HC Deb 14 February 2002 vol 380 cc297-9
4. Mr. Tony Lloyd (Manchester, Central)

If she will make a statement on the role of the Post Office regulator. [33792]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt)

The creation of Postcomm was part of the package of greater commercial freedom that we introduced in the Postal Services Act 2000. As my hon. Friend knows, the Act provides that Postcomm's primary duty is to exercise its functions to ensure the provision of a universal postal service.

Mr. Lloyd

Does my right hon. Friend agree that the most remarkable feature of Opposition Members' comments is their failure to refer to the "strike" in investment in the Post Office that lasted for so many years, which has left Consignia far too weak to function as an efficient business? Could not the regulator's recommendations damage Consignia' s ordinary operation so severely that the Government's guarantees of a universal postal service would be rendered null and void?

Ms Hewitt

As my hon. Friend knows, the Postal Services Act—for which he and I and all Labour Members voted—writes the universal service obligation into law. That means a delivery every working day to every address in the United Kingdom, and a collection every working day from post boxes throughout the United Kingdom, at a uniform and affordable price.

It is the regulator's primary duty to ensure that a universal service is delivered. Of course Postcomm will have to ensure that its decisions on market opening, which will be designed to give customers more choice and a better service, are framed in such a way that that service is indeed delivered.

Mr. David Cameron (Witney)

When the Secretary of State speaks to Postcomm, will she stress the need for a proper service in rural areas? Is she aware that many people in the countryside of my west Oxfordshire constituency are finding that mail is delivered later and later? How can the closure of post offices possibly help that? Will the right hon. Lady ensure that a universal service is provided early each day for people living in the countryside?

Ms Hewitt

The hon. Gentleman makes an important point about the importance of reliable mail deliveries and good post offices in rural communities. The service being provided by the Royal Mail in some rural as well as some urban areas is not good enough. That is why management are talking to unions about restructuring, which is necessary to deliver a much more efficient and reliable service to customers in rural areas and everywhere else in our country. The hon. Gentleman will be aware that we have very substantially slowed down the rate of closure of rural post offices, and that we have put in place the necessary funding to enable communities that would otherwise not be served to keep their post offices in operation.

Mr. John Grogan (Selby)

Does my right hon. Friend agree that there is a strong case for Postcomm to extend the six-week consultation, given that its proposals are far ranging, go much further than those in the rest of Europe and will, in a matter of weeks, open 40 per cent. of our postal services to competition?

Ms Hewitt

It is essential that Postcomm carries out a full consultation on its proposals. I have no doubt that it will do so and that it will take account of the views that my hon. Friend has expressed.

Dr. Vincent Cable (Twickenham)

Does not the Secretary of State agree that the rapid introduction of competition and the inevitable cherry-picking of the Post Office business will make carrying the financial burden of the universal service obligation much more onerous? Would it not be fair and economically sensible for the new private operators to make a financial contribution to the universal service obligation through a charge or levy? As that is not allowable under the present legislation, will the right hon. Lady discuss with the regulator how the anomaly could be corrected to put the universal service obligation on a sound and permanent footing?

Ms Hewitt

I refer the hon. Gentleman to the excellent report that was recently published by the National Audit Office. It sets out clearly the double risk: that if competition is introduced too rapidly to the market the universal service will be jeopardised; and that, without adequate competition, Consignia will not have the necessary incentives to restructure its business and improve its service. At the moment, the regulator and the company completely disagree about the effect of market opening on the business. Therefore, the most urgent priority is for the regulator and the company to arrive at a common analysis of the implications of market opening, so that Postcomm can make decisions to ensure that its primary duty of maintaining the universal service is achieved.