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Postal Services Bill [HL]

Volume 710: debated on Monday 27 April 2009

Committee (5th Day) (Continued)

Amendment 95F

Moved by

95F: Clause 44, page 26, line 1, after “them” insert “that the postal operator has significant market power and”

Our amendment explores the situations when a general access condition might be imposed. It appears from conversations with Ofcom that it envisages such a condition being imposed in two circumstances. The first is when it wishes to impose an access condition on the universal service provider, but in relation to services that fall outside the universal postal service. The second is when another postal operator has developed a dominant network in an area—perhaps a certain city—to such an extent that it is pushing out the universal service provider’s network. In both these circumstances, the operator on whom the condition is being imposed would have to have built up significant market power. It is hard to imagine it ever being desirable to insist that a small operator—perhaps one that has created a niche market by investing in a highly specialised network—give access to another. My amendment, therefore, would ensure that the access condition would not be imposed on an inappropriately small operator. I beg to move.

This amendment would restrict Ofcom’s power to impose general access conditions so that it can be applied only to postal operators with significant market power. The Government agree that stringent criteria must be met before a general access condition may be imposed. Those criteria are already set out in the Bill. First, under Clause 44(3), Ofcom may impose a condition only where it is necessary either to promote effective competition or to protect the interests of the users of postal services. This necessity test, which we discussed under the previous amendment but one, will rightly limit the cases in which this clause can apply. Secondly, Clause 44(4) specifically requires Ofcom to take account of a number of factors before imposing any general access condition. These include technical and economic viability, feasibility, investment made by the postal operator from whom access is being sought, the need to secure effective competition in the long term, and intellectual property rights. Further, Ofcom is bound by the general test set out in Schedule 6.

Clause 44 implements Article 11a of the 2008 Postal Services directive. That directive provision requires member states to ensure that transparent, non-discriminatory access conditions are available to elements of postal infrastructure, or services provided within the scope of the universal service, where it is necessary to do so to protect the interests of users. Clause 44 adequately provides for this.

The 2008 directive makes no reference to any requirement of “significant market power”. That concept, as I am sure noble Lords are aware, derives from European telecoms legislation, which lays down extensive provisions relating to the finding of significant market power in a range of so defined markets in framework directives, and the consequences which flow from such a finding. No equivalent provisions are to be found in the European postal directives. To introduce the term “significant market power” here in isolation would have the potential to cause legal confusion as to its intended effect and purpose.

I genuinely believe that the noble Lord can take some comfort from the fact that, because the concept of significant market power is so embedded in European telecoms legislation, it is, as a result of the last six years, a very real part of the Ofcom DNA. While it may not be enshrined in terms in the way he is looking for, he can take some comfort from the fact that it is enshrined in practice.

In the Government’s view, the Bill as drafted already provides adequate protection against unnecessary regulation. We therefore consider the amendment to be unnecessary and I hope that the noble Lord is content to withdraw it.

I am very grateful to the Minister for that clarification, which I would like to consider. In the mean time, I beg leave to withdraw the amendment.

Amendment 95F withdrawn.

Clause 44 agreed.

Amendment 96 not moved.

Clause 45 : Consumer protection conditions

Debate on whether Clause 45 should stand part of the Bill.

Clauses 45 and 46 establish a consumer protection scheme, which I understand expands on a scheme that has only recently been created under the Consumers, Estate Agents and Redress Act 2007. I sympathise completely with the desire to have all the relevant postal services legislation in one document and would have had no objection whatever to the transfer of the scheme from one Act to another. But that is not quite what is being done. Instead, the Government are taking the opportunity to amend the scheme in small but significant ways. One such difference is to allow a participant who breaches the scheme rules to be thrown out of the scheme. I can see why such a rule would be welcomed by some but I cannot immediately understand why it was not included in the Consumers, Estate Agents and Redress Act.

Do the Government intend to introduce legislation amending that Act to ensure that the new rules that apply here will also apply to the industries remaining under the old scheme? I am sure that there are other differences between the schemes and I hope that the Minister might clarify exactly what they are. The original Act went through after extensive consultation with the industry, yet, as far as I am aware, there has been no consultation on these changes. Perhaps the Minster can explain.

The purpose of the amendment is to ask the Minister whether he agrees that this is the right way to take this forward. If a scheme needs to be improved, steps need to be taken to improve it, but that should be done in a way that is both transparent and consistent. These clauses appear to be neither. I beg to move.

This is another example of getting the balance right in the distribution of responsibilities and powers in this regime. Clause 45, in conjunction with Clause 46, sets out the consumer protection conditions that Ofcom may impose. The noble Lord rightly identifies the one change, which is I believe the only change from the existing regime. Specifically, a consumer protection condition may require a postal operator to assume liability in respect of loss or damage to postal packets; establish and maintain procedures, standards and policies with respect to consumer protection matters; and make payments relating to qualifying consumer expenses of the National Consumer Council or the Office of Fair Trading. As the noble Lord, rightly observed, this clause allows Ofcom to set any condition that appears necessary for it to secure effective protection for users.

The clause highlights specifics, such as complaints handling, dispute resolution, provision of remedies and redress, and the availability of information to users. These protections are both right and important, as the noble Lord recognises, and they are recognised by the postal services directive which requires us to ensure that simple, inexpensive procedures are made available by all postal service providers for dealing with users’ complaints. Licensed postal operators, as the noble Lord pointed out, are currently already subject to regulations governing complaints handling and redress schemes. These were made under Part 2 of the Consumers, Estate Agents and Redress Act, which will no longer apply to post. This clause is necessary so that Ofcom has the power to maintain the effect of current regulations if, of course, it is proportionate and objectively justifiable to do so.

Clause 46 enables Ofcom to require that all or a particular subset of postal operators be members of an approved redress scheme, under which users of postal services may make complaints about postal operators. The key thing is that such an investigation and subsequent determination should be done by a person independent of the postal operators and of Ofcom, which is what this clause allows for. The clause also sets out that a consumer protection condition may require postal operators to provide Ofcom with information about the level of compliance with the standards for handling complaints and to publish information about the number of complaints made about it and the way in which they were dealt with. A consumer protection provision imposed on a universal service provider must include a requirement for the publication of information about the number of complaints and how they were dealt with. Again, the postal services directive requires that we ensure that universal providers and, where appropriate, undertakings providing services that come within the scope of the universal service publish information on the number of complaints that they receive and the manner in which they deal with them.

Clauses 45 and 46 provide necessary protection for consumers that we believe is proportionate to the benefit, and allow us to implement properly our obligations under the postal services directive.

I am grateful to the Minister, but he has not quite answered the point about what consultation has taken place. That is something that we might return to at a later stage: I will leave it to him to decide when he deals with that point.

On the basis of my knowledge, I will address it now. My understanding is that, as the noble Lord rightly points out, the existing accredited redress scheme is a relatively new innovation in the postal services market. We will write to clarify this, but I am almost certain that, in the change process, Ofcom will be consulting on the transfer.

Clause 45 agreed.

Clause 46 agreed.

Schedule 5 agreed.

Amendment 96ZA

Moved by

96ZA: Before Clause 47, insert the following new Clause—

“Separation for accounting purposes

OFCOM must have regard to the method by which costs are to be allocated to different services set out in the Postal Services Directive in imposing any regulatory condition under section 34, 35, 44 or Schedule 3 requiring a separation for accounting purposes between different matters.”

The amendment seeks to address a concern that was raised by the Select Committee in the other place about a possible inconsistency between the accounting methods required under the postal directive and those that might be required by Ofcom. The new clause would require Ofcom to ensure that only one system of accounting is used that will meet all the criteria.

Can the Minister give us any idea of the timescale in which the Government intend to respond to the Select Committee report in the other place? We have had a discussion about timing. Bearing in mind that we are scheduled to begin Report on 11 May, it would be helpful if the Minister would indicate whether we might by that date have some responses from the Government to the many questions raised by the Select Committee in the other place. The amendment seeks to address one of those concerns, but it would be helpful to the House to have a more general response to that important report before we ourselves reach Report.

Ofcom has to abide by the principle of proportionality under Schedule 6. I understand that the requirement in the Communications Act to review regulatory burdens and ensure that they are necessary carries over to these provisions. I would welcome the Minister’s assurances that this is the case and that due care will be taken to keep the numerous accounting conditions in the Bill as consistent and as straightforward as necessary. I beg to move.

I have read the amendment and listened to the noble Lord’s questions. I would describe this as a “seeking-clarity amendment”. On his question about the Government’s response to the Select Committee’s report—a “seeking-certainty question”—I am afraid that I cannot give him certainty about the date of the Government’s response. However, I reiterate that it is our ambition to get the response to the noble Lord in good time, and hopefully in time for it to inform the ongoing debate on the Bill.

On the specific question of Amendment 96ZA, through the Bill we have given effect to our postal services directive obligations in respect of accounting separation, in particular the requirements of Article 14 of the directive, by giving the appropriate powers to Ofcom. As such, the requirement to act in accordance with the directive in carrying out its obligations is placed on Ofcom. As a public authority, Ofcom must not, in any event, act in a way that is contrary to European law requirements.

As a further safeguard, Section 102 of the Postal Services Act will be amended to give power to the Secretary of State to make an order on Ofcom to ensure compliance with the directive, if it is considered that a Community obligation under the directive is not being complied with. I hope that these factors provide reassurance that appropriate controls are in place to ensure that Ofcom will act in accordance with the directive’s requirements in imposing accounting separation requirements.

This amendment may have been proposed to try to ensure that Royal Mail is not required to provide accounting information in multiple formats resulting in an excessive regulatory burden. If that is the intention of the amendment, I reassure noble Lords that when imposing any condition, including accounting separation conditions, the Bill requires that Ofcom must act in a way which is proportionate, and it would not be proportionate to impose unnecessary requirements on Royal Mail. However, I hope we all agree that this is an opportune moment for Royal Mail and the development of the market, and that when Ofcom goes through the initial process the analysis should be based on accurate information; hence the requirement to be able to ask for the information that is needed. I therefore invite the noble Lord to consider withdrawing his amendment.

I am grateful to the Minister, particularly for the assurance he has given about the response to the various questions raised by the Select Committee in another place. Given the force of his remarks, I was never looking for certainty. The fact that he will use his best endeavours to deliver that response as quickly as possible must satisfy even the most sceptical Member of this place. I am very grateful to him for all that he has done to bring that about. I would like to reflect on the points that he raised on the amendment. In the mean time, I beg leave to withdraw the amendment.

Amendment 96ZA withdrawn.

Clause 47 agreed.

Schedule 6 agreed.

Clause 48 : Appeals against price control decisions

Amendment 96ZB

Moved by

96ZB: Clause 48, page 28, line 15, leave out subsection (3)

I beg to move Amendment 96ZB. In doing so, I will also speak to the other amendments in the group standing in the name of my noble friend the Secretary of State.

This group of amendments relates to appeals against price control decisions. The first amendment removes a power for Ofcom to impose certain procedural requirements in relation to appeals from its decisions. Instead of this, we seek an amendment to provide the Competition Commission with the power to make rules regulating the conduct of appeals. This power is very similar to powers that the commission already has under paragraph 12 of Schedule 22 to the Energy Act 2004.

The next issue that these amendments address is a concern that the Bill does not currently give the Competition Commission a specific power to investigate matters before making its decision. As noble Lords will be aware, it is unusual for an appeal body to investigate matters afresh and, for this reason, specific provision is made in the Bill to make it clear that, in its appeal role in relation to price control errors only, the Competition Commission has the power to investigate any relevant matter.

Amendment 96ZE, which gives the commission the power to make rules about appeals to it under Clause 48, also provides a power for the Secretary of State by order to make provisions mirroring those of the Enterprise Act 2002 which allow the commission to require the attendance of witnesses and which give it the information-gathering powers that would be necessary for it to make a proper determination of the appeal. This also includes the ability of the Competition Commission to “stop the clock” if information pertaining to an appeals process is not provided in good time.

Without a provision to extend the statutory time limit for determining an appeal, the Competition Commission could find itself in a position where it would have to determine an appeal without information that it considers necessary to ensure that all relevant factors are taken into consideration when making a determination. The amendment, in essence, provides that the time limit may be extended if a person has not complied with a requirement made by the commission relying on its investigatory powers.

I hope that I have provided a clear description of these government amendments, which are important, we believe, to ensure that the Bill functions as intended. I beg to move.

Amendment 96ZA agreed.

Amendments 96ZC and 96ZD

Moved by

96ZC: Clause 48, page 28, line 18, after “section” insert “(and with rules made under section (Appeals under section 48: supplementary))”

96ZD: Clause 48, page 28, line 36, at end insert—

“(8A) The Commission may investigate any matter or do any other thing for the purpose of making a decision under subsection (7)(b).”

Amendments 96ZC and 96ZD agreed.

Clause 48, as amended, agreed.

Amendment 96ZE

Moved by

96ZE: After Clause 48, insert the following new Clause—

“Appeals under section 48: supplementary

(1) The Commission may make rules about the making, conduct and disposal of appeals under section 48.

(2) The rules may, in particular, impose time limits or other restrictions on—

(a) the taking of evidence at an oral hearing, or(b) the making of representations or observations at an oral hearing.(3) The rules may make different provision for different cases.

(4) The Commission must publish the rules in such manner as it considers appropriate for the purpose of bringing them to the attention of those likely to be affected by them.

(5) Before making the rules, the Commission must consult such persons as it considers appropriate.

(6) The Secretary of State may by order—

(a) apply any of sections 109 to 117 of the Enterprise Act 2002 (c. 40) (investigation powers of the Commission), with or without modifications, in relation to appeals made under section 48, and(b) make provision for and in connection with the extension of the period within which appeals must be determined in cases where requirements imposed under section 109 of that Act (as applied) have not been complied with.(7) An order under subsection (6) is subject to negative resolution procedure.”

Amendment 96ZE agreed.

Amendment 96A

Moved by

96A: After Clause 48, insert the following new Clause—

“Appeals to the Competition Appeals Tribunal

(1) This section applies to—

(a) any decision by OFCOM under this Part (other than a price control decision within the meaning of section 48(10)); and(b) a determination by the Competition Commission under section 48(7).(2) A person affected by a decision to which this section applies may appeal against it to the Competition Appeal Tribunal.

(3) The means of making an appeal is by sending the Tribunal a notice of appeal in accordance with Tribunal rules.

(4) The notice of appeal must be sent within the period specified, in relation to the decision appealed against, in those rules.

(5) The notice of appeal must set out—

(a) the provision under which the decision appealed against was taken; and(b) the grounds of appeal.(6) The grounds of appeal must be set out in sufficient detail to indicate—

(a) to what extent (if any) the appellant contends that the decision appealed against was based on an error of fact or was wrong in law or both; and(b) to what extent (if any) the appellant is appealing against the exercise of a discretion by OFCOM.(7) In this section references to a decision under an enactment—

(a) include references to a decision that is given effect to by the exercise or performance of a power or duty conferred or imposed by or under an enactment; but(b) include references to a failure to make a decision, and to a failure to exercise a power or to perform a duty, only where the failure constitutes a failure to grant an application or to comply with any other form of request to make the decision, to exercise the power or to perform the duty; and references in the following provisions of this Chapter to a decision appealed against are to be construed accordingly.

(8) For the purposes of this section and of the following provisions of this Chapter a decision to which effect is given by the exercise or performance of a power or duty conferred or imposed by or under an enactment shall be treated, except where provision is made for the making of that decision at a different time, as made at the time when the power is exercised or the duty performed.

(9) Section 195 of the Communications Act 2003 (c. 21) (decisions of the tribunal) shall apply to decisions of the Tribunal taken under this Act, save that in relation to appeals falling within subsection (1)(b) above, the Tribunal shall determine the appeal applying the same principles as would be applied by a court on an application for judicial review.

(10) Section 196 of the Communications Act 2003 (appeals from the tribunal) shall apply to appeals from the Tribunal under this Act.

(11) Section 117 of the Enterprise Act 2002 (c. 40) (offences of supplying false or misleading information) shall have effect in relation to information supplied to the Competition Commission in connection with their functions under this section as it has effect in relation to information supplied to them in connection with their functions under Part 3 of that Act.”

The amendment deals with appeals. The Bill follows the revision of common rules for postal services, directive 97/67/EC, by virtue of directive 2008/06/EC. It also rationalises the national regulatory arrangements by appointing Ofcom as the national regulatory authority. Under the three relevant Acts—the Competition Act 1998, the Enterprise Act 2002 and the Communications Act 2003—Ofcom is already a national regulatory authority for telecommunications and a concurrent national competition authority with OFT.

Under these Acts, appeals against or applications for judicial review of Ofcom decisions usually go to the specialist Competition Appeal Tribunal. There are special arrangements for so-called price control matters to be referred by that tribunal to the Competition Commission for its determination. It would seem sensible to make similar arrangements for postal services by providing for appeals to the tribunal. In particular, such arrangements would mean that, pending the outcome of any such appeal, the decision of the national regulatory authority would stand unless the tribunal, as a specialist body accustomed to such matters, decided otherwise, thereby conveniently transposing Article 22(3) of the revised European directive. Price control matters could follow the pattern already provided for in the Communications Act 2003, with a determination being made by the Competition Commission on reference of appropriate questions settled by the tribunal. I beg to move.

Amendment 96B (to Amendment 96A)

Moved by

96B: After Clause 48, leave out lines 6 and 7

We agree with much of what the noble Lord, Lord Cotter, has said about the need for postal operators to appeal against Ofcom’s decisions. The inclusion of a right of appeal to the Competition Commission on price control decisions is welcome, but it is not enough. Price control decisions will have an enormous impact on operators providing effective services, but so, too, will Ofcom’s decisions on whether to impose other access conditions and so forth.

I suggest that the Government are being optimistic if they think that Ofcom’s procedures will iron out any disagreements between the regulator and those being regulated. Representations, consultations, impact assessments and so forth are useful in informing the regulator as to the likely effect of its action, but they are not the same, nor are they an adequate substitute. Postal operators will of course appreciate having due notice of any regulatory changes, but I am sure that they will still disagree in some cases.

Of course, as I am sure the Minister will tell us, the costs and delays associated with many appeals systems can be significant. Decisions can take years to come to, and the only winners often seem to be the lawyers involved. It is, therefore, extremely surprising that the Government are willing to rely on judicial review to fulfil the requirements of the postal services directive. Judicial review is surely not the preferred option. It is hardly known as a quick and cheap method of resolving differences. The extension of the right to judicial review from what was possible under the Postal Services Act is welcome, but was a minimum requirement, given the new powers of Ofcom. It is not sufficient, and it is certainly not desirable, for the number of judicial review cases that is already swelling every year to be further increased.

Instead, we should be looking for a lower level appeal system to adjudicate on disagreements, which we hope would take less time and money to navigate. In his amendment the noble Lord, Lord Cotter, takes the appeal system with which Ofcom already has to comply under the Communications Act as his guide, and there is great sense in ensuring consistency across all Ofcom’s duties in this way. However, we feel that Ofcom may have a justifiable concern as to the time it takes for appeals to be processed under this system. It is right in highlighting the differences between the stable telecommunications sector and the declining postal service sector. The answer is, however, not to do away with appeals altogether but to extend what has been done with price control decisions and establish a rapid appeal process that extends across the board.

For this reason, we have tabled a couple of amendments to the amendment of the noble Lord, Lord Cotter, on the areas where we feel it could be modified to fit the postal service sector better. The restriction of the timetable to a matter of months is clear. I am also uncertain as to the desirability of allowing appeals against the Competition Commission’s judgment on price control decisions. However, our amendments are of a technical nature and relate to the details of the appeal system that should be set up. When it comes to the need for some sort of appeal system, I agree with the noble Lord and hope that the Minister can be persuaded.

The noble Lords, Lord Cotter and Lord De Mauley, have tabled amendments that would introduce a new clause entitled “Appeals to the Competition Appeals Tribunal” after Clause 48, which deals with appeals on decisions taken by Ofcom relating to price controls.

The amendment would provide for an appeal to the Competition Appeal Tribunal, the CAT, of any decision by Ofcom under Part 3, and would also allow for an appeal to the CAT on a decision made by the Competition Commission in respect of price controls as currently set out under Clause 48. I entirely agree with both noble Lords that this is a very important question as to how you get the balance right between the exercise of regulatory discretion and the legitimate role for appeal and review.

However, the amendment is unnecessary, as judicial review of decisions made by Ofcom on issues other than price control is an adequate recourse. I take some contention with the comments of the noble Lord, Lord De Mauley, that the Government are relying on judicial review. We are not suggesting that; good regulatory process tries at best to avoid judicial review, but as a final method of recourse it is the right one.

The Government are of the view that any appeal route in relation to decisions on postal matters needs to allow Ofcom to balance regulatory principles appropriately and to take into account non-economic, social factors when making regulatory decisions. As both noble Lords rightly pointed out, the Competition Appeal Tribunal is an expert body but its particular expertise relates primarily to competition matters. While competition has an important role to play in the regulation of the postal sector, as we have debated many times, there are many other issues at stake—for example, the social functions of a postal service and, in particular, the universal service that we place at the heart of the Bill.

The High Court, as opposed to the Competition Appeal Tribunal, is well versed in balancing all the factors that Ofcom must consider before making regulatory decisions, and therefore it is the right tribunal to hear appeals on regulatory decisions in this area. The sole exception to this is decisions relating to price controls, where the detailed and complex factual matters involved in such regulatory decisions make them less appropriate for broad judicial review. This is why we have provided for a specific appeal of such matters to the Competition Commission, which is better placed to undertake the complex economic analysis required in those cases.

The proposed clause also provides for decisions of Ofcom to be fully reviewed on the merits by the Competition Appeal Tribunal. Truly, this is unnecessary. It is only in telecoms, as I know to my cost at times, that there is a full appeal on the merits, and that is because an appeal in which the merits are taken into account is required by the relevant European directive—Article 4 of the framework directive on electronic communications networks and services. No other decisions made by other regulators—water, electricity, gas or rail—are subject to a merits review by the Competition Appeal Tribunal, and there is no equivalent provision in the postal services directive. Such an appeal provision would lead to delays, and we believe that that would be damaging for regulatory certainty in this market, which in this area is quite different from the telecommunications market. Therefore, I hope that noble Lords will feel able to withdraw their amendments.

Amendment 96B (to Amendment 96A) withdrawn.

Amendment 96C (to Amendment 96A) not moved.

I thank the noble Lord, Lord De Mauley, for his general support for our amendment. I do not think that it was unreasonable for him to draw out a timetable, particularly in Amendment 96C. I had a quick glance at it and it does not seem unreasonable in terms of responding to concerns that things could drag out and not be resolved in a reasonable manner. Therefore, I thank him very much for his support in that regard.

So far as concerns the Minister, I do not think that it was unreasonable for us to put forward Amendment 96A because there is a clear example, to which we have referred already, of such a procedure having been adopted. The Minister feels that it is not the appropriate procedure on this occasion but I think that we have made the point that it certainly needs to be kept in mind. On that basis, I beg leave to withdraw the amendment.

Amendment 96A withdrawn.

Amendment 97 had been retabled as Amendment 102.

Amendment 98 had been retabled as Amendment 108.

Clause 49 agreed.

Schedule 7 : Enforcement of regulatory requirements

Amendments 99 and 100

Moved by

99: Schedule 7, page 59, line 27, after “89A” insert “or 116(2A)”

100: Schedule 7, page 59, line 28, after “services” insert “, and the Postcode Address File”

Amendments 99 and 100 agreed.

Schedule 7, as amended, agreed.

Clause 50 agreed.

Schedule 8 agreed.

Clauses 51 to 56 agreed.

Schedule 9 : Transitional provisions for Part 3

Amendment 101

Moved by

101: Schedule 9, page 76, line 33, leave out sub-paragraph (6)

This is a probing amendment to explore the effect of the transitional period and the regulatory regime until the completion of the market assessment on existing postal operators. Paragraphs 4(2) and 4(4) of Schedule 9 ensure, as I understand it, that the current regulatory regime will continue much the same until the assessment is complete and Ofcom brings out the new regulatory conditions. I believe that this is a sensible approach but any assurances that the Minister can give us about the consistency of the regime will be very welcome to postal operators, who must of course continue to make investment decisions in a very uncertain climate. Sub-paragraph (6) seems to imply that Ofcom will not take on the old procedures governing the modification of regulations or the old appeals. I ask the Minister whether that means that, if a new appeal were to be brought soon after the Bill received Royal Assent, Ofcom would have to assess the old regime via the new procedure. What will happen to ongoing appeals? Will they be moved to the new regime or will they be allowed to complete their passage through the old process?

That also applies to ongoing complaints. I am given to understand that there are several complaints currently before Postcomm dealing with charges of unfair pricing between Royal Mail and other postal operators. What will happen to those complaints? Will Ofcom take them over from where they are now or will everything have to start all over again?

The ability to modify conditions has also been changed. Are not Ofcom’s requirements to consult regulatory changes rather lighter than those binding Postcomm, which had to seek consent in many cases? These are just the kinds of questions which I hope the Minister may be able to answer. I beg to move.

The eerily entitled Amendment 101—I believe that is where one is presented with one’s worst fears—is a probing amendment which rightly concerns the transition arrangements. I genuinely thank the noble Lord, Lord Hunt, for raising these questions and giving us an opportunity to give a brief explanation of Schedule 9. I share his view that however welcome the regulatory change may be—as I believe it broadly is in this market—it still brings uncertainty and in no market is regulatory uncertainty welcome. Therefore, the management of the transition process is rightly one which deserves scrutiny and debate. This schedule will be of particular interest to postal operators because it makes transitional provisions in relation to the regulatory part of the Bill—a sort of bridge over potentially unclear water. Schedule 9 aims to ensure a smooth transition between the current and the new regime and for this purpose enables Ofcom to carry out certain functions during the transitional period and while the initial conditions apply.

To give some specificity to that period, I should say that the transitional period will be the period between Royal Assent, whenever that is, and the date on which Ofcom takes full responsibility for postal regulation. The initial conditions will apply from that date until Ofcom completes its market assessment and makes the first universal postal services order. Schedule 9 requires Ofcom to determine before the end of the transitional period the initial conditions which will apply to postal operators once the Act comes into force. That will facilitate the move from the current licensing regime to the new authorisation regime. To create a smooth and, I hope, more stable transition, the initial conditions must have substantially the same effect as the current licence conditions, except where it appears unnecessary to Ofcom to maintain those conditions. That requirement will apply to both the universal service provider and to other postal operators.

I now turn to the specific amendment. I am sure that the noble Lord shares my concern that there should be certainty and a smooth transition between the current and the new regime and, as he has rightly observed, that is the objective of Schedule 9. We believe that the amendment will potentially have two main consequences: as regards the initial conditions, it would take away the procedural safeguards provided by the Bill for the imposition, modification and revocation of regulatory conditions and appeals about price controls and would introduce some uncertainty about how the initial conditions might be applied.

I shall address those two consequences in turn. Sub-paragraph 4(6) provides that the procedures for imposing, modifying or revoking regulatory conditions for appeals, and for appeals against price control decisions, apply to the initial decisions determined under Schedule 9 during the transitional period. That refers in particular to Schedule 6, which sets out at paragraph 3 the procedures for imposing, modifying or revoking conditions. Schedule 6 provides procedural safeguards for postal operators where conditions are imposed, modified or revoked. Ofcom must give notice of new conditions and there must be a period of at least one month during which postal operators and others can make representations about the imposition of change.

The Government believe that it is important to have that protection, including for initial conditions determined during the transition period. The principle applied by the Bill is that regulations should be proportionate and transparent and we believe that the provision passes that test. Removing sub-paragraph (6) as the noble Lord proposes would, we believe, take away some of those procedural safeguards from the initial conditions. A potential second consequence of the amendment would be to introduce uncertainty about the process applied to impose or change the initial conditions. Without sub-paragraph (6), the Bill would remain silent on that question.

The noble Lord, Lord Hunt, may be concerned that sub-paragraph (6) would enable Ofcom to modify initial conditions before completing its market assessment to impose additional regulatory requirements. I take this opportunity to reassure him and other noble Lords about that. Any modification of initial conditions must not result in conditions that could not have been imposed under the current regulatory regime. That is provided for explicitly in sub-paragraph (5). All ongoing appeals and complaints will be handled under the new regime under the existing terms. I hope that that provides clarity about those important matters and I ask the noble Lord to consider withdrawing his amendment.

The Minister has provided clarity and reassurance. I would now like carefully to consider all the points that he has raised. In the mean time, I seek leave to withdraw the amendment.

Amendment 101 withdrawn.

Schedule 9 agreed.

Clauses 57 to 59 agreed.

Schedule 10 : Minor and consequential amendments and repeals

Amendment 102 not moved.

Amendments 103 to 109

Moved by

103: Schedule 10, page 82, line 34, at end insert—

“26A In section 95 (power to acquire land etc), for “universal service providers” substitute “postal operators”.”

104: Schedule 10, page 83, line 12, at end insert—

“(2A) In subsection (2), for “the Commission” substitute “OFCOM”.”

105: Schedule 10, page 85, line 23, at end insert—

“(2A) After that subsection insert—

“(2A) OFCOM may give a direction to the owner for the time being of the Postcode Address File requiring the owner—

(a) to issue, and comply with, a code of practice dealing with the making of revisions to the File, or(b) to make such modifications of the code as are specified in the direction.(2B) A direction under subsection (2A) is enforceable under Schedule 7 to the Postal Services Act 2009; but, where it is given to a person who is not providing a postal service, that Schedule has effect with the omission of paragraphs 7(2) and (3), 8(4) and 11.””

106: Schedule 10, page 86, line 5, at end insert “and “, paragraph 4 of Schedule 7””

107: Schedule 10, page 86, line 23, at end insert—

“(3A) In the definition of “the Postal Services Directive”, for the words from “implementation” to the end substitute “improvement of quality of service, as amended from time to time,”.”

108: Schedule 10, page 91, line 30, leave out “section 9(5) of” and insert “paragraph 5 of Schedule 2 to”

109: Schedule 10, page 92, line 20, leave out from “for” to end of line 22 and insert ““section 42(3)” substitute “section 125(1)”.”

Amendments 103 to 109 agreed.

Schedule 10, as amended, agreed.

Clause 60 agreed.

House resumed.

Bill reported with amendments.

House adjourned at 9.14 pm.