Postal Services (Hansard, 3 July 2002)

§ Mr. Austin Mitchell
To ask the Secretary of State for Trade and Industry if she will make a statement on the(a) statutory and (b) commercial status of Royal Mail; and to which (i) Ministers and (ii) other persons it will be accountable. [65072]

§ Mr. Timms
Consignia Holdings plc is a company formed and registered under the Companies Act 1985. The shares in the company are owned by the Government. On 26 March 2001, all the property, rights and liabilities of the Post Office were transferred to this company. Consignia Holdings has one wholly owned subsidiary, Consignia plc, which is also a company formed and registered under the Companies Act 1985. This subsidiary is licensed to provide a universal postal service in the UK.
345W
Under the Government's reform of postal services, Consignia Holdings plc and its subsidiary have been given greater commercial freedom than that enjoyed by the Post Office. My right hon. Friend the Secretary of State for Trade and Industry holds a special share in Consignia Holdings plc and the Memorandum and Articles of Association sets out the areas where the special shareholder's consent is required by the company.
As a public limited company, Consignia Holdings plc is accountable to its shareholders. My right hon. Friend the Secretary of State for Trade and Industry (49,999 shares) and the Treasury Solicitor (as nominee of the Treasury) ( 1 share).

§ Mr. Austin Mitchell
To ask the Secretary of State for Trade and Industry what limit of(a) value and (b) weight is set for Consignia's monopoly status; for how long this status extends and under which legal provision; what recent discussions she has had concerning the move to unregulated and competitive postal services; when the change to open competition will take place; and under what statutory requirements. [65073]

§ Mr. Timms
Under the Postal Services Act (2000), the Postal Services Commission (known as Postcomm) was created, as an independent regulatory authority for the licensing of postal services. Postcomm administers a licensed area, broadly equivalent to the former Post Office statutory monopoly for letters weighing less than 350g and costing less than El. In March 2001, Postcomm granted Consignia a licence to provide services in the licensed area.
Under the Act, it is for Postcomm to further the interests of users of postal services, wherever appropriate by promoting effective competition between postal operators, subject to its primary responsibility to ensure the provision of a universal postal service at a uniform tariff. Under its statutory powers Postcomm may introduce competition by issuing licenses or by recommending "further exemptions" or reductions to the licensed area.
In April 2001, Postcomm initially established an interim licensing policy pending a wideranging consultation exercise on how to introduce competition into the market. Postcomm has issued 10 other licences for niche services under this policy. Following the conclusion of its consultation Postcomm announced its decision on competition on 29 May 2002. The effect of that decision is to extend Postcomm's licensing policy to open the postal market to competition in three stages over four years. The first stage to open one third of the market will take effect from January 2003 with increased opportunities for competition in the licensed area and progression to full market opening by 1 April 2007.