Royal Mail Welcomes BIS Committee’s Call For Greater Powers For Ofcom To Protect The USO

Royal Mail welcomes the BIS Select Committee’s report (Competition in the postal services sector and the Universal Service Obligation) and its finding that Ofcom has to recognise its over-riding obligation to ensure the protection of the Universal Service Obligation (USO) and that the regulatory framework may need to change to ensure this.

As Royal Mail set out in its 2014 submission to Ofcom, we share the Committee’s concerns that, while the USO is not under immediate threat from cherry picking competition, this could change quickly, given the ambitions of some direct delivery competitors. We also share the Committee’s concerns that Ofcom may not be able to respond fast enough to avoid a failure in the Universal Service, even in the short term. The Committee’s call for a quarterly update from Ofcom on the state of the Universal Service and any action it is proposing is therefore helpful.

Royal Mail also welcomes the Committee’s contribution to the important debate around standards of employment and consumer protection in the postal market. We endorse its recommendation that the Government considers extending Ofcom’s remit to include consideration of labour costs, conditions and standards in the postal sector.

Lastly, we recognise and accept the Committee’s finding that Royal Mail has done much to improve efficiency, but there is still more for us to do to match the most efficient postal operators. We are continuing to invest in our business transformation programme and are becoming even more efficient.