Postal Services Bill

Lord Low of Dalston Excerpts

Tuesday 17th May 2011 Lords Chamber

[Lord Low of Dalston]

I should like to speak to Amendment 65A. I think I can be quite brief because the noble Lord, Lord Young of Norwood Green, has covered quite a lot of the ground. I thank him for his supportive remarks. My Amendment 65A seeks to curtail the Secretary of State’s power to make an order amending the minimum requirements of the universal postal service, as set out in Clause 30, by providing that, for five years after the Bill comes into force, he,

“shall not make an order which diminishes or erodes the minimum requirements of the universal postal service”.

I tabled a number of amendments at Committee designed to reinforce the minimum requirements of the universal postal service so that they could not be downgraded. My noble friend Lord Tenby kindly moved them for me in my absence on 6 April. At cols. 1782-84, the Minister gave comprehensive reassurances about Ofcom’s ability—or, rather, lack of it—to vary the minimum requirements. I confess myself fully satisfied with these. She made it clear that the primary purpose of the Bill is to protect the universal service. “Ofcom’s overriding duty,” she said,

“is to secure the provision of a universal service”.

The Bill requires Ofcom to secure the provision of the universal service. She continued,

“the market assessment that Ofcom is obliged to carry out as a result of Clause 29(4) is not a review of the minimum requirements”,

contained in Clause 30, and:

“It cannot change those requirements”.

Furthermore, the Minister said, “The power in Clause 33,”—for Ofcom to review the extent to which the minimum requirements reflect the needs of users of postal services—

“enhances the safeguards against changes to the … minimum requirements”.—[Official Report, 6/4/11; cols. 1782-83.]

Finally, the Minister made it clear that the Government have no intention of reducing the minimum requirements of the universal postal service. That is all very satisfactory and we can accept that Ofcom does not pose a threat to the universal service.

Amendment 65A therefore has a specific and narrowly focused target in view: the Secretary of State’s power under Clause 33(5) to amend the minimum requirements contained in Clause 30. As the noble Lord, Lord Young of Norwood Green, said, the Delegated Powers and Regulatory Reform Committee makes reference to this provision in its report on the Bill in paragraph (9), under the significant heading “Clause 33(5) alteration of the minimum requirements for the universal postal service”. It says:

“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 which would allow the Secretary of State to alter the minimum requirements for a universal postal service”,

without reference to any Ofcom review.

Fears have been expressed that once Royal Mail has been sold off, the new owners will put pressure on the Secretary of State to reduce the minimum requirements of the universal postal service on the ground that they impose a burden on the business, which undermines its viability. What they really mean is that it will erode their profits. I believe this is a reasonable concern and my amendment curtailing the Secretary of State’s power to reduce the minimum requirements of the universal postal service for five years would afford a period of stability and be good for employees of Royal Mail and users of postal services across the United Kingdom.

I have had constructive discussions with Edward Davey, the Minister responsible for the Bill in another place, and I am grateful to him for making himself available to meet me. As I said, I believe I have identified a problem in Clause 33(5) and suggested what I think is a workable way forward which would meet the needs of both the Secretary of State and users of postal services. However, if the Minister can repeat her assurance this evening that the Government have no intention of eroding the universal postal service and can assure me further that they have no intention of using the power in Clause 33(5) within a decent period of time, we might be able to get by without the need to divide the House.

[Baroness Kramer]

My Lords, I want to make a couple of quick comments and ask a couple of questions of the Minister. I do not have the scope to get clarity myself.

Is it possible to constrain Ofcom’s powers to review by setting a clear period of time in which a review may not take place? We have a problem with the European postal services directive, which requires that the regulator responds to the needs of users. In other words, it has five years in which it cannot provide the response required under the directive. We have a possible problem with that.

I also looked quickly at the Communications Act 2003, which sits alongside this new legislation. Most of its content is about Ofcom’s regulation of television and radio, and so on. However, it also has a series of general obligations for Ofcom, which presumably apply to every activity in which Ofcom participates. These again require—as I read them; others may have a different view, but I think probably not—an ongoing process of review, so we have a potential conflict between two pieces of legislation. Does that exist? It would obviously add to the complication.

Having been in the other place, which I know is not always a good thing to say about oneself when in your Lordships’ House, I know that the chances that any Member of the House of Commons would allow an affirmative resolution to reduce the universal service obligation have got to be pretty close to zero. Frankly, I could think of nothing more suicidal in whatever election that individual has to face next. Some people may not consider that to be the strongest possible lock but, frankly, I find it hard to think of a stronger one. Far stronger, as far as I can see, than any legislation is the power of realpolitik that would apply under these circumstances.