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22 Nov 2005 : Column 391WH—continued

Ardmore Peninsula, Sutherland (Mail Deliveries)

12.25 pm

John Thurso (Caithness, Sutherland and Easter Ross) (LD): I am grateful to have this opportunity to raise the vital issue for my constituents on the Ardmore peninsula of mail deliveries, the cessation of which threatens the very existence of that small and vibrant community.

Perhaps it would be helpful if I were to explain where the Ardmore peninsula is. It is to be found on the west coast of Sutherland, to the south of Kinlochbervie. It is a small crofting township, comprising some half dozen or so households. There is also an important business located in it. It was founded by John Ridgeway, who is perhaps better known to Members as one half of the team of Chay Blyth and John Ridgeway that rowed across the Atlantic. He founded a very successful adventure school on the peninsula, which has been in operation for some 40 years.

Ardmore is in many ways typical of the remote west coast townships in my constituency and of many other communities in the west highlands, but it is atypical in one regard. Many such communities have withered and died in the modern era, but Ardmore has flourished and succeeded. It has made the most of its environment, and has a business that keeps it going.

Mail deliveries are essential for that business, but in March Royal Mail ceased to deliver mail to the Ardmore township. It cited two grounds for that. The first was that it was caught by the 15-minute rule exception—the rule by which, if it takes more than 15 minutes to deliver to a dwelling, Royal Mail can apply for an exemption from the universal service obligation.

Therefore, I should perhaps explain the access that there is to the township. From the main road, a single-track road goes most of the way to the township, but for the final part of the journey that becomes a one-and-a-half-mile path. It is a public path that is maintained by the Highland council, which has the responsibility of looking after it. I should also mention that the last part of the path is a steep rise through what is described as a waterfall.

Let me deal with the issue of the 15-minute rule. In an e-mail to me of 28 March, Royal Mail stated:

the decision to cease delivery—

Throughout its dialogue with me and the residents of Ardmore, Royal Mail has maintained that the 15-minute rule applies, irrespective of what might happen with regard to health and safety. However, when Postwatch looked into this matter, it found that that was not the case. It stated:

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Therefore, my first question to the Minister is to ask him to confirm that that is indeed the case, and that we may set aside the 15-minute rule in respect of Ardmore.

On the matter of health and safety, on 15 March a temporary postman slipped and fell. He reported the incident and also reported suffering bruising. The Lairg delivery manager, who has responsibility for the area, carried out a health and safety assessment and recommended the cessation of deliveries. At that time, I asked Royal Mail for a copy of the risk assessment, which it sent. It is clear from that assessment that it was written with the objective of achieving the desired conclusion, of which I give one example, rather than going through it line by line. The assessment states that by this stage of the route

Earlier in the year, I actually walked the route. I am nowhere near as fit as I used to be and I indulge in too many cigars, but I managed to walk from start to finish in 27 minutes without breaking into a sweat. I suggest that that is the more proper time for completing the circuit.

What is perhaps more worrying is that when the residents obtained a copy of the health and safety assessment through the Freedom of Information Act 2000, which they were entitled to do, the copy that they received was substantially different from the original copy that I had received, as significant changes had been made.

Postwatch has made it clear that it will not challenge Royal Mail's health and safety finding, as it correctly points out that it is Royal Mail's statutory duty to provide a safe working environment and Postwatch will not challenge its conclusion. However, its independent assessor also it made clear that it is the very last part of the walk, the steep part by the waterfall, that is of particular concern. I find it curious that a path that is considered safe by Highland council for a three-year-old and a five-year-old to walk to and from school every morning and evening, which is used throughout the year by thousands of visitors of all ages to access the adventure school, and which is used—obviously—by residents, and by tradesmen and other visitors, should be of such singular concern to Royal Mail.

There is a compromise that could be acceptable to the community, that the deliveries would be resumed to a point at the base of the waterfall where there is a fence. When I walked the path I was very pleasantly surprised, because there are a great many paths in the other part of my constituency, in Caithness, some of which even fall within my property, which are in nowhere near the same condition. The path is rather good and up to the fence it is reasonably level; it undulates rather than rising steeply. The community proposes that a post-box is placed at that point, which would be visible from their houses. The residents could then make the arduous ascent and descent to collect their mail. I ask the Minister to use his good offices to ensure that Royal Mail considers that option and, I hope, accepts it.

In the words of the residents,

The Scottish Executive's policy objective in Scotland—I am sure that it is shared in Westminster—is to encourage remote and fragile communities to survive,
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therefore diversification into the kinds of business that they have is vital. For their success in the modern era, it is vital that arteries such as the mail continue to enable them to survive.

I have always suspected that the decision was not really about health and safety, but far more to do with cost-cutting and with removing the costlier ends of the spectrum from the universal service obligation. I also suspect that the decision could be the first of many in my constituency and others like it in rural areas. We have heard a great deal during the last week about Royal Mail's profitability and its desire to become a viable and competitive business. I hope that that will not be achieved by shedding the more costly aspects of the universal service obligation.

Will the Minister commit today to a truly universal service obligation? Will he confirm that the 15-minute rule exception does not apply in this case? Will he confirm that a decision taken under the health and safety exemption is a temporary exemption and that it can and will be reviewed on a regular basis? Would he support the proposed compromise, which should go a long way to solving the perceived problems of delivery and would be—if not entirely—a satisfactory answer for the residents? Will he help a flourishing community in a remote part of Scotland to continue to flourish?

12.36 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Barry Gardiner) : I am tempted to begin by saying that we must stop meeting like this, Miss Widdecombe. I am delighted to serve under your chairmanship and all the more so because I know of your keen interest in the rural post service. I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) on doing exactly what a constituency MP should do: representing the needs and concerns of his constituents in a matter that is exceedingly important to them. He has done that clearly and set out proper concerns about mail deliveries in his constituency. I hope that I shall be able to address all his points.

It might be helpful if I begin by setting out the background to the restructuring of Royal Mail over the last four years, the universal service obligation, which the hon. Gentleman mentioned, and the framework for UK postal services. My right hon. Friend the Member for Leicester, West (Ms Hewitt), then Secretary of State for Trade and Industry, made two statements in the House in March 2002 and June 2002 following the announcements by Allan Leighton, the chairman of Royal Mail, then known as Consignia, about the company's three-year plan to restructure its postal services.

Nobody could have disputed that restructuring of Royal Mail was needed. The company was showing a pre-tax loss of £1.2 billion in 2001–02. Even allowing for exceptional costs from restructuring, there was still an underlying loss of £318 million on day-to-day operations. The company was losing more than £1 million every working day. The aim of the company's three-year renewal plan was to reduce costs by £1.4 billion a year, wipe out these losses and return the business to profit by April 2005.

I am pleased to say that Royal Mail has returned to profitability and the management have got to grips with costs and reduced overheads. The latest figures
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published last week for the half year to 30 September 2005 show that Royal Mail Group made an operating profit of £159.3 million. These interim results show a 20.5 per cent. improvement on the previous year's figure. As hon. Members will have seen, that performance was tempered by the 1.2 per cent. fall in mail volumes and by the size of Royal Mail's pension deficit.

Nobody should underestimate Royal Mail's achievement. The chairman, board, management and particularly the work force should all be congratulated on their efforts to turn the company around. However, Royal Mail still faces a huge challenge to build on this success and secure long-term sustainable profitability in a liberalised postal services market.

It was unfortunate, although perhaps not surprising, that Royal Mail's quality of delivery dipped for a while during the implementation of the renewal plan. There was a lot of media interest and justifiable concerns were expressed by customers about the poor performance they were receiving. However, it was a period of great change for Royal Mail—certainly the largest in its recent history and one with few parallels in British industry. Major changes were made simultaneously across Royal Mail's huge operational infrastructure—transport, sorting and delivery. Allan Leighton and Adam Crozier, Royal Mail's chief executive, held up their hands and apologised for the dip in service. Both gave personal assurances to the Government that they would give quality of service top priority.

The quality-of-service figures for the first half of the year were published last week and they are very encouraging indeed. The delivery of first class stamped and metered mail stands at 93.9 per cent. and is thus running at record levels. That performance beats the newly increased target of 93 per cent. as well as any performance that Royal Mail has ever achieved in the past. In northern Scotland, the figures for the most recent period indicate that Royal Mail delivered more than 96 per cent. of first class letters the day after posting. Royal Mail believes that 11 of its 15 quality targets are achievable this year.

We welcome those figures, which show a continued improvement in Royal Mail's quality of service results. Royal Mail and, in particular, the dedicated postmen and postwomen up and down the country, should be congratulated on their performance. However, the company recognises that it still needs to do a great deal. Market developments and changing customer needs continue to stimulate service improvement. Put simply, Royal Mail cannot take its customers for granted. Quality of service remains the board's top priority, because it cannot compete in a fully liberalised market if it does not get that right. The Government are confident that the company remains committed and determined to raise the quality of its service and that it will continue to focus special attention on those areas of the UK where local problems still undermine customer confidence.

The Government believe that they have established the right framework for the postal services market and Royal Mail. We have given Royal Mail greater commercial freedom in the public sector, established independent regulation as required by the EU postal services directives, and strengthened consumer representation. That policy was clearly set out in the White Paper "Post Office Reform: A World Class
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Service for the 21st Century", which was published in 1999 and implemented through the Postal Services Act 2000.

Underpinning the framework is the continued provision of the universal service at affordable prices. That is my first assurance in response to the questions asked by the hon. Member for Caithness, Sutherland and Easter Ross. That is why the obligation is enshrined in primary legislation in the Postal Services Act—the first time that any Government had done that—and why Postcomm's only statutory duty is to ensure the provision of a universal postal service at an affordable uniform tariff.

The universal service as written into the law—in section 4 in part I of the Postal Services Act—guarantees the following: a delivery every working day to homes across the UK, a collection every working day from access points throughout the UK, and a uniform and affordable price for posting letters and parcels up to 2 kg. In layman's terms, the universal service means that anyone in the UK can post letters and parcels to any other part of the country at the same affordable rates. It guarantees one delivery of mail for every UK household and business six days a week and one collection of mail six days a week. The Government aim to ensure that all UK postal users have access to postal services that are efficient, innovative and responsive to their needs. As the only licensed universal service provider in the UK, Royal Mail has the universal service obligation written into its licence.

There are exceptions to the universal service daily delivery, but exceptions can be allowed only in very specific and restricted circumstances. The Postal Services Act states that the universal postal service is provided

Postcomm—"considers to be exceptional". The reason for building that exception into the Postal Services Act is clear. The Act recognises that there are or will be some circumstances in which it may be impractical to deliver and collect mail daily. The responsibility for determining those circumstances was conferred on Postcomm as part of its overall responsibility for operating the regulatory regime. It has approached the issue with proper diligence and care with a view to balancing the needs of the customer and the service provider—Royal Mail.

Following a wide-ranging consultation, Postcomm published a policy statement in January 2003, in which it explained the circumstances in which Royal Mail would be exempted from its licence requirement to deliver letters to all homes or premises every working day. The new direction specified two categories for long-term exceptions to the universal service daily delivery obligation: health and safety, and difficulty of access. Long-term exceptions apply to addresses on islands serviced by regular but not daily ferry or air services. In those instances, Royal Mail should provide deliveries on the days on which a ferry or air service is available.

Fewer than 1,100 addresses receive mail on fewer than six days a week, and three quarters of those are on islands without a daily ferry service. For the few islands
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and other locations accessible only by boat and without a ferry service, Royal Mail has to provide a postal delivery service not less than once a week, by boat, using local agents. Mail is available to pick up free of charge from the local delivery office on other days, for those customers who can get there. Customers are able to request a temporary suspension of the universal service—for example, if they want delivery only on particular days of the week.

Royal Mail has a legal duty to protect the health and safety of its staff. Where that is put at risk—because, for example, access to addresses is possible only across difficult terrain or over treacherous paths on mountainsides—the addresses concerned will be considered for exemption from universal service on health and safety grounds.

Royal Mail cannot unilaterally decide not to fulfil its licence obligations on an ongoing basis. Any exceptions to the universal service obligation require authorisation from Postcomm. Postcomm has ensured that there is a four-stage formal process by which potential and ongoing exceptions are carefully scrutinised by the regulator. It involves the attention of the consumer watchdog, Postwatch. The first two stages of the process involve risk assessments carried out by Royal Mail. At stage 3, Postwatch, the Consumer Council for Postal Services, takes a view on the case for exception. At stage 4, Postcomm carries out its own evaluation of the site before making a final decision on the case. The process is rigorous and inclusive and it ensures that all exceptions are properly justified.

Postcomm's exceptions policy is designed to ensure that the number of homes or premises exempt from delivery every working day is kept to a minimum. I understand that just over 3,000 addresses out of the 27 million in the UK—about 0.011 per cent., or 1 in 9,000—are exemptions from the universal obligation.

The hon. Gentleman has expressed his concerns about the situation facing some of his constituents on the peninsula. I understand that Postcomm has received "stage 4" universal service obligation delivery exception appeals from the residents of the crofting township of Ardmore, and from Royal Mail

The Ardmore residents and Royal Mail have asked Postcomm to reach a final decision on the debate, following the company's decision based on health and safety reasons to suspend daily deliveries to Ardmore. Royal Mail is, as I have mentioned., required by law to provide a safe working environment for its employees. As part of the exceptions appeals process, it has carried out two health and safety risk assessments of the track conditions in the area. On both occasions, it found the track to be unsafe. Postwatch, the consumer watchdog, also came to this conclusion at stage 3 of the appeals process.

Postwatch subsequently proposed a compromise solution: the positioning of a mailbox halfway along the track that Royal Mail had been using to make deliveries, at a point before the track reaches its most dangerous point. Royal Mail has argued that on this occasion, the compromise solution does not eliminate the health and safety risk to its employees, as the delivery officer will still be required to walk along the first part of the track to deliver mail to the box. I understand that the residents' appeal is based on a view that the track is not
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so dangerous that their addresses should be exempted from the universal service obligation of delivery direct to their doors.

In accordance with the agreed process for determining appeals, Postcomm has arranged to visit the site at Ardmore. The visit is scheduled to take place on 1 December. The aim is to gain a first-hand account of the background to the appeals case and to take a view on the specific conditions affecting delivery. In line with its policy on determining USO exception appeal cases, Postcomm will be accompanied by an independent health and safety consultant who will be required to carry out a health and safety assessment of the access track used by Royal Mail to deliver to the properties in question.

In due course, the consultant will produce a report summarising the findings from the site visit and recommend what can be done to reduce any identified risks to an acceptable level so that Royal Mail can resume daily delivery. Postcomm will consider that independent health and safety advice and any other relevant facts before a fully informed decision can be taken on the future delivery of mail to these addresses. I am confident that the process that Postcomm has put in place is rigorous, inclusive and robust enough to produce the right decision.

John Thurso : I asked the Minister about the 15-minute rule exception. I am grateful for everything that he has said about the robustness of the processes, but will he say why Royal Mail maintained absolutely in an e-mail to me and throughout subsequent conservations between its authorities and the residents that the addresses were subject to the 15-minute rule, and why it sought to back off from that assertion only when Postwatch visited and ruled in its submission that the addresses were not subject to that rule? Is not that indicative of a desire to close the matter regardless of that submission?

Barry Gardiner : I shall talk about the 15-minute rule in a moment. First, let me respond by changing things around slightly. Postcomm, not the Royal Mail, designated the 15-minute rule and decided that there should be no limit on the additional road distance travelled by a postal delivery vehicle to reach an address over a public or a private road that is maintained in good condition. There is a round-trip limit of 15 minutes on the extra time that the Royal Mail must spend on delivering mail on foot or by the vehicle used for the delivery route along a private road or track where access conditions are poor but not so poor that the address is excepted on health and safety grounds.

John Thurso : My point is that the road is a public road. Until 20 years ago, the post was delivered by bicycle along the track. It is not quite up to bicycling standards now, but it is certainly up to walking standards.

Barry Gardiner : I take the hon. Gentleman's point. I was simply stating the conditions under which the 15-minute rule applies, while making the point that the 15-minute rule was designated by Postcomm, rather than by the Royal Mail as he implied. If the track is public—he has told the House that it is—the 15-minute rule, as
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I understand it, clearly does not apply. I believe that Postcomm has conceded that already, but that the focus of stage 4 of its investigation is on health and safety. Those are the matters on which we should focus.

The hon. Gentleman also asked whether this was simply a cost-cutting exercise. I do not believe that a minor incident has been exaggerated so that costs can be cut in rural deliveries. Royal Mail has been working very hard to improve its safety record, and the number of accidents has decreased considerably in recent years. Most accidents that occur when someone is accessing customer premises do not result in a suspension of delivery, and cost is certainly not a consideration in assessing whether a situation is safe. The process put in place by Postcomm is robust enough to ensure that any exceptions are properly justified under its long-term categories.

I am confident that this is not a case of people simply saying, "Wouldn't it make life simpler and cheaper for us not to have to deliver to these rather remote addresses?" Royal Mail delivers regularly to such addresses throughout the country and it is happy and proud to maintain the universal service obligation, so I do not believe that we are talking simply about a cost-cutting exercise. I am advised that the postman who suffered the accident was a mountaineer. I have not travelled the track as the hon. Gentleman has.

John Thurso : It might help the Minister to know what the craic, as they call it, is in Kinlochbervie. All the other postmen were issued with high-quality mountain boots to enable them to go along the track. The casual postman, who as the Minister says was a mountaineer, had not been issued with those boots. The view is that he reported the accident in the hope that he would be issued with a good set of boots.

Barry Gardiner : That is a good story and I am pleased that the hon. Gentleman has relayed it to the House this morning.

The hon. Gentleman asked whether the health and safety exemption was temporary or permanent and put a question mark over any permanency. There may be points on which the health and safety exemption could be made permanent, but I imagine that the situation that we are discussing is remediable if the track is improved to such a level that it becomes safe for Post Office officials to walk it. Exceptions are, in any event, subject to annual review or an intermediate review at a customer's reasonable request, so the matter would always be open to reinspection.

I firmly believe that the Government have established the right framework not only for the postal services market and Royal Mail, but to deal with the problems that have arisen in the specific case that we are discussing. We have given Royal Mail greater commercial freedom in the public sector, established independent regulation as required by the EU postal services directive, and strengthened consumer representation. Postcomm's primary duty remains to ensure the provision of the universal service obligation.

Adequate procedures are in place to examine exceptions to the universal postal service. They are being applied in the present case and are ongoing. It is not for the Government to become involved in decisions on
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deliveries to specific areas; that is, rightly, Postcomm's ultimate responsibility. I am confident that Postcomm is fulfilling its duty correctly in this instance and I hope that, after 1 December, when the final phase 4 inspection takes place, a satisfactory compromise can be agreed between the hon. Gentleman's constituents and Royal Mail. I congratulate him on raising his constituents' concerns so effectively in the House today.

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