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Postal Services Bill [HL]

We now move on to a series of amendments dealing with the duty of the future regulator. Amendment 80 seeks to reinsert into legislation the duty that was previously imposed on Postcomm—without me getting too excited about the way that it has helped to bring the Post Office to this parlous state—in the Postal Services Act 2000. That duty meant that Postcomm had to consider, in relation to the postal industry, the specific problems facing people with particular needs. I refer to the disabled, the chronically sick, pensioners, the poor and people living in the countryside. Of course, it can be said that Postcomm did not display any great energy in defending the needs of such people, but that must not be an excuse to ignore their needs in the new Bill. There is no reason why Ofcom should have fewer obligations than Postcomm. Changing the regulator does not change the circumstances of the users of Royal Mail. I am pleased that the Bill restates the need to maintain a service for blind people but it is not clear whether the deletion of those additional duties on the regulator is due to oversight or deliberation. If it is an oversight, I expect the Government to accept this amendment. If it is a deliberate exclusion, we must have an explanation from the Secretary of State. After all, the current recession is, in part, a result of Governments around the globe deregulating services to excess. The market does not provide solutions to many problems. Left to the market, postal companies see only higher costs in providing rural services; left to the market, the disabled, the low paid and pensioners find themselves with a bad bargain. It would be a great mistake to lower the social concerns of the regulator. I cannot accept that the loss of this duty is somehow compensated for by the ability of the Secretary of State to offer guarantees on, ""the attainment of any social or environmental policies"," set out in Clause 52. Such guidelines should supplement the permanent concerns covered by the amendment. In the interim report published by Richard Hooper in May 2008 entitled The Challenges and Opportunities Facing UK Postal Services, we find a fine observation: ""The postal service enables daily communications across all 28.4 million business and household addresses in the UK, regardless of the location, and beyond. It helps social cohesion by linking rural communities with more densely populated areas of the country, and ensures that older people and those with disabilities have an accessible, reliable means of communication and the capacity to send and receive physical goods"." Unless your Lordships accept this amendment, that statement by Richard Hooper’s team will no longer be true, for those elements of social cohesion referred to in the report will be removed with the passage of the Bill as it stands. I cannot for one moment believe that this House wants to see, for example, a deterioration in the service offered to rural communities by the universal service provider. There is an important difference between the duties listed in my amendment and those outlined in the Postal Services Act 2000. In this instance, I have added the category of small and medium-sized enterprises. I omitted them in my first submission on this clause and am now pleased to say that they feature as part of this amendment. In Hooper’s interim report, there were many useful observations on the impact of competition on the mail market. Unfortunately, much of that work was forgotten by the time the final report was published—presumably because the final report is more concerned with justifying the privatisation of Royal Mail—so it is necessary to return to the interim report to get a clearer picture on the issue of competition. The report makes it quite clear. It says: ""There have been no significant benefits for small businesses yet as a result of liberalisation"." It continues by pointing out that, ""small businesses have relatively little choice. The vast majority use Royal Mail’s services. Their dependence on Royal Mail seems to reflect an assumption that they are unable to attract alternative carriers, particularly if located in rural areas, based at home, or do not have high volumes to offer. Penetration by alternative carriers in the small business sector will increase over time, as owners have more information about their choices, are able to set out their needs, and new products are designed"." Surveys so far carried out show high levels of satisfaction with the quality of service offered at today's prices. Some 83 per cent of small businesses believe that first class mail offers good value for money. The response is higher still for a medium-sized enterprise at 92 per cent. But they do not believe that the service fully meets their particular needs. In some cases, recent changes in collection and delivery have made it more difficult to carry out their business. In spite of advances in technology and online banking, many small businesses are dependent on the postal network to organise financial transactions. More than 50 per cent of companies surveyed by the Federation of Small Businesses send over three-quarters of their bills and invoices through the post. When profit margins are tight, the ability to receive payment and avoid penalties for the late settlement of bills is vital. With that in mind, small businesses want later collections and earlier predictable delivery times. Liberalisation has not delivered that yet. The introduction of a new cost-reflective pricing structure based on weight and dimension known as pricing in proportion means that consumers are more likely to need advice about sending their letters. Small business representatives in particular have expressed concerns about the growing complexity of sending mail. These changes will have the greatest impact on those who work and live in more rural areas as well as domestic consumers unable to travel to the nearest post office, including the elderly and those with disabilities. We can see that there is no real gain for small and medium-sized enterprises. Market innovation by competitors has been almost entirely confined to the skimming off of the conveyance of bulk mail to Royal Mail sorting and delivery offices. Neither Postcomm nor Hooper suggested how liberalisation could actually deliver benefits to small and medium enterprises. Postcomm was convinced that there would be some sort of trickle-down benefit, yet that has not occurred. Why should competitors develop a highly dispersed customer base? Only Royal Mail has the network and coverage to address the needs of small and medium-sized enterprises. Therefore, it is appropriate to impose on Royal Mail the duty to consider the specific needs of small and intermediate enterprises and I hope that noble Lords will see the logic and sense in this amendment. I beg to move.