Intellectual Property (Unjustified Threats) Bill [HL]
Debate between Baroness Wilcox and Lord Stevenson of Balmacara(8 years ago)
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Baroness Wilcox (Con)
This is the point in the Bill where I think I can best make a contribution. The Intellectual Property (Unjustified Threats) Bill is legally satisfactory, but its difficulty lies in how it will operate in the real world. Specifically, for the many good changes that it contains to operate effectively, businesses must be fully aware of them and confident about their application. This is a problem particularly for SMEs, which often struggle to understand the complex law in the field of intellectual property. In the area of threats, it comes down to exactly what they can and cannot do and why.
The lack of engagement by SMEs with the Bill, especially an absence of written evidence, is a concerning indication of the difficulties that they face in the area. I have had my own SME and have personal experience of what it is like to receive an unexpected telephone call from a large company telling me that what I am doing is not quite right and that they would be happy to help me out and even to give me a payment for my trouble. So I understand the fact that most people running a small business are not reading all sorts of bits of paper to see what comes next for them. They cannot afford secretaries or legal fees while they are getting their businesses going. It is important for us to get small businesses going and up to that medium size where they are more secure and able to take the advice that they need.
I have one or two potential solutions that the Minister might like to think about. First, I would insert an amendment before Clause 7 reading: “Communication. The Intellectual Property Office shall take steps to ensure that the changes to the law relating to unjustified threats made by this Act are communicated to businesses in the United Kingdom, with a particular focus on communicating them to small and medium-sized enterprises in the United Kingdom”. This would be helpful, for example, in notifying businesses that professional advisers should no longer ask for indemnities to write to an alleged infringer or help them understand the permitted communication provisions of the Bill by setting out the examples listed.
A second solution might be the appointment of a champion for small businesses—we did this with the ombudsman for the grocery business. I am sure that the Minister does not want to find herself having to invent something, but if there is not good representation on the face of the Bill, the chances are that very little of it will feed down to small businesses. The appointment of a champion for small businesses in the field of intellectual property would be welcome. Such a champion could ensure that SMEs are fully aware of their rights and what they can and cannot do in the area of threats, and that big business could not exploit its superior understanding of intellectual property law to gain unfair advantages over SMEs.
Thirdly, a designated lead in the IPO to offer advice to small businesses about approaching and dealing with the threats provisions, while stopping short of offering actual legal advice, would also be welcome. I worked with the Intellectual Property Office when I was a Minister for Intellectual Property. Prior to that, back when I was running a small business, it was one telephone call I made to the Intellectual Property Office when I was told, “Sign nothing. Say nothing. We’ll send someone”. That is exactly the sort of help I would hope for. A small business that is approached or attacked by a large business would find that they could make a phone call and somebody would be there to answer.
Lord Stevenson of Balmacara
My Lords, I support the amendments introduced so well by the noble Baroness, Lady Bowles of Berkhamsted. There is very little that I need to add in terms of the general case—she made it very well. In the context of the remarks that we have just heard, a broader concern about the role of SMEs should carry weight in these debates. The anomaly of the omission of those commissioned by others who perhaps should know better is a point strongly made—the Lego example is rather a good one, even though we perhaps should not put it around too much in case people get ideas. The fact that such provision already exists elsewhere in statute suggests that, if we are trying in this Bill to level things up, this amendment and those consequential on it are very important. The amendment in the name of my noble friend Lord Hanworth is also worthy of consideration, although we will need to hear him speak to the other amendments in later groups to get a full picture of where he is coming from.
Consumer Rights Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara
Lord Stevenson of Balmacara
I endorse what my noble friend Lord Kennedy has said on this matter. These are new examples of the pernicious behaviour that is often adopted by petty lenders and similar types. It is not just them; it is also other high-cost credit providers. As the Minister indicated, we had a very good discussion on this at our last session, and many of the points there will have resonance for what is being said today.
I have two questions left in my mind after hearing what the noble Lord had to say. First, how did he know about those flashing lights at the corner of the screen? I know that his wife is present so he would not wish to reveal undisclosed secrets, but I think we ought to be told at some point. More seriously, why does it always seem to take pressure from within this House to get movement on this? If the practice were stamped on very quickly, a serious harm would be removed. I hope the Minister, when she comes to respond, will indicate the Government’s willingness at least to investigate this, to assess whether it is something they want to do. Hopefully, they will say that it is something they do want to do.
Baroness Wilcox
I will just add a word at this stage. I am very interested to hear what the Minister says about what the noble Lord, Lord Kennedy, has described, with the money all going into a fund somewhere else and people not getting their hands on it. I winced slightly, because I thought, “The Minister is listening to somebody talking about ring-fencing here”. I wondered how she was going to respond to ring-fencing money like this; I am not quite sure. The Financial Conduct Authority, as I understand it, is this big, new strong regulator that the Government brought have in, so I wondered if the Minister was going to tell us the result of the consultation paper they put out fairly recently. I have not heard too much about that since.
Export Controls
Debate between Baroness Wilcox and Lord Stevenson of Balmacara(12 years, 11 months ago)
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Baroness Wilcox
The Government do not want goods of UK origin to be re-exported for undesirable uses—of course not. However, the introduction of a statutory re-export control does not make our current export-licensing system more robust. We have talked this through with the European Union. The difficulty is that our law cannot be applied to another country to which something has been passed on. However, we make the questioning of anybody who is looking for an export licence from us very robust, particularly if it is for export to difficult countries, to make absolutely sure that we are clear about why they are doing it and where the goods are going. If, when they come back the next time, we discover that something has happened—that there has been a re-export—we will have an opportunity. However, it is most frustrating that we cannot do more. If anybody can come up with any other suggestion for us or the other members of the European Union, we will be only too happy to listen.
Lord Stevenson of Balmacara
My Lords, the tension that occurs between promoting commercial interests and seeking the improvement of human rights overseas is highlighted by the UK’s role as a major arms-exporting country. We also need to consider the role of government agencies in the support and promotion of arms sales. In its role as a supporter of UK growth, does BIS regularly analyse the industrial and economic benefits of MoD procurement decisions so that a proper cost-benefit analysis can take place? If not, why not? Can we expect to see such analyses being published?
Baroness Wilcox
I think that the answer is yes, it does—I am sure that it does. I will check to make absolutely sure, as I am sure that the noble Lord will ask me about this again otherwise. I will return to this with the information that he has asked for, if I may.
Postal Services Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara(13 years, 6 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, I shall speak also to Amendments 22, 24, 28, 29, 31 and 32 in order to reflect their purpose in its entirety. I shall also address Amendments 21, 23, 25, 26, 33, 34 and 35 in the names of the noble Lords, Lord Young, Lord Tunnicliffe and Lord Stevenson, as well as Amendments 20, 27 and 30 in the name of the noble Lord, Lord Kennedy. This is a large group of amendments but it covers ground with which we will all be familiar from earlier stages. I shall try, therefore, to be as brief as I can while still, I hope, addressing the concerns of noble Lords. I hope that the government amendments will help to ease the noble Lords’ concerns as well as the concerns raised in Committee by the noble Lord, Lord Whitty.
All sought to increase the parliamentary scrutiny around the transfer of Post Office Ltd to a mutual ownership structure. The Government believe strongly that a mutual structure should not be imposed on Post Office Ltd from the top down, and this has not changed. We are still of the opinion that Parliament should not dictate the structure of a mutual Post Office Ltd or the make-up of its board. When the company is mutualised these details must be agreed by all of the interested parties and the interests of stakeholders such as sub-postmasters and employees must come first.
As I have said before, the Government have asked Co-operatives UK to report on recommendations for a move to a mutual model. This report will be presented to Ministers shortly and we will of course make it public. Should your Lordships wish, I shall also ensure that a copy of it is placed in the House Library. I hope the report will provide more detail of what a mutual Post Office Ltd might look like in practice. The Government plan to launch a public consultation later in the year, which will develop further details of how a mutual Post Office Ltd might work.
Your Lordships will understand that the suitable model for a mutual Post Office has yet to be designed and that we cannot know its governance structure. As I said in Committee, it is by no means clear at this early stage that the selection of both sub-postmaster and employee representatives to the board would necessarily be the best option. Enshrining governance arrangements in legislation goes completely against our commitment to ensuring that the mutual is developed by the people who know it best. The Government do not, therefore, agree with Amendments 34 and 35 in the names of the noble Lords, Lord Young, Lord Stevenson and Lord Tunnicliffe.
I understand the desire of both Houses to be able to exercise further scrutiny over a move to a mutual. Until we have fully consulted, we will be unable to define specifically what the Post Office mutual will look like and we recognise that, in order for Post Office Ltd to transfer to mutual ownership, it must have become commercially self-sustaining. Indeed, the noble Lords, Lord Young, Lord Tunnicliffe and Lord Stevenson, recognise this too in their Amendments 21, 23 and 33. We are confident that the strategy mapped out by Post Office Ltd, backed by the Government’s £1.34 billion funding package, will deliver a commercially self-sustaining business.
There are a number of elements to this, as set out in detail in the Government’s policy statement published last November, particularly the aspiration that the Post Office should become a front office for both central and local government. There are great opportunities for the Post Office to develop this ambition and a number of pilots for new services have already been agreed. For example, the Department for Work and Pensions has recently announced plans for three pilots, including document verification for pensioners and support for jobseekers in more rural areas. The DWP has also confirmed that it will work with the Post Office to explore its role in supporting new ways of delivering welfare, including universal credit. Post Offices are also of course a trusted and natural place for people to access face-to-face government services such as identity verification services. Currently, the ambition to be a front office for government builds on existing capabilities and strengths.
As Paula Vennells, the Post Office’s managing director, explained to a number of us at the briefing meeting last week, the Post Office is working closely with the Cabinet Office to explore the services it could offer the Government to help them to make the savings that this demanding fiscal environment requires. Paula has also been working with Martha Lane Fox to ensure that the Post Office can have a sustainable role as services are increasingly delivered digitally—a trend which is set to continue. This could include supporting those who are unable or unwilling to access services in this way.
As Paula Vennells also emphasised last week, the front office for government strategy must not be considered in isolation. The Post Office must continually improve, with quicker transactions, shorter queues and longer opening hours. The better the Post Office’s customer-service offering, the more attractive it will be as a channel for government departments. That is why the Post Office’s network strategy—the introduction of 4,000 main post offices and 2,000 Post Office Locals across a network that remains above a total of 11,500 outlets—is so important. That is why the Government’s investment of £1.34 billion and their commitment that there will be no programme of Post Office closures are also so important. We will no doubt discuss that network strategy in more detail when we come to Clause 11.
On the question of a post bank, I reiterate what I said in Committee. The Government have already looked carefully at the options and arguments for establishing a standalone post bank. Regrettably, our conclusion is that it is just not a viable option, particularly in the current fiscal environment. Setting up and capitalising a post bank would be prohibitively expensive as well as creating a much more volatile and risky balance sheet for the company. Yet it is important to remind noble Lords quite how extensive the Post Office’s existing financial services business already is. For example, the Post Office offers savings accounts, ISAs, mortgages and credit cards and, following the recent agreement with RBS, it will provide access for more than 80 per cent of all UK current account holders. That is in addition to the wide range of basic bank accounts available to those who do not use conventional current accounts. As I said in Committee, from this strong base financial services have significant potential for growth.
These are some of the key strands of the strategy which we are confident will put the Post Office on a commercially sustainable footing. We have been clear that this is not an overnight solution. It will take a few years, and possibly more than the two years allowed under the amendments of the noble Lord, Lord Kennedy, for Post Office Ltd to become self-sustaining—that is, Amendments 20 and 30. The process of moving to a mutual model should not be rushed through and the Government have no intention of setting deadlines which Post Office Ltd and its stakeholders must meet in order to speed up this process. We recognise that some time will pass between the debates we are having now and any subsequent move to a mutual model. As such, Parliament should be given the opportunity, nearer the time of a proposed mutualisation, to scrutinise those proposals in more detail.
The amendments in my name in this group ensure that both Houses will need to approve a move to a mutual through the affirmative resolution procedure before it can proceed. They also ensure that a report giving details of the proposed move to a mutual will be laid before Parliament before any order is made. We hope that this addresses the concerns raised by the noble Lord, Lord Kennedy, and other noble Lords, since the government amendment seeks to ensure that the report will now be laid before Parliament before it votes on whether the company should be mutualised.
I reiterate that the proposals eventually brought before Parliament must be developed with the full involvement of all interested parties. The Post Office’s commercial position must have improved as we expect. Provided that these things happen, I am confident that proposals for a mutual Post Office will, after careful scrutiny, be implemented. The reports in Amendments 21, 23 and 33 will not be required because the improvements to the Post Office’s commercial position on which they seek comfort will necessarily already have occurred. Parliament will in any event have the safeguard of a vote on a move to mutual ownership.
Amendments 25, 26 and 27 are technical amendments that I hope I can clarify as unnecessary. As I stated at Committee, Clause 4(4) makes quite clear the only people who can own an interest in the Post Office. The clarification envisaged by Amendment 25 is not required to achieve this. Amendment 26 seeks to ensure that any disposal made by a relevant mutual would be a disposal of its entire interest. Again, as I said in Committee, we believe this amendment to be unnecessarily restrictive. Clause 7 provides sufficient safeguards to ensure that it is perfectly possible for different stakeholders to form separate corporate bodies to take their interest in the Post Office. Provided the safeguards in Clause 7 were met, why would we want to prevent this prior to completion of the process of designing what a mutual might look like?
Finally, Amendment 27 in the name of the noble Lord, Lord Kennedy, is technically unnecessary as Clause 4(1) ensures that a disposal of shares can be made only pursuant to a direction under subsection (2) or an approval under subsection (3). In addition, the government amendments brought forward today will ensure that any direction made by the Secretary of State under subsections (2) or (3)(b) must be subject to approval by Parliament through an affirmative resolution procedure.
I therefore hope that these government amendments will provide noble Lords with further reassurance regarding the move to a mutual model. I hope, too, that the noble Lords, Lord Young, Lord Stevenson and Lord Tunnicliffe, will feel they need not move their amendments. I beg to move the amendment in my name.
Lord Stevenson of Balmacara
My Lords, we welcome government Amendments 19, 22, 24, 28, 29, 31 and 32. They are a very positive response to the representations made inside this House and beyond for greater accountability before Post Office Ltd is made a mutual. They also deal with the case of that mutual disposing of Post Office Ltd subsequently in whole or in part to another mutual or set of mutuals, and we are very pleased to see them. We are particularly pleased that provision has been made for the Secretary of State to come back to Parliament to provide details and seek approval of an order under the affirmative procedure before it is too late to influence events. We welcome these amendments and support them.
I shall speak to a number of the amendments in this group that we have tabled, but I have taken comfort from what the Minister has said in her response and will give her some assurance that we will not press the amendments to a vote. However, one or two points need to be made for the record.
Amendments 25 and 26 seek the safeguard of maintaining Post Office Ltd as a single entity before and after the creation of a mutual. From what the Minister has said, that is probably not necessary. Amendments 21 and 23 seek to ensure the Government give proper consideration to the case for a post bank. We have heard from the Minister that she has looked hard at that proposal. Given that that is the case, would it be possible for the Minister to share some results of the investigation with us? That would put our concerns beyond all doubt. Perhaps she could write to me with as much detail as she feels she can.
What I am left with is to reiterate the comments that we made earlier but to add more flesh to the suggestion about the volume of government business being transacted at post offices before the disposal takes place. We should be given more information about that, and a report should be provided to both Houses.
On the amendment in the name of my noble friend Lord Kennedy, who is not in his place at the moment, I understand the wish to avoid unnecessary sloth over creating the mutual, but I agree with the Minister that the overriding consideration must be to have Post Office Ltd in good shape before mutualisation. That is why we put in Amendment 33 a call for a sustainable development plan for Post Office Ltd before any change of ownership is mooted.
It would be nice to see the Co-operatives UK report when it comes. It was promised in April but has still not been delivered. When it does come, we would like to have a look at it as well. The Minister said that she would publish it, and we are grateful for that. That will get us only to the stage where we understand better what the options are. We will need to know what the Government intend to do; as we have discussed, the Government intend to provide a full report on that before any proposals come through. I hope that in preparing a report for both Houses of Parliament, the questions that we have about what obligations a privatised Royal Mail will be under to utilise the Post Office network will be answered and, in the case of Post Office Ltd, what type or range of mutual bodies may end up owning our post office network. What will the rules be and what will be the extent of its powers? Who will be eligible to be a member? How will a board be constituted and could the mutual-owned post office have ownership and nationality tests that would be appropriate for a company-owned Post Office Ltd? Those are all questions that we will want to come back to at that time.
I turn to Amendment 23 and government business. The amendment puts in context some of the difficulties facing those who run the network of post offices throughout the United Kingdom. The Post Office is a trusted and traditional outlet for government services on the high street, and the future of the service lies in the redevelopment of that role. The post office network needs new sources of revenue to survive without subsidy; the Government need a reliable means of communicating with and serving the public directly in their local communities and, in this time of economic downturn, access to government services is more crucial than ever.
The Government should consider making the Post Office a first-choice provider of local and national government services on the high street. A systematic policy of using the Post Office as a shop front for government services could help the Government reach vulnerable and marginalised members of society in rural and urban deprived areas. Moreover, it could further the Government’s regeneration agenda, tackle the financial exclusion that is rife in communities across the UK and, in so doing, ensure a future for the post office network. Despite some of the removal of government services over recent years, post offices remain a massively popular and a reliable source for information and assistance to the public.
If the Post Office is to survive as a mutual, it cannot continue along its current trajectory. This can happen only if it keeps the work that it gets from two major clients—Royal Mail and the Government. Already there is concern about the Post Office’s business relationship with Royal Mail. A survey by the Communication Workers Union this week, widely published in the papers today, found that nine out of 10 sub-postmasters said that they could not survive without Royal Mail business. Assurances from the Minister about that relationship do not hide the fact that the Bill contains no real protection for Post Office Ltd in that regard. Equally, there are reservations about the so-called locals model of franchised post offices, which by their nature make it difficult for customers to interact with staff on anything other than the most superficial transactions. A recent report by Consumer Focus highlighted some of the problems in this regard.
The Post Office is dependent on Royal Mail’s business for its survival. Over one-third of its revenue, £343 million, and one-third of its sub-postmasters’ pay, £240 million, is generated by selling Royal Mail products and services. If the two businesses are forced to separate, a privatised Royal Mail will be likely to look elsewhere for retail outlets to sell its products. There is no guarantee that it will use post offices to the same extent. The loss of accounts such as TV licensing and the “green giro” was a bitter blow, particularly for those post offices operating at very tight margins. Taking those contracts away was a classic case of the Government’s left hand not knowing what the right hand was doing.
Having said all that, we think that the move to mutualisation is highly welcome, but employees and managers within Post Office Ltd will be concerned that the business they inherit has a real future. They will want to know that future revenue streams from the Government are secure and that business planning can proceed accordingly. Our amendment provides that assurance by setting out which government business will be transacted through post offices. Such a report will also enable the Government to consider what other types of their business the Post Office might be able to develop. We have a range of thoughts about that which echo many of the points that the Minister made, and we will be happy to exchange views on that, perhaps outside this discussion today.
We think that the Post Office banking remains a prize that could help sustain the future of the network. I heard what the Minister said about it not stacking up, but it is surprising that many of Post Office Ltd’s overseas equivalents have developed comprehensive banking services to offset losses of other traditional services which have made substantial contributions to the viability of those national post office networks. Even if they are not like-for-like comparisons, they are useful examples of where the future might lie.
The post office network, mutualised or not, can prosper as a standalone business with the Government and Royal Mail as key customers. Our amendments do not seek to force that choice upon the Government but ask them to consider what business they intend to transact via Post Office Ltd over the next few years so that the people who run our post offices, whom the Government want to take ownership of the business, can do so with certainty and security.
Postal Services Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara(13 years, 7 months ago)
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Baroness Wilcox
I apologise. Scrap that. How about Amendment 24NZA? This amendment is tabled in the name of the noble Lord, Lord Young, and is concerned with removing the ability to designate, in extremely limited circumstances, more than one company as a universal service provider. The intention of Clause 34 is to give Ofcom the power to designate more than one universal service provider in two specific circumstances only in order to ensure the provision of the universal service. As with other elements of the Bill, Clause 34 has been drafted to ensure that the Bill is future-proofed. It enables the regulatory regime to adapt when it needs to in order to ensure the continued and long-term provision of the universal service. The measures that we are taking are designed to put Royal Mail on a sustainable footing so that it can continue to provide the universal service that we all value so highly. However, it makes sense to future-proof the legislation in this way to ensure that the universal service could continue to be provided in two specific and extreme circumstances.
Clause 34 will allow Ofcom to designate more than one provider in only two specific cases. The first case is where providing the universal service is found to represent an unfair financial burden on the universal service provider. The Secretary of State agreed with Ofcom’s advice that the best way of addressing that burden was through a procurement exercise provided for by Clause 43. This would assess whether another company could provide the relevant part of the universal service with less of a burden. In that event, that company could be designated the universal service provider for that part of the universal service.
The second circumstance is where Royal Mail has become insolvent and has entered special administration. Where a postal administration order has been made under Part 4 and it is not possible to rescue Royal Mail as a going concern, some of its activities could be transferred to another company. Ofcom could then designate that company as a universal service provider as well in order to secure the universal service.
As I said, the full package of measures in this Bill is designed to secure the future of Royal Mail and the universal service and therefore to ensure that we do not end up in either of these scenarios. Both the procurement process and the special administration provisions are backstops to be used only—I repeat, only—if the future of the universal service is at risk. However, as I mentioned, having the ability to make multiple designations in these specific cases is a sensible and pragmatic safeguard.
It is also important to make it clear that having more than one designated universal service provider in no way provides for or permits a varying level of minimum service across the country. Provisions elsewhere in Part 3 have the effect of guaranteeing that the minimum requirements of the universal service must remain uniform. Given these assurances, I hope that noble Lords who tabled these amendments will feel able not to press them.
Amendment 24AHA, in the name of the noble Lord, Lord Young, relates to the power that Ofcom has under Clause 49 to impose a consumer protection condition on either,
“every postal operator, or … every postal operator of a specified description”.
The amendment would replace these categories with a single category that allows for the imposition of consumer protection on,
“every operator appropriate to the postal service each provides”.
The intention of this amendment may be to ensure that regulation can be applied with greater precision or to ensure that all circumstances are captured by regulation and that none falls through a perceived loophole. However, I hope that I can reassure noble Lords that it is unnecessary and has the potential to create confusion for the regulator and postal operators.
Giving Ofcom the power to describe separate categories of operator enables it to direct the consumer protection conditions very precisely. This follows the model in Section 52 of the Communications Act in relation to Ofcom’s functions in other regulated sectors. This approach is consistent with other parts of the Bill and allows for the clear and effective targeting of regulation to where it is required. I can therefore assure noble Lords that there are no loopholes.
I do not believe that this amendment would help Ofcom to regulate, nor would it offer any greater protection to consumers than is already provided for by Clause 49. However, it might leave the regulatory system open to challenge and confusion, which I believe all involved will wish to avoid. With these reassurances, I hope that the noble Lord, Lord Stevenson, will feel free to withdraw the amendment.
Lord Stevenson of Balmacara
I thank the Minister for her full reply. It was good of her to take the time to go through the detail we have raised because some of these are very technical points. Obviously we will need time to read through what she has said because she covered a lot of ground. I have not been keeping score, but my sense is that rather a lot of concessions were emerging in the previous two or three groups, which we are pleased about. We seek no vainglorious victory on this, but simply to improve the legislation, which is always the role of Her Majesty’s loyal Opposition in these matters. However, I am pleased that we are beginning to see a degree of discussion and debate around the issues that is not on the lines of “We have made the legislation and we will keep it”. We look forward to seeing what the Minister brings forward on Report.
Most of what has been said in this debate and in the debates on the two previous groups has really been about the type of regulation that must apply to the universal service provision and to the universal service obligation within that. There is bound to be tension between economic regulation on the one hand, which the noble Lord, Lord Jenkin, spoke to very fully, and the more social regulation which this side of the Committee wishes to see strengthened in order to ensure that the citizenship approach to the service is preserved. As many noble Lords have said, this is in a sense a fault-line across all the regulation that applies to former public utilities. I do not think that anyone has got it right yet and that there are going to be tensions. You cannot have at the same time the best possible public provision and the most profit-generating and economically appropriate way of doing these things because the two are in conflict. Profit will often—not always, but often—drive out the best. We have to live with that, and as the Minister said, we have to find a judgment that will work not only now but in the long term.
Although noble Lords who have spoken in the debate come from different places, we are all trying to seek one thing, which is that in times of change there will be some stability in the processes we are engaging with in this Bill. I felt that the Minister did respond in a way that gives us some assurance that on Report we will be able to see that built into the Bill. She also tried to explain why the Bill spends a lot of time future-proofing the arrangements. This may be simply because the advice she is getting from her civil servants is that, having gone through this in 2009, having walked up the aisle towards the altar and having been jilted at that point, they are experienced in these issues and therefore able to work towards producing what could be a divorce-proof marriage going forward. Perhaps there is a pre-nup situation here that we should be thinking about and using in other places, or perhaps not.
Having said that, the last part of the Minister’s speech stressed that future-proofing does not necessarily open loopholes, but we feel a little sceptical about that. We would like to look at it in some detail and I suspect that it will form one of our debates on Report. However, given what the Minister has said and the assurances we have received, which are extremely welcome, I beg leave to withdraw the amendment.
Postal Services Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara
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.
Lord Stevenson of Balmacara
I thank the Minister for her words. I thank the noble Baroness, Lady Kramer, for joining the debate in speaking to a complementary amendment. I am sorry that my noble friend Lord Kennedy was unable to speak to his amendment; but that did not seem to matter, as the Minister answered the points that I think that he would have made. We will tell him that in future it is almost unnecessary to be here, because the force of his personality was such that she felt that she had to answer his points.
The Minister gave us some positive words about the Post Office card account and picked up the point that we want to do all we can to ensure that access to the banks is improved and made available to as many people as need it. We will study what she said, but at this stage I beg leave to withdraw the amendment.
Postal Services Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara
Baroness Wilcox
Yes, that wide network will be there.
We strongly believe that funding for the Post Office will be best spent modernising and maintaining the network. The funding that we have provided to the network will mean that the Post Office is better placed to compete for new business and to further develop its offer to both local and national government, in its ambition to become a front office for the Government. As part of this strategy, we will of course also support the Post Office in expanding its financial services offering, but at this time we believe that that is best done by offering access to the existing high street banks through the post office network.
The noble Lord, Lord Stevenson, asked a number of further questions on credit unions. It would be best for me to deal with those concerns when we discuss credit unions specifically in the later amendment under Clause 11. I hope that it is possible at the moment for the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara
I thank the Minister for her reply. I suspect that I made a mistake in trying to bring a touch of levity to the debate by quoting “Blackadder”—it was picked up by only a couple of people, one of whom used it to beat me over the head with. I suppose that that is the risk of quoting Blackadder, who seemed to have a singularly unsuccessful way of making his plans come to fruition. I should probably never use that again, so I will not.
We are delighted that the Minister has confirmed that she has looked so hard at the question of a post bank—given the coalition agreement, it would have been rather hard not to do so. I am surprised, given the way that the coalition agreement seems to permeate so much of the business in this House, that my proposal has not been given more of a favourable wind, but there we are. It got a lot of support in the speeches that my noble friends and others on both sides of the House made, and I still think that it is a good idea.
My amendment was an attempt to express the frustration that came out in the intervention that the Minister took. In some senses, we seem to be underplaying the capacity of the existing network to do so much more for society. These post office branches exist. In most cases they are active, vibrant places. People use them—I quoted the figures in my address. We need a complete rethink about the way in which the Government do business. We should take the post office network and use it to achieve more than it is currently capable of doing, given the single use that we are making of it.
How do we save our declining post offices? We use the brilliant brand. We use the securely established places that these post offices inhabit in wonderful locations, with huge footfall, in every part of our country. They are used and valued by people but we do not use them properly to achieve the further output of government. They are places that people go to for their services. People use them for transactions and pick up more information to learn—
Baroness Wilcox
If the noble Lord will bear with me, I must intervene. We do believe that there is an exciting future, so much so that we are supporting 11,500 post offices. The previous Government closed them, but we are not closing any.
Lord Stevenson of Balmacara
I am afraid that the Minister did not quite get my point; I was in the middle of a wonderful peroration which, had she heard it to the end, would have made it clear.
I am talking not about post offices qua post offices but about post offices as an engine for doing more for the whole of government. That is what I am trying to argue the case for. The post bank would therefore be one of a number of things that, if it were located in post offices, used and built on, would be able to sustain the network and perhaps to build back to the numbers that we want to see. However, given that this is not the time to make that sort of speech or to make these sorts of arrangements and that the amendment is framed very narrowly, I beg leave to withdraw the amendment.
Baroness Wilcox
My Lords, I thank the noble Lord, Lord Stevenson, for this amendment. The Government are very keen to see sub-postmasters, sub-postmistresses and staff of Post Office Ltd—the very people who know the network best—involved in the running of the business. That is why this Bill contains provisions that enable the mutualisation of Post Office Ltd.
We believe that mutualisation could help to ensure that sub-postmasters, sub-postmistresses, staff and communities could in the future all have a say in how the Post Office is run. Co-operatives UK is seeking the views of the Post Office’s major stakeholders and will soon report back to my department on proposals for a mutual Post Office. The work that Co-operatives UK is carrying out seeks to address questions such as who the members of a mutual might be and which stakeholders should play key roles in how the Post Office is run in the future. A mutual Post Office must be established with the best interests of the company, the sub-postmasters and sub-postmistresses and the wider public, who are its customers at heart. It must be allowed to develop organically, with the willingness and participation of its members. We believe that it simply would not work if government imposed a rigid top-down structure.
Indeed, it is by no means clear at this stage that the selection of sub-postmaster and sub-postmistress and employee representatives to the board by election would necessarily be the best option for the Post Office network. There is an obvious reason for this; the mutual has not been designed yet, so we cannot know its governance structure. Enshrining its governance in legislation now and then trying to develop the mutual within these requirements goes completely against our commitment to ensuring that the mutual is developed by the people who know it best.
The Government strongly believe that the Post Office and its key stakeholders should be allowed to form their own mutual governance structure as appropriate. In the light of this, and in view of the work that is being carried out on the mutualisation of the Post Office, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Stevenson of Balmacara
I thank the Minister for her positive remarks. I am certainly interested in seeing Co-operatives UK’s report because that will obviously help us to progress this debate. I have little further to say. There are dangers in not specifying a little more what the Government really want out of mutualisation, but I accept that it is early days and that there is plenty of time for that. I beg leave to withdraw the amendment.
Postal Services Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara(13 years, 8 months ago)
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Baroness Wilcox
My Lords, I believe that the intended effect of Amendment 15, in the names of the noble Lords, Lord Young, Lord Stevenson and Lord Tunnicliffe, is to seek to ensure that Royal Mail remains a single company providing the universal postal service and that it is the only universal service provider. We will, of course, come on to the protection of the universal postal service when we debate Part 3 of the Bill, but I should make it clear now that we expect Royal Mail to be the universal service provider in the UK for the foreseeable future. I hope that reassures noble Lords.
I now turn to the issue of whether Royal Mail should be a single company. I do not consider that we should be legislating on the future structure of a company that will no longer be in public ownership. A privatised Royal Mail should be free to organise its business and operations in such a way that enables it to provide the universal postal service efficiently and effectively. This could mean establishing subsidiaries to deliver part of the service or it might mean no change at all. We simply do not know, in 2011, what the best operational structure should be for Royal Mail. Through a disposal of shares, we are giving Royal Mail real commercial freedom, and I do not consider that it is appropriate for the operational structure of Royal Mail to be set in primary legislation.
I have two answers in the question and answer part of the brief on subjects that the noble Lord mentioned. On whether Parcelforce or GLS will be part of the package, no decision has been taken on the formal method of sale. Just as for the Royal Mail, we have no plans to retain either Parcelforce or GLS in public ownership in the long term. The noble Lord also asked about the risks of a new owner stripping the assets from Royal Mail. The Government simply would not sell to a bidder if they believed that they would not assist in securing the future of the universal postal service. Furthermore, any shareholder would want to see a successful business and a sustainable universal service, given that the cash generated by a successful Royal Mail will outweigh the asset value in a very small number of years. Investors would also face significant reputational damage if they allowed Royal Mail to become insolvent. We believe that there is ample protection against that, both in the Bill and more generally. With those answers and the answer I gave previously, I ask the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara
I thank the Minister for that response. We seem to be placing a great deal of stress on hopes and aspirations about what will happen after the sale—other noble Lords picked up on this, I think—and very little on what many people in the country would regard as sensible and appropriate public interest measures, which are being taken on board by the Government or even considered in a serious way.
From what the Minister has said, there is a grave danger of cherry picking. That will still be a possibility. If the successful owner is robust and strong enough, they will be able to do what they wish once they have control of the assets. It is particularly important to register that the Government have not ruled out dismantling the Royal Mail and cherry picking the most popular parts, in particular GLS, which is the most successful European parcels service, as I said earlier. That must be a worry as we go forward.
The assets can be taken away; they do not have to be very large or prestigious to be capable of being sold. On the first day in Committee, the noble Lord, Lord Christopher, considered selling the Oxford sorting office at a profit. Heaven knows why. I have not visited it yet, but perhaps the Minister has. If that is his vision of it, then clearly the assets are valuable and they will go. There is also the possibility of the Royal Mail being split in a geographical way or by function, which would undermine the viability of the universal service provision, which in effect cross-subsidies rural and other diverse locations. We think this is an important issue, but on this occasion we shall not push the matter to a vote. I beg leave to withdraw the amendment.
Postal Services Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara
Baroness Wilcox
My Lords, Amendment 12 wishes to direct any proceeds received from a sale of shares to investment in the post office network and the universal postal service. I certainly agree that the both the Post Office and the universal service require long-term funding certainty if we are to secure both their futures, but I cannot agree at this stage that the proceeds of a sale should be used for either of these purposes. For a start, it is too early to estimate the potential proceeds from a sale, and too early to estimate where the proceeds should most sensibly be used. But the Government will, of course, look to use the proceeds that they receive to part-compensate the taxpayer for taking on the £8 billion deficit in the Royal Mail pension plan.
The Government absolutely recognise that investment is required in the post office network. That is why, as noble Lords will know, we announced last November a funding package of £1.34 billion for the post office network over the spending review period—a package that will be used to put the network on a sustainable footing, not to fund a programme of closures as the previous Government chose to do. We made this upfront commitment to fund the post office network precisely because we recognise its importance to communities across the UK. Funding for the network should not be dependent on the sale of shares in Royal Mail.
The primary purpose of the package of measures in this Bill is to secure the future of the universal postal service. This package will give Royal Mail access to the flexible capital that it needs to modernise and adapt to a changing postal market on a continuous basis. It will reform the regulatory regime with an increased emphasis on the protection of the universal service and remove the burden of Royal Mail’s historic pension fund deficit.
We will come on to discuss the detail of Part 3 in later sessions, but I draw the attention of noble Lords to Clause 28(3)(a), which requires Ofcom, in performing its duties under this Bill, to have regard to the need for the provision of the universal service to be financially sustainable. This is a vital new requirement on Ofcom, which was not in the 2009 Bill. The Government therefore believe that securing the future of Royal Mail by giving it access to private capital and establishing the right regulatory framework is the best way to support the universal postal service.
During the passage of the 2009 Bill, the previous Government resisted an amendment that would have required the Secretary of State to report on the Government’s intentions for the proceeds from a disposal of shares. In rejecting the amendment, the noble Lord, Lord Mandelson, undertook to inform both Houses how the payment for shares would be distributed. I am happy today to give the same undertaking for this Government. I therefore ask the noble Lord to withdraw his amendment.
Lord Stevenson of Balmacara
I thank the Minister for her response, which is rather depressing in its rejection of our proposal.
My reference to the pension deficit fund dealt with the assets. Tagged on to the end of that discussion was a comment that, in return for obtaining the assets, the Government were also acquiring the liabilities. I am not sure that that is an exact parallel. As I understand it, the assets are real and, even if sold in a measured way, will generate cash for the country which will go to HM Treasury, but the liabilities are ongoing. If I am right, the main pension responsibilities will be met on a pay-as-you-go basis. We are comparing apples with pears. One is a substantial reduction in our deficit position; the other is admittedly a long-term commitment but does not need to be capitalised on the resource accounts. Although I accept that £8 billion is a substantial sum of money, it does not really come into the question of whether the funds from the sale of Royal Mail should go back into the Post Office.
Secondly, the £1.34 billion package—which, as I mentioned, is both a continuation of work started under the previous Government and a commitment on behalf of the present Government to ensure that the Post Office is retained on a sustainable footing—is also a mixture. As I tried to say, the evidence is that it seems to result in a reduction in the number of post offices and certainly a change in the nature of post office services very similar to that which was available before.
My third point is that, without a proper package of business activities, there is no way that the Post Office can survive, however it is organised. It is depressing to read that the latest contract for services which could have gone to the Post Office from government has been given to Citigroup to operate. I suspect that that is only the first of a number of difficulties facing the network in future.
However, this was a probing amendment. The Minister has been kind enough to share her answer with us. I beg leave to withdraw my amendment.
Postal Services Bill
Debate between Baroness Wilcox and Lord Stevenson of Balmacara
Baroness Wilcox
My Lords, I thank the noble Lord, Lord Stevenson, for being as succinct as he was in proposing Amendment 3. It seems a long time ago now, but he presented his amendment in three minutes flat, which was very kind of him.
Before I go on, I will put the mind of the noble Lord, Lord Christopher, at rest on at least point today. He was concerned about what will happen to Royal Mail’s valuable collection of stamps, including iconic and historic stamps such as the penny blacks. Collections of such stamps are classified as public records. These are deposited with the British Postal Museum and Archive, and under the Bill they will remain public records. The ownership of Royal Mail’s museum collection, which contains artefacts that are not classified as public records, has been transferred to the BPMA, and as a charitable trust the BPMA cannot sell off this collection—so at least there is a little good news there.
The proposal in Amendment 3, like the one in Amendment 1, does not seem to reflect the fact that the disposal of shares in Royal Mail is a commercial transaction. In particular, if the Government decided to conduct an auction and invite bids from trade buyers, it would make no commercial sense to advertise to bidders our own view of the value of Royal Mail. As my noble friend Lady Kramer has pointed out, that is not exactly the art of negotiation, because all anyone would do would be to bid to that price. We really feel that we will not do that. No trade buyer would bid above the value, and it would therefore reduce the Government’s ability to get the best result for the company and for the taxpayer, because that is what we are about. The Government will, of course, work with their advisers to consider the potential value of Royal Mail so that we can properly assess bids from buyers. However, as my noble friend Lord Eccles clearly said, there is little logic in revealing what we consider the value of the company to be before any sale.
As I have said previously, the Government have not decided how they will dispose of the shares. We wish to retain flexibility, and in this way get the best result for the company and for the taxpayers, but we expect that both the National Audit Office and the Public Accounts Committee in the other place might wish to review the sale process after a sale had been completed. They would both provide their own independent view to Parliament on whether the Government had achieved value for money for the taxpayer.
I have of course listened to what has been said, and it will of course go on the record. I know that there are Members of your Lordships' House who would rather that Royal Mail was not sold at all, and I understand people who have been associated with Royal Mail for many years finding all discussions of this sort very difficult, especially having gone through all this a year ago with the previous Government—a Government of their own. Yet that Government, too, could not successfully find a way out. We need to find the right buyer for Royal Mail who will keep it alive and well. These are very difficult times. No one is writing letters. We have exercised these arguments over and over again, which I am sure everyone in the House knows. We think that this is the best way forward and that flexibility until the very last minute will be needed so that we can get the best price. I therefore ask the noble Lord if he will kindly withdraw his amendment at this stage.
Lord Stevenson of Balmacara
Dash it, I thought that the noble Baroness had forgotten that. I was going to enjoy wondering what to do if she had not asked me to withdraw—clearly, she was supportive. The point that we are trying to get across in this useful and interesting debate is that if there is no valuation process we will have two problems. The public will not necessarily know that we are getting value for money, which they should, and we would lose transparency, which is an important part of any transaction involving public assets. These are important principles to hold in our mind.
I fully accept what has been said, particularly by the noble Baroness, Lady Kramer, that public bodies are not in the normal business of valuing themselves. That is not what they are about. Their job is to provide a utilitarian service that is specified in statute. If they devote time to worrying about whether or not they have caught all the assets that they have acquired while they have been in existence and working out what their market value might be, they would not be focusing on what they should be doing and we do not want much of that.
However, if the Government are selling off the family silver, we should have a full inventory of all the aspects of that before it happens. The Minister is saying that that will happen and I hope that we will have a record. A compromise would not necessarily want to go all down this route, but we would get a much better Domesday Book of what the Royal Mail consists of and, thus, a better sense of what it might be valued at. We would therefore be in a better position to assess whether the bids received subsequently would be appropriate. Therefore, if the pound signs are removed, we would know about what we are talking a bit more at the time of the sale.
My noble friend Lord Christopher is eloquent in his ability to run the market in Oxfordshire—I am not sure why it is Oxfordshire—in terms of the sale he has clearly eyed up for the Post Office service stations there. I think that we would want to help him in ensuring his long retirement on the proceeds. I jest of course.
The second strand that comes through is that the valuation, or at least the lining up, of the assets that we are selling is not the same as disclosing to all and sundry what we want for them. But we can be a bit too coy about that. Clearly, we want to be in a position where we force someone to bid higher than we would have ever dreamed of receiving for the assets that we are putting up for sale. That is what we do all the time in our domestic lives.
I have always been perplexed by why the English do not adopt the Scottish system of selling houses, for example. In that situation, the seller seems to have all the cards. You say that your flat or house is for sale. What it consists of is advertised publicly and you say that you will accept offers in excess of £X where £X is the largest figure that you could possibly think of. Then you sit back and hope. It may have changed since I last sold a house up there, but the three times when I have done it I have been astonished by the braveness of those who have bid for the house and, disclosing no secrets, I have achieved many times more than I thought that I would get every time I have sold. I recommend that to all ye English and perhaps even to the Government in respect of the Royal Mail.
Yes, we want someone to bid more than we are prepared to disclose that we are prepared to accept. But there is a chap called Rupert Murdoch out there who is publicly engaged in bidding for part of his empire, which he only partly holds; yet I read every day about what price people are prepared to accept and what price they think it will be worth. The share prices down to even the last penny are mentioned. I do not think that we should be too worried about where we are going on this. It would not be wrong to say—privately if we want—what we will not accept. In other words, we would expect better bids.
The last thing we want to be part of is a post-hoc analysis of what went wrong in this case. Surely, we have got beyond that. The noble Lord, Lord Lea, made the point absolutely clear. If there is a 7 per cent premium on average sales of new or existing companies and it is 77 per cent on privatisations, there is clearly an issue to be addressed. I am jolly glad to hear that the stamps are being saved for the future, although it is a bit odd that they are going in the archive and not a museum where one would want them to be, but that is how it is.
Whenever one hears of public assets being sold, one has to think of the experience of other countries. It may be to the benefit of English football that this worked well in countries in the East, but we do not want that to be said of here. We want a good and sensible sale that is done in as open and transparent a way as possible. We want to be able to comment on the commerciality of what we are about and to do it so that no one feels that we have in any sense lost out. Those are conditions which I suggest should be taken into consideration of the Bill. We will reflect on what has been said, but at this stage I beg leave to withdraw the amendment.