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Postal Services Bill [HL]

Although the amendment draws an important distinction between courier services and postal services, a distinction which may be worth exploring further at a later stage, in the context of the proposal to widen the scope of regulation, we have reservations. The law already requires a registered and insured service to be provided at a uniform tariff, and that is provided by the Royal Mail special delivery service. That is a political decision and forms part of the USO. In recognition of that USO, Royal Mail has certain benefits such as the unique right not to charge VAT, as confirmed by the European Court of Justice on 23 April. We consider that it would be an unacceptable interference with normal business economics to extend that to other operators. It costs more to deliver to areas where there is a low delivery point density and mileage is not the biggest cost driver. As the costs of delivery are broadly speaking unaffected by crossing a border within the UK, there is no logic to make a distinction between such services and other services, as that might have the perverse effect of dissuading operators from serving parts of the UK. Parcelforce offers non-fixed prices to its current customers for, for instance, non-universal services. Royal Mail actively seeks to be paid different amounts from large customers and other operators for deliveries in rural areas to help them fund the universal service through zonal pricing. The amendment would stop that important evolution of Royal Mail’s business.