§ Mr. MitchellTo ask the Secretary of State for Trade and Industry which EU document promotes the lowering of the monopoly limit on postal services of member states; what measures restrict national choice; and what consultation he has had with postal users in the United Kingdom concerning the policies of Her Majesty's Government in these matters. [108722]
§ Mr. Alan JohnsonThe Postal Services Directive (97/67/EC) sets the agreement between the European Union member states and the European Commission on common rules for the development of the internal market of community postal services and the improvement of quality of service. The Directive established the principle that postal services may be reserved by member states only to the extent necessary to ensure the maintenance of the universal service. The initial upper limit to the reserved area was set at five times the public tariff for an item for correspondence in the first weight step of first class post provided that it weighs less than 350 grams. The United Kingdom's reserved area is within this limit. The Directive also provided for further steps to be taken towards the completion of the internal market of postal services and tasked the European Commission to come forward with proposals for gradual and controlled liberalisation. It is expected that these proposals will issue shortly.
In the United Kingdom, extensive consultation has taken place, in relation to the reserved area and other postal matters, during the review which led to the White Paper on Post Office Reform which was published in July 1999. A Bill has now been laid in with the intention of consolidating the reforms outlined in the White Paper.
The Government are of the view that greater competition is essential for postal reform. Liberalisation promotes competition and greater choice and keener pricing for consumers. It also encourages greater innovation, productivity and growth of businesses. The Postal Service Commission (which takes up its duties on 1 April 2000) will have a duty to promote the interest of consumers of postal services, having regard to the need for effective competition wherever possible and appropriate.
As set out in the White Paper, the Postal Services Commission will be expected to report on the scope for liberalisation within one year of appointment. We shall be asking the Postal Services Commission to provide its advice on the scope for reductions in the monopoly at the 123W earliest opportunity. We shall also be encouraging them to be thorough and to take account of the views of all interested parties.