Postal Services Bill
Debate between Baroness Wilcox and Lord Rogan
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.
Lord Rogan
I thank the Minister for her reply. However, I feel that she could have gone further. Therefore, I wish to test the opinion of the House.
Postal Services Bill
Debate between Baroness Wilcox and Lord Rogan(13 years ago)
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Baroness Wilcox
I turn first to Amendment 14. As I said earlier, Ofcom will be required to report annually to the Secretary of State on its activities, including the provision of the universal service, and the Secretary of State is required to lay this report before each House of Parliament.
In performing all its duties—those in this Bill and those in the Communications Act 2003—Ofcom must have regard to various areas and groups as set out in Section 3(4) of the 2003 Act. These include: the needs of persons with disabilities, of the elderly and of those on low incomes; the opinions of consumers in relevant markets and of members of the public generally; and the different interests of persons in the different parts of the United Kingdom, of the different ethnic communities within the United Kingdom and of persons living in rural and in urban areas.
That list covers all the groups set out in the amendment tabled by the noble Lord, Lord Low, and I hope that he will be reassured by that. As I said in Committee, those requirements on the performance of Ofcom’s duties will apply to all future regulation of the postal sector. That is far more enduring than a snapshot assessment at the time of a sale.
The noble Lord, Lord Low, mentioned the power in Clause 33 to amend the minimum requirements of the universal service. We will come to that power when we discuss amendments to Part 3, but I know now that the power in Clause 33 is subject to the affirmative procedure.
On Amendment 15 in the name of the noble Lords, Lord Rogan and Lord Laird, to which the noble Lord, Lord Rogan, spoke this evening, I reiterate what I said in response to a similar amendment laid by the noble Lord, Lord Touhig, in Committee. The overarching objective of the Bill is to secure the universal postal service in the United Kingdom. It is about securing a postal service that is available to all in the United Kingdom and delivers to all addresses in the United Kingdom.
As I said in Committee, the Government have already produced an impact assessment on the Bill’s proposals. The assessment considered the impact of the proposals on all parts of the United Kingdom, together with the impact on small firms, rural communities and disadvantaged groups.
As I said earlier, Ofcom will report annually on its activities, including ensuring the provision of the universal service throughout the United Kingdom. In addition, we expect Royal Mail to continue to report on its quality of service performance, broken down by postcode area, so that there continues to be transparency about the provision of the universal postal service to all parts of the United Kingdom.
With regard to post offices, the Government recognise the need for accessibility by specific groups. The report by a Post Office company required by Clause 11 must include information about that. Clause 11 also requires that the Secretary of State give a copy of the report to Ministers in the devolved Administrations, as well as, of course, laying the report before this Parliament.
The information that is already in the public domain and that which will be provided as a result of the Bill will provide long-term transparency on the protection of the universal postal service and the accessibility of post offices throughout the UK. Those reports and the activities of the regulator will, as I have explained, take into account the needs of disadvantaged groups and those in rural areas.
I hope that, with these reassurances, the noble Lord will withdraw his amendment.
Lord Rogan
My Lords, I thank those Members who have spoken to my amendment. I have listened to the Minister and thank her for her remarks. I beg leave to withdraw the amendment.
Daylight Saving Time
Debate between Baroness Wilcox and Lord Rogan
Baroness Wilcox
I am aware of the campaign and in particular the Elizabeth Garnsey report, to which my noble friend has referred. It is important to stress that evidence on this issue has not always pointed in the same direction. In particular, it is suggested that the change would save a significant amount of CO2 emissions. However, work undertaken in 2005 by the Building Research Establishment for Defra indicated that putting the clocks forward an additional hour in winter and summer would lead to a net increase in carbon dioxide emissions corresponding to around 1 per cent of total UK emissions.
Lord Rogan
Does the Minister agree that British business, especially manufacturing, would greatly benefit from the introduction of this time change by affording us at least two if not three extra hours in a trading day to communicate with our mainline European customers and suppliers?
Baroness Wilcox
I have been in this House a few years now and I have heard the arguments for and against doing this. Always we come back to the same thing: certain parts of the country would benefit while other parts certainly would not because the time zone would not be helpful to them. There would be an impact on the City, for example. As we are at the moment, the time works very well for us. We are there when Asia is online and we are still there when the United States starts trading. I am not sure that the arguments for and against are as clear as we would like them to be.