Postal Services Bill

Lord Brooke of Alverthorpe Excerpts

Monday 14th March 2011 Lords Chamber

[Baroness Kramer]

My Lords, the statements made by the noble Lord, Lord Clarke, expressed the distress that is widely felt and which we all understand. He got to the crux of the matter when he said that a previous Government had liberalised the market in mail without first putting Royal Mail on a secure basis. I agree totally with that analysis. Just as happened with Deutsche Post in effect, Royal Mail should have had private capital brought in in that period to put it on to a secure and thriving basis before the market was liberated. We can see that.

However, I ask the House to be careful that we do not repeat that mistake. Since Royal Mail is bleeding money daily, there is urgency in dealing with the problems facing it to make sure that it survives and that a universal service provider survives. Sometimes in these conversations we might occasionally overlook the reality that if there is no secure financial future for Royal Mail, which requires not just the current very important modernisation programme but steps beyond that requiring considerable additional outside money to establish it as a pre-eminent and effective organisation, the role of universal service provider is indeed in jeopardy. It is making sure there is a successful financial future for this organisation that makes the universal service provider concept viable. Rather than reading this legislation as some sort of attack or as a lack of faith in the universal service provider, I see it as attempting to put into place the structural underpinnings that make the USP a realistic ongoing proposition, because consumers and those who work in the Post Office wish to see that as part of our future.

[Lord Brooke of Alverthorpe]

I agree with the principal point that my noble friend Lord Clarke of Hampstead made about the universal service. As the House knows, I was one of those who recognised the problem that Royal Mail was facing and who was in favour of substantial capital investment to try to help with modernisation and moving forward, but I was not in favour of 100 per cent privatisation. There is a difference between those who are now expressing concerns in a way that they did not before. The major difference is that we are talking about 100 per cent privatisation as opposed to only a very substantial part of the shares being sold.

My worry is that we could find ourselves in a position where a foreign buyer might already be in the business in a country that no longer has a universal service and that might decide in due course that it will no longer maintain a universal service in this country. That would be very bad indeed for Britain. People are waking up to what is happening in the health service, with the threats and fears that they are starting to see, and I hope that they will start to recognise that while we need change in this area as quickly as we can have it, there have to be fundamental safeguards to meet the wishes of the British people. I hope that they will recognise that there is conceivably a threat at the end of the day to the universal service.

We are governed by European Union legislation in this area to a degree. Originally, the European Union was very much in favour of the retention of the universal service. Bit by bit over the years, the European Union has changed the legislation and has eased its position on it. A number of European countries have now moved from being totally state-owned to 100 per cent privatisation, and in some of them operatives are not required to deliver a universal service. It is quite conceivable that one of those could bid and be successful in purchasing the Royal Mail. I listened to the previous debate and the assurances given by the Minister. She hopes that there will be ways in which we would avoid any such difficulty arising. Ofcom would be involved. Will Ofcom have the right to stop a foreign bidder of the kind that I have just described proceeding with the purchase of 100 per cent, less the employees’ share, of Royal Mail? If so, how would it prevent the universal service disintegrating bit by bit if such a buyer were in possession of the Royal Mail?

[Lord Swinfen]

Apart from Royal Mail, there are a number of other providers of postal services, none of which produces a universal postal service. They all rely on Royal Mail to deliver the last mile, particularly in remote areas. We need something in the Bill, and I would like the Minister to tell the House how a universal postal service will be ensured by someone taking over Royal Mail. If she cannot, she must bring something forward on Report to ensure that. Otherwise, this Bill is not satisfactory.