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Mr. Carmichael: The Minister is being generous in giving way. My experience as a constituency Member has been that Parcelforce has done its level best, but does the Minister accept that the difficulty is the underlying structure of the market in which the company is required to operate? Parcelforce cannot subsidise operations to my constituency, to the Western Isles or anywhere else; it would be swiftly picked up under competition law if it did so. Can we find a mechanism to make competition law work in our favour instead of always working against us? Is not this a case of market failure?

Mr. Sutcliffe: The hon. Gentleman again tempts me into an interesting debate about competition and marketing, but I must refuse to engage in it at present. We shall return to the matter, as under my consumer brief there are certainly issues about performance and detriment to consumers. However, so that I can deal with the issues under debate in the context of my responsibilities for postal services, I am sure that the hon. Gentleman will forgive me if I stick to the script and investigate further after our debate.

Parcelforce has maintained its policy of not surcharging parcels being sent from the highlands and islands to England and Scotland. In addition, Parcelforce does not make a surcharge for customers sending parcels from one island to another; they pay only the zone 1 rate. The company has also abolished its zonal surcharge for parcels travelling within mainland Scotland.

I appreciate that not all customers are entirely satisfied with the outcome of the review, as has been pointed out. However, Parcelforce has considered the
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issues long and hard and believes that it has achieved the best balance between meeting the needs of its Scottish customers and providing services on an economically sound basis, but I am sure that the company will listen to representations and to the discussions that will take place.

As I said, the universal service obligation for parcels—the standard three-day service—has transferred to Royal Mail. Concerns have been expressed that Royal Mail has raised proposals to abandon its universal service obligation. I can appreciate those concerns, but I can assure the House that they are unfounded. Royal Mail has not raised that issue with the Government, nor do I expect it to do so. The Postal Services Act 2000 requires that the universal service must be provided at an affordable, uniform tariff throughout the UK. The Government have no plans to change that requirement.

Postcomm, the independent regulator for postal services, and Royal Mail have been discussing the possible introduction of some geographic pricing in relation to bulk mail products used by the company's larger customers. Royal Mail wants to introduce that approach to enable it to compete with other postal operators as the market is further liberalised. I understand that Postcomm intends to publish its initial views on the proposal later this month. Let me make it clear, however, that those proposals will not affect everyday users of postal services, such as small businesses or, for example, individuals sending birthday cards to relatives. So people will continue to be able to send parcels, as well as letters, at a uniform tariff to every part of the country, including remote and rural areas.

As I said earlier, during parliamentary questions on 16 September, my right hon. Friend the Secretary of State for Trade and Industry said that we would draw the concerns of the hon. Member for Orkney and Shetland to the company's attention. As I have already said, I will raise those concerns with Parcelforce when I meet its representatives in the near future. However, I wish to make it clear that Parcelforce—I know that the hon. Gentleman will accept this—must be allowed to operate commercially in a highly competitive environment in competition with other companies in the parcels sector and that its pricing and services structure is therefore an operational matter for the company, as it is with its competitors.
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I must stress—I am sure that I will do so on many occasions in time to come—that it is not for the Government to subsidise the continuation of unprofitable services in a competitive market. That would be unfair to other operators and, as the hon. Gentleman said, it would probably constitute illegal state aid.

I want to ensure that that the hon. Gentleman's issues and those of other hon. Members are addressed. We will do so in the usual discussions that take place. I undertake to respond to the hon. Gentleman on the issues raised, probably in writing, after the meeting with Parcelforce. I will consider the issues in the way that he suggests in the context of the marketplace and the detriment that his and other hon. Members' constituents are suffering because of the attitude of the mail order companies. I do not know whether the hon. Gentleman has had an opportunity to speak to the Mail Order Traders Association.

Andrew George: I am grateful to the Minister for giving way, as time is now running out, but I want to emphasise something to him. My hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) has articulately made the case, particularly in relation to his constituents and those of the Scottish islands. In fact, many of the issues raised have significant parallels in the Isles of Scilly in my constituency. I hope that the consultations and reviews that the Minister mentions in respect of parcel services will bleed south of the border and south of the English border, down to Cornwall and the Isles of Scilly as well.

Mr. Sutcliffe: The hon. Gentleman never fails to take the opportunity to mention his constituency and west country issues. I am grateful to him for that, but the debate relates to the areas that are suffering detriment at the moment.

There are another six or seven pages of the brief that is before me, but I simply wish to say that I will consider the issue and see what can be done in the spirit in which the hon. Member for Orkney and Shetland has dealt with it. I congratulate him on raising the issue. I hope that he will rest assured that we will take note of what he and other hon. Members have said, and we will get back to him in due course.

Question put and agreed to.

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