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Postal Services Bill [HL]

This amendment returns to the question of the basis on which the levy is to be imposed. I very much welcome the noble Lord’s justification of Clause 39 and I am pleased to see the requirement for a separate, audited and transparent review of the financial burden, but this amendment would include a further safeguard on efficiency. The imposition of a levy will obviously have a significant impact on the postal operators forced to subsidise Royal Mail under it. The Government have at least noted the potential for a levy actively to undermine competition in Clause 40, but I do not believe that they have satisfactorily addressed the possibility that it could also have the detrimental effect of subsidising inefficiency. If the costs used to calculate the financial burden are not adjusted to exclude ongoing inefficiencies the review will recommend a higher levy than is necessary, and one that would ensure that efficient private sector operators are forced to maintain the less than efficient practices of the universal service provider. Ofcom has indicated its unwillingness to use unadjusted costs when calculating access costs under Clause 34. Instead, it envisages a glide path ensuring that incentives remain to encourage postal operators to move towards efficiency. Even greater stringency should apply in the case of a compulsory fee. I beg to move.