Dave Thompson MSP

Dave Thompson MSP for Skye, Lochaber and Badenoch has cited the Royal Mail call on OFCOM for an early review to the workings of competition in postal services as a worrying development and is also very concerned to learn that Parcel Force, who are part of Royal Mail Group Ltd, are charging people in the Highlands and Islands more for their services.

The issue was brought to Dave’s attention by a constituent from Raasay Rebecca Mackay who was extremely disappointed to find out she would be charged an extra £6.60 to deliver to her home address, despite Parcel Force being part of the Royal Mail.

It appears Parcel Force are charging companies extra to deliver to the Highlands and Islands and those companies are taking the opportunity to pass this cost onto the customer. Parcel Force can legally do this as Royal Mail has set them up as a separate business wing of the Royal Mail Group Ltd. However, this has resulted in the USO not applying to Parcel Force deliveries.

Mr Thompson commented: "The Royal Mail Group Ltd has been created with a number of different business arms, which conveniently allows Parcel Force to get round the USO

Dave went on: “The Highlands and Islands being surcharged £6.60 to deliver in this zone is blatantly prejudicial to those who live in the Highlands and Islands and comes at a time when many are worried that Royal Mail might find some way to get round their commitment to the USO”.

He went further: “This highlights that the USO is far from safe and illustrates clearly what can happen when private competitive interests become part of a perfectly good public service”.

He concluded: “The USO is very important to my constituency of Skye, Lochaber and Badenoch and to Scotland as a whole, which is why I am pleased that the Scottish Government intends to bring the Royal Mail service in Scotland back into public ownership under independence”.

Note:

Briefing from Scottish Parliament Information Service (SPICe)

Thank you for your enquiry regarding the company Parcelforce, specifically whether or not they place a surcharge on delivery to the Highlands, and how this impacts on the Royal Mail’s Universal Service Obligation.

Parcelforce have a surcharge policy that covers a number of areas in the UK including the Highlands and Islands of Scotland. This is not always a flat fee and depends on a number of factors. The surcharge is not always added to the cost of delivery, and is dependent upon where the parcel originates. If a surcharge is added, £6.60 is the minimum surcharge applied to the Highlands and Islands zone. A full explanation of the surcharge zones, when a surcharge may be added and the relative cost of the surcharge is available here: http://www.parcelforce.com/sites/default/files/Surcharges%20PDF%20010812.pdf

A more detailed note of the postcode areas affected can be found here: http://www.parcelforce.com/send-uk/our-uk-prices/our-uk-delivery-zones

The Royal Mail Group Ltd can be thought of as an umbrella group, one that runs a number of different business arms including the Royal Mail and Parcelforce Worldwide. These businesses are separate entities that are managed within one group, and contracts that apply to one business do not apply to the other.

The company Royal Mail, not Royal Mail Group Ltd, is currently the designated provider of the Universal Service Obligation, and as such must ensure a uniform tariff for its services across the UK. As Parcelforce Worldwide is a separate business interest it is not considered the designated provider of the Universal Service Obligation. As such Parcelforce Worldwide can set rates however they choose to do so, including adding surcharges.

More information on the Universal Service Obligation is available here:

http://www.royalmailgroup.com/about-us/regulation/how-were-regulated/universal-service-obligation

Information regarding the businesses that operate under Royal Mail Group Ltd can be accessed here:

http://www.royalmailgroup.com/our-businesses/parcelforce-worldwide

If you have any further enquiries please do not hesitate to contact SPICe.