Railways: Fares

Lord Skelmersdale Excerpts

Tuesday 12th December 2017 Lords Chamber

[Baroness Sugg]

My Lords, VTEC has paid all its premiums in full to date, and we expect it to continue to do so as long as the contract continues. As with all recent franchise contracts, when entering into the east coast contract Stagecoach committed to inject additional funds into the business at its own expense, and we will hold it to that commitment in full. From 2020, there will be a new east coast partnership, one of the first of a new generation of integrated regional rail operations. That will include appropriate contributions from the private partner under a long-term competitively priced procured contract. I do not recognise the figures that the noble Lord uses.

[Lord Skelmersdale (Con)]

My Lords, can my noble friend explain to me why, in economic terms, the cost of travel appears to be inelastic, and we have seen many trains overcrowded in recent years?

[Baroness Sugg]

My Lords, passenger use of the rail network has doubled since privatisation, which is to be welcomed. As I said, the Government’s use of the RPI is consistent with general indexation on rail industry costs. We are trying to keep fares as low as practically possible, while maintaining the level of investment that our railways need to deal with the overcrowding my noble friend mentions.

Aviation: Large Electronic Device Ban

Lord Skelmersdale Excerpts

Tuesday 28th March 2017 Lords Chamber

[Lord Ahmad of Wimbledon]

If a person is coming through on transfer, the same rules will apply to them. Let me be absolutely clear that this is a measure that we have taken for six countries, as I am sure the noble Lord is aware. Anyone transferring through to any UK airport will be subject to the same restrictions.

[Lord Skelmersdale (Con)]

My Lords, using an iPhone, you can turn on your central heating from some distance. Surely the same could be done with a bomb. Why are not iPhones included in the ban?

[Lord Ahmad of Wimbledon]

As I already said, I will not comment on the specifics of the reasoning for this action. We monitor all issues of security and evolving threats and will continue to do so.

Infrastructure Bill [HL]

Lord Skelmersdale Excerpts

Monday 9th February 2015 Lords Chamber

[Lord Truscott]

What tends to happen is that in the United States, for example, a shale oil rig—a well—may cost $1 million to develop. You then drill in that well for a couple of years, and then you have to invest further in the next well in the same field. A number of shale oil companies in the United States at the moment face not getting the funding to invest in the next well, because it is very cash-flow intense. Therefore if you want energy security, shale oil and gas is not the way to achieve it. It is a very expensive short-term hit, and it adds to the volatility of the price of oil and gas. In a way, the success we are seeing in the United States is already unravelling. I therefore wonder whether it is worth the cost as regards the overall benefit.

We are also seeing the impact on businesses, both large and small, in the hydrocarbon sector. Ask any of the majors at the moment whether they are happy about where they are as regards medium to long-term planning, or go to Saudi Arabia and ask people what they think about the impact of shale oil and gas development in the United States and on the global market. You can say that they are game-playing, but nevertheless, it is destabilising. Is that the way we want to go? Is that a great success story? I am not so sure that when we look back on the development of shale in the United States it will look as successful as we all initially thought it would be. Therefore from that point of view, is what happened in the United States the right way for the United Kingdom to go? I am not so sure.

[Lord Skelmersdale (Con)]

My Lords, before the noble Lord sits down, can he tell me whether he knows of any company of any size, in any part of the world, which invests to not make a profit?

[Lord Truscott]

That is exactly the reason. The noble Lord may know that that is why some companies are going bust—today Max Petroleum, which develops oil and gas in Kazakhstan, said that it was facing insolvency because it can no longer raise the funds to develop new fields. When the price of oil is under $50 a barrel—and we are already seeing the effect on companies such as BP, which is laying off people in Aberdeen because the price of a barrel of oil makes it uneconomic to continue to develop mature fields in the North Sea—we are facing a problem, are we not?

Scrap Metal Dealers Bill

Lord Skelmersdale Excerpts

Friday 18th January 2013 Lords Chamber

[Lord Cormack]

My Lords, I could not be here on 30 November, as I was chairing a heritage meeting in Lincoln, where we have suffered from lead theft on the roof of the Medieval Bishops’ Palace. I have been a church warden in Staffordshire for 17 years and the church of which I was warden suffered from lead thieves on more than one occasion. No one could be more wholeheartedly in support of this Bill than I am, and I warmly congratulate my noble friend and Richard Ottaway on all the work that they have done.

I share a number of the misgivings and concerns of the noble Lord, Lord Faulkner, but if this is the price that we have to pay for government support of this Bill—and it seems to be quite a high price—then we have to pay it, because the sooner this Bill gets on the statute book, the better. I hope that my noble friend, when he responds to this brief debate, will be able to give us the assurance that the Government have not only moved this amendment for understandable reasons, but have moved it with a total determination to ensure that the progress of the Bill is not delayed or impaired in any way.

[Lord Skelmersdale]

My Lords, before my noble friend Lady Browning, whose Bill this is in this place, rises to speak, may I ask the Minister how the Government intend to use the next five years, assuming that this amendment is passed? Are there any plans in view for the Government to include in a government Bill the very necessary contents of this Bill?

[Lord Berkeley]

My Lords, I support the comments of my noble friend Lord Faulkner. I find it quite extraordinary, with all the work that has gone on to get this Bill through, and all the damage, cost and disruption to railways, sculptures, communications and churches that we have seen, that here we have the coalition supporting an amendment that will dump the same problem on the next Government in five years’ time. I hope they will reflect on this, because whoever is in government then—and I am sure it will not be the present coalition—will be blamed. It is really totally unnecessary to have this sunset clause. I hope that the Minister, on reflection, will withdraw this amendment so that the legislation can go through as quickly as possible and we can get some protection from these thieves through a system that will record transactions and enable the police to charge people, thereby reducing the thefts and all the damage they are causing.

Roads: Traffic Lights

Lord Skelmersdale Excerpts

Monday 27th February 2012 Lords Chamber

[Earl Attlee]

My Lords, I am very grateful for the noble Lord’s observations.

[Lord Skelmersdale]

My Lords, although this question refers specifically to the United States, has my noble friend considered the position in France, where the conditions are very similar to our own?

[Earl Attlee]

My Lords, if you look at Paris the conditions are more similar but, as I understand it, Paris was relaid out at one point so the road conditions there are different from those in the United Kingdom. In addition, as I said in my initial Answer, our traffic light system is responsive, so allowing left turns would not give the improvements in productivity that you would get in other countries.

Arrangement of Business

Lord Skelmersdale Excerpts

Monday 12th December 2011 Grand Committee

[Earl Attlee]

My Lords, the Statement or Division is likely to occur very shortly. Unless any noble Lords object, I propose to adjourn the Committee until after the Statement.

[The Deputy Chairman of Committees (Lord Skelmersdale)]

My Lords, this is a most unusual procedure. I note that the Opposition Front Bench spokesman has not yet finished speaking in the Chamber, nor has the Minister responded. However, I am of course in the hands of the Grand Committee.

[The Marquess of Lothian]

In referring to the end of the Statement, does the noble Earl mean the end of my noble friend Lord Strathclyde’s Statement or the end of proceedings on the Statement as a whole, which I see has been extended to 40 minutes?

Postal Services Bill

Lord Skelmersdale Excerpts

Wednesday 4th May 2011 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, we discussed the issue of a representative of employees serving on the board of Royal Mail in Committee and it received support from across the Chamber. The noble Lord, Lord Cotter, from the Liberal Democrat Back Benches, drew on his experience as managing director of a manufacturing company. He said on 8 March at col. 1553 of Hansard:

“It is crucial that employees have not only shares but a real voice in one way or the other. Without that, so many companies fail. We want the new conglomerate to succeed, to go forward and to bring its employees with it, as opposed to management and employees being at each other's throats as has sometimes been the case in the past”.

My noble friend Lord Myners pointed out that the shareholders in a privatised Royal Mail,

“—whether it is a large corporation, perhaps based overseas, or is floated on the stock market with a large number of investors—will nevertheless individually have a very modest interest in the company … few … will own more than 1 per cent of the company; they will have diversified their risk through portfolio construction. The employees cannot do that; they will have what investors would call a high-conviction portfolio, with all their money invested in a single share and all their employment in one place of work. It is surely right that people who exhibit such a high conviction to a company should have some voice in the leadership and management of the business”.—[Official Report, 8/3/11; cols. 1553-55.]

Postal workers already have a major stake in the company, and their livelihoods are dependent on its viability. This is more than just an issue of immediate employment, because postal staff invest their livelihoods and pensions in the company. We will suggest later under Clause 3 that they should be able to invest in trust-owned employee shareholdings in the company. Surely it is not too much to ask that they have a seat at the board table for their chosen representatives.

What do we see when we look across the channel? Employee representation is commonplace. In fact, some of the companies that are held up as shining examples of privatised postal services have employee representatives on their boards. The Minister for Postal Services, in Committee in another place, stated:

“I have never been opposed to the idea of employee representatives being on boards, or on board committees”.—[Official Report, Commons, Postal Services Bill Committee, 23/11/10; col. 325.]

We invite the Minister here to go one step further and make provision in the Bill for this good idea. Failure to introduce representation of postal workers would risk missing a real opportunity to create trust and confidence for the long term. I beg to move.

[The Deputy Speaker (Lord Skelmersdale)]

If the amendment is agreed, I cannot call Amendment 5, by reason of pre-emption.

[Baroness Wall of New Barnet]

My Lords, I shall speak to my Amendment 11 in the group. Like other amendments, it requires the Secretary of State to lay a report before Parliament detailing his decision to dispose of shares in a Royal Mail company. This must be done within a reasonable and practicable time, as we have discussed. My amendment seeks to strengthen the reporting requirements of Clause 2 and to make sure that Parliament has the opportunity to scrutinise the training and skills agenda of the newly privatised Royal Mail.

Royal Mail has a strong and well established culture of training and development, supported by comprehensive agreements with its union, the CWU. The business is committed to modern engineering apprenticeships through the 2010 business transformation agreement that underpins the current process of modernisation. An illustration of how that takes place and the level of that commitment is that last year the company was involved with 300 core apprentices and 200 advanced apprentices. That is a record about which the Minister will share my enthusiasm.

The Government have been vocal, today and previously, in their support for apprenticeships. In the Budget they announced 50,000 new apprenticeship places at a cost of £180 million. This support should ensure no erosion of current positions and opportunities in Royal Mail. I am sure that the noble Baroness would agree that it would be very disappointing if any of the positive and evolving culture of training in Royal Mail disappeared or diminished.

The Government’s vision is hugely important and has led Royal Mail in many ways. The impact of privatisation and the short-term cost-cutting agenda makes some people worried that the private shareholder may not bring the commitment that I mentioned. Royal Mail’s strong culture in training and skills development is underpinned by a range of robust agreements between the union and the business to ensure effective training for new starters, ongoing training and up-skilling, in line with the introduction of new equipment.

A culture of training and development at Royal Mail is crucial, as it is in many organisations. The noble Baroness will know that most businesses benefit and progress with a culture that encourages apprenticeships and skills improvement at all levels. My worry, and the worry of many people, is that short-term cost savings may need to be made by a reduction in investment in training and development. That would be detrimental to the future success of the business.

Royal Mail and its union, the CWU, have worked hard to introduce a comprehensive training framework that is available to all employees. When employees join the business, they are supported by an induction programme through which they are guided over a 13-week period. This involves induction days, and on-the-job and off-the-job training. This leads to a culture of encouraging further advancement into apprenticeships. Royal Mail embraces and continues many other schemes.

I want to make the quick point that, having grabbed hold of the culture that my Government and now this Government are pursuing and have pursued in apprenticeships, we must at all costs ensure that any sell-off of Royal Mail will in no way be detrimental to the business. A number of young people in Royal Mail are benefiting from that. The whole status of the business is dependent on that skill level being supported. I hope that the noble Baroness will assure me and the House that she is well and truly committed to that and that it will be enshrined in how Royal Mail moves forward.

Postal Services Bill

Lord Skelmersdale Excerpts

Wednesday 6th April 2011 Lords Chamber

[Lord Skelmersdale]

My Lords, I readily understand why the noble Lord, Lord Laird, seeks to protect local post offices, not only in Northern Ireland but in the other far flung parts of the United Kingdom. The trouble is that, with this amendment, he has cast the agreement between Royal Mail and Post Office Ltd in what I would call a leaden block. Not only is 15 years very long term but it means that, when Royal Mail is sold, there will be absolutely no opportunity within that 15 years to change the agreement, which might well be to the benefit of both sides. In the initial sale, the pre-nup agreement, as the noble Lord, Lord Stevenson, has just called it, will come as part of that particular package, but, as I have said, over a period of perhaps very few years, it may be to the mutual interest of both sides of the equation to come to renew the agreement. As far as I can see it, the amendment of the noble Lord, Lord Laird, prevents that happening.

[Lord Young of Norwood Green]

Amendment 24PA, standing in my name, would ensure the continuation of the current inter-business agreement between Royal Mail and Post Office Ltd. The agreement should be in force before any disposal of an interest in a Royal Mail company and should include the definition of the relationship between that Royal Mail company and Post Office Ltd after the disposal.

Amendment 24P, in the name of the noble Lords, Lord Laird and Lord Rogan, seeks an inter-business agreement of 15 years’ duration, while that in the name of the noble Lord, Lord Bradshaw, seeks one of 10 years’ duration. We share the view that that would be a reasonable period, although Amendment 24PA makes the point at a different clause in the Bill. At this stage, I am sure that if Ministers could accept the principle then we could between us find the best place in the Bill to insert it.

The noble Lord, Lord Skelmersdale, made a point about setting things in tablets of stone. I should have thought that there ought to be the capacity to review some of the detail of an inter-business agreement. The important thing is to establish it.

The Post Office is dependent on Royal Mail's business for a significant part of its survival strategy. More than one-third of its revenue, some £343 million, and one-third of sub-postmasters' pay, £240 million, is generated by selling Royal Mail products and services. If the two businesses are to be forced to separate, our concern is that a privatised Royal Mail might look elsewhere for a better bargain and for other retail outlets to sell its products. There is no guarantee it will use post offices to the same extent. The Bill does not safeguard the inter-business agreement through which Royal Mail guarantees use of the Post Office as its retail arm. When it comes to be renegotiated, a privatised Royal Mail could look to reduce costs by using other outlets such as supermarkets or high-street chains instead of post offices. To date, the Government have not agreed to undertake to extend the current, five-year IBA to 10 years.

Without an extended IBA, there is no guarantee that Royal Mail will continue to use the Post Office. In evidence to the Postal Services Bill Committee, the Minister, Ed Davey, stated:

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

But then no other Government have needed to intervene on the inter-business agreement because no other Government have separated the Post Office from Royal Mail. The Minister tried to reassure stakeholders by arguing that both Royal Mail and the Post Office want an extended inter-business agreement. He further said in evidence to the committee:

“I refer the Committee to what the chief executive of Royal Mail, Moya Greene, and Donald Brydon, the chairman, said. Moya Greene said it was unthinkable that there would not be a long-term relationship between Royal Mail and Post Office Ltd. Donald Brydon said that he wanted to have the longest possible legally permissible agreement”.

The stated aims of the current management of Royal Mail, while welcome, are insufficient reassurance. The relationship between the two companies is one of imbalance. The Post Office cannot survive without Royal Mail, yet Royal Mail could succeed without the Post Office. Ed Davey 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, Commons, Postal Services Bill Committee, 11/11/10; cols. 121-23.]

However, he has provided no evidence to support this position. Given the importance of retaining the relationship between the two businesses and the risk of leaving its maintenance to the discretion of Royal Mail, the Government should instead require a 10-year IBA as part of the Bill and ensure that this meets the requirements of EU competition law. To do so could only strengthen the position of the Post Office. As I understand it from a recent discussion with the Post Office, it is indeed seeking to establish a legally binding agreement with Royal Mail.

Consumer Focus has warned of the risk to the Post Office of the lack of a long-term IBA. It has argued that the number of post offices could fall by 37 per cent, from its current level of 11,900 to a minimum number consistent with the Government’s access criteria, 7,500. The National Federation of Sub-Postmasters believes that a minimum 10-year IBA is essential and that, in order to avoid further post office closures, the existing levels of Royal Mail work at post offices must be maintained, with a minimum 10-year IBA between the two companies.

Post offices—predominantly those in rural areas—are still struggling to survive; they are finding it hard. Only 4,000 of the UK’s 11,905 post offices are economically viable and, despite assurances from the Government, which we welcome, that there will be no further programme of post office closures, branches are still closing every week. More than 150 post offices have closed on a long-term temporary basis this year alone, with no absolute guarantee that they will reopen. So there is genuine concern here. The 900 post offices that are currently up for sale, an issued referred to George Thomson, the General-Secretary of the National Federation of Sub-Postmasters, is an unusually high number. Many sub-postmasters are retiring or leaving the business because of the low levels of revenue generated in sub-post offices and the Post Office is struggling to find alternative premises and service providers.

The post office network can ill afford to lose any more work. That is why it was unfortunate, to put it mildly—it is my attempt at irony—that the Post Office’s contract to award 400,000 green giros a week has recently been lost. This provided 400,000 transactions a week, a significant of level of footfall supporting the network and around £70 million in revenue over five years to Post Office Ltd. It strikes an unfortunate note given the recent statements by the Government that they are determined to ensure that post offices will be the front office for a number of government services. I would welcome the Minister’s comments on that decision.

As I have said, the Government have rejected a number of opportunities to make that commitment firm in this important legislation. They have declined to accept a statutory commitment, as exists in countries such as Germany and the Netherlands, to a figure of 11,500 offices; they have rejected embedding into the Bill the access criteria stating how close your nearest post office will be; and they have even rejected empowering Ofcom to adjust the statutory commitment over time. We do not doubt the Government’s good intentions but it will take more than that to require a privatised Royal Mail to use the post office network to the same extent as now.

European competition law is trailed as a possible obstacle to an inter-business agreement. The Minister for Postal Services told the Public Bill Committee in another place:

“I am unaware of any statutory precedent for requiring particular commercial terms between two independent businesses”.—[Official Report, Commons, Postal Services Bill Committee, 23/11/10; col. 360.]

However, there is no precedent for separating the Royal Mail from the post office network. The National Federation of Sub-Postmasters has said that there is nowhere in the world where this has happened. It is the role of new legislation to create precedents. It is because of the precedent of totally separating the Post Office from a privatised Royal Mail that we seek to underpin the relationship with the post office network.

We hope that the Government will reconsider this vital business agreement, which will ensure not only an enduring relationship but the future of the Post Office. I am conscious of the time and I shall cut short my contribution. I look forward to the Minister’s response.

Postal Services Bill

Lord Skelmersdale Excerpts

Monday 14th March 2011 Lords Chamber

[Lord Young of Norwood Green]

I beg to move the amendment standing in my name.

[The Deputy Chairman of Committees (Lord Skelmersdale)]

You are speaking to it.

[Lord Young of Norwood Green]

My apologies, I shall speak to it.