Postal Services Bill

My Lords, before I get on to this amendment, one problem with quoting when you have the author of the report in the Room is the danger of being corrected. I feel that I owe an apology to Richard Hooper, who said to me that he studiously avoided mentioning 100 per cent privatisation in his more recent report, for which error I humbly apologise. I wanted to put the record straight—before I see him in court. The ability of Governments to value a utility accurately at the point of its privatisation is mixed. The first two large privatisations of the 1980s, British Gas and British Telecom, saw the share values of those businesses rise quickly following privatisation. That was of course the objective then; privatisation had to achieve legitimacy and the Government of the time was about creating a shareholder democracy. However, our economic needs now dictate that the Government cannot be so generous towards shareholders if privatisation goes ahead in the form of a share sale. They should set a share price for Royal Mail that properly reflects its valuation. As the noble Lord, Lord Lea, said in Committee—he reiterated this view in today's debate—the public have on many occasions not got a particularly good deal out of privatisations. Ministers have been coy about the value of Royal Mail. Estimates have ranged from £700 million to £7 billion but the managers and employees who stand to gain 10 per cent of the value of the business will be particularly keen to know whether the upper or lower ends of the estimates are correct. They will want to know that the Government have undertaken a forensic and accurate valuation of the business prior to putting it up for sale. In Committee, my noble friend Lord Stevenson made a strong case for Parliament to receive a report on the valuation of Royal Mail. We believe that it is wrong to ask Parliament to give approval for the disposal of Royal Mail while denying it the powers to scrutinise the effectiveness with which the Executive go about their tasks in this regard. Amendment 3 seeks an independent valuation of Royal Mail to be made available to the Public Accounts Committee prior to any sale of the business. Such a valuation can be received and scrutinised by that committee in full commercial confidence. The PAC and other committees regularly receive restricted or confidential briefing. Parliament has a long tradition of receiving evidence in confidence. If necessary, the PAC could call the Minister to give evidence in camera but any parliamentary body tasked with ensuring good governance in this area would want to be reassured that an effective valuation of the business has taken place. That would include an assessment of its assets and liabilities, along with the proposed regulatory regime and how that would impact on its future prospects. The coalition Government make a strong case for transparency in government. We are able to access limitless information about government and local government spending. Freedom of information laws and parliamentary questions and debates are all there to oil the wheels of our democracy. As another great historic public institution sadly shrugs off the blanket of public ownership, it is only right that the people who once owned it are allowed to know how the Government have come to their conclusions of the value of that business. There is support for this from across the political spectrum. The TaxPayers’ Alliance and the Communication Workers Union—two unlikely political bedfellows—support the need for an independent valuation. The noble Baroness, Lady Kramer, said in Committee: "““I agree that … when public entities have been sold … there has often been an anxiety to achieve a sale quickly. I think that Governments have sometimes been seduced by investment bankers who would like a cheap, easy deal””—" and a profitable one at that— "““rather than trying to ensure that they get the maximum for the seller—in this case, the public. I hope that those lessons can be learnt. I agree that internal due diligence is critical””.—[Official Report, 8/3/11; col. 1546.]" Those are wise words. Some or all of Royal Mail may be passed on to shareholders. When that happens, in many respects the accountability for running that business will pass from the Minister’s hands. However, until we reach that point, the Minister remains accountable to Parliament for what he does in respect of Royal Mail. This share disposal and the complex processes that lead up to it fall firmly within that remit of accountability. It would be wrong for Parliament to have to force the hand of the Minister on this matter at a later date. Accountability post sale is no accountability at all. Once the sale has taken place, if the Minister has made a mistake it will be nigh on impossible to rectify. By providing Parliament with an independent valuation in advance of the sale, we can deal with any issues that might arise at the appropriate time. I beg to move.