Postal Services Bill

Debate between Lord Brougham and Vaux and Lord Brooke of Alverthorpe

Wednesday 4th May 2011 Lords Chamber

[Lord Brooke of Alverthorpe]

My Lords, I support my noble friend Lord Stevenson. I do not think that there has been any conversion on the part of the Labour Party. I was an employee when NATS was a PPP. I was an employee share representative acting on behalf of the employees and I was a partnership director. It is true that the employees had 5 per cent of the shares, which is less than what is on offer at the moment, but the Labour Government’s policy was to try to develop more employee involvement than there had been in the past. I suspect that, had they stayed the course with the previous Bill, we might have seen the emergence of something like that. There were certainly plenty of private discussions about the possibilities. Indeed, prior to the Bill being presented, some of us had conversations with Royal Mail about the prospects of creating a trust for employee shares, and we tried to be quite innovative in our approach. Some of us identified that one of the major issues facing postal employees was problems over home ownership. If we created employee shares within the company, while those shares would not be on the open market but would be kept within the trust, why could an arrangement not be created whereby the share ownership was offset against support from building societies to assist employees in purchasing or part-purchasing their homes? Royal Mail looked into that at one stage. Therefore, I welcome what the Government are trying to do. Perhaps the Minister, with all her powers of persuasion, can get round the Treasury and convince it that it should move from 10 to 15 per cent.

It has been pointed out to me that this offer is the biggest ever to be made during the course of a privatisation. I believe that if we check the records to see what happened with the bus industry, where deregulation and privatisation took place on a great scale around the country, we will find that many employees and managers had the opportunity to purchase shares in many of the bus companies in the country. Indeed, in some instances, they took them over 100 per cent, some of them also being put into trusts and some into ESOPs. Therefore, I believe that there is a precedent for offering a level of ownership higher than 10 per cent. I suggest that the Minister has a look at the bus industry if she needs some supporting evidence for her arguments in persuading the Treasury to go beyond the 10 per cent offer.

Secondly, I believe that there should be a trust, although I shall not repeat all the arguments that have been made before. There is a natural temptation for some people to get their hands on the shares and perhaps to dispose of them fairly quickly, as we have seen happen in several privatisations, but I believe that a trust provides a means for an employee to be more permanently committed to the company and to the welfare and profitability of the company in the long term. I hope that the Government will come forward with proposals on a trust.

Thirdly, that leads me to the final point made by my noble friend Lord Stevenson concerning representation on the board. I hope that shares will be issued on the basis of equality, regardless of people’s grades within the company, so that the managing director will get no more shares than a postal worker. Equally, I hope that, if there are instances in which votes have to take place within the trust, each vote will carry the same weight and value. In particular, an opportunity should be created—probably for the first time; certainly my Government did not do it—for there to be an employee director on the company that would be created under the privatisation proposals to represent the interests of the employees’ shares.

This is a chance for the Government to be progressive and to effect some changes in a new way. I see that on 7 June Mr Francis Maude is to speak to a gathering on employee ownership in the Strangers’ Dining Room in the other place. Perhaps he will float what the Government have in mind regarding further changes in the nature of ownership within the public service, with a greater push for employees to have a greater stake in the ventures in which they are involved. This could be linked up with what is happening in Royal Mail.

[The Deputy Speaker (Lord Brougham and Vaux)]

My Lords, I should have announced that, if this amendment is agreed to, I cannot call Amendment 17 due to pre-emption.