Part II Licences for Postal Services
Section 6: Restriction on provision of postal services
19.The Post Office currently has the exclusive privilege of delivering letters within the United Kingdom with a value of less than £1 or weighing less than 350 grams and it is an offence to infringe the privilege.
20.Under the Act, the monopoly will be replaced by a system of licensing. Licence holders will be able to convey, in accordance with the terms of their licence, letters worth less than £1 or weighing less than 350 grams (see section 7). Subsection (2) makes it an offence to convey letters without the necessary licence.
21.Subsection (1) establishes that no person shall convey a letter without a licence granted by the Commission. Exceptions to this prohibition are set out at section 7.
22.Subsections (2) to (5) create three methods of enforcing the prohibition in subsection (1). The first is to bring criminal proceedings for an offence under subsection (2). The second is to bring civil proceedings for an injunction interdict or other appropriate relief or remedy under subsection (4). Criminal prosecutions can only be instituted by or on behalf of the Commission or the Secretary of State or, in Scotland, will be dealt with by the Lord Advocate. (The Lord Advocate generally controls prosecutions in Scotland.) Civil proceedings under subsection (4) may be brought by, or on behalf of, the Commission or the Secretary of State. There is also provision in subsection (5) enabling civil proceedings to be brought by any person who suffers loss or damage.
23.Subsection (6) makes clear that conveyance for the purposes of section 6 and section 7(1) includes the incidental acts of receiving the letter, collecting or delivering it.
Section 7: Exceptions from section 6
24.Section 7 sets out exceptions from the general prohibition in section 6(1).
25.Subsection (1) exempts letters conveyed for a payment of not less than £1 or weighing not less than 350 grams.
26.Subsection (2) sets out further detailed exceptions. They include activities currently exempted as “class licences”, such as the document exchange system used by lawyers and other professionals. The section then defines exactly what is meant by these exceptions.
Section 8: Power to modify section 7 by order
27.Section 8 allows the Secretary of State acting on the recommendation of the Commission to modify by order section 7. This could, for example, be used to add a further exception to the general prohibition or modify the value or weight specified at section 7(1)(a) and (b). Such an order would be subject to approval by a resolution of both Houses of Parliament. Where the Secretary of State has received a recommendation from the Commission to amend the reserved area and the Secretary of State does not act upon it, he must place a report containing his reasons before Parliament.
Section 9: General power to suspend the restriction
28.Under section 9 the Secretary of State may, on the recommendation of the Commission, suspend the operation of section 6 and allow any person to convey letters.
Section 10: Emergency power to suspend the restriction
29.Under section 10 the Secretary of State may in the national interest suspend the licensing regime for a time-limited period not exceeding six months. Non-licensed persons would then be able to convey letters within the reserved area without penalty.
Section 11: Licences: general
30.Section 11 allows the Commission to grant licences authorising the licence holder to carry out the activities described by the licence. To that extent the general prohibition in section 6(1) does not apply to him.
Section 12: Licences: grant
31.Section 12 details the procedures that must be followed before a licence is issued including provisions about giving notice and receiving representations.
Section 13: Licences: conditions and other provisions
32.Section 13 gives the Commission the authority to include in a licence such provisions as it considers appropriate, including provisions which do not relate to anything authorised by the licence (including, for example, the provision of all or part of a universal postal service). Under subsection (4) the Commission must consult a person who is to be granted a licence about the conditions it intends to include in their licence.
Section 14: Modification of licences by agreement
33.Sections 14 – 21 provide a system for licence modification, similar to that seen in utilities regulation. Section 14 allows for licence modifications to be made by agreement between the licence holder and the Postal Services Commission. Before making any such modification the Postal Services Commission must publish a notice stating what the modifications are, the effect of them and the reasons for them and serve copies on the Secretary of State, the licence holder and the Council. Under subsection (5) the Secretary of State may direct the Postal Services Commission not to make a proposed modification if he considers that the modification should be made, if at all, following a Competition Commission reference under the procedures in this Part.
Section 15: References to the Competition Commission
34.Section 15 allows the Postal Services Commission to make references to the Competition Commission requiring the latter to investigate and report on whether:-
matters specified in the reference and which relate to the provision of postal services whose provision is authorised or required by a licence operate against the public interest or may be expected to do so; and
if so, whether the effects adverse to the public interest which the matters have or may be expected to have could be remedied or prevented by modifying conditions of the licence.
35.The Postal Services Commission may vary the terms of a reference. They may also specify what adverse effects they believe matters specified in the reference may be expected to have and any modifications of the licence by which it considers that those effects could be remedied or prevented. The Postal Services Commission shall give the Competition Commission any related information or assistance that it considers appropriate or which has been requested by the Commission.
Section 16: Reports on references
36.Section 16 provides that the Competition Commission shall make definite conclusions on the matters referred to it, and specify remedies where appropriate. The Competition Commission’s report shall be made to the Postal Services Commission who shall, if required to do so by the Secretary of State, exclude from the published report such matters he believes may be against the public interest or the commercial interest of a person.
Section 17: Modification following report
37.Under this section, where the Competition Commission has identified matters operating against the public interest and concluded that remedies could be made by licence modifications, the Postal Services Commission shall make such modifications to the licence conditions as it considers appropriate for the purpose of remedying or preventing the adverse effects specified in the report.
38.The Postal Services Commission shall give notice of its intended modifications. After this the Postal Services Commission shall make such modifications if after four weeks the Competition Commission has not issued a direction under section 18.
Section 18: Power of intervention of the Competition Commission
39.This section allows the Competition Commission the power to direct the Postal Services Commission not to make modifications under section 17 if it considers that the modifications proposed by the Postal Services Commission are not appropriate for the purpose of remedying or preventing all or any of the adverse effects specified by its report. Under subsection (5) of this section the Competition Commission may make its own licence modifications.
Section 19: Procedural requirements in relation to modifications
40.Section 19 sets out the procedural requirements for licence modifications following a report by the Competition Commission.
Section 20: Application of competition legislation to references etc.
41.Section 20 provides for the application of competition legislation to references. The purpose and effect of this section is to ensure consistency between the Competition Commission’s procedures in relation to a reference under this Part of the Act and with its procedures in relation to its (relevant) functions under competition legislation. For example, it deals with the treatment of witnesses and documents, time limits on reports and penalties for false and misleading information. Details of these provisions are set out in the relevant legislation and not in this Act.
Section 21: Modification by order under other enactments
42.Section 21 allows for the modification of licences as a result of investigations and reports under the Fair Trading Act 1973.
Section 22: Final orders
43.Sections 22-29 lay down the powers of the Commission to make final and provisional enforcement orders in relation to breaches of licence conditions, and the procedures to be followed. Under section 22, final orders may be issued where the Commission is satisfied that a licence holder is contravening any condition of his licence or is likely to do so. An order makes such provision as is needed to secure compliance with the licence condition and shall require the licence holder to do, or not to do, such things as specified.
Sections 23 and 24: Provisional orders
44.Where the Commission is not satisfied, but nonetheless it appears to the Commission that there is or is likely to be a contravention and that an order should be made, it may impose a provisional order lasting up to 3 months. If the Commission is subsequently satisfied, it shall confirm the provisional order.
Section 25: Exceptions from the duty to make or confirm enforcement orders
45.This section provides that the duty to make orders does not apply where the duties imposed under sections 3 and 5 on the Commission preclude it from doing so, the licence holder has agreed to take and is taking all the steps that the Commission considers appropriate, or the contraventions are trivial.
Sections 26 and 27: Procedural requirements
46.These sections set out the steps the Commission must follow when making orders, such as notice provisions.
Section 28: Validity of enforcement orders
47.This section allows a licence holder to whom a final or provisional order relates to appeal to the court on the grounds that the making of the order by the Commission was not within their powers under sections 22, 23 or 24 or that any of the requirements of sections 26 and 27 were not met. The court may quash the order.
Section 29: Effect of enforcement orders
48.Section 29(1) makes it a duty of licence holders to comply with a final or provisional order.
49.Section 29(6) makes it clear that if the Commission brings civil proceedings to enforce a final or provisional order, it shall not prevent others with a right to claim from bringing their own actions against the licence holder.
Section 30: Financial penalties
50.Section 30 gives the Commission power, where it is satisfied that a licence holder has contravened or is contravening a condition of his licence, to impose a penalty on the licence holder. The penalty must be of such amount as is reasonable and is limited to a maximum of 10% of the turnover of the licence holder determined in accordance with provisions to be specified in an order made by the Secretary of State.
Section 31: Statement of policy in relation to penalties
51.Section 31 provides that the Commission shall after consulting the Council and others prepare and publish a statement of their policy in relation to the imposition of penalties and the determination of their amount.
Sections 32 and 33: Penalties
52.Sections 32 and 33 lay down the procedures the Commission must follow before imposing a financial penalty including giving notice and allowing for representations, and procedures that may follow from the notice including variation of penalties.
Section 34: Time-limits on the imposition of penalties
53.Section 34 sets out time limits on the Commission’s ability to impose financial penalties.
Sections 35 and 37: Interest and payments by instalments; recovery of penalties
54.Sections 35 and 37 cover the payment of interest on unpaid penalties and the recovery of unpaid penalty payments.
Section 36: Appeals
55.Section 36 allows licence holders to appeal against penalties to the court (the High Court in England and Wales or Northern Ireland or the Court of Session in Scotland). The court may quash the penalty or order a reduction in the penalty or in certain cases substitute a different date for payment of the penalty.
Section 38: Register
56.Section 38 requires the Commission to keep a register of licences, licence modifications, revocations and surrenders, directions, determinations, consents and approvals given under a licence, the terms of final and provisional orders and revocations, and penalties imposed. Safeguards are provided to ensure that as far as practicable matters relating to the affairs of a person are not entered in the register if that could be seriously prejudicial to that person’s interests. In addition, the Secretary of State may direct the Commission not to make an entry where it would in his view be against the public interest or a person’s commercial interests to do so. The register is to be available to public inspection, and copies may be obtained, subject to a reasonable fee.
Section 39: Recovery of costs of the Council etc.
57.Section 39 enables the Secretary of State to direct that licence conditions shall include paying for the Consumer Council and its start up costs. It also enables the Secretary of State to direct the Commission in any matter falling to be determined under such a licence condition.
Section 40: Directors’ remuneration
58.Section 40 requires companies which are also licence holders under the Act to disclose the links, if any, between the achievement of service standards in the activities covered by their licence and the remuneration of their directors. If no such links exist, this must also be disclosed. The section sets out the criteria for determining whether a licence holder must comply with the provisions of the section and the disclosure requirements which then apply. The requirement to disclose what links, if any, exist between service standards and remuneration is intended to encourage companies to establish and strengthen such links and to stimulate improvement to service standards.
Section 41: Free services for the blind and partially sighted
59.Section 41 gives the Secretary of State powers to direct the Commission to impose a licence condition requiring the licensee to provide free postal services for blind or partially sighted people. The Secretary of State shall consult the Commission and the Council before giving any directions. The section is designed to ensure the continuation of existing non-statutory practice by the Post Office who convey certain items, known as Articles for the Blind, free of charge for blind and partially sighted people.
