News story

Amendments to strengthen Postal Services Bill

The Bill, which has been approved by the House of Commons and is currently being considered by the House of Lords, is designed to secure the…

From:
Department for Business, Innovation & Skills
Published
13 April 2011
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Bill, which has been approved by the House of Commons and is currently being considered by the House of Lords, is designed to secure the long-term future of two cornerstones of British life - the Royal Mail and the Post Office.

Amendments include:

  • New powers for the regulator, Ofcom, to allow them to better monitor any potential threats to the universal service arising from end-to-end competition.
  • A new requirement on Ofcom to have regard to the need for the universal service provider to earn a reasonable commercial rate of return on the provision of that service.
  • Ensuring that Royal Mail can remain the sole provider of the universal service for at least the next ten years.

These changes will give further clarity to the regulatory regime and enable the regulator to strike the right balance between competition and safeguarding the universal service - ensuring that Royal Mail can continue to deliver to the UK’s 28 million addresses, six days a week.

Other changes will ensure that:

  • Government reports more information to Parliament, including details of the ongoing commercial relationship between Royal Mail and the Post Office.
  • Parliament has the opportunity to scrutinise and vote on proposals for the mutualisation of Post Office Ltd in the future.

Minister for Postal Affairs, Edward Davey, said:

“Royal Mail is facing some huge challenges - falling mail volumes, a vast pension deficit, less efficiency than its competitors and an urgent need for more capital.

“The number one reason we are taking action is to ensure that the universal postal service is protected in the face of these challenges and that Royal Mail can keep delivering and collecting letters 6 days a week at an affordable, one-price-goes-anywhere tariff.

“Politicians, Royal Mail, other postal operators and the Communication Workers Union are also determined to safeguard the universal postal service. We have listened to their suggestions and made a series of changes that will further strengthen the legislation.

“These important amendments will give extra regulatory certainty to Royal Mail and increase transparency by putting even more reporting requirements on the Government.”

The amendments will be debated by Peers at the Report stage of the Bill.

Notes to editors

  1. The Postal Services Bill will enable private sector investment into Royal Mail, and it will allow Government to take on the company’s historic pension deficit. The Post Office network will not be for sale and has the opportunity to move to a mutual ownership model in the future. The Bill will also transfer regulatory responsibility for the postal sector from Postcomm to Ofcom, the communications regulator.
  2. The Postal Services Bill and an accompanying policy statement which explains the Government’s approach can be accessed here http://www.bis.gov.uk/policies/business-sectors/postal-services/postal-services-bill-2010.
  3. The Postal Services Bill has been informed by the recommendations of Richard Hooper CBE in his independent updated report on the future of the universal postal service. “Saving the Royal Mail’s universal postal service in the digital age” was published on 10 September 2010. This report can be accessed here [http://www.bis.gov.uk/hooper-report](http://www.bis.gov.uk/hooper-report).
  4. Details of all amendments tabled to the Bill can be found on the UK Parliament website: [http://services.parliament.uk/bills/2010-11/postalservices.html](http://services.parliament.uk/bills/2010-11/postalservices.html)
  5. An online video on the Postal Services Bill from Postal Affairs Minister Edward Davey can be found here [http://www.youtube.com/watch?v=sNqswvLPeRM](http://www.youtube.com/watch?v=sNqswvLPeRM).
  6. A further Q&A can be found here [http://www.youtube.com/watch?v=T9ig0AbhqTs](http://www.youtube.com/watch?v=T9ig0AbhqTs)
  7. BIS’s online newsroom contains the latest press notices, speeches, as well as video and images for download. It also features an up to date list of BIS press office contacts. See [http://www.bis.gov.uk/newsroom](http://www.bis.gov.uk/newsroom) for more information

Notes to Editors

Contact Information

Name BIS Press Office Job Title

Division COI Phone

Fax

Mobile

Email NDS.BIS@coi.gsi.gov.uk

Name Joe Upton Job Title

Division Department for Business, Innovation and Skills Phone 020 7215 5959 Fax

Mobile

Email Joe.Upton@bis.gsi.gov.uk

Published 13 April 2011