Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 140 - 159)

TUESDAY 11 DECEMBER 2001

MR JOHN ROBERTS, MS MARISA CASSONI, MR JERRY COPE AND MR PAUL RICH

  140. Do you have a contract dealing with these sorts of things between yourselves and the Department?
  (Mr Rich) We have a contract that recognises it is the Department for Work and Pensions' product and they can say what they like about that.
  (Mr Roberts) There are certain restrictions on us, from memory.
  (Mr Rich) There are certain restrictions on us.

  141. Which means you take what you are given?
  (Mr Rich) No.
  (Mr Roberts) This is technical and at one level it is a change of the way the Government Department on behalf of the Government is going to pay benefit. At one level we do not have the right to actually interpret that. It is important that the DWP, which is accountable for that, actually does say "This is the way it is going to be handled". We can certainly add to that by making sure that people do understand it and the role of sub postmasters, I have to say, day in, day out, is very much about interpreting and explaining some of the things that come out. It would be quite wrong for us to get in the middle and start, as it were, changing the words of what is something which is a Government policy explained by DWP.

  142. Do you have DWP people based in your offices?
  (Mr Roberts) In our post offices?

  143. In your head office?
  (Mr Roberts) No.

  Chairman: I think the word patsy maybe was not that far away from it because certainly those of us who remember Horizon in all its shapes and forms, it was their fault and you had better go off and make sure you are not going to take unnecessary blame for it, I would imagine. Can we just shift away from that and go back for a few minutes to services, we did not quite finish some of the points we wanted to get on the record. Mr Hoyle is going to ask you on that and then we will let you get away.

Mr Hoyle

  144. Obviously there are lots of reports about mismatch of what is going on. Behind it we hear that you may be able to pick the mail up at railway stations or you will be charged extra to receive the mail before 9.30. Behind all that is hiding and doing away with the second delivery. Now I just wonder which of these press reports do we believe and which of the services are no longer required? One just wonders is it the fact they are no longer required or is the bottom line that you just cannot deliver on the services you provide?
  (Mr Cope) Certainly in the 1950s and 1960s we needed a second delivery because railways were slower, road transport was less efficient, all those sorts of things and, secondly, it was all well loaded with mail. If I turn back to what is the situation at the moment. Only four per cent of mail is delivered on second delivery yet it costs us 30 per cent of our time on the streets. There is a clear mismatch between, if you like, the unit costs of first delivery and the unit costs of second delivery. Most customers, because it is only four per cent of mail, actually do not get mail on a second delivery every day, even though we do a second delivery everywhere we go.

  Sir Robert Smith: Every urban area.

Mr Hoyle

  145. I was just going to say that does not quite add up.
  (Mr Cope) In what sense?

  146. Not everybody has ever had a second delivery.
  (Mr Cope) No.

  147. I know I have never had one.
  (Mr Cope) In the rural areas people have never had a second delivery but 90 per cent of people get—

  148. Even in urban areas.
  (Mr Cope) Yes, a few have not, I agree, but 90 per cent of people get a second delivery. We have taken the view that we need to make our deliveries more efficient and, most importantly, more reliable as well because it is very hard in lots of areas of the country to get staff, getting up very early and that sort of thing. Following some market research, which we did with Postwatch, we have decided in principle to move to a single delivery of the day for residential customers and still have two deliveries a day for the heavy user business customers. We intend to pilot that early in the New Year. Now contrary to all the reports we have seen in the press which you ask about, actually the pilots are going to sort out what sort of things we want to do, what sort of things the customers want, what sort of things are sensible for customers, all that sort of stuff, and it is the pilots which will be very important in that process. We are going to work very closely with Postwatch particularly putting together those pilots and evaluating the work.

  149. It is interesting to say you will listen to what customers have to say and you will do a survey. Will it be slightly better than the survey that you carried out on Crown post offices where, yes, you do a survey but you ignore the view?
  (Mr Cope) We have done a lot of surveys already.

  150. Do you take on board what people say or do you ignore them? It seems to me your surveys are worthless.
  (Mr Cope) Not in this case, no.

  151. Not in this case but others were. The other point is, can I get it right that you said 90 per cent of people at the moment receive a second delivery?
  (Mr Cope) Correct, 90 per cent by mail volume.

Chairman

  152. Would be eligible?
  (Mr Cope) Yes.

Mr Hoyle

  153. The second part of this, seeing how you are cutting back on the services that you provide, what guarantees have we got of further services and what else can we expect to see withdrawn? What else is in the pipeline?
  (Mr Cope) We are not intending to cut back on services. What we are trying to do is make them more reliable and more efficient, I think something all our customers would like to have. We are moving services around to try and respond to customer demand and customer needs for sensible pricing, reliable services, those sorts of things.

  154. What are you looking at and what services have been considered for being withdrawn? What else is under the microscope?
  (Mr Cope) Nothing.

  155. There is absolutely nothing else under the microscope?
  (Mr Cope) Not of a major nature.

  156. The first part of my question, you have not touched on that. The gimmicks, picking up your mail from railway stations, how will that work? Are you pursuing that people have to pay extra for mail to be delivered before 9.30, in which case you are going back to having a second delivery?
  (Mr Cope) There will be some people who will want their mail delivered early and it is very important for them. Now in most cases we may be able to do that without charge and in some cases it may require a charge. It is this sort of thing that we are going to look at in the pilots, to see what the balance of advantage is for customers and for ourselves, because this is a commercial arrangement between ourselves and the customers, to work this sort of thing out. I do not know the answer to that yet. I will know it better when we have done the pilots.

  157. Can I just pursue that point because it is very, very interesting. Some customers may pay, some customers may not, so in a sense the universal service that we all benefited from or that we are all meant to benefit from may be reduced because I presume that people who want a 9.30 service in the urban areas will probably get it free, the likelihood is that those in the rural areas will have to pay. How do you decide who will pay and who will get it free?
  (Mr Cope) No, we will do it more by volume. You make a big assumption that we have decided people will have to pay.

  158. It is the only assumption you have given me.
  (Mr Cope) No, I have said it is an alternative.

  159. To what?
  (Mr Cope) To not paying. We do not know what the demand for such a service will be until we have done some pilot work. We do not know how we will be able to organise ourselves in the sense of the cheapness with which we will be able to do it. We do not know how it will work out in terms of the mail volumes coming through the network, all that sort of thing. That is what the pilots are all about. I think you are jumping to conclusions, which the press jumped to as well, that we are going to make people pay for the service. We have made no decision in that respect.


 
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