Require parliamentary scrutiny of any proposal to amend the Royal Mail USO

We call on the Government to amend legislation to require parliamentary scrutiny on any change to the Royal Mail's Universal Service Obligation (USO).

We also call on the Government to: insist any changes to the USO are dependent on Royal Mail meeting existing performance delivery targets for letters and cards; regulate the price of first class mail to avoid further above-inflation rises; and insist Royal Mail maintains a national, affordable, and reliable postal service that supports high streets and communities across the UK.

The government is committed to the provision of a reliable and affordable universal postal service. A postal service that works for customers, workers and communities is crucial to the UK businesses that help drive growth across the country.

Ofcom formally launched a consultation on the future of the UK’s postal services in January 2025, highlighting a significant decline in letter volumes and that users’ needs had changed. Ofcom set out that they have considered extensive evidence that the universal service obligation must change to secure its long-term future. Since January, Ofcom has consulted publicly on a package of potential reforms to the requirements for the delivery of second-class letters, to better reflect users’ preferences and support financial sustainability. The consultation closed on 10 April and Ofcom expects to publish a Statement in the summer. Further information is available on Ofcom’s website: www.ofcom.org.uk/post/royal-mail/consultation-review-of-the-universal-postal-service-and-other-postal-regulation/.

Ofcom is required by Parliament (under the Postal Services Act 2011) to ensure the provision of the universal postal service and is permitted to make limited changes to its regulation accordingly. The changes that Ofcom has proposed in its consultation would not require parliamentary approval. However, more significant reforms, such as changes to the minimum requirements set out in the Postal Services Act 2011, which include a six-days-a-week postal service at affordable prices, would need to be approved by Parliament. Ofcom remains accountable to Parliament through mechanisms such as select committee evidence sessions and its statutory obligation to lay its Annual Report and Accounts in parliament.

The government is clear that Royal Mail’s quality of service has not been good enough. Ofcom, as the independent regulator for the postal sector, has set Royal Mail enforceable targets each year to deliver 93% of First-Class letters next-day and 98.5% of Second-Class letters within three days. Ofcom takes compliance with its regulatory targets seriously and this involves conducting thorough investigations where failures have been identified. In December 2024, following its investigation of Royal Mail’s performance in the 2023-24 financial year, Ofcom fined the company £10.5m because of its failure to meet service levels. In January, Justin Madders, the minister with policy responsibility for postal services, met representatives of Ofcom who gave their reassurance that they are closely monitoring Royal Mail’s performance. The government expects that Ofcom will continue to closely monitor Royal Mail’s performance and regularly press it on this issue to improve service levels as a matter of urgency.

With regards to stamp prices, as an independent business, it is for Royal Mail’s management to set the prices for its services. The government does not have a role in the company’s day-to-day commercial or operational decisions. In setting its prices however, Royal Mail must work within the regulatory framework set by Ofcom, the independent regulator. In 2024, Ofcom reviewed its position on safeguard caps on certain 2nd class products and amended the cap accordingly. The purpose of the safeguard caps is to ensure an affordable service is available for all users. We are grateful for the widespread public interest in the postal service. The government recognises that the essential service provided by Royal Mail, and underpinned by its universal service obligation, is a vital part of the UK’s communications fabric. Customers, businesses and communities across the UK depend on a reliable and affordable postal service and the government remains committed to ensuring Royal Mail is able to effectively deliver for those users.

Department for Business and Trade