HC Deb 30 January 2004 vol 417 cc593-4W
Mr. Redwood

To ask the Secretary of State for Trade and Industry what steps the Government are taking to implement postal competition in line with EU requirements set out in COM (2004) 29. [151492]

Mr. Timms

The UK has set an end date for the full opening of the UK postal market by 31 March 2007. Market opening is proceeding in three phases to allow Royal Mail to prepare for competition and for potential entrants to prepare to enter the market.

The first phase, which started in January 2003, provides three possible entry routes for new entrants designed to open up 30 per cent. of the UK letter market (by revenue). In phase two, from 1 April 2005, Postcomm intends to open another 30 per cent. of the mails market (by revenue) by increasing the proportion of the bulk mail market that is open to competition. We believe that this staged approach provides Royal Mail, other operators and customers with a clear end date and a simple step-by-step transition to make their plans.

Market developments are consistent with trends in Europe, and concordant with the requirements of the EU Postal Services Directives.

Malcolm Bruce

To ask the Secretary of State for Trade and Industry if she will break down how(a) the funding allocated to modernisation of the Post Office network, (b) her Department's financial support to Consignia, and (c) the grant-in-aid to the Consumer Council for postal services set out in her Departmental Report 2003 was allocated for 2003–04. [147803]

Mr. Timms

The funding provision for 2003–04 for postal services as published in my Department's Departmental Report 2003 is:

(a) £90 million allocated to modernisation of the Post Office network in support for the urban post office network reinvention programme to fund the compensation payment terms negotiated between Post Office Ltd. (POL) and the National Federation of SubPostmasters and the investment grant package;

(b) The DTI has provided a loan facility to POL (a wholly owned subsidiary of Royal Mail Group plc) to enable it to fund its working capital requirements. This is primarily to ensure that there is sufficient cash in post offices to meet benefit payment and other cash needs. POL's cash used to be pre-funded by the Department for Work and Pensions but the pre-funding will decline as benefits are paid directly into recipients' accounts and POL still needs to have the cash available for benefits to be paid in cash. The loan facility package is designed on commercial lines in terms of interest and commitment charges and administration fees;

(c)The provision of £7.810 million is based on the Consumer Council for Postal Services (CCPS) actual budget expenditure for 2001–02. The actual budget agreed for 2003–04 is £9.905 million. The breakdown of how the funding was allocated for 2003–04 will be published in the CCPS financial report on 30 July 2004.