Online Retail Delivery Charges

Nick Boles Excerpts

Tuesday 8th September 2015 Commons Chamber

[The Minister for Skills (Nick Boles)]

It is a great pleasure to reply to this Adjournment debate with you in the Chair, Madam Deputy Speaker. I congratulate the hon. Member for Belfast East (Gavin Robinson) on securing this debate, which is very much on a subject of constant, day-to-day importance for his constituents and those of so many hon. Members. It is a tribute to the importance of this subject that, perhaps rather later than we hoped and on an evening after a day when we were here even later, there are nevertheless many more people at an Adjournment debate than is customarily the case.

I have a great deal of sympathy for the case that the hon. Gentleman laid out, not least because earlier in my life—you might even say in my mis-spent youth, Madam Deputy Speaker—I ran a business in the fair city of Belfast. I spent a long time commuting and dealing personally with the shipment of goods to the paintbrush factory that we ran just off the Crumlin Road and then shipping its products out of Belfast. I well know the difference in cost between shipping something to Felixstowe and shipping it to Belfast.

I have a great deal of sympathy for the case that the hon. Gentleman makes—that it is very unfair that consumers in some parts of the country should be treated so very differently from those on the mainland. I think he will understand that in an intensely competitive market, which the market for the delivery of parcels is, there will always be a variation in prices that reflects the true variation of shipment costs. When many of the goods purchased are themselves being shipped to the UK from elsewhere, it is not that surprising that getting them to an address in Hertfordshire is going to cost the consumer rather less than getting them to an address in Belfast East.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Does the Minister agree that the Scottish Government’s road equivalent tariff fare structure should be helping to reduce the cost of delivering goods to the islands of Scotland, such as the Isle of Arran and Isle of Cumbrae in my constituency, and that more must be done to ensure that any such reduced costs are passed on to consumers? Does he further agree that the whole point of the statement of principles on parcel deliveries was to secure a better and fairer deal for consumers in our rural areas? However, more must be done to increase delivery operator and retailer buy-in to these principles, given that Citizens Advice found that only four out of 449 businesses had even heard of this statement of principles.

[Nick Boles]

I thank the hon. Lady for her intervention, and I certainly agree with her about the statement of principles. I would like to come on in a minute to what we can do to make sure that more people understand and adhere to it.

Let me briefly address the question of the distant and far-flung parts of Scotland, which a number of hon. Members have represented through their interventions. As it happens, another part of my mis-spent youth—and, indeed, my mis-spent middle age—was regularly spent in the islands of Scotland, specifically on the island of Colonsay, where I have often spent the best weeks almost every summer of my life, including this last one.

My one observation here would be that all those islands, including Colonsay, are connected to the mainland —currently by the Caledonian MacBrayne ferry, a part of my life that I shall always cherish, not least the fry-ups. I know that this summer the Scottish Government were going through what I understand to be a somewhat controversial process of contracting out the tendering of the ferry service operated by Caledonian MacBrayne. It occurs to me that in the process of tendering that service, it might be possible to suggest to potential bidders—I believe Serco was much discussed in the local papers at the time—that they should group parcels together and take them to the various islands at a flat charge. It might be possible for the Scottish Government to achieve a lower cost and more universal service through these contracts for ferry services than is currently the case. That is simply an idea off the top of my head, having had a number of conversations in the Colonsay hotel this summer about the Scottish Government’s particular proposal.

Let me conclude with a constructive suggestion. The hon. Member for Belfast East made the very good point that the Government have passed legislation, set out principles and have high expectations, and that we have established that people should call trading standards if they have a problem or call Citizens Advice to report any bad behaviour. It is indeed outrageous, as the hon. Gentleman said, that people discover that a delivery option is either not available or available only at a dramatically higher cost only at the very end of the transaction process. It is clear from the principles we have laid out that that is not acceptable behaviour. I suggest that, later in the autumn, we organise a round table. The hon. Gentleman is welcome to come and speak at it, as, indeed, are any other interested parties.

[Lady Hermon (North Down) (Ind)]

Will the Minister give way?

[Nick Boles]

I shall be happy to give way to the hon. Lady, but may I finish describing my proposal first?

I propose that we invite representatives of Citizens Advice Scotland, and, indeed, the representatives of the Northern Ireland organisation who produced such an excellent report. Critically, I propose that we also invite senior executives from the big online retailers, and ask them what they are doing to ensure that information is provided transparently, early, and upfront. What are they doing to ensure that, as far as possible, the same options are available to all consumers, and that, when costs vary, they vary only in accordance with the true underlying costs of transporting parcels? I should be happy to organise such a round table, to chair it, and to welcome the contribution of all Members—

[Lady Hermon]

rose—

[Nick Boles]

Including the hon. Lady.

[Lady Hermon]

The Minister is very kind, and I am very grateful to him for inviting the Independent Member for North Down to the round table talks that he is to chair. May I, however, urge him to do something more, today of all days? Earlier today, in a special statement, the Secretary of State for Northern Ireland again conveyed her commitment to a one-nation Government, and the hon. Member for Belfast East (Gavin Robinson) used the same phrase quite frequently this evening. At those talks, could we see those words “one nation Government” translated into proposals for action? That is what people want to see when it comes to online charges for deliveries in Northern Ireland: they want to see evidence that there will be that commitment to a one nation Government.

[Nick Boles]

I am certainly happy to promise action, in the sense of trying to ensure that the statement of principles that we have agreed to publish is adopted by online retailers, and that, if it is not, action is taken to ensure that those retailers step up to the mark. However, I want to be a little bit cautious about implying that we will pass legislation imposing flat charges, meaning that every delivery service must charge the same prices for every part of the United Kingdom. I simply do not believe that that would work, or would be in the long-term interests of consumers, because it would drive out competitive providers of delivery services.

Ultimately, there is progress. The percentage of online retailers who are offering delivery options on a uniform basis is growing, and the percentage who are doing the things that we do not want them to do is shrinking. However, that is not happening fast enough. I think that, working together, we can put more pressure on the industry—on the Amazons, the eBays and, indeed, some of the smaller players—to act more responsibly, without necessarily legislating or regulating further. I shall be happy to work with them, and with SNP Members and other representatives of the fair country of Scotland—the other representative, or two—to achieve that goal. If we can work together, I am sure that we can make some progress, and achieve that one nation for consumers throughout the United Kingdom.

[Drew Hendry]

I have a brief question for the Minister. Would he consider giving consumers the option of using Royal Mail, rather than paying the standard charge that is applied by traders?

[Nick Boles]

That is an interesting question, which leads me to make a point that may correct an impression that was created earlier by the hon. Member for Belfast East. The universal obligation applies to parcels, it is a five-day service and it involves uniform charges, but it is not compulsory for retailers to offer it. What I believe the hon. Gentleman is suggesting is that we should make it a requirement to do so. We may find that, at some points, we will part company on some issues.

This Government are a determinedly deregulatory Government. We do not believe in imposing more burdens on business, and I believe the direction of travel in terms of costs of delivery and the universality of the service suggests that that is the right approach, but I am certainly happy to discuss any issue at this round table; it will not only be me who puts things on the agenda.

If nobody else has any further questions, let me say that I look forward to working with all hon. Members on this issue and I thank the hon. Member for Belfast East for raising it.

Question put and agreed to.