Railways: British Rail
Debate between Baroness Kramer and Baroness Wilcox(10 years, 5 months ago)
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Baroness Kramer
My Lords, I will resist the temptation to go into the territory of Royal Mail. The privatisation of the railways may not have been perfect; we certainly had Railtrack going into administration in 2002, and there have been other issues. The question is: do we have a system that has delivered a significantly better railway for customers and freight in this country? I would argue that we very evidently have. Does this give a basis for moving forward and providing yet further improvement? I think that argument is also made.
Baroness Wilcox (Con)
While I am delighted to travel by rail most of the time, all the way down to the West Country, I am very sorry to see, after all these years since 5 November 1993, that raw sewage is still going out on to the lines. Before we rush forward to HS2—to which I am looking forward enormously—I urge our new Minister to think about the men working on the lines and in the stations who have to deal with this excrement.
Baroness Kramer
The comments of my noble friend totally resonate. It is utterly disgusting. It speaks to the fact that customer service has not always been at the centre of the railways, because I think customers are very concerned about this issue. Beginning in 2017, the current InterCity 125 trains will all be replaced by the new Class 800/801 intercity express trains from Hitachi, which will solve that problem on the intercity lines. It is a tougher issue on the local diesel trains, which are gradually going out of service, and we could use some help from the industry in tackling that problem.
Economy: Growth
Debate between Baroness Kramer and Baroness Wilcox(12 years, 2 months ago)
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Baroness Wilcox
I agree that Wales needs attention; that is why we are having this new piece of work done to find the very best way forward. I hope that by next year, the Silk commission will have come back with good suggestions for Wales.
Baroness Kramer
My Lords, I understand the budgetary framework, but does my noble friend agree that staying within that envelope but moving faster towards the target of raising the starting rate of tax to £10,000 would provide a boost to consumer confidence and demand that would stimulate business and growth more rapidly?
Baroness Wilcox
My noble friend is very brave. As she will remember, the Government's plan for growth is to create the most competitive tax system in the G20, and that is the path we are on.
Office of Fair Trading
Debate between Baroness Kramer and Baroness Wilcox(12 years, 2 months ago)
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Baroness Wilcox
The noble Lord, Lord Borrie, was of course director-general of the Office of Fair Trading when I chaired the National Consumer Council. I have enormous respect for his view and have listened carefully to what he has just said. As I said in my original Answer, one reason why we looked to merging the Office of Fair Trading and the Competition Commission is to make sure that they are right and fit for purpose for our times and that there are the right resources needed for the world that we face. There is no doubt about it that the Office of Fair Trading has had a wonderful reputation in the past, and we would like to think that the new merger, if it goes forward, will take forward the very best of the OFT and the very best of the Competition Commission.
Baroness Kramer
I shall try to be very brief. The Minister will be aware that for the ordinary consumer trying to deal with the combination of the OFT, Consumer Focus, Consumer Direct, the CBA and the Competition Commission, knowing where to go when there is an issue that needs to be raised is next to impossible. With the restructuring coming, the confusion is just adding laying layer upon layer. Would it be possible for the department to put some real clarity on its website to direct people under the current structure and with some clear indication where restructuring is going to take us?
Baroness Wilcox
Change is always difficult, but it does give us the opportunity to listen to things like my noble friend has just brought up, such as access to information. My noble friend knows, of course, that we are trying to streamline these things and bring them forward as fast as we can, but her point is well made.
Postal Services Bill
Debate between Baroness Kramer and Baroness Wilcox
Baroness Kramer
My Lords, I want to come in now on this conversation. The noble Lord, Lord Whitty, talked about an elephant in the room and then dismissed the EU state aid issue. Many Members of this House have been following the debate from the beginning—some have come in perhaps a little later, but many have been engaged from the beginning—and have heard directly from Moya Greene, the current chief executive of Royal Mail, that she would wish for the longest possible agreement that she could achieve within the law for an inter-business relationship with the Post Office. Many will also have heard the same from Paula Vennells, the managing director of the Post Office part of the current Royal Mail Group whom I think we may regard as the chief executive presumptive of the Post Office when it becomes a completely separate entity. They have also heard the Government say, on many occasions, that they would wish for, and would try to achieve, the longest possible agreement that could be done legally.
The issue of European state aid rules is absolutely critical. The noble Lord, Lord Whitty, will have looked at the financial condition of Royal Mail Group and will understand that it is urgent that new investment comes in, in a very timely manner, if the group is to be preserved. The Post Office side also needs the injection of £1.34 billion that the Government are committed to putting into it, which would come through this legislation and the new structures. That is what will guarantee its future.
However, all of that would be jeopardised when—one could say “if”, but I suspect that if we go back to the lawyers and ask the Government it would be “when”—the state aid rules were tripped by one of these two amendments. I am rather under the impression that the Government have done everything they can to find language that would not trigger European state aid rules and cannot find it. The language proposed today by the noble Lords, Lord Stevenson and Lord Rogan, trips the European state aid rules. That would mean 24 months of constant wrangling, in which it is impossible to go out and bring in a new investor. All investors require some degree of certainty about what is happening to the organisation they are meant to examine and on which they are meant then to make an offer. It would also mean 24 months of uncertainty for the public. If this was two or three years ago, the luxury of including a clause like this and being resigned to spending two years fighting through state aid issues might have been possible. I suggest that we do not have that luxury at the moment.
We have two key organisations which matter to all our communities. We have people who work for Royal Mail—the regular staff who do incredibly hard work and need certainty about their jobs—and we have communities that rely on the Post Office. If we inject something like 24 months of further uncertainty, and who knows what comes out of the state aid negotiations, we jeopardise everything we have been trying to achieve—for weeks now in this House and in the other place—which is to make sure there is a secure future for the Royal Mail Group and that both the Royal Mail and Post Office parts of it can thrive. I understand that people have suspicions and concerns and will not take government assurances because they do not like to take them and perhaps do not quite believe Moya Greene or do not quite take the word of Paula Vennells. I understand all that, but there is an overriding issue and it has not been addressed by those who moved this amendment. The language triggers state aid provisions—we cannot afford the consequences of having that in the Bill.
Baroness Wilcox
My Lords, I thank very much indeed noble Lords who have spoken before me. I particularly thank my noble friend Lady Kramer for the exposition that she has just given to sum up with. I shall leave as many of those comments aside because they speak well for what I would like to say. I shall address some of the comments from the Opposition and the Cross-Benchers who moved the amendments.
The issue of the inter-business agreement between Royal Mail and Post Office Ltd is one of the issues which has stimulated the most debate throughout the passage of this Bill, both in this House and in another place. The noble Lord, Lord Razzall, summed up in his words the fact that all of us who have taken part in these discussions wish to see the same thing—this body established within the nation’s life to be continued in the best way possible. But we are going to do it in the way that we think will be effective; we have watched the Opposition try to do it in a different way and it was not effective. We are right to want to ensure the best possible future for the Post Office, which, as many noble Lords have pointed out, is a national institution highly valued by communities up and down our country.
Before I turn to the substance of the amendments, I would like to respond to the comments of the noble Lord, Lord Stevenson, on the 400 long-term temporary closures. There are inevitably changes in the total number of post offices from month to month, as some offices close and others are reopened. In fact, there has been a net reduction of only 58 offices in the last nine months—and this is, of course, constantly in flux. The Government have committed to no new programme of post office closures, as noble Lords have kindly noted.
Your Lordships are of course well aware of the fact that Royal Mail’s business is extremely important to the Post Office. This fact has not escaped us in government either, or the two companies themselves, as you have heard many times in our discussions. As your Lordships will by now be well aware, the chief executive and chairman of Royal Mail have pledged to ensure that the longest contract legally permissible will be in place before any sale. Edward Davey, the Minister in another place, and I have committed to both Houses that we will ensure that this pledge is upheld, and your Lordships have approved an amendment to the Bill to ensure that the report on the disposal of shares in Royal Mail will include details of the ongoing relationship between the two companies.
The new contract between Royal Mail and Post Office Ltd is not yet finalised, and, as I have said before, it serves little purpose to focus on the duration of the contract alone. The contract, which we hope to be ready to be signed next spring, will contain far more complex details, such as pricing and service level agreements, volume commitments and exclusivity agreements. The final nature of all of those details will have a bearing on the longest legally permissible duration of the contract. These details should not be presided over by government, but must be agreed by the two companies and their advisers. They are the experts, they know the businesses best, and it is they, not we in Parliament, who should fine-tune the details of this contract.
When this amendment was debated in Committee in this House, the noble Lord, Lord Young, posed various questions regarding what the longest legally permissible contract actually meant. I wrote to him following that exchange and, as I said in that letter, because the contract will focus on many other factors as well as duration, it is difficult to speculate on how long the longest permissible contract would be. We hope that the contract’s duration could be for as long as 10 years, or even more, but this cannot be finalised until all of the detailed negotiations are complete. The Government could not accept any contract between Royal Mail and Post Office Ltd which might be liable to legal challenge. Without a robust long-term contract between them, both companies would suffer commercially precisely the circumstances that noble Lords are seeking to avoid through their amendments. The Government could also not accept a legislative obligation which might lead to that very situation. As I have said repeatedly, the terms of this contract must be negotiated between those who know the businesses best.
In response to the concern expressed by the noble Lord, Lord Whitty, about the impact that a potential bidder for Royal Mail could have on the terms of the inter-business agreement, I would like to reassure noble Lords that any investor will have no input into these terms. As the chair and chief executive of the Royal Mail has stated, the longest legally permissible contract will be put in place before any investment into the Royal Mail. We will of course ensure that that happens. As I have said previously, what the Secretary of State, and indeed the Government, can and will help to do is to ensure that there is a contract in place between the two businesses before separation, and its duration will be for as long as is legally permissible. But most importantly, government must also help to create the conditions in which both businesses will flourish in partnership with one another.
Let me reassure this House that the separation of Post Office Ltd and Royal Mail will not lead to dangers for the post office network. As my noble friend Lord Razzall, emphasised, operationally, these companies are reliant on one another. Post offices carried out over 3 billion transactions for Royal Mail in 2009, and they will continue to be partners because there will remain an overwhelming commercial imperative for the two businesses to work together. The noble Lord, Lord Stevenson, noted that there are no international precedents for splitting a mail provider and retail arm. The Government are not aware of any international comparisons for the Post Office, which has such a vast branch network, offering a broad range of government, financial and mail services in the heart of communities. Separation from Royal Mail will give the Post Office the chance to focus on growing its revenue and getting the most out of its branch network. It will ensure that each organisation is able to focus more effectively on its own challenges and help to secure a sustainable network. The separation of Post Office Ltd from Royal Mail was welcomed during the Public Bill Committee evidence sessions in the other place by the consumer group Consumer Focus, the current regulator Postcomm, and the independent expert Richard Hooper.
It is of course important too that the Post Office continues to offer the very best possible service to Royal Mail, as well as to other current and potential clients. Our £1.34 billion funding package to the Post Office over the spending review period will ensure that the service provided by post offices is modernised and improved, to ensure that people continue to see their local post offices as the natural and convenient place to access Royal Mail products and that the Royal Mail management continues to see the Post Office as its retail partner of choice. This Government have not given Post Office Ltd such a considerable sum of money for nothing. We will do all we can to ensure that Post Office Ltd has a vibrant future, and continues its valued relationship with Royal Mail. As I have said before, it is primarily by attracting customers for all types of services that the Post Office will ensure its future success. With this Government’s funding and support, I believe that is precisely what it will achieve. As such, I would ask the noble Lords to withdraw their amendments.
Economy: Personal Debt
Debate between Baroness Kramer and Baroness Wilcox
Baroness Wilcox
On 12 February, the Government announced continued funding of £27 million this year to maintain the service for debt advice in citizens advice bureaux and other independent advice agencies in England and Wales. We are working to put the future provision of debt advice on to a more sustainable footing, ensuring that consumers can access the support they need easily, and that the debt-advice services deliver the best possible value for money. Good advice is worth every penny we can possibly spend on it.
Baroness Kramer
My Lords, following the comment from the noble Baroness, Lady Coussins, the noble Baroness will be aware that, because of workload and financial pressures, many citizens advice bureaux are no longer giving face-to-face advice, other than on an exceptional basis, and are directing people to what is euphemistically called a self-help system of publications and websites. Is her department monitoring how many people switch from talking to the CAB to the commercial websites which, frankly, are frequently honey pots that get them into a worse financial mess? If there is a major switch, will she consider providing additional resources to enhance face-to-face advice?
Baroness Wilcox
My noble friend is reflecting worries that we must always have when changing from one system to another. We are of course protecting the core funding for Citizens Advice and Citizens Advice Scotland, and we have directed £470 million over the spending review to support the voluntary sector. As my noble friend knows, we propose to streamline the consumer landscape, but during this time we are obviously keeping a weather eye on what is happening. I am grateful to my noble friend for bringing this to the attention of the House.
Postal Services Bill
Debate between Baroness Kramer and Baroness Wilcox(13 years ago)
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Baroness Kramer
I shall speak briefly to Amendment 24AB in my name and that of my noble friends Lord Razzall and Lord Cotter, as the argument for the need for stability and certainty for Royal Mail as a universal service provider has been made extensively in the House today in discussion of the previous group of amendments and by the noble Lord, Lord Stevenson, on this group. However, there is a glaring gap in the Bill, because there is no set timetable for the period during which Royal Mail would continue reliably to carry that role. The amendment would set a period of 10 years before Ofcom may make a procurement determination that would change that position.
The case was well made in the other House by a Member of the Opposition—some people will think that I am supporting those on the Benches opposite more today than those on mine. The honourable Member for Ochil and South Perthshire, I think, said that moving to the 10-year period,
“gives Royal Mail the certainty to make investment and business decisions, confident that it will remain the universal service provider for a reasonable amount of time”.—[Official Report, Commons, Postal Services Bill Committee, 7/12/10; col. 648.]
The point was also made that, for Royal Mail to have a secure future, significant investment will be required, much of it in equipment. Given the lifespan and cycles of equipment, 10 years becomes a reasonable minimum for that kind of stability.
We have heard again in this House real concern about cherry picking. It is clear to me that your Lordships do not want others coming in to cherry pick pieces or aspects of the universal service. I am sure that that is true for the public at large, who perhaps matter the most; it will certainly matter to Royal Mail itself and future investors. Given the widespread concern, it strikes me that an amendment such as Amendment 24AB neatly covers a variety of concerns by providing fundamental stability over a 10-year period. That may alleviate many of the other issues raised in this important debate.
Baroness Wilcox
My Lords, this group of amendments relates to the actions that could be taken if Ofcom found that there was an unfair financial burden on the universal service provider as a result of its complying with its universal service obligation to ensure that consumers are protected under the new regulatory regime. Clause 43 sets out three options if there were found to be an unfair burden: a review of the minimum requirements; a procurement process; or the establishment of a compensation fund. If it considered that action would need to be taken, Ofcom would have to recommend to the Secretary of State which of those options would best address the unfair burden.
I speak first to Amendment 24X, in the names of the noble Lords, Lord Razzall and Lord Cotter, and the noble Baroness, Lady Kramer. The noble Lord, Lord Cotter, made an eloquent case for the amendment. It is right that we should consider it alongside the other amendment that would prevent a procurement determination for 10 years; the two need to be seen in balance. Your Lordships will need no reminding that our central objective in the Bill is to protect the universal postal service. We have been clear that Royal Mail must continue to modernise and, to that end, have included a new requirement on Ofcom to have regard to the efficient provision of the universal service.
No one would dispute that Royal Mail needs to improve its efficiency, and the company has already taken significant steps on its modernisation journey. However, without further modernisation, costs will remain high, increasing the risk of substitution by other forms of communication, in turn exacerbating volume decline and further threatening the universal service. The package of measures in the Bill will greatly assist Royal Mail in its modernisation. We believe that it is important to allow Royal Mail to continue on this modernisation path for a few years, able to take advantage of the benefits of the Bill, before the regulator assesses whether the universal service represents an unfair burden. This would also give certainty to all those who might be required to contribute to a compensation fund, given the reassurance that that would not be on the table for at least three years after the Bill came into force. This is clearly a fine balance. There is no right number; it is a judgment. I would therefore like to take the amendment away to consider it, so I hope that the noble Lord will, for now, consent not to press it.
Postal Services Bill
Debate between Baroness Kramer and Baroness Wilcox
Baroness Kramer
My Lords, I shall speak briefly on my very short Amendment 23A, which I put before this House partly to have the excuse to name and shame and, perhaps more importantly, to give the Secretary of State in his annual report to Parliament the opportunity to name and shame. My decision to put forward this amendment came through a conversation with Age UK, which was careful to point out to me that in 2006, when it did its survey of older people,
“44% … used the post office to collect their pension, 43% for access to cash and 56% used it to pay their bills”.
That demonstrates what an important role the Post Office played in the financial life of older people.
Age UK welcomed the Government’s announcement, as did I, last November that their ambition is for all UK current accounts to be accessible through the post office network. Of course, the significant majority of high street banks are now going along with providing that service, but there are two major exceptions. Here is my opportunity to name them: HSBC and Santander. They do not make their standard current accounts accessible at post offices. Age UK has pointed out that older people could say, “This is very inconvenient”. Perhaps they are in deprived areas or in rural communities where there are no easily accessible bank branches. They could transfer their accounts to one of the banks that use the Post Office, but the reality is that switching accounts is complex and difficult. There are endless forms to fill out and I know from experience that it frequently goes wrong. To put that additional burden on older people is unacceptable.
We had a good discussion not long ago when in every part of this House there was real concern for the post office network, but even more for the communities to see more financial services available through the Post Office with its trusted name and accessibility and to keep people out of the hands of loan sharks. There were endless reasons, and it is important to provide the Secretary of State with the little reminder that there is a mechanism that can be used to name and shame. I hope that it will not be needed and that the banks will have fallen into line, but if they have not they ought to hear themselves declared on at least one of the Floors of Parliament.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, for clarity I confirm that when we have said that we will write to noble Lords, we will of course put copies of these letters in the Library.
I thank noble Lords for tabling the amendments. As I said earlier, the Government are clear that the wide range of financial services offered by the Post Office—for example, personal loans, credit cards and savings products—are an important part of its total product suite.
I shall begin with Amendment 22D, and attempt to ease the noble Lord’s concerns about access to and use of Post Office accounts such as the Post Office card account, which can be used by people to collect their benefits through the Post Office. The Government are absolutely serious about protecting the post office network, and we fully support the Post Office as it seeks to develop the services that it offers. The Post Office card account is currently available across the network and will remain accessible at all post offices, including the new post office local model. The Post Office is a valued partner of the Department for Work and Pensions to deliver benefits through this account. One of the things that people most like about the Post Office card account is its simplicity. The Post Office card account remains a simple product, aimed at those who are unable or unwilling to open a basic bank account. Those who want additional features have a very wide choice of basic bank accounts, and many current accounts, which are readily accessible at post office counters.
That brings us to Amendment 23A in the name of my noble friend Lady Kramer. I know that my noble friend has a great deal of experience in the banking industry and I always value her contribution to our debates. The Government have been absolutely clear in their ambition for all UK current accounts to be accessible through the post office network, making post offices the convenient place for everyone to access their cash. In November last year the Royal Bank of Scotland reached agreement with the Post Office to allow RBS customers, including NatWest customers, access to their current and business accounts at post offices. As I mentioned in the debate on Amendment 21B in the name of the noble Lord, Lord Young, this will mean that almost 80 per cent of all UK current account holders will be able to withdraw money free of charge at post offices, and many can also pay money in and check their balances.
Of course, this is excellent progress, but I agree with my noble friend that we must continue to strive to ensure that all the UK’s major banks provide access to their current accounts through post offices. All the UK’s major banks, as well as the Nationwide Building Society, provide at least one basic bank account that is accessible at post offices, but we would encourage HSBC and Santander also to offer access to their current accounts through the Post Office. With a network larger than all of the high street banks combined, and 20 million customer visits each week, the Post Office offers unparalleled access to their customers.
We therefore continue to support the Post Office’s ambition to ensure access to 100 per cent of UK current accounts. However, it is not necessary to include that stipulation in the Bill. Clause 11(2)(b) already requires the Post Office to provide details of the services provided at post offices, and we would fully expect that to encompass the financial services that it sells over its counters. Although the decision to allow customers access at the post office is ultimately a commercial one for the banks to make, the Government have made clear our commitment to encourage those arrangements to be put in place.
Amendment 24, in the name of the noble Lord, Lord Kennedy, who is not here, is about credit unions. Let us remember that co-operation between the Post Office and credit unions is already strong, and the Government support it becoming even stronger. The Department for Work and Pensions recently announced a significant package of support for the credit union sector, which includes funding set aside for a shared credit union and banking platform, subject to a feasibility study. That would open up opportunities for the Post Office to provide credit union services such as banking transactions, bill payments and low-cost credit services to many more people.
We made clear in our policy statement, published last November, that we support an even stronger link between the Post Office and credit unions, and we have demonstrated clear progress against that aim. I fully recognise the worthy intentions behind the amendments, and I hope that noble Lords and the noble Baroness will be reassured about the good work that is already under way in those areas. Placing those obligations or reporting requirements in legislation would simply increase bureaucracy. We will continue to encourage co-operation between credit unions and Post Office Ltd, and to support the Post Office in its provision of financial services. I hope that the noble Lord will feel able to withdraw his amendment tonight.
Postal Services Bill
Debate between Baroness Kramer and Baroness Wilcox
Baroness Kramer
Is it not correct that in negotiating the sale of the shares, the value of property that could be disposed of would be considered as part of the mechanism for valuing the company?
Baroness Wilcox
I am much supported by my noble friends on this side. They have given every answer that I could give at this stage and I am very grateful to them. I return to Amendment 2 and ask the noble Lord to withdraw it. I am sorry that it is such a long time since I made my argument. I hope that he has kindly remembered it.
Apprenticeships: Network Rail
Debate between Baroness Kramer and Baroness Wilcox
Baroness Wilcox
My Lords, my noble friend is absolutely right. It came as a surprise to me that we now go from hairdressing to nuclear decommissioning as apprenticeships in this country, which is very worthy.
Baroness Kramer
My Lords, the Minister will be aware that there is a desperate shortage of civil engineers in this country. I believe that in the core team of civil engineers on the Crossrail project there is not a single member under the age of 60. In looking at these schemes, will she give some priority to civil engineering because the need is serious and desperate?
Baroness Wilcox
I am sorry to hear my noble friend’s news that all those people are over the age of 50. I shall look into this when I get back. I cannot imagine—