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Baroness Miller of Hendon: I have to tell the Minister that I am somewhat disappointed with his answer but not unduly surprised. I find it extraordinary that the Minister feels that the Government cannot put what I propose on to the face of the Bill. He is certain that it will be a matter for the regulator and will be in the licence when it is set out. Therefore, it will be there at some stage.

I find it extraordinary to rely on the fact that something will happen when one considers the words in the Government's own White Paper. We have a directive on the matter, yet we are left in the position that the Government hope that it will be in the licence. It may not be. I do not think that what we say here will have any effect on what the commission decides to put into the licence.

However, I shall read carefully the comments of the Minister. In the course of his detailed answer he mentioned that he thought the proposal would restrict competition. There is no way that any Member of the Committee sitting on this side of the Chamber would wish to restrict competition. We are all for competition. We believe that it is healthy and will make for a better service for the consumer using the services of the Post Office. Whether it is on the face of the Bill or goes into the licence, one would have thought the effect is the same. However, as I have said, at this stage I shall read carefully what the Minister has tried to persuade me to believe will be an excellent position. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Hendon moved Amendment No. 12:

The noble Baroness said: I suspect that this is the last amendment that I have tabled to Clause 4, but it is by no means the last amendment I am proposing to the Bill.

The considerable importance of the amendment is not reflected by its brevity. It brings the definition of a "relevant package" down from 20 kilograms to

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10 kilograms. In other words, it reduces the Post Office monopoly on packages up to 20 kilograms down to those up to 10 kilograms.

For the benefit of those Members of the Committee who, like me, still think in pounds and ounces, here we go again. Twenty kilograms is 44 pounds. That is the equivalent of the amount of baggage carried free on an economy-class flight. The proposal in the Bill is partially inconsistent with the EU postal services directive which fixes the figure at 10 kilograms but permits individual governments to increase the ceiling to what is proposed in the Bill; namely, 20 kilograms. As drawn, the Bill would subject commercial couriers to unfair competition.

A universal service provider, such as Parcelforce, would be able to cross-subsidise its delivery of packets and packages weighing up to 20 kilograms. I said that the importance of the amendment is not reflected by its brevity. The point I make is that 20 kilograms is an enormous parcel weight. I believe that it should be reduced to 10 kilograms. I shall be interested to hear the Minister's comments.

Viscount Goschen: Perhaps I may follow on from the comments of my noble friend Lady Miller and press the Minister to explain to the House how he would justify the figure of 20 kilograms. My noble friend put forward a powerful argument against having a band between 10 and 20 kilograms. There may well be equally powerful arguments for why that should not be so. However, there is an important issue here about the cross-subsidisation of parcels within the range of nought to 10 kilograms and from 10 to 20 kilograms. I look forward to the Minister's reply.

Lord McIntosh of Haringey: There certainly is a good reason. Let me repeat for the record that the Government are committed to preserving the universal postal service; that is, the delivery of letters and parcels to any part of the United Kingdom at a uniform tariff. We feel that that is enormously important and believe that the public feel it to be important also. That is why we enshrined the universal service obligation in legislation through the Postal Services Regulations 1999.

Amendment No. 12 would reduce the scope of the universal service from that proposed in the Bill. It would halve the maximum weight under the universal postal service obligation from 20 to 10 kilograms--I cannot remember how to work that out in pounds.

The point is that the EU Postal Services Directive allows the Government to extend the scope of the universal postal service for clearance, sorting, transport and distribution of postal packets from 10 to 20 kilograms; in other words, that is already envisaged in the directive and we are taking one of the options available to us. If we extend it in that way we allow domestic users to benefit to the same extent as those posting items to the UK from other member states.

The directive requires member states to deliver within their territories packages received from other member states up to 20 kilograms. When we made the

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postal services regulations in 1999 we took the view that there should be no discrimination between users on the basis of where they were posting packets. And we ensured that postal users in the UK would enjoy a right of universal service that was at the very least as good as that available anywhere else in Europe.

We did not want the situation where we could post to anywhere in the UK from outside the UK, elsewhere in Europe, at the same tariff, whereas, by dint of the 10 to 20 kilogram range being outside the universal postal service, there could be differential charges for different destinations within the United Kingdom. It is for that reason, fundamentally, that this amendment is not to the benefit of postal users and the Government cannot accept it.

Baroness Miller of Hendon: The Minister will not be surprised that I am somewhat disappointed by his reply. I shall read what he said and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Clause 5 agreed to.

On Question, Whether Clause 6 shall stand part of the Bill?

Lord McNally:

I gave notice of my intention to raise this question. I noticed, when reading the Bill, that in Clause 6 there is no reference to how a prosecution might start in Scotland. I am certain that it is intended that Clause 6 should have effect in Scotland. I believe this to be an almost wholly reserved matter and that no devolution issue arises here. I note that in the Explanatory Notes it is said that prosecutions in Scotland will be started by the Lord Advocate. Why therefore does it not say that on the face of the Bill? Or is it intended that the Scottish Parliament should legislate for this element of the Bill?

Lord McIntosh of Haringey: The answer is simple. We have a complicated system of a range of prosecuting authorities in England, Wales and Northern Ireland; in Scotland the system is very simple. In Scotland it is virtually only the Lord Advocate who can initiate prosecutions and therefore it is not necessary to say so in the Bill.

Clause 6 agreed to.

5.45 p.m.

Clause 7 [Exceptions from section 6]:

Baroness Miller of Hendon moved Amendment No. 13:

    Page 4, line 36, leave out ("£1") and insert ("50 pence").

The noble Baroness said: In moving Amendment No. 13, I shall speak also to Amendment No. 14. I am pleased to say that we have now reached Part II of the Bill and have left Clause 4 behind us.

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These amendments are designed to modify the Post Office monopoly by reducing the ceiling in value of money and weight where that monopoly exists. The amendments enable the Government to implement their own policy, which they have reversed since it was first announced.

On 16th September 1999 the Government placed an expensive display advertisement, seven inches by seven inches, in the Sunday Times, seeking candidates for the chairmanship of the postal services commission. It said,

    "the Government is granting the Post Office greater commercial freedom but is convinced that successful reform requires more than this. It requires greater competition in the postal market; already a major first step towards liberalisation has been taken with the halving of the monopoly currently enjoyed by the Post Office to 50p from April 1st 2000".

The Government laid an appropriate statutory instrument before Parliament in October.

On 8th December the Government tabled a Motion to revoke their own statutory instrument. The Minister for Competition had the embarrassment of trying to explain away that massive U-turn to the committee in the other place. He produced a reason which I can only describe as pathetic. He said that the Government had been persuaded by an "eloquent and persuasive argument" contained in a report of the Trade and Industry Select Committee, that the regulator should set the limits of the reserved area.

I described the reason as "pathetic" because the report of the Select Committee was published on 14th September 1999, having presumably been in the Minister's hands for some time before that. In any event, 14th September was two days before the advertisement which appeared in the Sunday Times and well before the Government's statutory instrument was first laid before Parliament.

It does not take a detective to see what happened to cause that U-turn. I believe it was pressure from the unions and the Government decided that that is what they would do. It is another example of the Government saying one thing and doing another. If and when the regulator changes the boundaries of the monopoly, the Government will be able to trot out their usual excuse, "Its not my fault, guv".

I turn now to Amendment No. 14. I believe that there is an even blacker cloud looming on this horizon. On 30th May it was announced that the Dutch Internal Market Commissioner at the EC is planning to reduce the monopolies enjoyed by the post offices of the 15 individual member states down to a nominal 50 grams. That is about one envelope and a couple of sheets of A4 paper. The chief executive of the Post Office, Mr John Roberts, reacted by pointing out that that proposal would jeopardise existing services, forcing it to charge more for mail delivered to remote areas. He said that the proposals would risk damaging postal services throughout the EC.

While the Conservatives support the greater liberalisation of postal services, we remain committed to the maintenance of the universal service obligation.

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My honourable friend, the Shadow Secretary of Trade and Industry in the other place, tabled numerous Questions today on this very point, one even asking the Secretary of State for Trade and Industry if he would support a levy on postal licence holders to create a fund to support the universal service obligation. We would not like to see domestic customers facing the higher prices that have been the case in some of the more, so-called, "liberalised" regimes elsewhere.

In view of the dire warning from Mr Roberts that I just quoted, I suggest to the Government that, although they and the unions--and perhaps many people--do not much like the present amendment that I have tabled, it might be better than nothing. It would reduce slowly and gradually the monopoly area, which is what the Post Office said that it could live with. I believe that it would be a very good thing to bring in certain disciplines. I suspect and very much hope that the Government will be able to tell us that they will push this directive aside for as long as they can, but, in the end, it will no doubt be brought forward. We must ensure that our Post Office is prepared for this development. If we protect the Post Office in a way that is too easy, we shall make its position very difficult. I believe that my amendment is just one step forward: it is not the giant leap that we may be ordered to take at some stage.

In its 1997 manifesto, the Labour Party said that,

    "effective competition can bring value and quality to consumers ... In utility industries"--

I assume that postal services could marginally be described as one of the latter--

    "we will promote competition wherever possible".

As I have already said, we admire competition, but we do not want it thrust forward in a way that makes it impossible for the Post Office to live within it. That is why we are reintroducing these two amendments that were introduced in the other place. We hope that the Government will be able to accept them. It would help to make life easier for the Post Office if they were to accept these modest amendments now, thereby preparing it for what might happen in the future. I beg to move.

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