Documents considered by the Committee on 26 October 2016 Contents

1Cross-border parcel delivery services

Summary and Committee’s conclusions

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee and the Exiting the European Union Committee

Document details

Proposal for a Regulation on cross–border parcel delivery services.

Legal base

Article 114; ordinary legislative procedure; QMV

Department

Business, Energy and Industrial Strategy

Document Number

(37821), 9706/16 + ADDs 1–6, COM(16) 285

1.1High prices for parcel delivery deter consumers and small businesses from buying and selling cross-border within the EU. Two particular reasons for this market failure have been identified. First, consumers and small businesses lack information about available delivery services, providers and prices. Second, regulation of cross-border parcel delivery is very limited. As part of its package of measures designed to boost cross-border e-commerce, the Commission proposes to increase price transparency for cross-border parcel delivery and improve regulatory oversight of the market.

1.2When the Committee first considered the proposal at its meeting of 6 July, the Committee raised a series of questions. Several of these were related to the UK’s departure from the EU given that the Government’s Explanatory Memorandum had been submitted prior to the Referendum.

1.3The details of the response from the Minister for Small Business, Consumers and Corporate Responsibility, (Margot James), are set out below. Her Brexit-related comments are inevitably of a tentative nature. In summary, she notes that the terms of the legislation could be applicable to the UK after it has withdrawn from the EU but that this depends on a number of factors, including the terms negotiated “in relation to access to the EU Single market”. She adds that the UK intends to play a full role in the negotiation of the Regulation keeping in mind that this may be applicable to the industry once the UK exits the EU, depending on the terms which are agreed. The Government will be mindful to ensure that this negotiation does not have a negative impact on the wider exit deal being negotiated.

1.4We note that the Government will continue to negotiate constructively while “ensuring that this negotiation does not have a negative impact on the wider deal being negotiated.” If there needs to be a trade-off between negotiations on this and other elements of the Digital Single Market on the one hand and the wider negotiation on the other, how will that be resolved? What consultations is the Government undertaking to ensure that it is fully aware of the risks involved in any trade-off?

1.5On the negotiation of this proposal specifically, we note that a Presidency compromise text was published on 12 October for discussion among officials on 18 October. We look forward to further information about progress in both Council and the European Parliament, including the Government’s view on the compromise text and any specific concerns that the Government is raising during the negotiations.

1.6We consider that the Minister’s letter raises issues that will be of interest to both the Committees on Business, Enterprise and Industrial Strategy and on Exiting the European Union. We therefore draw it to the attention of those Committees. We retain the proposal under scrutiny and look forward to a response well in advance of any Council meeting at which agreement to a General Approach is anticipated.

Full details of the documents

Proposal for a Regulation on cross–border parcel delivery services: (37821), 9706/16 + ADDs 1–6, COM(16) 285.

Background

1.7The Commission’s 2012 Communication on e-commerce1 identified improving the physical delivery of goods ordered online as one of the key elements for e-commerce growth. Subsequently, its 2013 Parcel Roadmap2 set out various actions but, despite some improvements, the Commission considers that further measures are needed to improve both price transparency and regulatory oversight. This is because the prices for some cross-border services are still high and not all national regulatory authorities have the ability to collect the data needed to monitor the evolution of parcel markets.

1.8Earlier in the year, the Government submitted a “non-paper” to the European Commission advocating regulation of cross-border parcel delivery and making various suggestions, including improvement of transparency and market oversight. The Government emphasised the need for transparency of information not only about price but about other aspects of service such as delivery options and the cost of returns.3

1.9The Committee’s Report of 6 July4 sets out further information on: the background to the Commission’s proposal; the details of that proposal; the Government’s position; and the issues raised by the Committee.

Minister’s letter of 10 October 2016

1.10On the likely timetable for adoption of the legislation, the Minister notes:

“The Slovakian Presidency has an ambition to reach a Common Approach by December 2016. It is not yet clear whether this is achievable or likely timings beyond this stage.”

1.11As to whether the UK would wish to apply the terms of the legislation to some degree after withdrawing from the EU, the Minister says:

“Whether the UK would want to apply the terms of the legislation to some degree after the UK has left the EU is dependent, amongst other things, on:

1.12The Minister goes on to observe:

“There would be some limited potential for divergent domestic and EU laws on cross-border parcel delivery to operate as a barrier to trade. However, we would aim to identify in advance where that could be the case and consider measures to mitigate such barriers.”

1.13In response to the Committee’s question about how active a role the Government intends to play during negotiations, the Minister says:

“Until European Union exit negotiations are concluded, the UK remains a full member and all the rights and obligations of EU membership remain in force. During this period the Government intends to continue to negotiate, implement and apply EU legislation.

“As previously set out, the Government was proactive in explaining the UK’s views on what it thought the Commission should focus on in respect of cross-border parcels through the publication of a non-paper. We intend to play a full role in the negotiation of the Regulation keeping in mind that this may be applicable to the industry once the UK exits the EU, depending on the terms which are agreed, but ensuring that this negotiation does not have a negative impact on the wider deal being negotiated.”

1.14The Minister responds to the Committee’s query regarding consultation of the Devolved Administrations in the following terms:

“The Devolved Administrations have been approached for comment on this Regulation. Overall, the response has been limited but it is worth noting that the Government is fully aware of the need to maintain good parcel delivery services to all parts of the UK, especially when it comes to the end product of online retail. The Government recognises that a wider focus is needed when it comes to tackling delivery costs, and has set out to ensure that online retailers have all the relevant information to hand, to make sure that they are both complying with existing law and making sure that consumers are getting the best deal when it comes to delivery costs.

“Whilst this is not specific to cross–border delivery, the principles are the same and could be followed on a wider stage. We intend to submit the short guidelines to the Commission as a form of best practice, and ask them to consider something similar to go onto the COSME-funded website they are launching as one of the measures in the cross-border parcels regulation.”

1.15The Committee noted that, having completed their assessment of affordability of tariffs, national regulatory authorities are required to submit confidential and non-confidential versions of their assessment to the Commission. The Committee asked whether guidance should be included within the proposal as to what should be considered ‘confidential’ and ‘non-confidential’, or whether provision should made for such details to be decided at a later date, so as to ensure consistency of information across jurisdictions. The Minister responds in the following terms:

“In terms of defining what should be considered confidential and non-confidential, this is something the UK intends to raise at working group level to understand if further consideration of what should fall within these remits should be considered domestically or if, this is something that should be given to the ERGP [European Regulators’ Group for Postal Services] to consider and produce guidance on to ensure consistency of information across jurisdictions.”

1.16As regards the extent to which Royal Mail’s approach of charging a standard price for cross-border parcel delivery within the EU, regardless of the specific destination and actual cost incurred, is standard practice among universal service providers, the Minister says:

“According to information provided through the Commission impact assessment,5 there are a number of pricing models used by Member States for international standard parcels. Ten Member States use a universal price to all other Member States with the others using a varying number of zones ranging from 2–27.”

1.17The Committee noted that, in its paper earlier in the year, the Government emphasised the need for greater transparency of information about aspects of parcel delivery other than price, such as delivery options. As these aspects did not appear to be included in the Commission proposal, the Committee asked whether the Government would be pressing for their inclusion. The Minister responds:

“The Commission have emphasised that the measures in the cross–border parcels regulation are part of a package and that complementary measures as part of the wider Digital Single Market (DSM) package should all contribute to deliver the overall policy objective. Whilst we recognise the potential benefit of exploring additional measures such as obligations on retailers, we also recognise any sort of intervention here would need to be supported by a strong evidence base as to the benefit and not impose any additional burdens on business. The Commission has ruled out the prospect of introducing any obligations on retailers as part of this measure.”

1.18Finally, the Committee asked whether the proposal goes far enough in helping consumers to understand and compare prices given that transparency of tariffs is applicable only to those set by universal service providers. In response, the Minister says:

“UK consumers are well served by existing price comparison mechanisms. As the proposal is designed to help consumers and SMEs as both receivers and senders of goods and not necessarily starting or in their resident Member State—for example a UK consumer arranging for shipment of a good from Croatia to the UK—the current proposal should be a good indicator of the ceiling price for basic delivery services in each Member State.”

Previous Committee Reports

Seventh report HC 71–v (2016–17), chapter 5 (6 July 2016).


1 COM(11) 942.

2 COM(13) 886.

3Opportunities to develop cross–border parcel delivery”, UK Government, January 2016.

4 Seventh report HC 71–v (2016–17), chapter 5 (6 July 2016)

5 http://data.consilium.europa.eu/doc/document/ST-9706–2016-ADD-4/en/pdf Pricing for International standard parcels is unavailable for Estonia, Cyprus, Luxembourg and Portugal.




28 October 2016