Ministerial Code (Culture Secretary)

Debate between Damian Collins and John Denham

Wednesday 13th June 2012 Commons Chamber

[Mr Denham]

I need to make some progress.

What do we now know about the conduct of the Secretary of State? On 12 November 2010, he was advised not to have any external discussions on the merger and not to write to the Secretary of State for Business, Innovation and Skills about it. He was told that if he did so, it carried risks to the robustness of the decisions.

As other Members have said, there were two key parts to the memo sent to the Prime Minister. The first lets us know in no unambiguous terms of the Secretary of State’s support for the merger proceeding and his belief that if it were blocked, our media sector would suffer for years. Secondly, however, and of equal significance, it proposed a meeting between the Prime Minister, the Deputy Prime Minister, the Business Secretary and the Culture Secretary himself

“to discuss the policy issues that are thrown up as a result.”

In the light of the legal advice given to the Secretary of State on 12 November, he must have known not only that sending that memo was inappropriate, but that the course of action he was proposing—a cabal of Ministers at the top of Government involving the one person who was meant to be acting in a quasi-judicial manner and who should have had no discussions and no connections with anyone else—flew in the face of the advice he had been given and was clearly acting in an entirely inappropriate manner.

[Damian Collins]

The right hon. Gentleman has read out the last sentence of the memo. Will he read out the preceding sentence?

[Mr Denham]

The previous sentence referred to the procedural processes. [Interruption.] Let me acknowledge that the memo refers to the proper procedures, but I will make this point to the House. The Secretary of State seems to be under the impression that if only he litters his memos and letters with the occasional reference to proper procedure, he can behave in a way that is entirely improper and outside the procedure. The sentence about proper procedure to which the hon. Gentleman wants me to refer is totally invalidated by the following sentence, which effectively says, “Let’s do something completely improper”—have a meeting involving the Business Secretary. The Secretary of State, of all people, should have had no discussions with any Minister, the Prime Minister or the Deputy Prime Minister, because he was meant to be acting in a quasi-judicial manner.

My final point is about the relevance of the motion. I believe that the Secretary of State’s and, indeed, the Prime Minister’s actions in concealing this memo are an absolute disgrace, placing the advice that the Cabinet Secretary was able to give us in a very bad light. They failed to correct that; they failed to go to the Cabinet Secretary to say, “You should know about his memo.” What is more, and it is directly relevant to the motion, when the Culture Secretary had the opportunity to put the record straight on 25 April in response to my hon. Friend the Member for East Lothian (Fiona O'Donnell), he failed to do so. He has concealed the existence of the memo, concealed the fact that he was proposing to act in an entirely inappropriate manner and failed to disclose it to the House when he had the opportunity to so. At the very least, shall we say, might that not suggest in the mind of a reasonable person that there is a question or two for Sir Alex Allan to consider? It is the refusal even to look into these matters that makes this matter such a disgrace. That is why this motion should be carried.

Postal Services Bill

Debate between Damian Collins and John Denham

Wednesday 12th January 2011 Commons Chamber

[Mr Denham]

But the evidence remains, some 50 years later, that that did not happen. My point remains—public ownership, and the debates around it, protected that position.

Before Christmas, when the Minister was challenged on this issue, his response was, “Don’t worry. No sensible private buyer would dream of removing the monarch’s head.” He has now conceded that that response is not enough. Yet when Members asked him today about a private buyer’s relationship with the post office network, the same argument came into play: “Don’t worry. No sane private buyer would take the business away from the post office network.” If the guarantee is necessary for the sovereign’s head, it is necessary for the inter-business agreement with post offices. It will not do to ask the House to accept this on trust, because thousands of post offices are at risk. That is, and has been from the outset, the fundamental argument against a majority privatisation of the Post Office. Although Royal Mail must be run as a commercial enterprise, majority shareholding for the public gives an ultimate protection that privatisation will not provide. If the Bill is flawed, as it is, then that protection will not exist.

The case has not been made in other areas, because, in contrast with the situation just a few years ago, transformation and modernisation are under way. The challenge of bringing in capable, senior management has been met, as I am sure all Members who have met the chief executive will confirm. Investment funds are currently available, and there are mechanisms well short of majority privatisation or a minority shareholding that could be used to raise equity in future.

[Damian Collins]

Moya Greene, the chief executive of Royal Mail, said to the Bill Committee:

“I think that if the Bill does not go through, you will see a continuation of what have been chronic problems for Royal Mail.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 4, Q3.]

She was very clear with us that this is a path that Royal Mail has to go down.

[Mr Denham]

I understand those remarks, but I believe that it would be possible for a Government who wished to do so to resolve the need to bring in additional investment in future through measures that fall short of selling a majority shareholding in Royal Mail. Some of those measures have been proposed by my party in the past, while other mechanisms have been proposed from outside. The truth is that the Government are driven by the desire to raise the albeit relatively paltry funds that they will get from selling as quickly as possible. That is fundamentally why they have refused to provide the safeguards on future business that many Members have been seeking. The highest price will come from giving the buyer the greatest freedom to make money through eroding the quality of service by closing post offices and transferring functions elsewhere.

If the Bill goes through this House today, and if it succeeds in another place, that is not the end of the story, because uncertainties still exist. First, there are the state aid discussions that will have to take place with the European Union. That arises from the need to deal with the Post Office deficit, and it will arise, if not in exactly the same form, if Royal Mail remains in public hands. We do not yet know whether any restructuring of Royal Mail will be required or whether profitable subsidiaries will need to be sold off, as the press have speculated, so we do not know what would be available for sale.

Secondly, there is still uncertainty about the regulatory regime. There is agreement about the transfer to Ofcom, but there is a crucial question about whether it will review the regulatory relationship between Royal Mail and its private sector competitors. Royal Mail has argued, most recently in a letter from the chief executive this week, that the current arrangements are commercially unfair, and that many of the letters that we all saw being delivered on our Christmas visits to post offices were, in effect, costing Royal Mail money because of the terms of the agreement. The crucial question on the proposed privatisation is whether Ofcom will review that relationship and, if so, when. Clearly, any change, particularly if it conceded Royal Mail’s argument, would make a very big difference to the future financing of a publicly owned Royal Mail and a huge difference to the price that could be obtained from a privately owned Royal Mail. We must begin to say that a final decision on whether to sell can be made only once it is clear whether Ofcom will investigate this issue, what the time scale of such an investigation will be, and after there is an indication of the likely outcome. That is the second reason to say that there is great uncertainty.

The universal obligation has been debated this afternoon, and I will not take it further.

The final area of uncertainty is the future of the post office network. The major argument today has been about the inter-business agreement, but there are other questions about the amount of business that will go to local post offices. I welcome the Government’s promise of substantial investment in the network. In some ways, that is a bold decision, because if they are wrong about the future business that goes to local post offices, that will be public money not well spent. Capital investment cannot of itself secure revenue from the Royal Mail. Promises of other work are slim and not tied down. Our plans for a Post Office bank have been dropped, and the promises from other Departments are vague.

The National Federation of SubPostmasters has supported the principle of the Bill, but the briefing it has circulated to right hon. and hon. Members for today’s debate could not be more explicit. It states that

“ministers must recognise that their plans will only succeed if they deliver on access to government and Royal Mail work at post offices. If they fail on this, not only will plans to mutualise the Post Office be doomed to failure; there will be no way back for the network and our post offices will face even greater jeopardy.”

It goes further and states that if adequate levels of new Government work at post offices are not secured, it believes that the separation of Post Office Ltd and Royal Mail, and the sale of Royal Mail, must be “indefinitely delayed”.

The House has rejected the first thing that the federation asks for, which is a long term deal. The Government have failed, as yet, to deliver the second thing that it asks for, which is a clear commitment for future levels of other Government work. The argument over indefinite delay is, I think, the battleground on which the forthcoming campaign to save our postal services will be fought.