Postal Services Bill

Lord Sentamu Excerpts

Wednesday 16th March 2011 Lords Chamber

[Baroness Howe of Idlicote]

My Lords, I sympathise with these amendments. They reflect a number of concerns that those of us who spoke at Second Reading raised. I was certainly one of those as far as mutualisation was concerned. I had a great deal of sympathy, too, for the concept of banking in local post offices, but that has clearly been firmly ruled out by the Government. That does not mean, however, that they should not be thinking of ways in which they could satisfy the concerns. There should be some return to Parliament for an assurance that the route down which the Government are going will be in the best interests of those concerned. I thought the comments made by my noble friend Lord Cameron about rural areas were extremely important. The post offices are important for the sustainability of those local areas.

I hope that when the Minister replies she will feel able to give more assurance than we have had so far on this issue. I commend the amount of money available and the way in which the Government have thought through this Bill in order for it to be sustainable for the future. However, despite all the money—we will no doubt hear details after the Budget of other ways in which the Post Office and postal services will be helped—it would be in everyone’s interest if the Minister could say that there will be a hard look at reassurance on some of the many important points that have been made in this group of amendments.

[The Archbishop of York]

My Lords, under Amendment 21A, one of the greatest regrets about the manufacturing base of this country is that companies in the public interest were disposed of without the kind of assurance that is being asked for here. If we look at steel, coal-mining and our car manufacturing bases, public interest in those companies was disposed of in the hope that the people who took them on would make them more viable, but when they took them over they explained that these businesses were not viable. Before we knew where we were our car manufacturing base and our steel industry were not about any more.

It worries me that if you get rid of any public interest—in the case of the Post Office, it is the Crown’s interest—before you are quite certain that whatever company is created will be viable at least through some financial times, you will be in real difficulty. It would be very easy for whoever takes these organisations on to say “By the way, when we looked at the books, they were not what we thought they were”. Then someone else buys it and takes it on, and before you know where you are the Royal Mail and those other places are not about.

Although it is difficult to put it in the Bill, the assurance that this amendment seeks is absolutely necessary. As long as there still is Crown interest in the Post Office, there is a chance that we may do it properly. As soon as that goes—before there is the assurance sought in this amendment—I am afraid that we may end up with what happened to British Steel, coal-mining and the car industry.

[Baroness Wilcox]

My Lords, here we are on day three eventually at the issue of the Post Office and all the concerns that have been expressed today. The noble Lord, Lord Whitty, raised a number on the future of the post office network, as did the noble Lord, Lord Cameron, the noble Baroness, Lady Howe, and the most reverend Primate. These will be covered by a number of amendments that follow and I ask noble Lords if I may respond to those points in those debates.

On the future relationship between the Royal Mail and the Post Office, I hope that my commitment to the noble Lord on Monday to consider his amendment to include information on that relationship in the Clause 2 report provides him with some comfort. This group of amendments relates to the circumstances in which the Secretary of State can transfer his interest in the Post Office to a relevant mutual and the information which should be furnished to Parliament in connection with that transfer. This Government believe that mutualisation of the Post Office could be ideally suited to the particular economic and social role it plays up and down the country. We understand that sub-postmasters, sub-postmistresses and other stakeholders would highly value the opportunity to have more of a say in how this well loved institution is run.

We envisage that a mutual Post Office Ltd could allow communities to tailor services to their needs and give those who know the Post Office best a greater stake in the future of the institution that they value so dearly. Indeed, the many community-run post offices across the country demonstrate that this can work. Clause 7, which we will discuss in due course, ensures that any mutual must act for the public benefit. No Post Office mutual will exist solely for the financial benefit of its members.

Clauses 4 and 7 work together to set clear parameters within which a transfer to mutual ownership could be made, but they do not oblige such a transfer to be made. That is because developing the appropriate model for a mutual Post Office must not come from the top down.

Amendments 21A and 22ZD seek to ensure that Post Office Ltd is on a secure financial footing before any move to a mutual model may be made. The network must of course be on a secure financial footing before any move to a mutual model is made. Indeed, it would not be in the interest of any Post Office Ltd stakeholders to take on the running of a company that was not in a suitable position to sustain itself. Nor indeed would the Government consider handing over control of the Post Office if they were not satisfied that the company could flourish in the absence of the levels of subsidy that are currently provided.

The £1.34 billion in funding that we are providing to the network over the next few years will do more than just guarantee that at least 11,500 post offices will remain working. It will ensure that the network can be modernised, offer an improved customer experience and so be in a better position to compete for new business. We believe that the Post Office could be in a financial position that would allow for the possibility of mutualisation by the end of this Parliament. I hope that goes some way to answering the question put by the noble Baroness, Lady Donaghy. This funding will ensure that the Post Office services across the United Kingdom on which so many people rely, particularly the most vulnerable in our communities, are protected exactly as the noble Lord, Lord Cameron, so eloquently explained is needed.

Whether or not this move to a mutual structure happens, we envisage that the Government would still need to provide a small amount of subsidy to ensure that offices remain open where they might not otherwise survive, such as in rural or deprived urban areas; yet Amendment 21A would not permit a mutual to operate in these circumstances.

However, it is important that there is transparency about improvement in the financial position of the Post Office, as, for example, the noble Lord, Lord Whitty, seeks under his amendment. That is why this Bill introduces, at paragraph 17 of Schedule 12, a new requirement that the annual accounts of the Post Office be laid before Parliament every year.

We aspire to a vibrant and flourishing Post Office in the future, which does not simply rely on government handouts, but which can provide a wide range of services across a nationwide network. The markets in which the Post Office operates are highly competitive. It would not be in the interests of the Post Office, the future members of the mutual or the Government if the business plan being relied on to continue fostering that vibrant and flourishing Post Office were published, as envisaged by Amendment 22ZD.

I turn to Amendments 21C, 22ZA, 22ZB and 22ZC. These amendments all seek to require a further parliamentary approval process prior to any transfer of the Secretary of State’s interest in the Post Office to a relevant mutual. Amendments 21C and 22ZB do this as stand-alone amendments, while Amendments 22ZA and 22ZC combine to the same effect.

Clause 5 introduces an important means by which Parliament can hold the Secretary of State to account for a decision to move towards a mutual ownership model for the Post Office. However, we do not believe it would be appropriate for Parliament to have a veto right over any subsequent move to mutual ownership that is within the statutory parameters being debated today. The reason is that developing the appropriate model for a mutual Post Office must not come from the top down. I am grateful to the noble Lord, Lord Borrie, for his observations. He may be interested to know that, subject of course to the strict statutory parameters set out in Clause 7, the interests of all of the Post Office’s stakeholders—for example, sub-postmasters, staff, business partners and customers—must come first.

Co-operatives UK, the national trade body for co-operatives, is talking to those stakeholders and will shortly report to Ministers on some potential options for a mutually owned Post Office, and before any final decision is taken by the Secretary of State, there would of course also be a public consultation. But since, at the conclusion of that process, the ultimate decision to transfer the Post Office to a relevant mutual will rest with the Secretary of State, Parliament must be informed swiftly and in appropriate detail of the decision. Clause 5 sets out those requirements. It specifies the details that must be included in the report and also requires the Secretary of State to lay it before Parliament as soon as reasonably practicable after he has made the relevant direction or authorisation.