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Baroness Miller of Hendon moved Amendment No. 12:

("(6) The power to make regulations under this section shall be exercisable by statutory instrument.

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(7) No regulations shall be made under this section unless--
(a) a draft of the regulations has been laid before the House of Commons together with a reasoned statement from the Treasury confirming that, in its opinion, the regulations, if made, would not distort competition in the provision of postal services; and
(b) the draft regulations are approved by resolution of that House.").

The noble Baroness said: My Lords, I believe that this is the third time that we have debated this issue. I hope that that will show the Minister the seriousness that we attach to the amendment. When the clause was debated for the first time in Committee, I pointed out that the commercial courier services would be at a severe disadvantage vis-a-vis the Post Office because of new procedures being imposed by Customs and Excise regarding the clearance of packages to and from this country.

I shall not trouble your Lordships this evening by repeating the details, but at the very least the commercial concerns will be forced to do their pick-ups for goods consigned abroad at a much earlier time in the evening which will adversely affect their highly competitive, next-day delivery round the world. The extra paperwork will cost millions of pounds over a period to implement, aside from creating the problem of recruiting and training staff to do all the computer input.

Four major express operators have ascertained that it will cost them £5 million every year to implement these new procedures and to no object from the point of view of either security or increasing the tax revenue. As far as can be seen, it is simply to facilitate the Customs and Excise administration. The Minister previously told the House that this was an international issue and that a study was being conducted by the World Customs Organisation, the Universal Postal Union and the International Express Carriers Conference. Unfortunately, he could not tell my noble friend Lord Caithness when those deliberations would reach a conclusion. I am far from hopeful of an early decision.

It took the best part of a generation for the Universal Postal Union to establish itself and for the respective countries to enact the necessary legislation. We have to deal with the matter for the benefit of our own carrier industry here and now. If the international negotiations eventually reach a conclusion, then, as with any other form of treaty, the Government can introduce the necessary legislation to implement it. The other parties to the negotiations are not currently enacting the postal services legislation, so they will have to create their own new legislation in due course.

In his reply to my amendment, the Minister also said--presumably with the authority of Customs and Excise--that they had no wish to impose undue financial or administrative burdens on anyone or to distort competition. I am most grateful to the noble Lord for those fine words. But as they have been told in the course of the vigorous representations that the industry has made to them, that is precisely the effect that their current proposals will have. It is not too late for them to reconsider, because imposing these

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procedures on everyone, except the Post Office, will distort competition. It is certainly not a level playing field.

The other matter I wish to raise is the information that is required. Again, I also raised the issue on Report, when the Minister commented:

    "Customs are clear that the information called for will in no way exceed that provided at present".--[Official Report, 29/6/00; col. 1136.]

I faxed a letter to the noble Lord on 5th July to inform him that I had been advised by the express operators that that does not appear to be the case. Of course, I shall not go into a detailed breakdown at this point, but my letter also gave details regarding what Customs are now requiring under the so-called "simplified procedures", which do not look much more simplified to me.

However, the question as to whether Customs require more information cannot, I suggest, be relevant to the central issue. The core issue is, as the Minister himself stated, that there are two types of traffic that partly reflect the difference in the Customs' treatment. But from the figures that the Minister supplied in a Written Answer on 29th June and from the Parcelforce advertisement--as well as from a cursory look at its Internet site, as I informed the Minister--it appears that the company actively sells rapid guaranteed deliveries around the world. It clearly competes head to head with the express industry.

I can do no better than to quote my noble friend Lord Freeman, who summarised the situation so well in our debate on Report when he said that,

    "if there is no distortion in competition, as the Government have argued, there can be no problems in ensuring that Parcelforce and the public sector abide by and are governed by exactly the same Customs and Excise regulations and new procedures as is the private sector".--[Official Report, 29/6/00; col. 1135.]

I received a fax this afternoon from the Minister containing three points, which no doubt the noble Lord will remake in his reply. The first is that this provision only brings the Customs and Excise powers up to date to reflect the modern postal services required. But why does that not apply to the Post Office? Why not adopt a minimalist approach to help to reduce red tape?

Secondly, the Minister stated that the matters are under discussion with the trade association and cannot be settled before 3rd August, which is too late for the Bill. All we want is an assurance from the Minister that the independent carriers will not be at a disadvantage vis-a-vis the Post Office. If the matter is not settled before the Bill is passed, the independents will not have a leg to stand on.

Thirdly, the Minister stated that the date required is mandatory under the EC agreement. Will the Minister confirm that that applies to the state-owned Post Office as well as to the express companies?

The amendment that I propose simply ensures that regulations made under the clause should be scrutinised by the other place before they come into effect, as I believe should be the case as they involve

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fiscal issues. That would give the other place the opportunity to ensure that the Treasury, in seeking such approval, was not distorting the competition in postal services or imposing undue financial burdens, both consequences having been disclaimed by the noble Lord on behalf of Customs and Excise. I am afraid that those who advise me do not think that is the position. I beg to move.

Lord Sainsbury of Turville: My Lords, as I stated in the fax, the provisions contained in the Postal Services Bill that apply Customs legislation to postal packets do not give Customs greater powers than they have at present. Clause 105 merely re-enacts and updates the provisions contained in Section 16 of the Post Office Act 1953. It gives the Treasury, on the recommendation of the Secretary of State and the Commissioners of Customs and Excise, the power to make regulations specifying how the legislation should apply. This power has been amended only in so far as it is necessary to reflect the changing market conditions by changing references to the Post Office to postal operator. It is intended only to maintain the powers that Customs and Excise currently enjoy and operate.

The regulation-making power contained in Clause 105 was included in the Department of Trade and Industry's memorandum to the Lords Delegated Powers and Deregulation Committee, dated 2nd May. The committee, in its seventeenth report, dated 24th May, did not find it necessary to comment on the use of the negative resolution procedure in the case of this power. In fact, it considered that no amendment was necessary to either the delegated powers in the Bill or to the parliamentary control provided by those powers.

I now turn to two distinct issues which the noble Baroness, Lady Miller, has raised. The first concerns whether there is unfair treatment by Customs of express courier companies and the supposed advantages enjoyed by the Post Office. However, the different treatment of the two groups reflects the different arrangements that are put in place by the two different international bodies that govern these arrangements. The differing arrangements arise because the legal bases are different. The arrangements for postal traffic are based on international agreements, made under the auspices of the Universal Postal Union and the World Customs Organisation. These provide standard Customs declaration forms for postal traffic which serve as both the exporter's declaration and the import declaration in the country of arrival. EC agreements confirm that these are the only declarations required for the vast majority of postal packages.

The arrangements for express carrier traffic, on the other hand, follow the EC provisions for general import and export trade--specifically the EC Customs Code and its implementing regulation. These provide for a different form of Customs declaration. We have little room to act alone--changes can come only with international agreement. As I said before, the World Customs Organisation, Universal Postal Union and

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the International Express Carriers Conference are jointly undertaking a study to compare Customs procedures for postal and express carrier traffic. Recommendations will be considered by the WCO and UPU and decisions will be incorporated into international agreements. I cannot give a time when that will occur because no time limit has been set. I share the pessimism of the noble Baroness that this will not occur quickly.

Fair competition between the postal service and express carriers is also an issue in the USA. There, too, the express industry has made representations that there should be a level playing field with the same Customs requirements being imposed on both kinds of traffic. The House of Representatives sub-committee on Postal Services commissioned a fact-finding report on competitive concerns with particular reference to Global Package Link, an international parcel post service. The report of June 1998 did not contain recommendations but recognised that the post and express carriers faced different Customs requirements and obligations, both in the USA itself and in other countries which formed part of the study, including Canada, Japan and the UK. The report recognised the international dimension of the problem and noted that legal changes in the USA alone, even if permitted by international agreements, would be of limited benefit.

The noble Baroness referred to the new export system. This is required to enhance the effectiveness of Customs controls. The existing export system is largely manual with exporters or carriers presenting Customs with paper declarations. These arrangements are becoming increasingly ineffective as trade and the amount of paperwork increase year by year. If the system is not modernised, either the service delivered by Customs will deteriorate or exports will be subject to delay. Maintaining dual manual and electronic systems will be a burden on both the trade and Customs and will require more resources. Electronic processing will provide positive benefits for the majority of exporters and is in line with the Government's commitment to keep pace with developments in electronic commerce.

Customs are currently in discussion with the Association of International Courier and Express Services (AICES) about features of the system which they claim to be unduly onerous. These discussions are making good progress and there is every prospect that solutions can be found which will be acceptable both to express carriers and to others involved in exporting.

The noble Baroness wrote to me on the information requirements and provided me with examples of the current system and the future one. I have looked into the matter in great detail. The lists of requirements are not comparable. The first list of the noble Baroness omits some requirements; the second list deals with a situation which allows for local clearance and aggregation. That concession has been made by Customs to the express carriers and there is a longer list of requirements in those different circumstances.

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Customs have assured me that the information called for will not materially exceed that provided at present and is the minimum required under EC agreements. For low value (that is, less than £600) non-sensitive goods or those which are of no statistical significance, Customs are asking only for a single summary declaration per aircraft, for each of these two categories, which will include the total value and number of items covered by the declaration. This will cover several hundreds of consignments. There will be no need for individual eight-digit tariff codes to be supplied. This accounts for between 70 and 80 per cent of exports by express carriers.

As I indicated earlier, discussions are already taking place with AICES. However, I note the concerns which the noble Baroness has so eloquently presented and I therefore propose that they be the subject of an urgent meeting between AICES and senior officials in Customs and DTI, where there is every prospect that further acceptable solutions can be found. On that basis, I ask the noble Baroness to withdraw the amendment.

6.30 p.m.

Baroness Miller of Hendon: My Lords, I have learnt a very salutary lesson from the Minister today--that is, that it is a big mistake to bring something back at the third attempt, when there is no chance to study the Minister's reply and to come back at yet another stage. As I was listening to the Minister I came to the conclusion "That wasn't such a good point", "That wasn't a bad point"--and then, all of a sudden, he went on to something completely different and I shall not have the benefit of reading what he said before making a decision as to what to do.

As regards the question of the paper and electronic mandates, the point I was trying to make is that it would be an unfair playing field if one group of companies--that is, the express postal operators--had to switch to the electronic system and the Post Office did not. From what I can recall--I said it in my speech--the core issue is that the Minister said that there were two different types of postage: one was electronic express and one was not. The point that I was trying to make from the Written Answers to the Written Questions that I tabled some time ago deliberately to tease this out, is that I think they will meet head-on with each other in competition. I do not see where they are so very different.

Perhaps I may ask the Minister to explain again that issue to me. It is absolutely core as to whether or not the Post Office should be exempt from the burdens under which other express postal operators have to work.

The Minister suggested that he is willing to call an urgent meeting with his department and people from AICES and so on to deal with this matter. I said that if he could give me some kind of assurance--I am trying to find where I said it so that I can quote the exact words, but I cannot--that the express postal operators will not be at a disadvantage, I would feel much better about the situation. Unless he can clarify

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for me that there are two different kinds of post and that the other express postal operators will not be disadvantaged--as they have assured me on numerous occasions that they feel they are--I may have to take a different approach from the one the noble Lord has asked me to take in regard to withdrawing the amendment. As I shall not have another chance to come back on this issue, I must feel relatively content about it--although I could not go through the whole of that speech again; it went in one ear and by the end it had gone out of the other, I regret to say.

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