Postal Services Bill

My Lords, I first declare the interest that I declared many times when my party was trying to push through the disposal of Royal Mail. I am a former postman, a former trade union official, a former trustee of the Post Office pension fund, and I have had a few jobs in the Post Office. I am sure that that declaration will suffice as we consider the Bill. My amendment seeks to add new paragraphs to the part of the Bill that deals with the situation after the Secretary of State has made a decision on the disposal of shares in Royal Mail, and then makes a report to Parliament. My purpose is to require that any report that the Secretary of State may make on the disposal of shares includes the requirements listed in the amendment. It simply asks that in his report the Secretary of State recognises the need for clarity before Parliament is asked to agree to any of his proposals. The first new paragraph calls for what should be a vital element in any proposal—that there should be a clear understanding of how the Secretary of State proposes to enshrine universal service provision in respect of the new legislation. We have just heard a little about that. The second new paragraph outlines that the necessary information be provided regarding the expenditure of Royal Mail’s modernisation budget and how much of the budget remains unspent at the time of the disposal of shares. Noble Lords who were here a couple of years ago will recall the repeated requests that I and others made for information on what was meant by ““modernisation””, what the programme was, and what machines were being talked about. Unfortunately, the Secretary of State at that time did not answer any of those questions. The third new paragraph instructs the Secretary of State to report on how much progress has been made towards the existing goals at the time of the transfer. Many people would agree that Royal Mail is part of our national infrastructure and cannot be looked at as just another company to be sold off on the Stock Exchange or otherwise. Such a view is shared by me. As the Bill progresses, I shall try very hard not to become too emotional. It hurts me deeply that we are contemplating the destruction of Royal Mail, and it saddens me to the point where I feel that I am witnessing an act of legislative vandalism. When the Minister spoke last week on the first day of the Committee she said: "““I have of course listened to what has been said, and it will of course go on the record. I know that there are Members of your Lordships’ House who would rather that Royal Mail was not sold at all, and I understand people who have been associated with Royal Mail for many years finding all discussions of this sort very difficult, especially having gone through all this a year ago with the previous Government—a Government of their own. Yet that Government, too, could not successfully find a way out””.—[Official Report, 8/3/11; col. 1549.]" I do not know whether the Minister had me in mind when she said that but she can certainly count me in as one of those who are very saddened at what is going on. I would rather Royal Mail was never sold off, and the alternatives should have been examined before rushing into what is happening today. Before noble Lords opposite remind the House of the role played by the previous Government, perhaps I may say that I and a very few other noble Lords tried to point out the error of their ways at the time. I suppose that a redeeming feature of this Bill is that it is not a direct contradiction of a government manifesto commitment, as was the previous Bill under the Labour Government. It was like a dagger in my heart that the party for which I had worked for so many years proposed to sell off this valuable asset. I am sorry that that Bill ever saw the light of day, especially when my party had promised the British public that they would not make such a sale. I shall say no more on that at this stage. I believe that this Bill is scant on information regarding the sale of Royal Mail. As the Secretary of State has only to report on his decision, Parliament would merely be noting the sale and would not be able to ensure that it was value for money or that it was in the appropriate format. Later amendments will deal with the need for a proper and thorough valuation of Royal Mail. There is a good argument for ensuring a stronger form of accountability to Parliament by the Secretary of State regarding the terms of the sale. This could be through a variety of methods, including further legislation, the super-affirmative resolution procedure, the affirmative resolution procedure and so on. The Bill states that the Secretary of State needs only to lay before Parliament a report on the proposed disposal, but unfortunately the requirement to report comes into force only after a decision is made. This seems to close off the opportunity for Parliament to influence how the sale takes place. I hope that, when the Minister replies to this debate, the House will be told exactly what form the report will take. We should consider what the Minister for postal services said on the form of that report when he was challenged in the Public Bill Committee in another place. He said that, "““in clause 2, we are putting a requirement on ourselves to report back to Parliament. No doubt, when we debate clause 2, you will want us to do far more than that. I can just imagine the amendments that you will put forward””." The clause states only that a report will be laid and not how it will be laid. At that time, the Minister was asked whether he intended just to pop it in the Vote Office. He would not be drawn but he did state that, "““there will be a Command Paper””.—[Official Report, Commons, Postal Services Bill Committee, 11/11/10; cols. 126-27.]" A Command Paper, as this House well knows, can cover a multitude of sins. It is a document issued by the British Government and presented to Parliament. It encompasses a wide range of forms, including White Papers, Green Papers, treaties and reports from royal commissions and various government bodies. Therefore, the House is no further forward in understanding the Government’s intention to allow parliamentarians to arrive at an informed decision on the future of Royal Mail. I am confident that the House will also agree that any decision to sell off part of such an historic and valued organisation as Royal Mail must, at a minimum, be subject to a vote by the people’s representatives on the value of the deal on the table. A Bill would provide the most certain way of ensuring that objective. I stress to the Minister and the House the importance of bringing before Parliament for approval any proposal to sell Royal Mail. As the Bill stands, the only duty of the Secretary of State after deciding to sell is to lay a Command Paper in the Vote Office. Surely we need a little more detail from the Government, as well as a larger commitment from them to report adequately to Parliament on this vital issue. The people of our nation, in poll after poll, overwhelmingly support the Post Office—that is how they see Royal Mail, whether we like the term or not. The public see the Post Office and Royal Mail as the same thing. They deserve better than the cavalier way in which their Government are proceeding. Would it not be better to accept the need for clarity now rather than face criticism in the future that not enough consultation has taken place and that the proposals have been rushed through Parliament with indecent haste? I said that a few times about the previous Bill that we discussed. The previous Government broke their neck to try to get these things through. I hope we can learn that lesson and not rush this Bill through. I hope that the Government will take the opportunity to ensure that Parliament is properly consulted on the decision to sell a part of the national institution that we all know as Royal Mail. Until now, the Government have been extremely vague about how, where and when they intend to use the powers to privatise Royal Mail. Considering the importance of this institution and the public service that it provides, the House will want a number of assurances to satisfy its concerns. The amendment goes a little way towards making clear how the Government intend to deal with these matters. Without too much sentiment, I have to say that, when Ministers make it clear that they have no objection to Royal Mail being sold to an overseas buyer, it fills me with anxiety. How many investors care about the universal service obligation or the standards of service, pitiful as they are from my time as a Post Office worker? If we rush into a sale and Royal Mail ends up in the hands of a particular private company, we shall know what to expect, because that company has already said that the universal service obligation belongs to Jurassic history. It even questioned whether there should be six deliveries a week. We have to be very careful. I urge the Government to set down clearly in the Bill a real protection for what we have left of the service. There must be conditions or attributes which allow the Government to disqualify a buyer whose track record is one of slash and burn—witness what has been said about Jurassic history. Would the Government sell Royal Mail to anyone at all? What conditions would apply? What plans do the Government have to restrict shareholdings by investors and market operators following any trade sale or initial offering? I believe that that needs to be specified, as the amendment would do. I expect the Secretary of State to make clear exactly how he proposes to enshrine in law the universal service provision as laid out in Clause 28 of the Bill. Such provision is extremely important to the small business customers and other customers of Royal Mail across the country. Royal Mail is currently the only universal service deliverer and there is no likelihood of anyone else coming into the market to cover parts, or all, of our country when they can cherry-pick and take the best parts of the business. Almost a decade ago, I stood on the other side of the Chamber and warned this House what would happen with cherry-picking. Sadly, every word that I said has been borne out by people picking the biggest cherries they could get. I am talking about the pre-sort downstream access arrangements that Royal Mail has had to subsidise throughout that period. The tragedy is that, when downstream access arrangements were introduced, we knew that was going to happen. However, we were saddled with a regulator, which we shall come on to later in the Bill, that had the wrong idea about its responsibilities, and a decade of income was lost by Royal Mail because of the way in which those arrangements were rushed through. Is not the crux of the matter the structure of the company after it is privatised? Will it be an independent entity? Can it have a separate operation with a separate board and a head office in the United Kingdom? If, for example, it is fully owned by Deutsche Post, it may be run merely as a subsidiary of that company, with any entity in the UK having very little power over the ultimate direction of the company. One difficulty that I have is in grasping the detail and discovering what information is in the Bill about whether there will be an initial public offering—an IPO—or a trade sale at auction, whether it will happen all at once or in tranches, whether it will lead to a sale to a proven communications business or a private equity group, or whether it will mean the break-up of the company into different geographical and functional units, with parts of the business being hived off and so on. The Government have not set a clear timetable. Before any sale takes place, surely this House will want to be assured about the future of the universal service, the exact regulatory regime and the future of the post office network. What stage has been reached in obtaining state aid clearance from the Commission? Noble Lords who were present will remember hearing of the dead hand of the European Commission about state aid. The House needs much more detail and much more information. I believe that many noble Lords on all sides of the House are anxious and want to table amendments which will, in varying degrees, bring accountability back to Parliament by ensuring that we have more information about what exactly is proposed. Requiring a further specific Bill would ensure the maximum possible involvement of Parliament in the full scrutiny of the Bill. In certain cases, previous privatisation legislation has provided more detail. The amendments I propose are not revolutionary. For example, the Railways Act 1993 imposed a series of general duties on the Secretary of State and the franchising director in respect of the award of franchises. There were detailed prescriptions concerning to what type of entities assets could be transferred. The Secretary of State was also subject to several franchising and licensing general duties to protect the interests. I expect that all noble Lords, regardless of affiliation or none, are concerned for the users of the Royal Mail service and the users of the post office network. By implication, they will be affected by what happens. Under the Railways Act, specific measures were mentioned in more detail as set out in the Bill. The Secretary of State was also subject to a number of general duties, such as promoting the use of the railway network, promoting efficiency, promoting competition, minimising the restrictions on operators and ensuring safety. He was further obliged to promote the award of franchise statements to companies where the employees had a substantial interest. Many Members of this House are worried that there is not the same degree of detail in the Bill, which is why, ideally, I should like to see a new Bill introduced. Failing that, I would go for a super-affirmative resolution or an affirmative resolution procedure as such matters need considerable consideration. It would be a mistake to move forward too quickly. Remember, how Royal Mail or the Post Office suffered because of the indecent haste of the then Labour Government rushing into liberalisation long before any other European country did so. I am told on good authority that some of them have still not done it and for 10 years we have had to suffer. Parliament needs the opportunity for further scrutiny of exactly what the Government are proposing. Without any pleasure, I move the amendment. I just wish that we were not in the position of expediting the destruction of the Royal Mail, Post Office, call it what you will. As I said, it is a very sad day for me and for countless thousands of customers and workers who have the greatest respect for its history and exemplary record of service to the people of our nation. I beg to move.