the hon. Gentleman that Royal Mail has reviewed the time of collections from post boxes in which fewer than 50 items of mail were being deposited each day, as part of an overall review of its service. In a positive move which I think Members should welcome, it has maintained all those collection points rather than decommissioning some of them, although collections will be less frequent. It has also ensured that there will be an alternative posting point within half a mile of post boxes from which there are fewer collections or an earlier final collection, from which mail will be collected later.

[Grahame M. Morris (Easington) (Lab)]

5. If he will take steps to increase apprenticeship places and support small businesses through greater use of Government procurement.

--- Later in debate ---

[Mr Alan Reid (Argyll and Bute) (LD)]

I welcome the introduction of big fines for supermarkets that breach the groceries supply code of practice, but I urge the Government to bring forward the review. We need to extend the code to indirect suppliers such as dairy farmers, who are suffering greatly at the moment. They cannot wait another year. May we have the review much sooner, please?

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I thank my hon. Friend for that question. I know that my hon. Friend the Member for Somerton and Frome (Mr Heath) has also been raising this issue assiduously. It is one that Members across the House are, understandably, very concerned about. The Groceries Code Adjudicator is already proving to be a great success in her work with supermarket companies, by encouraging them to change their behaviour. We have ensured that she has, and will have, the power to fine as well as to launch investigations—the first, of course, was launched recently. The question whether the remit should be extended needs to be looked at, and I commit the Government to doing that.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Government procurement can be used to drive innovation and to support our small business sector. How can small businesses in my constituency find out what opportunities exist to help them?

--- Later in debate ---

[Mr David Heath (Somerton and Frome) (LD)]

A business in my constituency received a communication from Royal Mail the week before Christmas, saying that with effect from four business weeks later, the business reply and freepost service that it had used for 10 years was to be discontinued and it would have to re-register. The business was told that if the old address was used, there would be a 20p penalty per item and the item may not be delivered. It will cost the business £10 per customer and £10,000 in lost stationery. Is that reasonable? Should not the Royal Mail respond to my letter? Will the Minister intervene?

[Jo Swinson]

Royal Mail should certainly respond to the letter that my hon. Friend sent it, and I will happily take that up on his behalf. The issue that he raises goes wider. The change had been notified earlier to some customers but that may not have happened properly in this circumstance, and I shall be happy to look into it.