Equitable Life

Debate between Alan Reid and Mike Weir

Thursday 26th February 2015 Commons Chamber

[Mr Weir]

I never had my pension with Equitable Life, but the right hon. Gentleman makes a good point. Many solicitors, accountants and other professionals invested in Equitable Life. It was popular with financial advisers because it was seen as a safe, steady company, but it turned out not to be, and people lost a lot of money because it was not properly regulated.

The Government need to consider future pension provision. Increasingly, we are being urged to invest in pension provision to augment our state pensions, and with the recent revelations that less than half of new pensioners will receive the whole new single-tier pension when it is introduced next year, that is more relevant than ever. The new rules granting much greater freedom for pension holders to access their pensions savings will greatly alter the pensions landscape and the attitude of savers towards pensions, but it might also make it more difficult for company investment strategies. It is imperative in this new environment that there is confidence in the stability and worth of pensions investment—it is not the same as putting money in a bank or building society, where the rate of interest is known, pitiful though it might be at present; it depends on fluctuations in the market and the type of investment made. Admittedly, there is no guaranteed return—there is always an element of risk—but for most people it is a major investment, so the risk should be as small as possible.

[Mr Alan Reid (Argyll and Bute) (LD)]

I agree with the hon. Gentleman. The public need confidence that the pension industry will be regulated properly, and in this case it obviously was not—the Government Actuary’s Department failed. Now that the public finances are in a better state, I think the Government should pay up in full, as recommended by the ombudsman, otherwise people will not have confidence in the future.

[Mr Weir]

I agree with most of what the hon. Gentleman says. We have to grasp the nettle because it is becoming ever more important that we have confidence in our pension provision. If we fail to give people that assurance, we risk them not having the confidence to invest in pensions, or taking their money out at the earliest opportunity, leading to even greater pressure on the public finances. Equitable Life remains a running sore, and so long as that is the case it risks damaging the whole industry and the attempts to encourage future pension savings. It was not simply a bad investment; the regulator failed to do its job, and that led to substantial losses.

We accepted that people were due compensation on the basis that the amount offered would be determined by the state of the public finances, but, as I said, there remains a gulf between the various amounts suggested. Before we come to any agreement, therefore, we must be clear about the amount involved, but it would be unwise to make it a party political issue just because there is an election around the corner—voters base their decision on many issues, including, in some cases, Equitable Life—but if the public finances are improving, of which some of us are less convinced than others, it is right that Equitable Life policyholders be considered anew. I urge the Minister to consider greater compensation.

Universal Postal Service

Debate between Alan Reid and Mike Weir

Thursday 17th July 2014 Commons Chamber

[Mr Weir]

I do not disagree with that; in fact, I am very keen for it to start, but even with the best will in the world, given previous investigations of this nature, it will take time, and time may be what we do not have. Does anyone really believe that it will be done in a few months? What will be the state of the USO if it takes 18 months or even two years to undertake such a review? What will Ofcom do? Does anyone in the Chamber really believe that the Government would go to competitor companies and say, “You cannot continue to expand” or “You must contract”? I very much doubt that.

It seems to me that its options under the 2011 Act are constrained. Under section 8—no one has mentioned this point so far—the Government could review the minimum requirements in terms of section 33, and therefore reduce the minimum requirements of the service. We should remember that under section 29 of the Act, at all times when securing the universal service Ofcom must also take into account

“the need for the provision of a universal postal service to be financially sustainable,”.

Does that not also open the door, for example, to raising the price of the universal service? I have previously made the point that with the abandonment of price controls over all other services, second-class post is now the only truly universal service, and even that could be at risk under the proposals. Many small businesses have already seen a rise in costs since privatisation, with an increase in first-class costs and small package rates.

The hon. Member for Ealing North (Stephen Pound) recently sponsored a meeting in this House at which Royal Mail presented its case for a review of the USO. I asked it directly whether it was seeking a diminution of the USO, but it denied that. I cannot say that I entirely believed that, but we must be aware that it is one possible outcome of a review, whether or not that is the company’s intention.

[Mr Reid]

The hon. Gentleman is well aware that the USO can be changed only if there is a vote in both Houses of Parliament, and I cannot believe that any sane political party would vote to reduce the USO.

[Mr Weir]

I am not sure that the present Government are sane political parties, but I will let that one go.

The Government will rightly point out that the 2011 Act enshrines the USO in law for the first time. That is true, but during the passage of the Act many of us asked specifically what will happen if the company comes back and says that it can no longer sustain the service. Royal Mail has been privatised, investors have made their profits, and we may well be about to explore the answer to that question.

--- Later in debate ---

[Mr Weir]

Indeed, that is my understanding.

[Mr Reid]

Will the hon. Gentleman give way?

[Mr Weir]

No, I have given way enough already.

[Mr Reid]

On a point of order, Madam Deputy Speaker. Am I right in saying that the procedures of the House are that an affirmative resolution requires a vote of the whole House, not just a vote in Committee?

Scottish Referendum (Trident)

Debate between Alan Reid and Mike Weir

Thursday 7th March 2013 Westminster Hall

[Mr Weir]

We have already said that our armed forces will be in the region of 15,000. That is on the record.

I have given way enough, and I would like to make some progress.

Scotland’s share of UK defence forces and our share of Trident costs could be used for the diversification of HMNB Clyde and to create jobs that met the defence, economic and public service priorities of an independent Scotland. Scotland’s population share of Trident running costs is estimated at around £163 million per year, while its population share of the Ministry of Defence’s estimated costs for the replacement of the Trident submarine fleet and infrastructure equates to around £1.25 billion to £1.7 billion. That is at least £84 million for each and every year of the 15 years it would take to construct.

A recent freedom of information request to the MOD revealed that 520 civilian jobs at Faslane and Coulport are directly dependent on Trident. That is only a small proportion of the more-than-6,500 military and civilian personnel who support operations at the bases. Channel 4’s “FactCheck” reported in 2007 that the lion’s share of Trident jobs—around 12,340—are based elsewhere in the United Kingdom, not in Scotland.

[Mr Reid]

Will the hon. Gentleman give way?

[Mr Weir]

No, I will not.

There is no reason why the vast majority of Trident-based jobs cannot be redeployed in the redevelopment of the bases for non-nuclear defence use. In addition, the money being spent on Trident could be much better used to provide high-quality jobs in the area and beyond.

The argument put to the Select Committee by a Defence Minister, which was quoted in the report, that Scotland would somehow have to pay for a replacement base is laughable. If the remainder of the UK wants to keep those dreadful weapons, it is up to it to find a solution on where to base them, and to pay for them.

Whatever the discussions or arguments regarding the removal of Trident from Scotland after independence, no one should be in any doubt that it is our clear intention that the weapons will go as quickly as is safe.

Recently there has been much argument about the costs of Trident. It is completely unaffordable. Malcolm Chalmers of the Royal United Services Institute noted that about 35% of the MOD’s total core procurement budget would be going on Trident by 2021.

Such weapons are immoral. If they were ever used, they would indiscriminately destroy hundreds of thousands of lives and do untold damage to humanity and our planet, if not destroy it completely. The UK is a signatory of the non-proliferation treaty. We spend a lot of time telling others that they should not have nuclear weapons—indeed those who are developing civil nuclear programmes—for fear of what they might do with them. It is high time that we took a lead and accepted that we can no longer sustain a nuclear capability.

Bishop Desmond Tutu has put the argument much better than I could:

“We cannot intimidate others into behaving well when we ourselves are misbehaving. Yet that is precisely what nations armed with nuclear weapons hope to do by censuring North Korea for its nuclear tests and sounding alarm bells over Iran’s pursuit of enriched uranium. According to their logic, a select few nations can ensure the security of all by having the capacity to destroy all.

Until we overcome this double standard—until we accept that nuclear weapons are abhorrent and a grave danger no matter who possesses them, that threatening a city with radioactive incineration is intolerable no matter the nationality or religion of its inhabitants—we are unlikely to make meaningful progress in halting the spread of these monstrous devices, let alone banishing them from national arsenals.

Why, for instance, would a proliferating state pay heed to the exhortations of the US and Russia, which retain thousands of their nuclear warheads on high alert? How can Britain, France and China expect a hearing on non-proliferation while they squander billions modernising their nuclear forces?”

Someone once said that a unilateralist is a multilateralist who means it. I give no apology for believing that we need to get rid of nuclear weapons. Scotland, at least, wants rid of them and means it.

Scotland Bill

Debate between Alan Reid and Mike Weir

Tuesday 21st June 2011 Commons Chamber

[Mr Reid]

My hon. Friend is correct. There would be an incentive for a white van man to drive south, fill up his white van, come up to Scotland and sell the alcohol at a profit. When I intervened on the hon. Member for Dundee East, we heard a sedentary intervention from the hon. Member for Angus (Mr Weir) to the effect that Argyll was not close to the border. However, I would point out to him that for a whole variety of reasons people from Argyll regularly visit England and, if they could buy alcohol cheaper there, there would be an incentive for them to fill up their car with it. That would mean a further loss of income to the Scottish economy.

[Mr Weir]

The hon. Gentleman is making a case, but for many years people have been going on holiday to other jurisdictions and bringing back alcohol with them; there is nothing unusual in that. The suggestion that all of a sudden there is going to be a massive influx seems to me ridiculous, especially given the cost of fuel in Argyll.

[Mr Reid]

But they would also fill up their cars with fuel when they were outside Argyll. The hon. Gentleman makes a point. We have heard about booze cruises to Calais, but despite the high price of fuel, it is cheaper for someone in Scotland to drive to England than to go to France. Britain has a certain degree of flexibility over its excise duties because it is surrounded by water. The one land border we have is between Northern Ireland and the Irish Republic and we have all heard the allegations of fuel smuggling. That shows it is more difficult for a country to set its own excise duties where there is a land border than it is when there is only a sea border. With a land border, setting a separate rate of alcohol duties would be difficult.

The hon. Member for Paisley and Renfrewshire North (Jim Sheridan) mentioned that people working regularly in England would be able to take alcohol back to Scotland on the train. That led me to think about what would happen on the train itself—I can imagine the announcement on the tannoy as the train leaves Carlisle: “Get your drink now because in five minutes the price goes up”!

To summarise, the SNP did not make the case for their amendments. Through their new clauses, the Government are giving substantial extra powers to the Scottish Parliament, so I will support the Government tonight.

Scotland Bill

Debate between Alan Reid and Mike Weir

Tuesday 15th March 2011 Commons Chamber

[Mr Reid]

If the SNP wants to call itself Alex Salmond for First Minister, it is perfectly entitled to do so. What it cannot do is confuse the electorate by having two names. One minute it is called the Scottish National party; the next minute it is called Alex Salmond for First Minister. If only SNP members would make up their minds on what they want their party to be called.

[Mr Weir]

What the hon. Gentleman is saying is very interesting. I seem to recall that his party registered the name “Ming Campbell’s Liberal Democrats”, but, surprisingly, did not use it at the general election.

[Mr Reid]

I think that the law was changed.

I understand that the hon. Member for Central Ayrshire chairs the all-party parliamentary group for the promotion of first past the post. He has continually extolled the virtues of the first-past-the-post system, but that is not my understanding of what his new clause actually means. I think that it would be more accurately described as promoting “first two past the post”.

Scotland Bill

Debate between Alan Reid and Mike Weir

Monday 7th March 2011 Commons Chamber

[Mr Reid]

I was giving way to the hon. Member for Angus (Mr Weir).

[Mr Weir]

I am listening closely to the hon. Gentleman. Do we not already reciprocally recognise qualifications within the EU, and is it not the case that doctors can come from other parts of the EU to practise in the UK? Therefore, what is the problem with the recognition of Scottish qualifications and Scottish regulation?

Postal Services Bill

Debate between Alan Reid and Mike Weir

Wednesday 12th January 2011 Commons Chamber

[Mr Alan Reid (Argyll and Bute) (LD)]

I agree that much more Government and local government work has to go to the Post Office, but can the hon. Gentleman tell us what his Government in Scotland are doing to give more Scottish Government work to the Post Office?

[Mr Weir]

The Government in Scotland will have discussions with the Post Office, in the same way as the Government here, but that will depend on what happens. I was making the point that, although I welcome the development that I have described—I could equally well ask the hon. Gentleman what his colleagues in local government are doing about it—I have concerns about what will be produced, albeit not because I distrust the Government’s intentions. The Minister held a meeting before the Bill came forward and he explained what he was trying to do. I support that, but there are practical difficulties.

I made the point that, in my area of Angus, the local authority has established local access offices in most boroughs to offer a front-office service for all local authority services. In Arbroath, Brechin, Kirriemuir, Forfar and Montrose, those offices are all situated around 100 yards at most from a post office. In the case of Kirriemuir, Forfar and Montrose, those are the only post offices in the borough. However, there are two difficulties with that. It is difficult to see how the local authority will have a greater ability to deliver services through the post offices in those borough areas, especially where there is only one post office. Also, because of what happened in the last round of closures—when many of our stand-alone larger post offices were closed, being moved into sweet shops, paper shops and other premises, as the hon. Member for Linlithgow and East Falkirk said—those post offices do not have the space to deliver greater services and nor, in many cases, do they have the expertise.

In my constituency, there are already problems with some of those post offices because of lengthening queues and an inability to deliver the services already provided by the Post Office. It is difficult to see how those post offices will cope with an influx of other services from the UK Government, the Scottish Government, local authorities or anybody else. That is a practical difficulty, and I have not heard anyone in the Government come up with a solution to it. What is proposed may be a possibility in rural areas, but in their programme for post offices, the Government are talking about 4,000 main post offices that will provide a full range of services—incidentally, that is the number of post offices that are currently viable, which is slightly worrying. However, on top of that is what the Government call the post office local model. The idea of the local model is to put post offices into smaller businesses to deliver—the Government say—longer office hours and greater help for local people.

That is fine in theory, but the post office local model does not provide the full range of post office services. I suggest that the bulk of our post offices will be unable to provide the full range of services in smaller communities if the Government, local government, Scottish Government and whoever else get their act together and produce such services in the first instance. That practical difficulty needs to be tackled before things can proceed. That is another reason why a long-term inter-business agreement is a good idea. We have to look at not only the business, but the structure of the post office network, so that it can deliver the new business that is being promised to it.

However, the most important point is what the relationship will be between a privatised Royal Mail and a Government-owned Post Office Ltd, where the Government are determined to push down the costs to the taxpayer of continuing to support Post Office Ltd. As the hon. Member for Colchester rightly said, Royal Mail will inevitably try to push down its costs in delivering a mail service. When asked about that in the evidence session, Paula Vennells of Post Office Ltd said:

“In terms of what is in the Bill, what is important for Post Office is that we maintain our strong relationship with the Royal Mail Group.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 5, Q6.]

That is fine and well, but we all know that at present Post Office Ltd gets fully one third of its business through the inter-business agreement. The Minister will, I am sure, point to the statement made during the evidence session by Royal Mail. Moya Greene, the chief executive, said:

“For me it is unthinkable that we would not have a very long-term relationship with the Post Office.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 18, Q42.]

Again, that is all very well, but I would suggest that the relationship between a fully privatised Royal Mail and a Government-owned or mutual Post Office Ltd would be very different from that between two companies that are both members of Royal Mail Group, as they are at present. In passing, one might also wonder how long the present management will remain in place, given what has happened with management previously.

--- Later in debate ---

[Mr Weir]

Indeed. I would put it a different way. There is no effective sanction available to Ofcom to deal with something after it has happened to the detriment of the USO. It is only able to impose conditions or a fine, and fining a shell company is no good. Ofcom cannot prevent the sale; it can react only if what is happening turns out to undermine the ability to provide the USO. As I said, if the company has already sold off all its profitable parts leaving only a shell, what is the point of a large fine that it is not in a position to pay?

The Bill must provide the power to allow Ofcom to take action before a sale is proceeded with and to ensure that the privatised company cannot dispose of all profitable assets to avoid the duty of the USO. I am sure that the Minister will say that that is a burdensome hurdle, but it is not. It is not the first sale that would be required to clear a regulatory hurdle before going ahead—indeed, many deals are done subject to regulatory approval. I am sure that the Secretary of State for Business, Innovation and Skills is only too well aware that the BSkyB case had to go to the European Commission to determine whether it would be blocked at that level before the remaining shares could be put forward.

If the new clause was passed, Ofcom could look at the proposal and ensure that the assets of the company remained sufficient to meet the needs of its social obligation. In most cases, that would be a relatively quick process. However, it would give the reassurance that once there is a privatisation—if that disaster should happen—there would at least be something in place to ensure that the universal service continues in all circumstances. I ask hon. Members to support the new clause to give that extra protection.

Time is short, but I would like to mention briefly the other amendments in my name. Amendment 11 would add to the Bill a reference to

“the needs of small business users in rural and remote areas”

and make it a specific matter to which Ofcom must give concern in considering the USO. The reason is simple. We need to ensure that the universal service obligation is secured for small businesses in rural areas if we are to have any chance of creating new employment opportunities in our rural communities. On Second Reading, Scottish National party Members tabled an amendment supported by Plaid Cymru and all the parties of Northern Ireland because of our huge concern that the Bill would have profound implications for that ability to continue the USO.

It is vital to bear in mind that not only residential but small business customers rely on Royal Mail. They do not have any real options and cannot access the deals that may be on offer from alternative carriers. In the parcels market, if one can get anyone to deliver to large parts of Scotland at all, it is only at a vastly increased price. Not so long ago, the then management of Royal Mail proposed a zonal pricing structure that would have created different prices for different areas of the United Kingdom. In the recent spate of bad weather in Scotland, many of the alternative carriers simply gave up, and several publicly stated that they would not attempt deliveries in Scotland at all.

Throughout this time, Royal Mail did its best to ensure that the mail got through, with postal workers struggling in very difficult conditions to ensure that the mail was delivered. Although there were delays and although, for obvious reasons, some areas could not get mail, most of the mail got through. We should congratulate Royal Mail and its workers on doing that. It shows the difference between a dedicated public company service and the privatised services that operate elsewhere. Amendment 11, allied with the others in the group, is simply an attempt to ensure that if the disaster of privatisation befalls Royal Mail, as much as possible is done to ensure that the USO is watertight and that the interests of all users are adequately protected.

Amendments 12 and 13 are linked, in that the purpose of both is to ensure that the universal service obligation for postal packets is a six-day service.

[Mr Reid]

The hon. Gentleman has a point. Although the USO for parcels is currently only five days, and the Bill does not change that, I hope that the Minister will consider increasing the USO to six days for parcels. He has improved the USO in many ways in the Bill, but I ask him to take this away and look at it again, because I am concerned that if we do not have a six-days-a-week USO for parcels, Saturday parcel deliveries in the highlands and islands will end.

[Mr Weir]

The hon. Gentleman is perfectly right. I hope that he will follow up that strong support for the proposal by coming through the Lobby and voting for it in order to send an additional message to his Minister.

As the Bill stands, we have a six-day service for letters but only a five-day service for postal packets. I am at a complete loss as to the logic behind the differences between the two. One thing that came through loud and clear from Richard Hooper’s report, on which the Government have relied, is that the market for letters is declining substantially. The bulk of private letters are now being sent around Christmas, and they will mostly be Christmas cards. I suspect that I am not the only one who has noticed that the rise of the e-card is biting even into this market, with fewer cards being sent through the post, or perhaps it is just that I have fewer friends this year—I do not know. In any event, the one area where there is real scope for building the business is what we are now told we should call e-fulfilment—in effect, the delivery of orders made over the internet. This is a two-way process. In my constituency, for example, there are businesses in rural areas who sell over the internet and send out packages on a regular basis. They rely on the universal service obligation to ensure that they have access to the postal service at a reasonable cost and that allows them to operate at a reasonable cost.

Interestingly, in research on the business market carried out by Postcomm, more than half the businesses surveyed were of the opinion that they will use the internet more in future, but the vast majority—93%—believe that they will always need to send some things by post. Half of businesses expect more customers to order products online in future, indicating a belief that the market will grow further. Digging down into the figures, it appears that of those who spend between £100 and £500 a month on mail—basically small businesses—72% have either stayed at the same level of usage of Royal Mail or have increased it in the past year.

That is the one growth area within Royal Mail, and not having the universal service obligation cover it in the same way as in the letters market does not appear to make any great sense. Again, I point out that if we are to grow private businesses in rural areas, we need to have the infrastructure to allow them to flourish, and that includes a reliable six-days-a-week postal service.

[Mr Reid]

I am grateful to the hon. Gentleman for giving way again. I reinforce my earlier point that I am concerned that if the USO for parcels is not extended to six days a week, parcels will not be delivered in the highlands and islands on Saturdays. As he said, the delivery of parcels in response to internet selling is such an important growth area that the highlands and islands would miss out if parcels were not delivered on Saturdays.

[Mr Weir]

I reiterate that the hon. Gentleman may have a chance to vote for that later and to help the Minister make up his mind.

Goods not only go out by post, but are received by post. Raw materials may come in by post. For many constituents, no one is at home during the day from Monday to Friday. I am sure that such people would like packages to be delivered on a Saturday, when they actually might be in and would not have to travel to collect them at the nearest sorting office, wherever that may be after privatisation. If we are serious about increasing business and ensuring that every area of the country has access to a reliable, reasonably priced postal service, it would be daft to exclude from the universal service the one area that has potential for substantial growth.

Finally, amendment 14 would remove Ofcom’s ability to use geographical criteria to suspend the universal service. That has long been a contentious issue, even under the current framework. Households that are difficult to reach can have delivery suspended. The condition in the Bill is far too wide and could result in whole isolated mainland or remote island communities being removed from the universal service. That would be a travesty and lead to a huge increase in costs for such communities. There may always be some individual dwellings where the mail simply cannot be delivered, but those should be looked at on an individual level.

I urge all hon. Members to support the proposals, which all attempt to strengthen the USO and to recognise that the highest priority for the Royal Mail, whether it continues as a publicly owned company, as I hope, or becomes a privatised company, is to deliver to all our citizens.

[Mr Reid]

As I said in my interventions on the hon. Member for Angus (Mr Weir), I hope that the Minister takes away the proposal in amendments 12 and 13 to extend the universal service obligation for parcels to six days a week. As I said, I am concerned that parcels will not be delivered on Saturdays in the highlands and islands without such an extension. Apart from that one remaining concern, I think that the Minister has done a great job in the Bill to strengthen the USO in many ways, which is so important for the highlands and islands.

Amendment 14 deals with the hon. Gentleman’s concern that the geographical exceptions clause will be used to remove large parts of the highlands and islands from the universal service obligation. I do not share that concern. The wording is the same as that in the Postal Services Act 2000. The regulator, Postcomm, has used that exception only in a small number of cases, such as for islands that do not have a daily ferry service. Obviously, it would be nonsense for Royal Mail to charter a boat to an island to which Caledonian MacBrayne does not have a daily ferry service. The solution is for Caledonian MacBrayne to improve the service so that islands such as Tiree, Coll and Colonsay have a daily ferry service, but it is not for Royal Mail to charter special boats. Postcomm has also introduced exceptions on health and safety grounds, such as dangerous dogs. Under amendment 14, Royal Mail would have to deliver to houses with a dangerous path or animal. The wording in the Bill, which is taken from the 2000 Act, is satisfactory. I questioned Postcomm and Ofcom in the Scottish Affairs Committee and Ofcom gave an assurance that it will maintain Postcomm’s regulatory regime for geographical exceptions. Given those assurances, amendment 14 is not necessary.

Postal Services Bill

Debate between Alan Reid and Mike Weir

Wednesday 27th October 2010 Commons Chamber

[Mr Weir]

Indeed. Let me quote one of the myths in the leaflet:

“Growth in parcels from online shopping will outweigh falls in letter volumes”.

The response states:

“The parcels market is much smaller than the letters market and has been fully liberalised since 1981, making it highly competitive.”

It might be highly competitive, but many carriers will not deliver to remote and rural areas, particularly to Scottish islands, except at immense cost. There is a real danger in going down the route of privatising postal services.

[Mr Alan Reid (Argyll and Bute) (LD)]

The Bill mentions, in clause 30:

“At least one delivery of letters every Monday to Saturday…to the home or premises of every individual…in the United Kingdom”

at a uniform price. What better guarantee than that does the hon. Gentleman want?

[Mr Weir]

I remind the hon. Gentleman that in the summer his Business Secretary said that the service might go down to five days a week, so he recognises that it might be reduced. He also said that European regulations rightly ask only for a five day a week service. Any privatised service will inevitably want to cut costs and there will be pressure on the Government to allow that.

--- Later in debate ---

[Mr Reid]

No. I am afraid that I have already taken the two interventions that I am allowed.

The Post Office is extremely important, and it is also important for the whole Government to back it. Given that it has branches throughout the country, it is in an ideal position to deliver Government services. I hope that we shall not see from this Government some of the silo thinking that we saw from the last Government. I am thinking particularly of the Department for Work and Pensions. Owing to the way in which government is structured in Departments, there is often an incentive for silo thinking, and for looking only at an individual Department’s budget and not the wider budget. I can understand the pressures on the DWP to cut costs and therefore perhaps to allow services such as the payment of pensions and benefits to go to a competitor that does not have as wide a network as Royal Mail and the Post Office, but I hope that those pressures will be resisted, that the whole Government will back the Post Office, and that in particular when considering the contract for the payment of benefit cheques, the DWP will continue to give it to the Post Office. Any other private sector competitor does not have the same widespread network.

The key test of whether I would support the Bill was always going to be, “Does it protect the universal service obligation?” The Bill clearly passes that test. I intervened on the hon. Member for Angus (Mr Weir), because he clearly had not read the Bill. I draw his attention to clause 28(1), which states:

“OFCOM must carry out their functions in relation to postal services in a way that they consider will secure the provision of a universal postal service”,

and to subsection (2), which states:

“the power of OFCOM to impose access or other regulatory conditions is subject to the duty imposed by subsection (1).”

That is the USO.

[Mr Weir]

Will the hon. Gentleman give way?

[Mr Reid]

Very briefly, because I will not get an extra minute, as the hon. Gentleman did following my intervention on him.

[Mr Weir]

The point I was making is that we have a six-day service now, that the Bill guarantees only a five-day service and that the Business Secretary seemed to think that that was sufficient.

[Mr Reid]

The Bill requires

“At least one delivery of letters every Monday to Saturday—

(a) to the home or premises of every individual or other person in the United Kingdom”.

The hon. Gentleman is getting confused between the Bill and the European directive. The directive guarantees only five days. What the Secretary of State has been saying is that he already has the power under the European Communities Act 1972 to reduce the service to five days, by order, but he has no intention of using it because the Bill guarantees six days. I encourage the hon. Gentleman to read clause 30.

I am also delighted that clause 44 allows Ofcom to impose a duty on other mail operators to make a contribution towards the cost of the USO if that is necessary. I have been campaigning on that for many years. The previous Government resisted it and I am delighted that this Government have put that in the Bill.

I support the Bill and congratulate the Secretary of State on bringing it forward. I believe that it covers all angles and that it will deliver sustainable postal services in all parts of the country.