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Universal Service Obligation (Mail Deliveries)

Volume 592: debated on Thursday 12 February 2015

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.

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.

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.

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?

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.

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

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.