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What if a company is asking you to deliver the parcel? If a person orders something online and the company cannot deliver it, it might ask Royal Mail to do it. Could the company impose a penalty on you if you failed to deliver it in the relevant timeframe, whether that was 24 hours or 48 hours?

I would also like to ask about the price of stamps. I think that I am correct in saying that it is Royal Mail that sets the price of a first-class stamp, whereas the price of a second-class stamp is still capped by Ofcom. At the moment, it costs £1.10 to send a standard first-class letter, whereas it costs 75p to send a second-class letter, which means that it is 35 per cent—or more than a third—dearer to send a letter first class. It seems that the price of stamps has increased quite dramatically. Do you think that the increase in price might be one of the factors in the reduction in the volume of letters? Particularly at Christmas, when we expect people to buy a high volume of stamps, there is a question whether £1.10 is still affordable.

We recognise that, in the UK, we have a very valued service, with a universal service obligation that other countries do not have. We also recognise that you reach every point of the UK, which is really important and is valued by people, too. However, there has been quite a big increase in the cost of a service that people regard as an everyday service, and the concern is that it has now become a special service that they use only on special occasions, because they are not prepared to pay the high cost. What consideration is given to such matters when you make decisions on the price of first-class stamps?

But if it is a card for a special occasion, that could take five days. It is recognised that second-class delivery is slower. I know that three days is the target, but it seems to be the case that second class is now quite a bit slower than first class.

As members have no further questions, that brings us to the end of this morning’s session. I thank both our witnesses for their evidence, which has been helpful to the committee.

Consumer Scotland is also doing a short investigation into Royal Mail. We had its representatives before us a few weeks ago; it is a new organisation, and I understand that it is considering Royal Mail services from a consumer point of view. I am not sure when that investigation is going to conclude, but it has shared with us some information, which I think is all in the public domain, on postcodes that are performing below the UK average.

We have talked about some of those areas today, but there are other ones that match them, and the area that I represent contains some of those postcodes that are below the UK average. Are those within Scotland affected by some of the issues that we have already discussed such as remoteness and difficulties in reaching areas? Are there other factors that explain why particular postcodes come up? The ones that are below average are DD, FK, IV, KA, PA and PH, while KY and ML are average. We have ones that are above average, too, but they are still not hitting the target that has been set.

As I said, we put out a call for evidence. The views reflected that people value Royal Mail and recognise the importance of the universal service, particularly for parts of Scotland. I am sure that members will touch on those issues.

We are not the first parliamentary committee to take evidence on Royal Mail; recently, Royal Mail appeared in front of the Business, Energy and Industrial Strategy Committee, which has led to an Ofcom inquiry into parcel deliveries. In evidence that we received, people said that they felt that service in some areas had fallen short of the current standards and that deliveries were happening on only a few days a week. That is a familiar story that we hear from our constituents; they feel that their letters arrive in a bundle and that parcels are prioritised over letters.

Ofcom looked at that during the pandemic and recognised that there was a legitimate reason why Royal Mail prioritised parcels in that period. However, the concern is that that has continued as a practice. Will you give us an update on the work that Ofcom has done? Has such a picture developed in Scotland?

Do you not think that that decline is partly to do with the cost? This is very anecdotal, but I know older relatives who th ink, “I’m not going to send a card any more, because it costs £1.10. I’ll send an email instead.” I know that £1.10 is the third of the price of a coffee, but the issue is the perception that people have. The increase in price is encouraging the shift to alternatives. Maybe it is the pace of the increase rather than the amount that is making people feel that they are not prepared to pay the cost. Is that not discouraging them from sending things first class?

Good morning and welcome to the Economy and Fair Work Committee’s 21st meeting in 2023. Apologies have been received from Colin Beattie, and John Mason is attending as a substitute.

I understand that this is likely to be Michelle Thomson’s last meeting with the committee. I thank her for her contribution to the committee and recognise the work that she has done on women in business and women’s representation, which are issues that the committee will endeavour to continue to highlight. I wish her all the best in her next committee.

Our first item of business is a decision on whether to take item 3 in private. Do we agree to take it in private?

Members indicated agreement.

I have a couple of questions. In 2019, you had a £1.5 million fine, which was to do with first-class-post delivery failures; I understand that part of the current Ofcom investigation is to do with performance; and, indeed, you recognised at the start that there was disappointment with current performance. When do you see us returning to pre-pandemic performance under the universal service obligation? I know that the Ofcom inquiry is on-going, and I do not think that a decision has yet been made whether a fine will be applied this time. When do you see pre-pandemic performance returning?

What about financial incentives for prioritising parcels?