Postal Services Bill

My Lords, I support the amendment in the name of my noble friend Lord Whitty. A couple of noble Lords have suggested that these discussions, particularly in relation to the assets, are putting carts before horses but I am not sure about that. We are really talking about the transfer schemes that are referred to in Clause 8 and Schedule 1. Those are clearly mammoth undertakings, which will take a lot of time, so while I understand the points being made that they should not be in a position to hold back the main purpose of this Bill, they really do underpin it. The Post Office is a massive enterprise. The business has revenue of £838 million with a profit of £72 million and employs more than 8,000 staff. There are nearly 12,000 post offices, of which 500 are outreach services and 10,000 are sub-post offices. That network, taken together, is bigger than all the bank and building society branches put together so we know that its scale will require a lot of attention. It would be rather surprising if some work was not already being done in that way. First, it is necessary to identify the assets, then to get into the complicated task of disaggregating the parts of those assets which have to go to Royal Mail and the parts which have to go to Post Office Ltd. It is, of course, not just a question of assets. I am sure that the Minister will want to refer to this; quite a lot of the Royal Mail’s outstanding loans, including the modernisation loan from the Government, are secured against the assets. What effect will the splitting of the assets have on that and how will that be moderated as we move forward? Then there are the normal activities that one would expect in this sort of process about headquarter costs and shared administrative functions, which will be hard to disentangle—particularly where premises and the supervision of Royal Mail activities take place on Post Office premises. Part of my noble friend’s amendment deals with the inter-business agreement and we have had a good discussion on that. My noble friend Lady Drake made a number of points on that and I will not repeat them. However they, again, go towards the question: how are we are going to see the viability both of the assets and of the ongoing business put in a way that will put beyond doubt the questions that we will have in this House and in the other place about how this goes forward? This issue, again, contains many unanswered questions—a feature of this Bill. If the Government do not know what the assets of Royal Mail and of the Post Office are before moving on to selling the Royal Mail or handing over the Post Office to mutual ownership, they may well end up selling the people of this country very short. That will certainly increase the risk of asset stripping and of selling at too low a price. In the nature of price comes the nature of who will buy it and by changing the parameters here, we may well end up with a different company—one that is, perhaps, less preferred. My noble friend Lord Whitty’s amendment seeks to get a proper record of Royal Mail’s assets in the division between it and the Post Office, and draws attention to the vital role that the IBA will play. I am sure that we will come back to these points later in the Committee’s deliberations but, at this stage, I support the amendment.