Draft Postal Services Act 2011 (Penalties) (Rules for Calculation of Turnover) Order 2012
Draft Postal Services Act 2011 (Disclosure of Information) Order 2012
The Committee consisted of the following Members:
† Bebb, Guto (Aberconwy) (Con)
† Beresford, Sir Paul (Mole Valley) (Con)
† Burt, Lorely (Solihull) (LD)
† Carmichael, Neil (Stroud) (Con)
† Cryer, John (Leyton and Wanstead) (Lab)
Doran, Mr Frank (Aberdeen North) (Lab)
† Drax, Richard (South Dorset) (Con)
† Eustice, George (Camborne and Redruth) (Con)
† Fovargue, Yvonne (Makerfield) (Lab)
Godsiff, Mr Roger (Birmingham, Hall Green) (Lab)
† James, Margot (Stourbridge) (Con)
† Lamb, Norman (Parliamentary Under-Secretary of State for Business, Innovation and Skills)
† Morris, Anne Marie (Newton Abbot) (Con)
† Murray, Ian (Edinburgh South) (Lab)
† Ruddock, Dame Joan (Lewisham, Deptford) (Lab)
Simpson, David (Upper Bann) (DUP)
† Wright, David (Telford) (Lab)
† Wright, Jeremy (Lord Commissioner of Her Majesty's Treasury)
Lloyd Owen, Anne-Marie Griffiths, Committee Clerks
† attended the Committee
Fifth Delegated Legislation Committee
Monday 16 April 2012
[Mr Peter Bone in the Chair]
Draft Postal Services Act 2011 (Penalties) (Rules for Calculation of Turnover) Order 2012
4.30 pm
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Norman Lamb): I beg to move,
That the Committee has considered the draft Postal Services Act 2011 (Penalties) (Rules for Calculation of Turnover) Order 2012.
The Chair: With this it will be convenient to consider the draft Postal Services Act 2011 (Disclosure of Information) Order 2012.
Norman Lamb: It is a pleasure to serve under your chairmanship, Mr Bone.
This order is made under the Postal Services Act 2011, which was enacted last June. The overall purpose of the Act is to secure the future provision of the universal postal service. The vast majority of the provisions in the Act came into force on 1 October 2011, including those within part 3, which covers postal regulation. Part 3 of the Act enabled a number of changes to be made to the regulatory framework for postal services, including the transfer of regulatory responsibilities from Postcomm to Ofcom. The order supports the statutory functions of Ofcom as the independent regulator for postal services, extending to Ofcom powers that were previously available to its predecessor Postcomm under earlier legislation.
In order to regulate effectively, Ofcom, like any regulator, needs powers to enforce its decisions. The Postal Services Act provides Ofcom with enforcement powers mirroring the Communications Act 2003 in relation to compliance and enforcement notifications, penalties, urgent cases, serious and repeated infringements, suspension or restriction of the entitlement to provide a service, breach of directions and civil enforcement. This system is already in place for the wider communications sector, and Ofcom, as the regulator for the communications sector, has considerable experience of it. It is required because Ofcom may at some point need to take action against a postal operator for breach of a regulatory requirement.
There is of course a range of steps that Ofcom may take if a person is in breach of a regulatory requirement, starting with a notification, moving to an enforcement notification, through to imposing actual penalties. The maximum penalty must not be more than 10% of turnover and must be appropriate and proportionate to the contravention it is designed to address, as set down in the Postal Services Act 2011. The order sets out the rules by which Ofcom must calculate turnover for the purposes of imposing such penalties. The schedule to the order establishes the general rules for the calculation of turnover for the purpose imposed by Ofcom.
Rule 1 sets out that turnover shall be calculated in conformity with accounting practices and principles that are generally accepted in the UK. Rule 2 sets out that turnover of a person’s postal services shall be calculated after the deduction of sales rebate, value added tax and other taxes directly related to turnover. Rule 3 makes provision for the calculation of turnover where a person’s postal services business consists of two or more undertakings. As I mentioned earlier, the power to impose penalties was available to Ofcom’s predecessor, Postcomm, under the previous legislative framework. The order will simply allow Ofcom to exercise the same power in the same way, if ever required, in order to enforce its regulatory decisions. I commend the order to the Committee.
4.35 pm
Ian Murray (Edinburgh South) (Lab): It is privilege to serve under your chairmanship, Mr Bone. I wish Mrs Bone well—she was mentioned again twice in the Chamber this afternoon. It is always nice to hear about the debate going on round the kitchen table.
The Opposition disagreed fundamentally with the Postal Services Act 2011, but we do not disagree with the order. It is clear from paragraph 8.1 of the explanatory memorandum that the Department has consulted with Ofcom and, formerly, Postcomm. There is no material change to the status quo regarding the rules for calculating turnover, so I will save the Committee time and leave my comments at that.
DRAFT POSTAL SERVICES ACT 2011 (DISCLOSURE OF INFORMATION) ORDER 2012
That the Committee has considered the draft Postal Services Act 2011 (Disclosure of Information) Order 2012.— (Norman Lamb.)