Postal Services Bill

Baroness McIntosh of Hudnall Excerpts

Tuesday 8th March 2011 Lords Chamber

[Lord Young of Norwood Green]

My Lords, 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, of course. It is the final guarantee of rent or mortgage repayments. Working for Royal Mail is the means whereby their children will be educated and cared for. I make the point because it is sometimes suggested that postal workers lack motivation because they do not identify with Royal Mail. Postal workers may not always see eye to eye with management, but they are acutely aware that a viable and successful Royal Mail is in their own interests.

Through their own organising efforts, postal workers have achieved a high level of unionisation in Royal Mail. They have also, over many years, secured comprehensive negotiating rights on matters of national and local significance. This has meant that members of the workforce have some elements of control in their own working lives. Management, for its part, has learnt to accept and live with the fact that the workforce does have a say in workplace relations. Sometimes there are conflicts, but 99 per cent of those cases are resolved by the usual patterns of industrial relations which have been established in the industry. This is important because those endeavours have been made by postal workers themselves, and they have made the workplace a better, safer, more comfortable and rewarding place. So we should leave aside any suggestion that postal workers are unable to express themselves, unable to organise themselves, or unable to exercise their rights in the workplace.

Recently there has been a much-trailed comparison on rights of representation or share ownership with John Lewis workers, although we believe that that is misunderstood. In comparison, postal workers have many more rights than John Lewis workers, who are not even unionised. That said, if there is to be an employee share scheme, it is only right that it should be introduced with employee involvement and voice, and placing at least one member on the board would be of benefit both to the workforce and the employer. Members of the workforce would see that it had someone who could reflect their experiences and concerns in the most powerful part of management, and the employer would have an immediate expression of the wider concerns of the workforce in the deliberations of the central management team.

In the past, there has been some experience of trade union involvement on the board. Although not a postal worker, my noble friend Lady Prosser, who unfortunately is not in her place, was until recently a widely respected and influential trade union leader before she became a member of the Royal Mail board. Certainly, management believes that it has benefited from her experience in the working of the Royal Mail board. Failure to introduce representation of postal workers on the board would, in my view, risk missing a real opportunity to create trust and confidence. It is widely known that employee representation exists on management boards in other European countries, and surely it is time that this became more general in Britain. I welcome the coalition Government’s espousal of mutualisation in another part of the Bill, and the requirement that we are suggesting here would strike a chord with that principle and approach. I therefore commend the amendment to the Committee. I beg to move.

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall)]

I should inform the Committee that if this amendment is agreed, I cannot call Amendments 5 to 7 inclusive by reason of pre-emption.

[Lord Lea of Crondall]

My Lords, perhaps I may make a point for clarity. The discussion we have just had about the wider public interest and stakeholders around the country suggests to me that what we are looking at is a sort of supervisory board. Does that not frighten the horses so far as the Minister is concerned? Does she acknowledge that the maximum number of different stakeholders should be somehow involved in this exercise since that would help to put our worries at rest on a number of other aspects that we have just been taking on board, such as asset-stripping and all the rest of it, and where ambiguities still remain in the Bill?

--- Later in debate ---

[Lord Young of Norwood Green]

My Lords, I am sure that a number of amendments to the Bill will come from all sides of the House as we progress. I am seeking more information about the Government’s plans for postal services in the UK. The purpose of the amendment would be to ensure that the Secretary of State reported back to Parliament on the disposal of Royal Mail. The Secretary of State would have to deliver an Oral Statement and lay an order subject to the affirmative procedure.

There are real concerns about what the Bill will mean for people who live in rural areas, for small businesses, for those who receive specialist services for the blind, for the taxpayer and for the employees and agents of Royal Mail and Post Office Ltd. Rarely can a government Bill have given rise to as many questions as it seeks to answer.

Noble Lords have argued eloquently that it is essential for Parliament to receive more detail about the financial value of Royal Mail, the future of universal and affordable postal services and the impact of privatisation on services in the devolved Administrations. The Government are urged to respond to these concerns with written and oral reports to the House at the time when Ministers decide to dispose of some or all of the Government’s shares in Royal Mail. Only the Government appear to suggest that these concerns are not legitimate, otherwise they would happily accept these amendments and the Minister would produce the reports requested in advance of the sale.

At times the Government appear to be in an unseemly haste to complete all the stages of the Bill. The danger is that, if the Bill is not itself flawed, then there are significant gaps in it that need filling. There are simply too many questions unanswered, too many concerns about the Government’s intentions and too little of substance in the way that the Government have responded to these concerns for Parliament simply to give its assent to this measure and then depart the field. It is the firm belief of the Opposition that the lack of a fully worked-out proposal, linked to a wait of possibly two, three or four years before a disposal takes place, necessitates Parliament being able to review this matter once again.

As the Bill stands, the Secretary of State will make a decision about a full or partial disposal of Royal Mail and then make a report to Parliament. There is no requirement even for the report to be accompanied by an Oral Statement; there is no commitment that Oral Questions should be able to be put to Ministers; and there is no commitment for Parliament to have a vote of any kind. Moreover, the report will be made after the Secretary of State has made the decision. That is, I am sure many in this House would agree, simply not adequate. As I said earlier, it is interesting how often, in dealing with other Bills when we were in government, the affirmative procedure was required and demanded.

The current Postal Services Bill has a number of similarities to the 2009 Postal Services Bill, but the fact that this Bill seeks to privatise Royal Mail in its entirety makes it distinct from the 2009 Bill. One of our difficulties is in trying to grasp the detail to discover exactly what information is in the Bill about whether there will be an initial public offering or a trade sale at auction. The Government have not set a clear timetable. They have not explained whether there will be a general sale of shares to the public, an IPO, a restricted sale to certain categories of buyer or a trade sale by auction to a single buyer, such as a private equity firm or a postal competitor, which might raise competition issues.

Nor have the Government explained any measures to ensure value for money for the taxpayer. They have not explained whether they would sell the whole company all at once—with all the risk involved of selling cheaply, as has been mentioned—or whether they would be prepared to sell in tranches. They have not been clear about how valuable public assets will be allocated among Post Office Ltd, the pension funds and Royal Mail—and thus find their way into private hands. They have not indicated how the board might be consulted. They have not ruled out dismantling the Royal Mail and cherry-picking the most profitable parts, such as Royal Mail’s successful European parcels service GLS and Parcelforce. They have not indicated how they will guard against a buyer with a short-term horizon that seeks to squeeze costs and cherry-pick the assets.

Before any sale takes places, this House will want to be assured about the future of the universal service, the exact regulatory regime and the future of the post office network. What state has been reached in obtaining state aid clearance from the Commission? What is the expected timetable for that state aid clearance?

The other amendments in this group seek to require a further Bill or a super-affirmative procedure to allow Parliament properly to scrutinise and have a say about the method of sale and the sort of Royal Mail that will emerge in the private sector; our amendment provides for a less stringent parliamentary test, but I feel that it is the very minimum that is owed in the name of proper parliamentary scrutiny. Of course there is no wish to constrain the Government unreasonably in carrying out a sale if the Bill is passed with Clause 1 intact. The House will of course recognise the reasonable constraints of commercial confidentiality, but for such a momentous decision as this to be carried to its conclusion without further reference to Parliament, in a way that gives Parliament a proper say, would be highly regrettable.

If the Government are not willing to report back to Parliament on the specific concerns set out in other amendments, they should accept our amendment and agree to allow a general scrutiny of the disposal of Royal Mail at the point that that takes place. They should do so under the affirmative procedure, so that there is a genuine opportunity to consider and debate the sale.

There is genuine, non-partisan, cross-party concern about this measure, so it is right that Parliament is given the opportunity to debate the matter again when the Government are in a better position to answer the questions that they have so far failed to answer. I hope that the Minister will take this opportunity to improve the Bill by accepting a more accountable route for parliamentary accountability, which would involve not just an ex post facto report after the decision has been taken. I beg to move.

[The Deputy Chairman of Committees]

I should tell the Committee that, if Amendment 5 is agreed to, I shall not be able to call Amendments 6 or 7 by reason of pre-emption.