Previous Section | Index | Home Page |
13 Jun 2007 : Column 282WHcontinued
It has been reportedwe have covered this in todays debatethat the measures might have an adverse effect on businesses based in rural areas using bulk mail for operating purposes, as the hon. Member for West Aberdeenshire and Kincardine just said. Again, will the Minister quantify his assessment of the problems that that might create for small and medium-sized enterprises in rural areas? There have been reports that the measures might be the thin end of the wedge and that the USO will be eroded gradually. Will the Minister give assurances on behalf of his
Departmentfor as long as it continues to existthat he will oppose any steps to erode the USO?
The Highland councils submission to Postcomm on the application by Royal Mail noted that it could become prohibitively expensive for companies to circulate their correspondence and will result either in a reduction in services provided in affected areas or in the costs being passed on to consumers. Does the Minister share that analysis? What assessment has he made of the likely impact of the proposals on the standard of living in profoundly rural areas?
The hon. Member for Orkney and Shetland made valid points about the inherent absurdities of zonal pricing. I would be grateful for the Ministers response to that as well. It would appear to be more expensive to send something within the zone than from there to an urban area. That does not seem to make economic sense. We look forward also to his response to issues raised today about whether other carriers should be surcharged to assist the funding of the USO and whether that would require primary legislation.
Other useful issues have been raised in the debate. The hon. Member for Stroud (Mr. Drew) talked about the closure programme and the unacceptable way in which that has been handled. The hon. Member for Argyll and Bute talked about the changes to early collection times.
This debate goes to the heart of the future of the postal services operation in the 21st century. We all agree, I think, on the importance of preserving the universal service obligation. We recognise also that Royal Mail must be allowed to adapt to new competition. Some 90 per cent. of its business comes from business post, which is vital to subsidising social mail, where the company is making big losses. To many consumers, that is the most important thing to preserve. If we do not allow Royal Mail to compete effectively, the ability to subsidise social mail will decline, with severe consequences for the cost and quality of postal services for all of our constituents. However, we are all right to be wary of where the changes might lead. The debate has raised significant and legitimate questions on which we would welcome the Ministers reassurances.
The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): It is a pleasure to see you in the Chair, Mr. Caton. I begin by congratulating the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing the debate and by expressing my appreciation to all hon. Members who have contributed to this interesting and useful discussion. The hon. Gentleman spelled out clearly and fully his concerns about the future of the universal service obligation. I hope to be able to address the specific points raised by him and other colleagues.
Let me start by making it clear that the Government consider the maintenance of a universal postal service to be of the highest importance. I can assure the hon. Gentleman that there are no plans to abandon the universal postal service obligation, which is an obligation under EU law. The Postal Services Act 2000 reflects that and requires the universal service to be
provided at an affordable, uniform tariff throughout the UK. The Government have no plans to change that requirement.
As well as enshrining the obligation in primary legislation in the Postal Services Act, we established Postcomm as an independent regulator and gave it statutory duties under the Act, with the primary duty of ensuring the provision of a universal postal service at an affordable, uniform tariff. Postcomm ensured that the obligation was written into Royal Mails licence as the universal service provider.
The universal service is written into law as well. Section 4(1) of the 2000 Act guarantees 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 a standard letter. Postcomm has taken the lead among Europes national postal regulators by initiating a thorough public consultation on what services should be enshrined as universal services.
In June 2004, following a year-long review, Postcomm listed five areas of service offered by Royal Mail that the company will be required to provide as universal postal services at an affordable flat rate. They are Royal Mails first and second class services, Royal Mails standard parcel service, a registered and insured service, a range of support services to ensure the safety and integrity of the mail, and an international mail service.
Postcomm is responsible for defining the scope of the universal service and may choose periodically to revisit it. Although there will be exceptions, they can be allowed only in specific and restricted circumstances. The 2000 Act is clear on that by asserting that the universal service is provided
except in such geographical conditions or other circumstances as the Commission considers to be exceptional.
Following a wide-ranging consultation, Postcomm published a policy statement in January 2003 in which it explained the circumstances under which Royal Mail could be exempted from its licence requirement to deliver letters to all homes or premises every working day. Long-term exceptions can be justified only, for example, in cases where there is a risk to the health and safety of Royal Mail staff, or in cases of geographical remoteness, to which the hon. Member for Argyll and Bute (Mr. Reid) referred.
The reasons for building that exception into the Act are clear. It is recognised that there are some circumstances in which it might be impractical to deliver and collect mail on a daily basis. The responsibility for determining those circumstances rests with the postal regulator, Postcomm. Consequently, Royal Mail requires authorisation from the regulator on exceptions. In such cases, there is a formal process involving four stages of assessment and scrutiny, under which any proposed exemption is carefully examined by Postcomm, together with the Consumer Council for Postal ServicesPostwatch. Postcomms exceptions policy is designed to ensure that the number of homes or premises excepted from delivery every working day is kept to a minimum. I understand that just over 2,800 of the 27.5 million addresses in the UK are exempted from the universal obligation.
Postcomm fully opened the UK postal market to competition in January 2006. It is now developing a strategic review on how postal regulation should
develop in the medium to long term. Specifically, Postcomm is addressing three fundamental questions: first, how the postal market might develop over the next five to 10 years; secondly, what postal users will need from the universal service and how that will be best provided; and, thirdly, what is the best long-term framework for promoting effective competition and deregulation. Following an initial consultation in 2006, Postcomm is expected to bring forward proposals later this summer. It is important that all those with an interest in postal services make their views known. Given the comments that have been made in the debate, I am sure that all hon. Members who have contributed are waiting for those proposals so that they can respond to them.
A number of hon. Members mentioned the levy. The Government have not said anything specific about the levy, but the 2000 Act allows Postcomm to put a levy on other operators to fund the USO, if that is necessary. Several hon. Members, including my hon. Friends the Members for Selby (Mr. Grogan) and for Stroud (Mr. Drew), raised the issue of pay or play, which is contained in the proposal for the third postal services directive. The UK strongly supports the option for USO funding. To respond to hon. Members questions, it is possible to raise a levy, if necessary, because Postcomms primary responsibility under the 2000 Act is to sustain the universal service obligation, and a levy would certainly be one way of doing that, via licensing obligations. I understand that the third postal services directive has been agreed and that it is expected to be introduced some time in 2008.
Let me respond to the question about conducting a review of the working of the 2000 Act, which was set out in our manifesto. The Governments view is that that will not be appropriate until the strategic review has concluded, but that it might be appropriate after that time.
The hon. Member for Orkney and Shetland raised the issue of zonal pricing, as did virtually every other hon. Member who contributed to the debate. It is clear that Royal Mail is interested in charging bulk mail companies for the delivery of mail on a zonal basis, given that different delivery footprints, as they are known, have different costs, according to the geography and population density of the delivery area. There is, however, a critical consideration to bear in mind on zonal pricing. Even if it is ultimately agreed by the regulator, it will apply only to bulk mail products on which prices are negotiated commercially by Royal Mail. Zonal pricing will not extend to universal services. There is no question of the consumer being charged different prices for single-piece letters deposited in letter boxes simply because they are addressed to different destinations in the UK. As we know, international mail is different because prices vary according to the overseas destination.
Mr. Carmichael: Will the Minister give way?
Jim Fitzpatrick: If the hon. Gentleman will allow me, I have several points to make about zonal pricing, which might deal with the question that he wishes to ask. If I do not cover it, however, I will of course be happy to give way.
Hon. Members asked about the effect of zonal pricing on the recipient. That is a matter for Postcomm to take into account in its forthcoming consultation, which is due in the next few months. As I have mentioned, it is vital that all interested parties participate in the consultation when Postcomm issues its proposals. Postcomm is responsible for safeguarding the interests of vulnerable consumers, too.
Mr. Carmichael: I cannot remember the exact figure myself, but will the Minister remind the Chamber what percentage of the letter post market will be affected by the situation involving bulk mail? My recollection is that the figure is substantial. Does he not understand that that is the root of concerns about the chipping away of the universal service? Whatever the legal definition might be, the layman or woman in the street would consider that mail to be part of a universal service in any meaningful sense.
Jim Fitzpatrick: I do not have the figure that the hon. Gentleman requests to hand. It might be handed to me in a moment, but if it is not, I will write to him and other hon. Members who have contributed to this debate. [Interruption.] I am advised that bulk mail constitutes about 85 per cent., which is a significant element of the market, as he suggested.
The hon. Member for Wealden (Charles Hendry), among others, asked about the differential market in the EU. It is important to remember that we liberalised the market in the UK for consumer benefit, not to secure reciprocal access. Postcomm takes those elements into account when considering what Royal Mail can and cannot do in its overall business and when setting its price controls, which are to be reviewed later this year. According to Postcomms figures, 18 months after the liberalisation of the market in 2006, the effect of competition is that Royal Mail still has 96 per cent. of the market. The suggestion that Royal Mail has been decimated by its competitors therefore does not really stand up.
The Government consider the universal service to be of the highest importance. We have tasked the regulator with the duty to protect the provision of the universal postal service. It is not for the Government to become involved in decisions on deliveries to specific areas because that is rightly the responsibility of Postcomm. Postcomm has put in place a robust process for examining any proposed exceptions on the basis of established criteria. It also undertakes public consultations from time to time so that all postal service stakeholders may make known their views on whether the universal service meets consumer needs, or whether it should be modified. It is right that it should do so. As consumer needs and the wider communications market evolve, it is in all our interests that the universal service evolves with them. That is the best way of ensuring that mail services have a sustainable future.
I was asked about the consultation exercise on the Post Office restructuring programme. There will be considerable advance planning among Post Office Ltd, Postwatch and local authorities before proposals come forward, so they will be quite refined before the six-week consultation period.
Mr. Carmichael: Since the Minister has two minutes remaining in which to speak, will he say what he is doing to encourage his colleagues in other Departments to use the Royal Mail for their bulk mail?
Jim Fitzpatrick: As the hon. Gentleman knows, the Prime Minister established a Cabinet Sub-Committeethe Post Office Network Committee, or MISC 33, as it is calledto review Post Office Ltd. It has created a framework for all the main Departments to discuss Royal Mail Group and Post Office Ltd and the services that they provide. We have thus reinforced the Governments awareness of the importance of the services provided by Royal Mail and the Post Office. Notwithstanding the fact that Departments have a responsibility to the taxpayer to ensure that they get the best possible value for money from services, I assure the hon. Gentleman that the £1.7 billion that we are committing to Post Office Ltd and the £3.5 billion that we have committed overall to Royal Mail Group demonstrate the Governments full commitment to both the universal service obligation and the post office network. We are determined to ensure that that is in the best possible position and that it has a secure financial footing.
Mr. John Baron (Billericay) (Con): The September 2002 dossier, entitled Iraqs Weapons of Mass Destruction, was central to the Governments case for war in Iraq. There is little doubt that the dossier was sexed upthat the balanced judgments and reservations of the intelligence community were transformed into near certaintiesbut we also know that Lord Hutton and Lord Butler ultimately cleared the Government of sexing up the dossier, because they believed that the Joint Intelligence Committee had authorship and ownership of the document.
However, I suggest that recent evidence casts doubt on that conclusion. Part of that evidence points not only to a hitherto unknown first full draft of the dossier, written by a press officer, but to its importance in the drafting process itself. Indeed, it shows that spin doctors were on the inside of the drafting process and were integral to it, and that the JIC did not approve or sign off the document in any meaningful way. That is contrary to what we have been told by the Government so far. It is therefore no wonder that the dossier was characterised by spin and exaggeration.
I make no apologies for raising this issue four years after the event. It is important because the dossier was central to the argument for the war, which is still costing lives today. It is important because a public servant lost his life, and because, as the Chancellor of the Exchequer has admitted only very recently, we must learn the lessons from this episode and never again go to war on a false premise.
May I say at the outset that I would welcome any interventions from the Minister, as such interventions would help our discussion? I hope that he will show me the same courtesy when he is speaking.
Lord Hutton cleared the Government of sexing up the dossier, because he believed, as we all believed, that the dossier
was prepared and drafted by a small team of the assessment staff of the JIC
was issued...with the full approval of the JIC.
Since Parliament voted for war in March 2003, we have learned much more about the role of spin doctors in the drafting process. For example, from the Hutton inquiry, we know now what Parliament did not know in 2003that Alastair Campbell commissioned the dossier from John Scarlett, chairman of the JIC, that Campbell chaired the two planning meetings on the dossier and that he bombarded Scarlett with drafting suggestions throughout the process.
However, what was not credited by the inquiry was the involvement of press officers on the inside of the drafting process, working alongside the assessment staff of the JIC and attending meetings. I understand, for example, that press officers attended the drafting meeting on 9 September 2002 at which the 45-minutes claim was picked up and subsequently inserted into the dossier. John Scarlett acknowledged the involvement of up to four press officersone from 10 Downing street and the others from the Foreign and Commonwealth Officein his memo to the Prime Minister on 4 June
2003, but new evidence shows that spin doctors were not only shaping decisions about the content; they were helping to write the dossier itself.
Patrick Mercer (Newark) (Con): I congratulate my hon. Friend on securing the debate. Does he not think it extraordinary that a press officer was demanding documents from a member of the security and intelligence agencies? Surely any demands that are made of civil servants should be made by elected representatives, or am I wrong?
Mr. Baron: I think that my hon. Friend is right, but we must not forgetI shall come to this point laterthat the document was commissioned by Campbell, who commissioned John Scarlett to undertake it. We can understand the relationship a little better once we know that fact, but on the face of it, I agree with my hon. Friend.
Part of the new evidence that I am bringing forward suggestsor proves, in my viewthe existence of the first full draft of the dossier, written by John Williams, press secretary at the FCO. That new evidence confirms that Williams produced his draft on 9 September 2002 one day before John Scarlett wrote his own first draft. We also know, from information supplied by the Information Commissioner only last month, that John Scarlett requested that draft before writing his own. None of that has been in the public domain until now.
Although we now know of its existence, the document has been withheld by the FCO in the face of parliamentary questions and a freedom of information request. It is now imperative that we see that draft dossier for ourselves. We need to know the extent to which the Williams draft formed the basis of John Scarletts draft on the following day.
On the morning of 9 September, there was a planning meeting on the dossier. In the afternoon, there was the first drafting meeting. John Williams was asked to produce a draft document. It is surely unthinkable that such a document did not significantly influence the drafting process. We need to know what that influence was, as Williamss involvement runs contrary to the conclusion of the Hutton inquiry and the impression that the Government gave Parliament and the public about the origin and status of the dossier, yet the FCO still refuses to make the draft public. Originally, the Government defended their decision by arguing that disclosure would discourage officials from giving free and frank advice in the future. However, last month, the Information Commissioner ruled that such considerations were outweighed by the public interest argument in favour of publication. The FCO, I understand, is now appealing against that decision.
Next Section | Index | Home Page |