Postal Services Bill

Baroness Turner of Camden Excerpts

Wednesday 16th February 2011 Lords Chamber

[Baroness Turner of Camden]

My Lords, I welcome the opportunity to participate in the Second Reading of the Bill. I am a former trade union official and therefore have some sympathy with the views of the CWU, the Communication Workers Union.

At the time the previous Bill was debated, it was reported that labour relations were at a low level. However, that does not now appear to be the case. The business transformation agreement between the union and Royal Mail means that agreed modernisation is proceeding. The pensions deficit issue has also apparently been resolved. All this is contrary to the claim of my noble friend Lord Mandelson this afternoon that the union is not giving effective leadership to its members.

The Hooper report, which was under discussion at the time of the previous Bill, has been updated. The union informs me that what now remains is the need for Royal Mail to access capital for investment. It is said that this is needed to maintain and sustain the universal postal service. The Government believe that this can be done only if Royal Mail is privatised—hence the provision in the Bill for Royal Mail shares to be sold off, apparently without any remaining shares left to the Government. The union disputes the Government’s view. It believes that the problem of capital could be addressed if the Royal Mail remained in the public sector, whether through commercial loans from the Government or through Royal Mail having access to borrowing from the financial markets. I understand that one organisation, not a union, has suggested that Royal Mail could be turned into a not-for-profit company like the BBC or Network Rail, as was suggested by my noble friend Lord Kennedy.

The union disputes the Government’s claim that the universal service operation, which everyone is anxious to maintain, is secured by the formulation in the Bill. The union cites a number of examples in which the USO is being undermined and weakened, including the introduction of criteria that base the USO on commercial, rather than service, provision. The union says that the need for stability and coherence is key. It cites the need for a five-year guarantee before the Ofcom review and a 10-year guarantee for Royal Mail as a single universal service provider. It is possible to examine these issues further in Committee.

A number of issues arise concerning accountability and transparency. The Bill makes it clear that the Secretary of State will make arrangements for the sale of the Royal Mail and then make a report to Parliament after the decision has been taken by the Secretary of State. What about an independent valuation? This has been raised by a number of noble Lords. Surely this is of concern to Parliament as a whole, not just to the Secretary of State.

The Bill separates Royal Mail and Post Office Ltd, which stays within the public sector. The disposal of assets is therefore important and of concern to Parliament generally. There are no restrictions on the time within which the sale takes place. The Government want that to happen in 2012. What happens if the market conditions are not then favourable? There should be provision for the Government to relegislate if a suitable sale cannot be made within a prescribed period. These should be matters for Parliament.

Another important issue is the continuing relationship between Royal Mail and Post Office Ltd. How will the Government ensure that Royal Mail products, currently worth 37 per cent of POL income, will continue to be offered through Post Office Ltd? Apparently there has been debate about the inter-business agreement, but so far the Government have refused any amendment to the Bill that would guarantee a continued relationship between a privatised Royal Mail and a publicly owned POL. As I said, these are some issues that we will explore further in Committee.

The situation is changing. More people use e-mail. I do myself. I do not like my computer much, but I use e-mail rather than typing a letter and posting it in the way that I used to. Nevertheless, the mail service is highly regarded and it is still a requirement that we should continue with it. Many of us have doubts—I do myself—about whether privatisation is the right way forward. Is it always true that privatisation is more efficient? I sometimes doubt it, and I speak as a consumer who is elderly and disabled and who has a lot of complaints about the service I receive from some of our privatised services.

Issues relating to the Bill had been raised with me by people who know the service and understand the people who work in it. Therefore, I hope that we will have the opportunity to raise these matters in Committee, because the people who have made these points to me know what they are talking about.