End of business adjournment debate (Commons) on Delivery Charges: Scotland - Mar 7

Douglas Ross (Moray) (Con)

I am delighted to have secured tonight’s Adjournment debate on an important topic for my Moray constituents. The Minister has already put in a great shift at the Dispatch Box today, and I apologise for delaying him further. However, in my article in The Northern Scot this week explaining to my constituents that I was having this Adjournment debate, I said that hopefully we would get to it quicker than last Monday’s, which started at 1.07 am, so we have done a little better already.

If the Minister wants to blame anyone for being here at this hour, he should blame the Treasury. I originally secured this debate on the use of red diesel at ploughing matches, but I am very pleased that the Minister, who was perhaps worried about what might come out in an Adjournment debate, agreed to change excise notice 75 to ensure that ploughing matches in Moray, across Scotland and in the rest of the UK will no longer be subject to the potential change. I am delighted that we got that without an Adjournment debate—no pressure, Minister, but I now expect everything I ask for this evening to be delivered.

Alberto Costa (South Leicestershire) (Con)

I congratulate my hon. Friend on securing this debate. He talks about blaming someone for our being here at this time of the evening. May I ask his view? This is an important debate affecting the good people of Scotland, yet on the Opposition Benches I see no hon. Member from the nationalist party. Does that not demonstrate to the people of Scotland that the important topic that he is raising is simply being ignored by nationalist MPs?

Douglas Ross

Well, that is for others to decide, but I am grateful to my hon. Friend, who is a fellow member of the Select Committee on Scottish Affairs.

Before my hon. Friend and I joined the Committee, it had looked at this issue. I have also secured Westminster Hall debates on it, including one that the Minister responded to 15 months ago, and I have raised it at Prime Minister’s questions. I know that it concerns Members across the House and our constituents, particularly those of us in the north of Scotland and the highlands and islands, and I make no apology for raising it again.

The surcharges on the delivery of products bought by people in Moray and across many parts of Scotland are punitive and unfair and have been going on far too long. Businesses and couriers are treating my constituents and the people affected with utter contempt. It is completely wrong, and something must be done. To put into perspective how many people the issue affects, a Scottish Parliament briefing paper suggests that 440,000 people in Scotland live in areas affected by the surcharges. To put that into context, the same report says that 87% of adults in the United Kingdom buy online. That figure rose as high as 95% during the pandemic. That means that a big number of shoppers—95% of 440,000 people—are being punished not for what they want to buy, but because of where they want to buy from.

It is absolutely wrong that the issue is raised time and again, but no action seems to be taken by the businesses or the couriers to deal with the problem. The Scottish Parliament Information Centre’s report says that the additional cost of delivery charges in commonly affected areas, compared with the rest of Scotland, is £45 million. That is £45 million that someone has to pay because they live in Moray, Inverness or one of many areas north of Perth—not the cost of the products, but the cost to deliver them.

I would like to give some examples from my constituency, and one from slightly further afield, that I have been dealing with as the local MP. I have made it very clear that I want constituents to tell me when they have faced such problems, because I want to stop them. The only way we will stop them is by highlighting the injustice, highlighting the unfairness of the system and trying to get some action. I am glad that some action has been taken. The Advertising Standards Authority has issued several enforcement notices in cases that I have referred to it and in many others. Indeed, the Minister and I discussed that in our previous debate, but let me give just a few examples.

A constituent in Mosstodloch purchased a wallet with no delivery charge advertised, yet when it came to the checkout online £15 was added. The ASA issued an enforcement notice on that company, because it had advertised no additional charges to mainland United Kingdom. A Findhorn resident tried to order a battery for a strimmer and was told it would be £30 to deliver to the IV36 postcode, which was almost more than the cost of the battery itself. Another constituent in Dyke was quoted £15 to order a tap for his motor home, even though free UK delivery was advertised. Dyke, in Moray, is part of the UK. How do these companies not get it? Why do they think that somehow we are cut off? We are not—we are part of the mainland UK. Therefore, if they advertise “free delivery to mainland UK”, whether for a tap for someone’s motor home or for something else, the person deserves to get free delivery to mainland UK. A constituent from Forres ordered goods worth £89 and the company was offering free delivery on orders over £40. She put in her IV36 postcode and the delivery charge rose to £117. So from free delivery for purchases of over £40, for her purchase of £89 it then became £117. Unfortunately, on this one, the ASA stated that because the company did not say that the free delivery applied to the whole of the UK, it was not able to take action. I would be interested to hear the Minister’s thoughts on that. Free delivery was being advertised, but just because the company did not say it was to the whole of the UK it got away with it.

Another constituent from Findhorn had ordered £155-worth of specialist pipe insulation. Normal delivery was going to be £9.95, but they entered their IV36 postcode and an additional £40 was added, taking the total delivery cost to £50. In this case, the ASA did issue an enforcement notice, and I am pleased to say that the constituent got a full refund from the company. It accepted that it had done wrong in this case, even though it applied the charge in the first place. Another constituent put in an order for some garden equipment and although free UK mainland delivery was advertised, they were asked to pay a surcharge of £24 for “Scottish highlands”. We are not in the Scottish highlands. There is a Highland Council region, and Aberdeenshire and Aberdeen regions. Moray is a region on its own, yet we are again lumped in with the highlands. Finally, a product was ordered by one of my constituents in Elgin and they were told that the delivery charge was going to be £149.95. They then changed the address to that of a relative in Rothes, which is about 10 miles from Elgin and has an AB postcode, and there was no delivery charge whatsoever. So by travelling 10 miles within Moray one can go from a charge of almost £150 for delivery to having no charge at all. That just highlights issues with both businesses and couriers; they each try to blame each other, but they are both as guilty as each other and are imposing these charges when there is no good reason to do so.

I was looking at the debate that the Minister and I held in Westminster Hall some time ago, when we spoke about how companies must at least be up front. We might not like the small print but if they are up front about things, in some cases we have to accept it. I do not accept it, but they are also not being up front. Another constituent in Elgin bought a bed for £435 and the order went through and was completed, but several days later she was contacted to say, “Actually, we have looked at your address and there is going to be a £70 surcharge for delivery.” That happened days after the purchase had been accepted by the company and agreed with my constituent. They believed that they were going to pay a certain amount, only then to get a phone call or an email to say, “Actually, we’ve found out where you live, we think it is too far away and we are going to put on another £70.” That is indefensible on the part of these companies and couriers; I am sure the Minister would agree on that, and so something must be done about it.

I also said I would give one example from outwith my constituency, and I could have chosen literally hundreds. However, the example that I gave in a previous Westminster Hall debate—even previous to the one that I had with the Minister, because I have raised this issue a number of times before—was that it would sometimes be cheaper for me to buy an item in London, and instead of paying a charge to some company for it to be delivered to Scotland, pay for a seat for the gift I had bought, or some other parcel, on my easyJet flight.

That is no longer the best example that I could give. A resident of Inverness, Jim Oliver, was seeking to help his mother-in-law, who was trying to purchase a gardening tool online. The cost of the gardening tool was £40, but she was going to be charged £2,000 for delivery. [Interruption.] Oh, it gets worse! It gets a lot worse than that. Jim decided to try himself. He typed in the same product name, and the delivery charge came out, not more expensive than buying a seat on the easyJet flight to get it up to Inverness, but more expensive than the world’s most expensive footballer. They could have bought Neymar for less. The delivery charge for a £40 product came in at £2,001,997.

That was clearly a computer glitch, but I also want to highlight the fact that these companies just do not care. They literally do not care about their customers in parts of Scotland if they allow their system to say, “We will charge you more than the cost of Neymar to deliver this product to Inverness.” That demonstrates the contempt in which a number of these businesses hold our area, and the fact that they have got away with it for so long allows them to continue in the same vein.

I must give credit to the Advertising Standards Authority for the work that it does in this area. It has seriously tried to tackle the issue, and has been extremely diligent in pursuing cases that I have put to it. It has tried to deal with them by means of enforcement notices—I have given examples in which that has not been possible—but what is an enforcement notice? What does it do? It is a slap on the wrist. Enforcement notices are clearly not stopping other companies following similar practices, they are clearly not acting as a deterrent, and people in Moray and other parts of the north of Scotland are being treated completely differently from people elsewhere in Scotland and the United Kingdom as a whole. We need tougher enforcement from the ASA, and I think we should consider what further powers we could give it to take far stronger action.

I decided to return to that debate in Westminster Hall and remind myself of the points that the Minister raised in his response. I wonder if he can update us on some of the issues. Back then, he said:

“The consumer protection partnership chaired by officials in my Department continues to work on the issues.”

Can he tell us what work the partnership is doing, and what proposals it has advanced to him or to other Ministers? He also noted that

“Ofcom will be undertaking a review of its future regulatory framework for post”

—and, presumably, other items—

“over the next year.”—[Official Report, 9 December 2020; Vol. 685, c. 453WH.]

That will have reached a conclusion by now. I do not know whether there have been any delays as a result of the pandemic, but can the Minister tell us what the outcome was of Ofcom’s review?

In the past the Minister and his predecessors have been averse to the idea of legislating in this area, but does he accept that the longer we debate the issue—the more times I return to it, or it is raised by Members from my part or other parts of Scotland—while the current measures are not dealing with the problem, the more important it is to consider legislation? Why do 440,000 constituents in the far north and many other parts of mainland Scotland have to live with this day in day out, week in week out, year after year? For these prices are going up year after year. We read in parliamentary briefings that the cost for many parts of Scotland is going up and up. It was £45 million in 2021; what will it be in 2022 or 2023 if this continues?

Will the Minister seriously consider potential legislation? In the more immediate term, will he agree to meet me and some of the big companies involved—the couriers and some of the other companies that are most guilty of adding excessive charges for constituents in Moray and many other parts of the highlands and the north? We need to get these companies round the table and explain to them that the problems they are causing and the issues that this causes for local representatives and the Government have to be dealt with. At the moment, they seem to be continuing as if nothing is wrong, although, as I have tried to explain tonight, things are continuing to go wrong. We need a meeting with them and the Minister, sitting round the table, to hear their responses to these concerns and to the cases that I and other elected Members put to them. If they think that they are in the right, we need to hear the reasoning behind that, but if they accept, as I hope they will, that they are in the wrong for imposing these excessive charges, we need to hear what they will do about it. I hope that the Minister’s office will help to bring these people round the table and help to deal with the situation before it is allowed just to go on and on.

This is simply unacceptable. It was unacceptable when I raised it in 2017 in my maiden speech, it was unacceptable when I raised it with the former Prime Minister at Prime Minister’s questions, it was unacceptable when I raised it with the Minister’s predecessor in Westminster Hall and it was unacceptable when I raised it with this Minister in Westminster Hall. It is still unacceptable now, as I raise it in this Chamber in March 2022, that my constituents are forced to pay these excessive charges simply because of where they live. This is a postcode lottery. It is no longer acceptable to treat people in Moray and many parts of the country so differently from their friends and relatives in other parts of Scotland or the United Kingdom.

The time for action has long passed. It has not come quickly enough, and we now need firm action from the Government to deal with this issue. Once and for all, we need to deal with the problem that many people have faced for far too long. I hope that, in responding to this debate, the Minister can update us on any actions taken since this was previously raised in this House, tell us what more can be done and give some hope to the people of Moray as they look to the year ahead. It is never too early to mention Christmas, and people will already be thinking about purchases for the year ahead and going into Christmas—[Interruption.] Well, it probably is too early to mention Christmas, but genuinely, people look at purchases and are deterred from buying them, not because they do not want or need the product but because they are unwilling to pay these extortionate costs. The people of Moray and the people of the highlands and islands are watching with interest tonight to see what hope the Minister and his Department can give them that this long-running problem will soon be just a bad and distant memory and that we can look forward to a future when Moray and other parts of Scotland are not affected by these extortionate costs.

Mr Deputy Speaker (Mr Nigel Evans)

I wish you all a merry Christmas, and I call the Minister.

10.42pm
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)

Thank you, Mr Deputy Speaker. I congratulate my hon. Friend the Member for Moray (Douglas Ross) on securing today’s really important debate. He is right to say that we have had a long day and we have debated some really important global events and our response to them. None the less, he is absolutely right, at this hour or any hour, to speak up for his constituents who, when they see the situation in Ukraine and Russia, and even the situation of property in London and the sanctions that we are looking at in London and elsewhere, feel distant from them. They are worried about the ongoing cost of delivery from places that they see at a distance in the UK. Those delivery companies clearly feel that Moray is distant from them, but we are one UK and we have to ensure that we are shrinking this country, because we are one community.

I congratulate my hon. Friend on his continued championing of his constituents’ cause. It clearly continues to be an important issue for his constituents, and I know that other Members have raised similar issues. I have a lot of sympathy for their concern that consumers in some parts of Scotland are charged differently from consumers in other parts of the UK. I also recognise that similar issues exist for some consumers in Northern Ireland. I am pleased to be able to take part in this debate and outline what has happened since the previous Westminster Hall debate, which was secured by my hon. Friend in December 2020.

It is not unreasonable for a business to seek to recover its costs, and the Government recognise that delivery costs can be higher when reaching some parts of the UK, but any delivery surcharges applied should be based on real costs such as the additional cost of longer transportation, and clearly not on the cost of Neymar, as my hon. Friend described. The Government strongly encourage businesses, as far as possible, to provide consumers with a range of affordable delivery options. Thanks to the Government’s universal service obligation, which is implemented by Royal Mail, retailers across the UK have access to parcel delivery at uniform rates. The Government’s aim is to secure sustainable, efficient, affordable and universal postal services, which ensures everybody, including small retailers, has access to affordable, consistently priced postal services for deliveries across the UK.

Royal Mail, through the universal service obligation, must deliver parcels weighing up to 20 kg five days a week at uniform rates throughout the UK, but, of course, the delivery operator chosen by the retailer is a commercial choice for that retailer. The Government believe that businesses should be free to choose partners and make the contractual arrangements that best fit their commercial needs. At the same time, as my hon. Friend said, consumers need transparent information on any delivery charges and restrictions so that they can choose the supplier that best meets their requirements.

Consumer protection laws require costs, including delivery charges, to be transparent. Retailers are therefore required to be up front about their charges, including on where they deliver, what they charge and when any premiums may apply. That way consumers know exactly where they stand and can decide accordingly whether to proceed with a purchase with that retailer or whether to look elsewhere.

For retailers to take advantage of the considerable opportunities of online sales, particularly given the rise of online shopping, they will need to take heed of the needs of consumers in all parts of the country by developing delivery solutions to realise the sales potential in those areas and taking advantage of the universal service obligation, where appropriate.

David Duguid (Banff and Buchan) (Con)

I congratulate my hon. Friend the Member for Moray (Douglas Ross), my constituency neighbour, on bringing this important issue to the House. Does the Minister agree there is an issue not just for customers who are looking for things to be delivered to their homes and businesses in the north of Scotland but for the businesses across the UK that are missing out on achieving that custom simply because they are shutting themselves to those with an IV or AB postcode?

Paul Scully

My hon. Friend makes a good point. Businesses need to be competitive and open but, by choosing the wrong delivery partner, they are missing out on great consumers across Great Britain and Northern Ireland. As we have heard, there are remote parts of Northern Ireland and Moray, too. It is important that we are inclusive not just to tick a box but because it is the right thing to do and the practical and economic thing to do, too.

The deliverylaw.uk website established by Highland Council trading standards provides advice on delivery charges for consumers and businesses. Any consumer who believes those rules are being breached should report it through deliverylaw.uk so that incidents are recorded and appropriate enforcement action can be taken.

Furthermore, the Competition and Markets Authority and the Advertising Standards Authority have undertaken a significant volume of enforcement work to ensure compliance with transparency on charges and restrictions. The ASA issues enforcement notices to online retailers where parcel surcharging practices are raised, and it has achieved a compliance rate of over 95%. My hon. Friend the Member for Moray described one of the 5%, where, because of the way it was phrased, the ASA let them get away with it.

The CMA continues to issue advisory notices to the major retail platforms and has published guidance to retailers that sell via these platforms. It continues to work through primary authorities to ensure improvements in this area. The Chartered Trading Standards Institute has also produced a good practice guide on delivery charges, which is available on its business companion website and sets out clearly how businesses should comply with consumer law.

On legal compliance, our enforcement partners are continuing to take action where issues of non-compliance are brought to their intention. As guidance is freely available to all businesses, large or small, through both the business companion website and deliverylaw.uk, there is no excuse for businesses not to comply with their legal responsibilities.

As we have heard, in November 2020, the postal sector regulator, Ofcom, published updated information on how the parcels market was operating, as part of its annual postal service monitoring update. Ofcom found that operators take different approaches to the pricing of parcel delivery services. Some vary their prices by location, but others do not, so businesses have options.

Of the subset of suppliers that vary their delivery prices by location, some use a binary standard charge and an out-of-area charge and some set different prices for different areas. In other cases, the prices charged for parcel delivery are bespoke. Operators may start with a standard rate but will often negotiate charges on a bespoke basis with individual retailers.

As I have outlined in previous debates on this issue, some major retailers, including Argos and Wayfair, have taken positive steps and vastly improved their delivery services by removing surcharges for most customers in the Scottish highlands and islands. The parcel delivery market is competitive and the steps taken by suppliers to remove delivery surcharges will put downward pressure on other charges from other suppliers.

Ofcom is reviewing its future regulatory framework and consulting on its proposals. The consultation was launched on 9 December 2021 and closed on 3 March. Once responses have been considered, Ofcom will issue a statement in the summer of 2022-23—so in the next financial year.

In its review, Ofcom found that the parcels market is generally working well overall and that competition is driving benefits for consumers, but the evidence suggested that some problems for consumers still need to be addressed. Those problems relate to the handling of consumer complaints and contact-handling processes, as well as the fact that disabled consumers’ needs are not being met and they are more likely to experience detriment. Ofcom is therefore consulting on its proposal to issue guidance on how complaints should be handled and to require parcel operators to have in place policies that better meet the needs of disabled customers.

Ofcom is also examining improvements in respect of the accessibility and convenience of parcel services, including the expansion of pick-up and drop-off locations and the improvement of consumer control, such as through the ability for consumers to nominate delivery windows and specify delivery preferences. On geographical variations, or surcharging, Ofcom does not propose any new regulation at this stage but will continue to engage with stakeholders and policy makers.

Douglas Ross

The Minister will understand how disappointing that is. Ofcom has to treat this issue seriously. He has mentioned competition a lot. It seems that these businesses, and many of the couriers, do not really care about the north of Scotland and are quite happy to leave it to other people. That is a cost issue, but a significant proportion of Scotland’s population—and part of the UK population—continues to be affected by the issue and the response from Ofcom makes it look like the couriers do not care and nor does the regulator.

Paul Scully

I appreciate and understand my hon. Friend’s view. Ofcom will continue to look at this issue and will undoubtedly continue to push on it. I assure him and other Members that the Government will continue to monitor the issue of the fairness of charges through the work of the Consumer Protection Partnership, which he mentioned. The partnership has a dedicated working group that includes consumer advocates, trading standards and Government representatives who focus on the issue. The group includes the Scottish Government, who have their own fair delivery action plan, and continues to engage with stakeholders to better understand the drivers of charging. It is also considering whether there are initiatives that could help to improve or drive down delivery costs to rural and remote communities. That work could include, for example, looking at infrastructure, but as such issues are devolved they are for the Scottish Government and the Scottish Parliament to consider.

To conclude, the legislative framework is robust and provides the appropriate protections for consumers. The Government remain committed to ensuring that the universal service obligation, including the delivery of parcels at a single charge rate throughout the UK, remains affordable and accessible to all users. My priority is the continued enforcement of the law to ensure that customers are not surprised by delivery charges and are able to make choices based on clear information. In that way, consumer decisions will apply competitive pressures that can drive down delivery charges to the benefit of all.

I am happy to meet my hon. Friend and representatives of the industries. I thank him again for his contribution to the debate and look forward to meeting him soon.

Question put and agreed to.