Postal Services Bill

Lord Hunt of Wirral Excerpts

Wednesday 16th February 2011 Lords Chamber

[Lord Hunt of Wirral]

My Lords, we have heard a brilliant maiden speech. Comparatively few of us follow in the steps of the great people of the past in creating phrases that become quoted and are everyday phrases in our lives, such as those coined by my noble friend. I was thinking:

“You might very well think that. I couldn't possibly comment”.

However, I know that we are all thinking what an outstanding speech that was—and I am the one who can comment on it, and I will. It was 35 years ago that the now noble Lord appeared in my life—I am reminded of the radio programme: “35 years!”; it seemed an age. I am not sure why the Guardian coined the phrase “baby-faced hit-man”, but this personality came into the by-election in Wirral to write my speeches, coin my phrases and take over the campaign, and suddenly I was transported into the other place with the largest Conservative majority anywhere in the UK, so I have known for some considerable time of his outstanding speech-writing and famed organisational skills.

As my noble friend Lord Tebbit knows too, my noble friend Lord Dobbs has gone on to be a successful chief of staff but, in particular, a superb writer of—I think—17 novels now. We got a sense of that in the speech that we just heard, and he is now a valued Member of this House. If I am allowed another phrase of his, I shall say that he has just given us a remarkably effective demonstration of his being the epitome of elegant elocution; the last word was slightly different in House of Cards. I am sure that we will hear many great speeches from him. Today was the first in what I hope will be a long line of effective contributions, for which we thank him.

I declare the interests shown in the register, particularly my being a partner in the national commercial law firm of Beachcroft, where I have in fact been a partner for 42 years. I pay tribute to the speech from the noble Lord, Lord Mandelson, my former close working colleague in the British Youth Council. It was a remarkable insight into what we are debating. Having heard the other, very effective maiden speech from the noble Lord, Lord Empey, I say what a debate we are having.

I suppose that we are a fortnight late for Groundhog Day; noble Lords may remember the film starring Bill Murray, in which the leading character was doomed to relive the same day again and again. As my noble friend Lord Razzall said earlier, this debate has a remarkably similar feel to it to many others that we have had. Of course, we had the Second Reading of a Postal Services Bill on Tuesday 10 March 2009. On that occasion all the Front Benches were in favour of it and, after some process, the Bill was improved. The three main recommendations of Richard Hooper in his excellent first report—private sector capital, pension reform and regulatory reform—were not only accepted but embraced by this House. The title of that report, Modernise or Decline, could not have been more apposite. Sadly those dissident voices that were heard from time to time, particularly in the other place, eventually won the day, despite the best efforts of the noble Lord, Lord Mandelson. For once, the noble Lord’s powers failed him. It was one of the few occasions on which a Bill with overwhelming all-party support was withdrawn. Now, almost two years on, we are here again.

So what has changed? As the noble Lord and other speakers have pointed out, we now find the Royal Mail in a financial situation that has deteriorated further. Its core market is declining at an even faster rate than predicted, and a dangerous chasm is opening up. The accounting deficit on the pension scheme has more than doubled and, to quote Sir Richard Hooper’s latest report,

“doing nothing is not a tenable option … without serious action, Royal Mail will not survive in its current form”.

I could not agree more.

It is no exaggeration to say that unless the serious structural problems are urgently addressed, the future of the universal postal service, or UPS, could be in serious jeopardy, which would be unacceptable. Despite its declining core postal market, the Royal Mail remains the only entity that can preserve the UPS. As Richard Hooper rightly observed in that second report on the future of the Royal Mail, commissioned by my colleagues in the coalition Government, the UPS,

“is part of the country’s social and economic glue”.

There has been a further development, which is acknowledged in the second Hooper report; namely, that the Royal Mail has changed in a positive direction its management. The need for private capital has intensified, but the need for private sector expertise has now been addressed. New management has brought with it a completely revised and revived sense of mission. I compliment Moya Greene, the chief executive, and her team on having achieved just that. The need now is not for some kind of hybrid, collaborative arrangement with external investors and expertise from the private sector, because Royal Mail possesses the necessary expertise. This new Bill, which I warmly welcome, offers privatisation rather than public/private partnership and is entirely fit for purpose.

I am also delighted that Ministers in the department have heeded calls to involve employees in the sale. The Conservative and Liberal Democrat parties have long agreed that a degree of co-ownership and employee involvement is essential in privatisations such as this. We supported the noble Lord’s Bill, but he may recall that we pressed him to be more explicit in ensuring that widening employee share ownership was an objective of the legislation. How to engage employees in an exercise of this kind is of critical importance, and balance must be achieved in a number of respects. Above all, as several speakers in this debate have pointed out, employees must be offered a genuine and meaningful stake in the new enterprise, but managers must retain the power to manage. An important firm such as this must never be vulnerable to being held to ransom by an unrepresentative cabal of activists, be they employees or whoever else.

The coalition agreement commits the Government to the following:

“We will seek to ensure an injection of private capital into Royal Mail, including opportunities for employee ownership. We will retain Post Office Ltd in public ownership”.

As my noble friend has just pointed out, the Royal Mail will become part of the big society. The details of this will be worked out by us all in Committee, but, in principle, it must be the best way forward. Many of us, of course, have had a hand in the privatisations of the past. I was the junior Minister given the responsibility of taking through the legislation to privatise British Gas. I confess to the House, privately, that I was never aware that the uncle of my boss, the late Lord Walker of Worcester, was actually Sid. So in appealing for Sid, I had not realised that I was appealing not only to the wide world. However, it became a successful privatisation in the spirit that my noble friend then always dreamed of. There is no need to reinvent the wheel and I am sure that my noble friend and her ministerial colleagues will draw upon the considerable expertise that is available and at her disposal in this House.

However, I stress that time is not on the side of Royal Mail. It was the height of irresponsibility for the previous Government to take up so much important parliamentary time with this legislation only to abandon it. We were never quite sure why it was abandoned but it seems to have been on the grounds of political expediency. It is very much to the credit of Vince Cable, Ed Davey and my noble friend the Minister, strongly supported by their Conservative colleagues, that they now seek to succeed where Labour lost its nerve and so signally failed.

The urgent need to address the secular decline of Royal Mail was first identified in the 1990s by the Major Government and then, through a parliamentary Statement, on 17 December 1998 by the Labour Government. We have wasted enough time. The time has surely come to give to the Royal Mail the opportunity that it craves, not only to survive but to flourish. I hope that all sides of the House will see that, by giving the Bill our constructive support, it could be on the statute book by the summer. Then, and only then, will the Royal Mail be transformed into the success story that it deserves to be.