Department for Business, Innovation and Skills (Performance)

Debate between Baroness Burt of Solihull and Ian Murray

Wednesday 2nd February 2011 Commons Chamber

[Ian Murray]

The hon. Lady, like many of her coalition colleagues, has mentioned the cut in corporation tax as a massive driver of economic growth. Does she agree that corporation tax is paid only on profits and that many small businesses, particularly those in the service and tourism sector in my constituency that write to me, are more concerned about their profits because they have either no customers or fewer customers as a result of the massive VAT hike?

[Lorely Burt]

The Government have been particularly generous to small businesses for the coming year. The hon. Gentleman is right that no one wanted to increase VAT, but unfortunately the alternatives were even less palatable.

Postal Services Bill

Debate between Baroness Burt of Solihull and Ian Murray

Wednesday 12th January 2011 Commons Chamber

[Ian Murray]

We are proposing protection for the post office network in any fashion, which the Minister point blank refuses to give, even though his Back Benchers are asking him to consider it through the new clause.

In Committee, the Minister said:

“No previous Government have thought to put it on any different footing.”

However, no other Government have needed to intervene on the inter-business agreement because no other Government have separated the post office network from Royal Mail, which is what will happen under this full-scale privatisation. He has tried to reassure stakeholders by arguing that both Royal Mail and the Post Office want an extended inter-business agreement. As has been said, the stated aims of the management of Royal Mail and the Post Office are to keep the relationship, but to be frank, management changes rather quickly and regularly. We need more reassurance in the Bill, rather than words from the management of Royal Mail and the Post Office. The Minister went on to argue in his evidence to the Committee:

“If you actually wrote that there should be a contract between two companies that are going to be separate companies into law, I think that it would be subject to serious legal challenge.”––[Official Report, Postal Services Public Bill Committee, 11 November 2010; c. 121-123, Q244-245.]

He therefore admitted that there will be no inter-business agreement going forward and that the post office network is essentially being hung out to dry by this legislation, along with the Royal Mail and tens of thousands of workers.

[Lorely Burt (Solihull) (LD)]

My understanding, on which I stand to be corrected, is that the problem is not that the two companies want to have an inter-business agreement—they are free to do that—but that EU rules prohibit Governments from intervening to ensure that an inter-business agreement is prescribed for a specific period. I believe that that is the problem with the new clause.

[Ian Murray]

But as we have already discussed, Germany seems to have found a loophole in that legislation, so I do not see why we should not be able to find a way forward for an inter-business agreement in this country. It would be up to the Minister and the Government to find a way around that problem and ensure that the post office network was maintained for the future.

[Ian Murray]

As I said in response to my right hon. Friend the Member for Rotherham (Mr MacShane), nothing astonishes me about the Liberal Democrats these days. Indeed, blaming the European Union is one of their latest wheezes as they break their pledges and proposals and change their philosophy.

The National Federation of SubPostmasters believes that a minimum 10-year inter-business agreement is essential, and it knows about the matter having worked with its members, postmasters and postmistresses across the country. That organisation, which is at the coal face, says that such an inter-business agreement would protect its members, and I think it is telling the truth in this particular matter and giving us the evidence that we need that agreement.

Today we are seeing a disgraceful privatisation of one of the country’s, and the world’s, treasures. The Royal Mail is not safe in the hands of this shameful Government, and the Bill in its current form will decimate the post office network in this country.

[Lorely Burt]

I have a great deal of sympathy with my hon. Friend the Member for Colchester (Bob Russell) and with everyone else in the House who wishes to protect the relationship between the Royal Mail and the Post Office. We all want that relationship to continue, but I have severe reservations about whether we can enforce that through Government legislation.

If we examine the situation between the two companies, we will see that they rely on one another. There will continue to be a long-term contract in place between them because there will remain an overwhelming commercial imperative for the two businesses to work together as they do now. The chief executive of Royal Mail, Moya Greene, has said that it is “unthinkable” that there will not always be a very strong relationship between the Post Office and Royal Mail. However, legislation is not the appropriate way for the commercially sensitive terms of a relationship between two independent businesses to be settled.