Policy & Research

All member states of the European Union, including the UK, and the European Parliament, negotiate European Union Directives. They must be implemented through national legislation within a prescribed timescale. Member states can go beyond the standards set out in the Directive but must comply with Directives. 

There are three EU Directives covering postal matters (Directive 97/67/EC, Directive 2002/39/EC and Directive 2008/06/EC), and three related UK Acts (Postal Services Act 2000, Enterprise Act 2002 and Consumers, Estate Agents and Redress Act 2007). 

EU Directives

Directive 97/67/EC 

The 1997 Directive set up a new EU framework for the regulation of postal services, which aimed to improve the quality of European postal services. Key to this was opening up the postal sector to competition by setting common limits for services reserved for the universal service provider(s) in each member state and ensuring the provision of the universal service by defining the minimum characteristics of the universal service to be guaranteed by each member state. 

The main requirements of the framework created by the 1997 Directive were that: 

• all member states should provide a universal postal service comprised of at least one delivery and collection on at least five days a week and a registered and insured service
• the maximum part of the market reservable for the universal service provider (USP) in each member state is 350g in weight or five times the basic tariff of an item of correspondence
• member states can establish authorisation procedures, which may include individual licences in the universal service area and a compensation fund
• member states shall ensure that users have good access to the postal network, and that this access should be transparent and non-discriminatory
• USPs should consistently apply transparent and separated cost accounting principles and provide separate accounts for reserved and non-reserved universal services and non-universal services
• quality of service targets for cross border mail are set (85 per cent for three days after delivery, 97 per cent for five days after delivery for the fastest standard category of service) and member states are required to define compatible national targets
• member states must ensure that adequate consumer protection measures are in place, particularly with regard to complaints and redress procedures
• member states should establish one or more national regulatory authorities independent from the postal operators
• a timetable is established for decision-making on further opening of the market to competition with a view to creating a single market in postal services by 2009

Directive 2002/39/EC 

On June 2002, the European Parliament and the Council formally adopted the Postal Directive (2002/39/EC), which amended the 1997 Directive. It required the European Commission to submit a report to the European Parliament and the Council by the end of 2006 assessing 2009 as an appropriate date for full market opening across the EU. The maximum area that could be reserved to a universal service provider was decreased to 100g from 1 January 2003 and to 50g from 1 January 2006, the intention still being to introduce full market opening when the Directive expired on 31 December 2008. 

Directive 2008/06/EC 

On 20 February 2008, the European Parliament and the Council adopted the Directive 2008/06/EC, which amended the initial Postal Directive 97/67/EC as amended by Directive 2002/39/EC by defining 21 December 2010 as a final step in the process of gradual market opening for the majority of member states. For some states this date has been extended until 2012, with a temporary reciprocity in such cases. 

UK Acts

Postal Services Act 2000 

Prior to the implementation of the1997 Directive, the UK postal service sector was governed by the Post Office Acts of 1953 and 1969 and the Telecommunications Act 1981. This legislation set out the responsibilities of Government towards postal services and gave the Post Office its powers and duties. 

The Postal Services Act 2000 (PSA) implemented the 1997 Directive in the UK. The UK took a different approach to the 1997 Directive than other member states. Rather than establish a ‘reserved area’ as required by the Directive, the PSA created a ‘licensed area’ for items weighing up to 350 grams or costing £1 or less. This licensed area remained a monopoly for Royal Mail as the Universal Service Provider.

The 1997 Directive also required the establishment of an independent regulatory authority, and the PSA created Postcomm to regulate the licensed area and protect the universal service. It went further and also established Postwatch, an independent statutory organisation, to represent, promote, and protect the interests of postal service users. Outside the licensed area, the PSA did not place any restrictions on the services that could be provided. However, the conditions of licences granted to operators in the licensed area could apply to their postal operations outside the licensed area and all operators had to abide by general competition law. 

Additionally, the Post Office was converted from a statutory corporation to a public limited company, whose sole shareholder was the Government. Statutory Instrument 2002 No. 3050 amended the PSA to take account of the changes required by EU Directive 2002/39/EC. 

Enterprise Act 2002 

This enabled consumer bodies designated by the Secretary of State to submit ‘super-complaints’ to the Office of Fair Trading (OFT) which then considered whether any market feature, or combination of features, such as the structure of a market or the conduct of those operating within it, was, or appeared to be, significantly harming the interests of consumers. Postwatch became a designated body in 2005, and this status was renewed in 2006. 

Consumers, Estate Agents and Redress Act 2007 

This provided for the merger of the three consumer bodies sponsored by the Department of Trade and Industry (Postwatch, Energywatch and the National Consumer Council) into a new statutory National Consumer Council (Consumer Focus).