Written question asked by Nick Gibb (Conservative) on Friday, 3 December 1999, in the House of Commons. It was due for an answer on Wednesday, 8 December 1999. It was answered by Alan Johnson (Labour) on Wednesday, 8 December 1999 on behalf of the Department of Trade and Industry.

Dept of Trade and Industry

Question: To ask the Secretary of State for Trade and Industry, what measures he is implementing to ensure the half-year loss by Parcel Force does not constitute a hidden subsidy; and if he will make a statement on his assessment of the effect this loss will have on competitors.

Answer: Mr. Gibb: To ask the Secretary of State for Trade and Industry what measures he is implementing to ensure the half-year loss by Parcelforce does not constitute a hidden subsidy; and if he will make a statement on his assessment of the effect this loss will have on competitors. [101805] Mr. Alan Johnson: Parcelforce operates in a competitive area and is continuing to improve its competitiveness and profitability, as shown by its improved financial performance. The Post Office is required to take steps to make sure there is no undue cross-subsidy between Royal Mail monopoly services and Parcelforce. These include the separation of accounts and, in accordance with normal practice, a requirement that the in-year funding requirement to Parcelforce from Post Office Group is charged at a commercial rate. In future the new, independent regulator, the Postal Services Commission, will ensure that any cross-subsidy from the monopoly areas to competitive activities is the minimum required, in its opinion, to ensure the continued provision of services required by the Universal Service Obligation at a uniform public tariff (which includes the standard parcels service). The Postal Services Commission will also ensure fair competition.

Secondary information