Second Reading (Continued)

Part of Postal Services Bill – in the House of Lords at 5:59 pm on 16th February 2011.

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Photo of Lord Rowe-Beddoe Lord Rowe-Beddoe Crossbench 5:59 pm, 16th February 2011

My Lords, I support the Bill, which, in principle, I welcome warmly, as indeed I supported in principle a Bill on similar matters which the then Government introduced in 2009. The Bill has in many respects cured certain significant defects in the 2009 version.

Before I go further, I welcome and thank my noble friend Lord Empey and the noble Lord, Lord Dobbs, for their excellent contribution to our proceedings this afternoon.

As many noble Lords have said, there is much probing to be done as well as the tabling of amendments at later stages to ensure that the sale of Royal Mail achieves optimum value for the taxpayer, on the one hand; and, on the other, that it secures a universal postal service which is appropriately enshrined in statute. At the same time, increasing flexibility on pricing, and hence on margins, is needed over substantial parts of the current business which are controlled by the regulator. I refer to large packets and large parcels, for example, which have already been mentioned, which, as often as not, are contracted to third parties who finally utilise the distribution network of the Royal Mail at subsidised prices.

Responsibility for the universal postal service within a private entity must receive greater protection than the Bill provides. Accountability to Parliament needs to be strengthened, and your Lordships may also wish to consider a requirement for primary legislation before any changes to the service can be made.

I welcome the proposal to allocate equity to employees, and I am very pleased to note the considerable improvement in labour relations within the Royal Mail since the arrival of new management. Longer periods between the review of the universal postal service must also be considered both to assist the attractiveness to a purchaser and to provide greater confidence to the public and to Post Office Ltd.

I turn briefly, therefore, to the part of the Bill dealing with the transfer and establishment of the Post Office company. Assurances have been given in the Department for Business, Innovation and Skills document CM 7946 of October 2010. On page 3, it provides six government commitments. I draw your Lordships attention to the statement:

"We are clear that there will be no further programme of Post Office closures".

I suggest that we will need to understand the precise definition of the word "programme".

I echo what some of your Lordships have already said this afternoon. Some provisions of the Bill are too short-term for either the new company, Royal Mail or Post Office Ltd to have confidence in their respective business plans. They need an interbusiness agreement of a longer duration than that in the Bill. Whereas I appreciate, as the noble Lord, Lord Razzall, said, that such matters should be more properly negotiated commercially between the two parties, it is the duration of that agreement that gives me concern. I believe that that is crucial to stability for both parties and for the public. Indeed, the duration of any further amended agreements should be considered.

I hope that the Government will consider strengthening their commitment to maintaining the current number of post offices. In her introduction, the Minister referred to certain "myths". Within the current stable of our post offices, I understand that there is some confusion about definition. For example, of the current number up for sale, how many are being blighted by the uncertainty about an interbusiness agreement? How many of those up for sale are classified as "long-term temporary closures"? In regard to Crown offices, am I right in understanding that the guarantee for them expires at the end of this year?

Finally, I am sure that we are all relieved that the pension deficit will be removed. However, perhaps the Government will at some stage inform us of what is planned for the assets of the pension fund, which I understand are estimated at around £26 billion.