Question

To ask the Secretary of State for Business, Innovation and Skills, what assessment he has made of the effect of direct delivery competition on Royal Mail and the sustainability of the universal service obligation.

Under the Postal Services Act 2011, Parliament established Ofcom, as an independent regulator for postal services, and gave them the primary duty to secure the ongoing provision of the universal service in the United Kingdom. To this end Ofcom must have regard for the financial sustainability of the universal service and has the powers to intervene if the provision of the universal service is ever at risk.

Ofcom has put in place an ongoing and forward looking monitoring regime to closely track any potential impacts of postal competition on the provision of the universal service in the UK. Ofcom is committed to carrying out a full review on end-to-end competition next year, though it has made very clear that it would carry out an earlier review if market developments dictated the need to do so. At the present time, end-to-end competition accounts for less than 0.5% of letter volumes in the United Kingdom.