Royal Mail — Statement

Part of the debate – in the House of Lords at 3:40 pm on 16th December 2008.

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Photo of Lord Blackwell Lord Blackwell Conservative 3:40 pm, 16th December 2008

My Lords, I should like to ask the Secretary of State about two points. Although I have not read Richard Hooper's report, on the basis of the Secretary of State's summary I welcome it. As he said, it is very clear that the status quo is not tenable.

My first question is on pensions. Is it envisaged as part of the package that there may need to be changes to future pension arrangements? Any private company faced with the situation that the noble Lord outlined would look first and foremost at what it would need to do to ensure that pension payments—and, indeed, every other part of the package—were comparable with those of competitors. In taking on the liabilities, will the Government want to pursue or insist on that?

Secondly, I wish the Minister well in bringing in a private sector partner and private capital in a minority stake, but clearly, given the situation he describes with regard to the need to improve efficiency, substantial restructuring is required to get to the point where this is a profitable enterprise. I imagine that the cost of that restructuring—which, given the efficiency numbers he talks about, is bound over time to include a reduction in the labour force—means that it will be difficult to engage private sector capital, particularly against the industrial relations background he described. In bringing in a private sector partner, are the Government prepared to underwrite the restructuring costs that may be necessary to get the company through that transition to a profitable level of efficiency?