Select Committee on Trade and Industry Minutes of Evidence


Examination of Witnesses (Questions 200 - 202)

TUESDAY 11 DECEMBER 2001

MR PETER CARR, MR GREGOR MCGREGOR AND DR IAN LEIGH

Chairman

  200. Just before you finish, a couple of points. I think it is fair to say that you have obviously succeeded in getting under the skin of the Post Office in your remarks, the final accounts would suggest that. I was wondering what your relationship is with Consignia in terms of the information that they provide you with. Are they obliged under statute to provide you with information, and do you get it?
  (Mr Carr) I think that one could say that over the last few months there has been an improvement on one or two levels, on one or two subjects. For example, we have become concerned through complaints that we have received from customers and other methods of observation that the universal service is not being provided in certain parts of the country. We decided to focus our attention on the South and West region rather than covering the whole country, because clearly we are an organisation with a very small resource, to look at this to try and establish whether the Universal Service Obligation was being supplied. The initial reaction from Consignia was to say, first of all, the information did not exist and, secondly, when we showed that it did that it was too onerous and costly to get at it. Then eventually the excuse was it was not appropriate for us to be investigating this. We then threatened to use our legal powers under what is called Section 58, which means we were going to go to court and ask the judge to say whether it was reasonable or not, but they have a get out in the process that allows them to ask the regulator the same question. This was done and, unfortunately, last Friday we received the judgment of the regulator that he felt our request for 14 postcodes was too onerous and, therefore, we should confine our investigation to four in particular. That sort of thing is very sad because obviously, as we all know, delivering the universal service is a fundamental and primary requirement of the licence and duty of the operator. If the first time the consumer council comes along and asks the question he does not get supported by the regulator then that, I think, is very sad and questions the integrity of the licence and the regulator's commitment to the consumer.

  Chairman: I think it could also be explained away by the fact that this is still one last vestige of the old Civil Service culture which when they do not want to answer anything they always say it can only be provided at disproportionate cost. That is an answer which Members of Parliament when they table questions have often received in the past, so you are not alone in that if that is any consolation. On the other hand, you do have statutory powers to wind them up and sort it out.

Mr Hoyle

  201. Just one point, going back to something you said earlier. You were very concerned, and I understood the point you were making, about people and PIN numbers and being able to get benefits. Do you not believe that they will have the right to opt out if they want to be paid in cash? I was a bit concerned that the hint was that will not happen.
  (Mr Carr) My guess is it will be very difficult for it to happen because clearly the pressure is going to be on this change. It must be one of the most ill-conceived changes to take place because you know that the elderly and the disadvantaged eventually cease to exist and you let this thing come in gradually rather than forcing the pace so people do not get themselves into this situation. I have to answer your question, I do not know the answer to that. I would like to be able to sit here and say in the ultimate event if somebody says "I have an objection to having a bank account, I want my money in cash", I would like to think that would happen but I cannot tell you I know that.

  Mr Hoyle: It is just that every minister we have addressed and put questions to has always given us that guarantee. The first time that question has become shaky is following your answers today, so I am as worried as when we started off.

Chairman

  202. Just one last point, Mr Carr. One of the features of regulation has been the uneasy relationship between the regulators and the consumer councils, or whatever they were called. I think you and I probably feel that the regulator could have moved a wee bit faster in some areas but we do not necessarily need to go down that road at the moment. Could you give us any indication of how you get on with the regulator? Is that a constructive relationship? Is there a residual feeling that somehow the consumer watchdog is really doing a job that the regulators could do just as easily themselves? That used to be the view amongst some regulators.
  (Mr Carr) I must say when I took the job I wondered why they had the two. I can now see it but that may not be in perpetuity. I would say that our relationship with the regulator is good in parts. A lot of constructive work does go on and I must compliment the regulator particularly on the work they are doing on the Counters network, it has been very positive, very precise and very helpful. Therefore, my remarks do not apply to that part of their work. I suppose it is always going to be a difficult relationship because they do have to be seen to be doing things but they have an opportunity to rev up this industry by being strong and powerful and pushing things forward and making change happen. If you have only got one incumbent, like this one, which is a big huge machine, it really does need dynamite under it and, therefore, you have got to have a regulator that is so vigorous and active that change is forced upon the people. That does not happen and that is not a view that is shared. My concern is that this regulator is obsessed with process and less concerned with results because very little has happened since the licence was produced in March 2001. Half a dozen people have been licensed for one year only and that is not exactly competition. They probably add up to less than one per cent of the total market. We do not have a competition policy yet. We do not have a pricing policy yet. We heard on Friday, for example, that the compensation scheme, which we have worked on for six or eight months, which compensates people in the event of loss and damage, which we know are the two major reasons for complaint, is no longer possible, the way in which the licence has been written does not allow a compensation scheme to be introduced for damaged and lost mail. It is a blunder, an error, that the regulator has made in applying the Act into the licence. This is fundamental to consumers. These people have a right to be protected, they have a right to get their money back if the service they buy fails them. I do not see this passion and commitment to looking after consumers and making things change.

  Chairman: On that note, Mr Carr, I think we will finish. I think it is fair to say that we will be seeing you again before too long. Obviously we will have the regulator in as appropriate after Christmas when he has something to talk to us about of a really substantial nature, although I think the point you made is an important one. I anticipate that later in the year when we are having the Post Office in to discuss Horizon that we will be interested in getting your observations on what progress, if any, has been made on that and hopefully some of your worst fears will not have been realised, we will wait and see. Thank you very much.





 
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