HL Deb 11 July 2000 vol 615 cc174-96

(" .—(1) Where the Post Office company or any relevant subsidiary enters into a notifiable transaction it must, as soon as practicable after the terms of that transaction have been agreed, issue a disclosure notice in accordance with this section.

(2) For the purposes of' this section "notifiable transaction" means any acquisition or disposal of any undertaking or interest in any undertaking by the Post Office company or any relevant subsidiary which, if the acquisition or disposal was made by a listed company, would be a transaction in respect of which that company would need to give notification or make an announcement in accordance with the listing rules.

(3) A disclosure notice must include the same information regarding the transaction to which it relates as any notification or announcement under the listing rules would be required to include if the transaction was an acquisition or disposal which had been made by a listed company.

(4) A disclosure notice shall—

  1. (a) he published in the London Gazette, the Edinburgh Gazette and the Belfast Gazette; and
  2. b) he published or disseminated in any other manner as the Secretary of State may prescribe.

(5) In this section—

The noble Baroness said: My Lords, in Committee I moved an amendment similar in principle to this one but different in wording. The Minister rejected it on the ground that, as he claimed, it would put the Post Office company, at a considerable commercial disadvantage compared with its commercial competitors". He added: Publicly listed companies are merely required, in certain circumstances, to announce acquisitions, once the terms of the transaction have been agreed".—[Official Report, 8/6/00; col. 1358.]

I am afraid that I believe that the Minister is mistaken in that assertion. Every day we can read in the press of bids, deals and negotiations in progress. Shareholders are entitled to know a fact that could affect the value of the shares that they are considering buying or selling. Relevant details should be published as soon as it is reasonable to do so. If the Post Office were in negotiations with a publicly quoted company, that company would be required at some suitable stage to make an announcement, whereas the Post Office would be entitled to remain silent, thereby confusing the market. That would be preposterous.

There was some criticism of the wording of the amendment I proposed in Committee. Although I divided the House, due to an insufficient number of your Lordships voting the House was counted out. In accordance with the rules, on 15th June I had a second bite at the same cherry. On that occasion, I told your Lordships that on the previous day I had received certain information that I had privately imparted to the Minister and that that information had suggested there was a cogent reason why the Government should have introduced a similar amendment. As I had not had a chance to verify the information, I did not repeat it to your Lordships at that time. The Government again rejected the amendment, which I withdrew in order to give them an opportunity to reconsider their attitude in the light of the information that I had given to the Minister. They did not do so.

On Report, I brought back my amendment in a revised form—the same form in which it appears today. I am afraid that it is necessary for me to quote from what I said on that occasion. I said: I wish to turn now to another serious and major point. I am informed from a very reliable source … that"— the National Audit Office— had reported to the Government advising that the disclosure regime for the Post Office should he the same as the one I am now proposing".—[Official Report, 29/6/00; col. 1115.]

I asked the Minister five specific questions: whether there was such a report; whether I was correct in saying what it recommended; whether the Government agreed with the report; if not, why not; and finally, if they agreed, whether they would undertake to bring forward a similar amendment on Third Reading. The Minister did not answer those questions. He merely said, at col. 1116: The National Audit Office intends to produce a report, but the publication date is for the NAO to decide". I remember saying that I would not ask when it would be published because I thought that that was not very tactful. Note the Minister's words, intends to produce a report", as though it were not already in the hands of the department at the time of the debate. I shall come back to that in a moment.

The Minister rejected my amendment yet again on the same specious and unacceptable grounds as before—grounds that, I was given to understand, are in contradiction of the recommendations of the National Audit Office.

In a later letter to me, the Minister said that he wanted to secure the same objective as I did but that he felt it would be achieved by provisions in the articles of association of the new Post Office company, which are still under discussion. He also said that on Report.

That is not correct procedure. Every company has certain obligations of disclosure to its shareholders. In some cases, companies are required to obtain shareholders' approval before acquisitions or disposals, particularly those entailing issues of shares or loan stock. I am not seeking to make the Post Office report to its one and only shareholder; I want disclosure to Parliament. Parliament should make the rules of disclosure, not some cosy group of lawyers or accountants currently working in the public service.

The Minister's letter also confirmed the existence of the National Audit Office report. It said that, the report has not yet been finalised and I am sure you ill appreciate that I cannot go into detail of what is being recommended while the report is still in draft". I do not appreciate that. Whether or not the report has been finalised, there has come into my hands an extract of what the Minister says is still only a draft. I believe, although I am not sure, that the extract is from the second draft. From some of the text it is clear that the report had been discussed between the National Audit Office and the department of the Minister and accepted by that department. The relevant passages call for, the disclosure to Parliament of analogous information to that which would have been required had the state-owned business been quoted on the London Stock Exchange. This would, where relevant, include information on the price paid … and the effect of the transaction on the profit and loss account and balance sheet of the purchaser". The report continues: The Department has told us that it accepts our argument that there is a case for the Post Office and other similar public bodies to accept analogous rules".

That could not be clearer. Whether or not the report has been published and whether or not the Minister was previously aware of it, once I had alerted him of it on 15th June there was plenty of time for him to find out what it said. Whatever alterations there may be in the final wording, there is no possibility that the National Audit Office would perform a complete somersault and reverse its key recommendation.

More importantly, when the Minister glossed over the report while speaking on this amendment previously, I believe he should have known that his department had already accepted the principle. Therefore, I find somewhat surprising the Minister's failure to answer my questions on Report and his casually dismissive and absolutely minimalist reference to the report as though it were not relevant.

The report is even more emphatic than the short extract I have quoted. In a section headed, What lessons of good practice can he learned from this transaction?"— that is the German parcel office deal—it calls for detailed information on deals to be given to the board, which I would have thought went without saying, and a procedure to monitor acquisitions that preserves accountability and avoids second-guessing. Most important of all, it says that the department should consider the Stock Exchange requirements on listed companies.

Item (iv) states: the provision of transparent information to Parliament on the transaction as if the acquisition were subject to the London Stock Exchange disclosure requirements". In Figure 13, the report even contains a checklist to illustrate the information to be provided for public sector acquisitions.

The Government claim to be in favour of open government. On the three previous occasions that we have debated this issue, the Minister's speeches have been peppered with references to "transparency", a buzz word currently in high favour with the Government. But here they refuse to accept, in the face of clear advice from a most influential independent source, that once the Post Office is launched into the ordinary commercial world it should conform to the same rules—not more—as other public companies. The Government argue that it should be less open to public scrutiny in its dealings.

On Report the Minister's response was that the National Audit Office intends to produce a report. That suggests that he did not know the contents or, at the lowest, that he had not investigated the information that I had given to him some two weeks earlier. I believe that the Minister should tell the House what he knew of the contents of the National Audit Office report on 29th June, the date of the previous stage of this Bill.

Assuming that he has acquainted himself with those contents that I had discussed with him, we also need to know why the Government persisted in pursuing their negative attitude to this amendment, contrary to the independent and authoritative advice they had not only received but had accepted. Is the Minister telling the House that, despite my alerting him to the report, he was unaware of its contents when he last addressed your Lordships on this topic and found all sorts of irrelevant reasons for refusing to accept an amendment that carries the recommendation of the report into effect? Or is he saying that despite his department having told the Audit Commission that it accepted the recommendations, in fact it had no intention of doing so?

The Government have been dismissive of Parliament on more than one occasion. It seems as though they are also dismissive of an important, independent, supervisory body such as the National Audit Office. Who told the Audit Commission that the recommendations were accepted? Was it the Minister? If he did not, why was he not aware of his own department's policy? The House would also like to know whether the Government will take this opportunity to follow the advice fully and so ensure that a public company, of which the Government will be the sole shareholder, conforms to the same high standards of disclosure to which other companies are required to conform. Why does the DTI say one thing to the Audit Commission and do another in Parliament? I beg to move.

5.45 p.m.

Lord Razzall

My Lords, the amendment tabled by the noble Baroness touches on the point she has nobly struggled through at every stage of this Bill and which I raised initially at Second Reading. On this occasion I do not require the normal mandatory plaudits that she has given to me in relation to that. I assume she is aware of what I am about to say.

Baroness Miller of Hendon

My Lords, the first time I mentioned this amendment I gave all credit to the noble Lord, Lord Razzall. He knows very well that I congratulate him on having brought the matter to the attention of the House.

Lord Razzall

My Lords, noble Lords who have followed the progress of this Bill will realise that I can never resist teasing the noble Baroness.

At Second Reading I was concerned about "transparency", the point that the noble Baroness has raised at every stage of the Bill. I agree with her, as do other noble Lords on these Benches—I understand the Minister also agrees—that it is essential that under its new guise the Post Office complies with the degree of transparency that would be normal for a public company of this nature.

Far be it from me to lecture her or the Minister, considering his previous guise, about the way that listed companies work in the public company arena. However, I fear that the point made by the noble Baroness does not work because, as the Minister has said previously, to attempt to incorporate the listings into the legislation as applicable to the Post Office ignores the fact that the listing rules, by and large, are there to protect the interests of shareholders. As the noble Baroness rightly says, if a significant transaction takes place in the market that can affect the price at which shares are dealt in, the companies involved have to make an announcement. That is right and proper. Of course, in relation to the Post Office, that cannot happen because there are no shareholders who can buy or sell shares in the Post Office.

Secondly, if under the listings rules the acquisition is a significant one, approval has to be sought from company shareholders and documents under the listings rules have to be published with details of the transaction requiring the approval of the company shareholders. Again, that does not apply to the Post Office. Despite this lengthy report from which she has quoted endlessly and which noble Lords have not had an opportunity to see, the noble Baroness is left with the third obligation under the listings rules, namely, that an announcement has to be made by the company after a certain transaction has taken place.

The Government appear to be saying that the listing rules do not apply to the Post Office and that to attempt to make them do so simply will not work. Therefore they are trying to take the principle of the listing rules—that is, that transactions of a certain size have to be notified to the public at large and to Parliament—and put that requirement into the articles of association of the Post Office. In so doing they will comply with the recommendation of the National Audit Office that, to the extent that it is practicable, the principles of the listing rules should be applied to the Post Office.

It is not a difference of principle between the noble Baroness, myself and the Government; it is simply an argument as to how in practice we can insert the substance of the listing requirements. The only one which can apply to the Post Office is the requirement to notify a significant transaction after the event. That is why, despite the fact that I support the principle of what the noble Baroness is trying to do, I do not believe the mechanism she chooses can possibly work and why, as long as the Minister repeats the undertaking he gave on Report that this requirement will be entrenched in the Post Office's articles, from these Benches we will support the Government.

Lord Skelmersdale

My Lords, of course this is an issue of transparency. But I disagree with the noble Lord, Lord Razzall. For example, Parcel Force, which is a Post Office entity, may bid for and secure International Carriers Limited (ICL). On its side, because of the listing rules and because it has shareholders, ICL would have to admit that such an approach had been made. But the Post Office would not and we would be left with a rather nasty hybrid situation.

I believe that, since we all seem to he agreed with the principle of the intentions of the amendment—that is, to have transparency on the face of the Bill rather than in the memorandum and articles of association—the Bill is where it ought to go. Our difficulty is that we are now at Third Reading of the Bill. But if the principle that this matter should go on the face of the Bill is accepted, then it is up to another place to change the details of that principle in order to fit in with the wishes both of another place and of your Lordships' House. Therefore I say to my noble friend, "More power to your elbow".

Lord Sainsbury of Turville

My Lords, when we discussed this same amendment at Report stage, the noble Baroness asked me a number of questions about whether the National Audit Office had made similar recommendations regarding the disclosure of information on acquisitions and disposals. She asked me to write in response to those questions before Third Reading. For the benefit of the House, perhaps I can repeat the points I made in my reply.

The National Audit Office has been examining the DTI's role in approving the Post Office's acquisition of German Parcel. But I repeat that the report has not yet been finalised and therefore has not been seen by Ministers, formally replied to or had consents given to it.

However, that is not the issue here. We accept the principle that, if the noble Baroness is correct, the report recommends; namely, that there should be transparency about this issue. I wish to reinforce the point of the noble Lord, Lord Razzall, that, while we accept the principle of transparency, it must be said clearly that this is not a public company in the sense of having shareholders on the Stock Exchange who have to be kept informed because of the implications and possible impact of that information on the market-place.

I turn to the substantive issue of the disclosure of information about major acquisitions and other significant deals.

Lord Mackay of Ardbrecknish

My Lords, before the Minister does that, perhaps he will give way. I have been observing this debate almost from afar, and my noble friend has been keeping me informed. The Minister is almost dancing on the head of a pin in relation to the National Audit Office report, saying that the department does not know anything about it.

If I read the extract correctly, the department clearly told the National Audit Office that it accepts its argument that there is a case for the Post Office and similar public bodies to accept analogous roles. Therefore the department must know the view of the NAO, otherwise it would not be able to make the response that the NAO intends to publish. I suspect the Minister has been caught because this report has not yet been published. Perhaps it ought to have been, or perhaps the Bill ought not to have had its final stages until it was published.

Lord Sainsbury of Turville

My Lords, I thought I was clear on this point. I did not say that the department did not know of the report. I said that the report had not been finalised; that no Ministers had seen the report and that no agreements to its contents had been given by Ministers. That is the substantive point in this case. Clearly officials in the department would know of the report; it would be inconceivable that they would not.

Baroness Miller of Hendon

My Lords, I am grateful to the Minister for giving way. The line in the report says, The Department has told us that it accepts our argument". I asked who it was in the department who told the National Audit Office that. I understand the Minister to be saying that his department knew about the report but no Minister had seen it. If so, how can anybody say that they accept the principle behind it?

Lord Sainsbury of Turville

My Lords, I cannot comment on what is presumably a quotation from internal documents of the National Audit Office. All I can say is that, when one refers to the department giving authority to the report, that must mean Ministers. I can assure the House that Ministers did not give authority for the statements being made. I cannot say any more than that. The noble Baroness obviously has access to an internal memorandum from the National Audit Office, which I have not. The substantive point is that Ministers have not agreed to this.

I turn to the question of how we handle this issue. The Government made clear that we are proposing to formalise the requirement for the Post Office company to disclose information by making provision for disclosure in the Post Office company's articles of association. I said that we are currently discussing the draft memorandum and articles of association for the Post Office company with the Post Office. We shall be discussing the inclusion of an article which requires the disclosure to the Secretary of State of information about major acquisitions and disposals relating to transactions involving 10 per cent or more of consolidated profits, turnover or gross assets. The provision will require disclosure within a specified period of business days after the transaction in question has been agreed and will also require the Post Office company to issue a press announcement giving certain prescribed information.

During Report stage I explained at some length why we did not agree that the noble Baroness's amendment was the best way of securing transparency for the Post Office company and so I shall not repeat that argument. But I stress that we wish to achieve the same objective as the noble Baroness, without subjecting the Post Office company to an unnecessarily onerous and inflexible regime which is designed to serve a very different purpose. The Post Office changed its approach to disclosing information about acquisitions in the light of the concerns expressed following the acquisition of German Parcel. Our proposals will ensure that the current policy of openness is enforceable by the shareholder.

The noble Baroness asked me during the Report stage whether the Government would be bringing forward an amendment at Third Reading to the same effect as her own. But I can only repeat the comments I made on Report. We consider that our proposals achieve the transparency the noble Baroness desires, but without inflexibly shackling the Post Office company to a regime which is intended for another purpose entirely and to which no competitor would be bound in the same way. And perhaps I can reiterate that the difference here is that other companies have the possibility of going to the authorities and discussing the need for specific disclosures to be made. That would not be possible if this were simply a legal requirement on the Post Office.

In addition, our proposals better reflect the requirements that are placed on other companies. No competitor would be required by law to disclose the information demanded by this amendment about transactions undertaken by its subsidiaries unless they were material in the context of the group as a whole. Again, this amendment goes far beyond what would be required if the Post Office was a quoted company. I am all in favour of ensuring a level playing field, but the noble Baroness's amendment would tilt the balance too far against the Post Office company. I urge Members of this House not to contemplate shackling the Post Office company in that way with an amendment which in fact would make its task more difficult than that of a public company.

I very much hope that the noble Baroness is now persuaded that our proposal is the best means of securing the transparency that she seeks while at the same time being fair to the Post Office company. We want both a fair and level playing field. I believe that our proposal for securing that off the face of the Bill will achieve our joint objective. I ask the noble Baroness to withdraw her amendment.

Baroness Miller of Hendon

My Lords, I know the Minister has said that he believes that he, I and the noble Lord, Lord Razzall, are seeking to achieve the same thing. We believe that articles of association are all very well, but they are not as good as having a provision on the face of the Bill. That would be far better.

The Minister may have called it an internal document of some kind. My explanation came in a brown envelope. It is the second draft of the National Audit Office report on the German takeover. If the final printed and published report contains the assertion that, The department has told us that it accepts our argument that there is a case for the Post Office I believe that the Minister may have to eat some words. So much for the Government's pledge for freedom of information. In the circumstances I must seek the opinion of the House.

6.1 p.m.

On Question, Whether the said amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 103; Not-Contents, 190.

Division No. 3
CONTENTS
Alton of Liverpool, L. Lamont of Lerwick, L.
Anelay of St Johns, B. Liverpool, E.
Astor of Hever, L. Lucas, L.
Attlee, E. Luke, L.
Barber, L. McColl of Dulwich, L.
Biffen, L. McConnell, L.
Blatch, B. Macfarlane of Bearsden, L.
Boardman, L. Mackay of Ardbrecknish, L
Bridgeman, V. Marlesford, L.
Burnham, L. [Teller] Miller of Hendon, B.
Buscombe, B. Montrose, D.
Byford, B. Mowbray and Stourton, L.
Caithness, L. Moynihan, L.
Campbell of Alloway, L. Murton of Lindisfarne, L.
Carnegy of Lour, B. Norfolk, D.
Chadlington, L. Northbourne, L.
Clark of Kempston, L. Northbrook, L.
Coe, L. Northesk, E.
Colwyn, L. O'Cathain, B.
Cope of Berkeley, L. Onslow, E.
Courtown, E. Oppenheim-Barnes, B.
Dacre of Glanton, L. Palmer, L.
Dean of Harptree, L. Park of Monmouth, B.
Dixon-Smith, L. Pearson of Rannoch, L.
Eccles of Moulton, B. Pike, B.
Elles, B. Pilkington of Oxenford, L.
Elliott of Morpeth, L. Prior, L.
Elton, L. Rawlings, B.
Feldman, L. Rees, L.
Ferrers, E. Renton, L.
Flather, B. Roberts of Conwy, L.
Fookes, B. Rotherwick, L.
Forsyth of Drumlean, L. Saltoun of Abernethy, Ly.
Gardner of Parkes, B. Sanderson of Bowden, L.
Seccombe, B.
Garel-Jones, L. Selsdon, L.
Glentoran, L. Sharples, B.
Gray of Contin, L. Shaw of Northstead, L.
Greenway, L. Skelmersdale, L.
Hanningfield, L. Stewartby, L.
Harris of Peckham, L. Stodart of Leaston, L.
Haslam, L. Strathclyde, L.
Hayhoe, L. Thomas of Gwydir, L.
Henley, L. [Teller] Trefgarne, L.
Higgins, L. Trumpington, B.
Holderness, L. Tugendhat, L.
Howell of Guildford, L. Vivian, L.
Jenkin of Roding, L. Waddington, L.
Jopling, L. Wade of Chorlton, L.
Kelvedon, L. Weatherill, L.
Kingsland, L. Willoughby de Broke, L.
Knight of Collingtree, B. Wolfson, L.
NOT-CONTENTS
Acton, L. Andrews, B.
Ahmed, L. Archer of Sandwell, L.
Allenby of Megiddo, V. Ashley of Stoke, L.
Amos, B. Ashton of Upholland, B
Avebury, L. Hoyle, L.
Bach, L. Hughes of Woodside, L.
Barker, B. Hunt of Chesterton, L.
Barnett, L. Hunt of Kings Heath, L.
Bassam of Brighton, L. Irvine of Lairg, L. (Lord Chancellor)
Berkeley, L.
Billingham, B. Islwyn, L.
Blackstone, B. Jacobs, L.
Blease, L. Janner of Braunstone, L.
Bledisloe, V. Jay of Paddington, B. (Lord Privy Seal)
Borrie, L
Bragg, L. Jeger, B.
Brennan, L. Jenkins of Hillhead, L.
Brett, L. Jenkins of Putney, L.
Brooke of Alverthorpe, L. Judd, L.
Brookman, L. King of West Bromwich, L.
Brooks of Tremorfa, L. Kirkhill, L.
Burlison, L. Layard, L.
Carter, L. [Teller] Lea of Crondall, L.
Chandos, V. Lipsey, L.
Christopher, L. Lofthouse of Pontefract, L.
Clarke of Hampstead, L. Longford, E.
Cocks of Hartcliffe, L. Lovell-Davis, L.
Craig of Radley, L. McCarthy, L.
Crawley, B. Macdonald of Tradeston, L.
Currie of Marylebone, L. McIntosh of Haringey, L. [Teller]
Dahrendorf, L.
David, B. McIntosh of Hudnall, B.
Davies of Coity, L. MacKenzie of Culkein, L.
Davies of Oldham, L. Mackenzie of Framwellgate, L
Dean of Thornton-le-Fylde, B. Mackie of Benshie, L.
Dearing, L. McNally, L.
Desai, L. Maddock, B.
Diamond, L. Marsh, L.
Dixon, L. Mason of Barnsley, L.
Donoughue, L. Massey of Darwen, B.
Dormand of Easington, L. Merlyn-Rees, L.
Dubs, L. Molloy, L.
Elder, L. Monson, L.
Evans of Parkside, L. Morris of Castle Morris, L.
Evans of Temple Guiting, L. Morris of Manchester, L.
Evans of Watford, L. Murray of Epping Forest, L.
Ewing of Kirkford, L. Newby, L.
Ezra, L. Nicol, B.
Falconer of Thoroton, L. Oakeshott of Seagrove Bay, L.
Falkland, V. Parekh, L.
Farrington of Ribbleton, B. Patel, L.
Faulkner of Worcester, L. Patel of Blackburn, L.
Filkin, L. Paul, L.
Fyfe of Fairfield, L. Peston, L.
Gale, B. Phillips of Sudbury, L.
Geraint, L. Pitkeathley, B.
Gibson of Market Rasen, B. Plant of Highfield, L.
Gilbert, L. Ponsonby of Shulbrede, L.
Gladwin of Clee, L. Prys-Davies, L.
Goodhart, L. Ramsay of Cartvale, B.
Gordon of Strathblane, L. Randall of St. Budeaux, L.
Goudie, B. Razzall, L.
Gould of Potternewton, B. Rea, L.
Grabiner, L. Rendell of Babergh, B.
Graham of Edmonton, L. Rennard, L.
Gregson, L Renwick of Clifton, L.
Grenfell, L. Richard, L.
Hardy of Wath, L. Rodgers of Quarry Bank, L.
Harris of Haringey, L. Rogers of Riverside, L.
Harris of Richmond, B. Russell, E.
Harrison, L. Sainsbury of Turville, L.
Haskel, L. St. John of Bletso, L.
Hayman, B. Scotland of Asthal, B.
Healey, L. Scott of Needham Market, B.
Hilton of Eggardon, B. Sewel, L.
Hogg of Cumbernauld, L. Sharman, L.
Hollick, L. Sharp of Guildford, B.
Hollis of Heigham, B. Shepherd, L.
Howells of St. Davids, B. Shutt of Greetland, L.
Howie of Troon, L. Simon, V.
Smith of Clifton, L. Walker of Doncaster, L.
Smith of Gilmorehill, B. Wallace of Saltaire, L.
Smith of Leigh, L. Walmsley, B.
Strabolgi, L. Warner, L.
Warwick of Undercliffe, B.
Symons of Vernham Dean, B. Watson of Invergowrie, L.
Taverne, L. Watson of Richmond, L.
Taylor of Blackburn, L. Wedderburn of Charlton, L
Taylor of Gryfe, L. Whitaker, B.
Thomas of Gresford, L. Whitty, L.
Thomas of Walliswood, B. Wilkins, B.
Thornton, B. Williams of Crosby, B.
Tomlinson, L. Williams of Elvel, L.
Tordoff, L. Williams of Mostyn, L.
Turnberg, L. Williamson of Horton, L.
Uddin, B. Winston, L.
Varley, L. Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.12 p.m.

Clause 75 [Dissolution of the Post Office]:

Lord Sainsbury of Turville moved Amendment No. 10: Page 47, line 18, at end insert ("or an order made under this Act").

The noble Lord said: My Lords, this is a small amendment aimed at ensuring that the Post Office is not dissolved while there are any outstanding issues relating to the old Post Office. The transfer provisions in Clause 62 ensure that all the property, rights and liabilities of the current Post Office corporation transfer to the Post Office company on the appointed day. There should thus be no outstanding issues, apart from the vesting of foreign property rights (which may not be transferred simply by the UK statute) as provided for in Schedule 3.

However, there may be transitional issues that we may need to lay on the Post Office under the powers provided in Clause 129. An example could relate to the way in which the final accounts of the Post Office are drawn up, in accordance with Clause 73(1)(b). We may need to make a transitional order to determine the handling of this. We would not want the Post Office to be dissolved until duties under such an order had been discharged. The amendment would require the Secretary of State to be satisfied that everything had been completed before making the dissolution order. I beg to move.

On Question, amendment agreed to.

Clause 105 [Application of customs and excise enactments to certain postal packets]:

Lord Sainsbury of Turville moved Amendment No. 11: Page 63, line 35, leave out ("any other") and insert ("a").

On Question, amendment agreed to.

Baroness Miller of Hendon moved Amendment No. 12: Page 63, line 47, at end insert— ("(6) The power to make regulations under this section shall be exercisable by statutory instrument. (7) No regulations shall be made under this section unless—

  1. (a) a draft of the regulations has been laid before the House of Commons together with a reasoned statement from the Treasury confirming that, in its opinion, the regulations, if made, would not distort competition in the provision of postal services; and
  2. (b) the draft regulations are approved by resolution of that House.").

The noble Baroness said: My Lords, I believe that this is the third time that we have debated this issue. I hope that that will show the Minister the seriousness that we attach to the amendment. When the clause was debated for the first time in Committee, I pointed out that the commercial courier services would be at a severe disadvantage vis-à-vis the Post Office because of new procedures being imposed by Customs and Excise regarding the clearance of packages to and from this country.

I shall not trouble your Lordships this evening by repeating the details, but at the very least the commercial concerns will be forced to do their pickups for goods consigned abroad at a much earlier time in the evening which will adversely affect their highly competitive, next-day delivery round the world. The extra paperwork will cost millions of pounds over a period to implement, aside from creating the problem of recruiting and training staff to do all the computer input.

Four major express operators have ascertained that it will cost them £5 million every year to implement these new procedures and to no object from the point of view of either security or increasing the tax revenue. As far as can be seen, it is simply to facilitate the Customs and Excise administration. The Minister previously told the House that this was an international issue and that a study was being conducted by the World Customs Organisation, the Universal Postal Union and the International Express Carriers Conference. Unfortunately, he could not tell my noble friend Lord Caithness when those deliberations would reach a conclusion. I am far from hopeful of an early decision.

It took the best part of a generation for the Universal Postal Union to establish itself and for the respective countries to enact the necessary legislation. We have to deal with the matter for the benefit of our own carrier industry here and now. If the international negotiations eventually reach a conclusion, then, as with any other form of treaty, the Government can introduce the necessary legislation to implement it. The other parties to the negotiations are not currently enacting the postal services legislation, so they will have to create their own new legislation in due course.

In his reply to my amendment, the Minister also said—presumably with the authority of Customs and Excise—that they had no wish to impose undue financial or administrative burdens on anyone or to distort competition. I am most grateful to the noble Lord for those fine words. But as they have been told in the course of the vigorous representations that the industry has made to them, that is precisely the effect that their current proposals will have. It is not too late for them to reconsider, because imposing these procedures on everyone, except the Post Office, will distort competition. It is certainly not a level playing field.

The other matter I wish to raise is the information that is required. Again, I also raised the issue on Report, when the Minister commented: Customs are clear that the information called for will in no way exceed that provided at present".—[Official Report, 29/6/00; col. 1136.] I faxed a letter to the noble Lord on 5th July to inform him that I had been advised by the express operators that that does not appear to be the case. Of course, I shall not go into a detailed breakdown at this point, but my letter also gave details regarding what Customs are now requiring under the so-called "simplified procedures", which do not look much more simplified to me.

However, the question as to whether Customs require more information cannot, I suggest, be relevant to the central issue. The core issue is, as the Minister himself stated, that there are two types of traffic that partly reflect the difference in the Customs' treatment. But from the figures that the Minister supplied in a Written Answer on 29th June and from the Parcelforce advertisement—as well as from a cursory look at its Internet site, as I informed the Minister—it appears that the company actively sells rapid guaranteed deliveries around the world. It clearly competes head to head with the express industry.

I can do no better than to quote my noble friend Lord Freeman, who summarised the situation so well in our debate on Report when he said that, if there is no distortion in competition, as the Government have argued, there can be no problems in ensuring that Parcelforce and the public sector abide by and are governed by exactly the same Customs and Excise regulations and new procedures as is the private sector".—[Official Report, 29/6/00; col. 1135.]

I received a fax this afternoon from the Minister containing three points, which no doubt the noble Lord will remake in his reply. The first is that this provision only brings the Customs and Excise powers up to date to reflect the modern postal services required. But why does that not apply to the Post Office? Why not adopt a minimalist approach to help to reduce red tape?

Secondly, the Minister stated that the matters are under discussion with the trade association and cannot be settled before 3rd August, which is too late for the Bill. All we want is an assurance from the Minister that the independent carriers will not be at a disadvantage vis-à-vis the Post Office. If the matter is not settled before the Bill is passed, the independents will not have a leg to stand on.

Thirdly, the Minister stated that the date required is mandatory under the EC agreement. Will the Minister confirm that that applies to the state-owned Post Office as well as to the express companies?

The amendment that I propose simply ensures that regulations made under the clause should be scrutinised by the other place before they come into effect, as I believe should be the case as they involve fiscal issues. That would give the other place the opportunity to ensure that the Treasury, in seeking such approval, was not distorting the competition in postal services or imposing undue financial burdens, both consequences having been disclaimed by the noble Lord on behalf of Customs and Excise. I am afraid that those who advise me do not think that is the position. I beg to move.

Lord Sainsbury of Turville

My Lords, as I stated in the fax, the provisions contained in the Postal Services Bill that apply Customs legislation to postal packets do not give Customs greater powers than they have at present. Clause 105 merely re-enacts and updates the provisions contained in Section 16 of the Post Office Act 1953. It gives the Treasury, on the recommendation of the Secretary of State and the Commissioners of Customs and Excise, the power to make regulations specifying how the legislation should apply. This power has been amended only in so far as it is necessary to reflect the changing market conditions by changing references to the Post Office to postal operator. It is intended only to maintain the powers that Customs and Excise currently enjoy and operate.

The regulation-making power contained in Clause 105 was included in the Department of Trade and Industry's memorandum to the Lords Delegated Powers and Deregulation Committee, dated 2nd May. The committee, in its seventeenth report, dated 24th May, did not find it necessary to comment on the use of the negative resolution procedure in the case of this power. In fact, it considered that no amendment was necessary to either the delegated powers in the Bill or to the parliamentary control provided by those powers.

I now turn to two distinct issues which the noble Baroness, Lady Miller, has raised. The first concerns whether there is unfair treatment by Customs of express courier companies and the supposed advantages enjoyed by the Post Office. However, the different treatment of the two groups reflects the different arrangements that are put in place by the two different international bodies that govern these arrangements. The differing arrangements arise because the legal bases are different. The arrangements for postal traffic are based on international agreements, made under the auspices of the Universal Postal Union and the World Customs Organisation. These provide standard Customs declaration forms for postal traffic which serve as both the exporter's declaration and the import declaration in the country of arrival. EC agreements confirm that these are the only declarations required for the vast majority of postal packages.

The arrangements for express carrier traffic, on the other hand, follow the EC provisions for general import and export trade—specifically the EC Customs Code and its implementing regulation. These provide for a different form of Customs declaration. We have little room to act alone—changes can come only with international agreement. As I said before, the World Customs Organisation, Universal Postal Union and the International Express Carriers Conference are jointly undertaking a study to compare Customs procedures for postal and express carrier traffic. Recommendations will be considered by the WCO and UPU and decisions will be incorporated into international agreements. I cannot give a time when that will occur because no time limit has been set. I share the pessimism of the noble Baroness that this will not occur quickly.

Fair competition between the postal service and express carriers is also an issue in the USA. There, too, the express industry has made representations that there should be a level playing field with the same Customs requirements being imposed on both kinds of traffic. The House of Representatives sub-committee on Postal Services commissioned a fact-finding report on competitive concerns with particular reference to Global Package Link, an international parcel post service. The report of June 1998 did not contain recommendations but recognised that the post and express carriers faced different Customs requirements and obligations, both in the USA itself and in other countries which formed part of the study, including Canada, Japan and the UK. The report recognised the international dimension of the problem and noted that legal changes in the USA alone, even if permitted by international agreements, would be of limited benefit.

The noble Baroness referred to the new export system. This is required to enhance the effectiveness of Customs controls. The existing export system is largely manual with exporters or carriers presenting Customs with paper declarations. These arrangements are becoming increasingly ineffective as trade and the amount of paperwork increase year by year. If the system is not modernised, either the service delivered by Customs will deteriorate or exports will be subject to delay. Maintaining dual manual and electronic systems will be a burden on both the trade and Customs and will require more resources. Electronic processing will provide positive benefits for the majority of exporters and is in line with the Government's commitment to keep pace with developments in electronic commerce.

Customs are currently in discussion with the Association of International Courier and Express Services (AICES) about features of the system which they claim to be unduly onerous. These discussions are making good progress and there is every prospect that solutions can be found which will be acceptable both to express carriers and to others involved in exporting.

The noble Baroness wrote to me on the information requirements and provided me with examples of the current system and the future one. I have looked into the matter in great detail. The lists of requirements are not comparable. The first list of the noble Baroness omits some requirements; the second list deals with a situation which allows for local clearance and aggregation. That concession has been made by Customs to the express carriers and there is a longer list of requirements in those different circumstances.

Customs have assured me that the information called for will not materially exceed that provided at present and is the minimum required under EC agreements. For low value (that is, less than £600) non-sensitive goods or those which are of no statistical significance, Customs are asking only for a single summary declaration per aircraft, for each of these two categories, which will include the total value and number of items covered by the declaration. This will cover several hundreds of consignments. There will be no need for individual eight-digit tariff codes to be supplied. This accounts for between 70 and 80 per cent of exports by express carriers.

As I indicated earlier, discussions are already taking place with AICES. However, I note the concerns which the noble Baroness has so eloquently presented and I therefore propose that they be the subject of an urgent meeting between AICES and senior officials in Customs and DTI, where there is every prospect that further acceptable solutions can be found. On that basis, I ask the noble Baroness to withdraw the amendment.

6.30 p.m.

Baroness Miller of Hendon

My Lords, I have learnt a very salutary lesson from the Minister today—that is, that it is a big mistake to bring something back at the third attempt, when there is no chance to study the Minister's reply and to come hack at yet another stage. As I was listening to the Minister I came to the conclusion "That wasn't such a good point", "That wasn't a bad point"—and then, all of a sudden, he went on to something completely different and I shall not have the benefit of reading what he said before making a decision as to what to do.

As regards the question of the paper and electronic mandates, the point I was trying to make is that it would be an unfair playing field if one group of companies—that is, the express postal operators—had to switch to the electronic system and the Post Office did not. From what I can recall—I said it in my speech—the core issue is that the Minister said that there were two different types of postage: one was electronic express and one was not. The point that I was trying to make from the Written Answers to the Written Questions that I tabled some time ago deliberately to tease this out, is that I think they will meet head-on with each other in competition. I do not see where they are so very different.

Perhaps I may ask the Minister to explain again that issue to me. It is absolutely core as to whether or not the Post Office should be exempt from the burdens under which other express postal operators have to work.

The Minister suggested that he is willing to call an urgent meeting with his department and people from AICES and so on to deal with this matter. I said that if he could give me some kind of assurance—I am trying to find where I said it so that I can quote the exact words, but I cannot—that the express postal operators will not be at a disadvantage, I would feel much better about the situation. Unless he can clarify for me that there are two different kinds of post and that the other express postal operators will not be disadvantaged—as they have assured me on numerous occasions that they feel they are—I may have to take a different approach from the one the noble Lord has asked me to take in regard to withdrawing the amendment. As I shall not have another chance to come back on this issue, I must feel relatively content about it—although I could not go through the whole of that speech again; it went in one ear and by the end it had gone out of the other, I regret to say.

Lord Sainsbury of Turville

My Lords, I do not know whether I can make the noble Baroness content. Perhaps I may explain the problem. We have two different systems, which are controlled by two different pieces of legislation; therefore one cannot simply take a unilateral decision as a country that one will treat them in the same way.

Obviously there are cases where the express operators are competing for the same business. That is why this is an issue for them; they feel that they are competing for the same business but are being treated differently. But the fact is that, under international legislation, they are treated differently and there are different systems.

The second point I would make is that while it may often he felt that a new, modern electronic system for handling information is a backward move—it causes more work and involves more investment and so on—the electronic system is not being imposed as a penalty on people; it is an attempt to deal with a rising amount of extra business and to make certain that it is handled in an efficient and effective way. Clearly there is some disagreement about how it should be done in reaching that point, but the aim of the new electronic system is to improve business, not to make it materially worse. There are a whole series of benefits that should flow to companies by handling it on an electronic basis.

I do not think that I can give an assurance that the two situations will he treated in the same way; they are covered by different pieces of legislation. However, I know that it is the aim of the Customs that, as far as possible, they will treat everyone on a fair basis. Of course, it is not simply those two bodies involved in this matter; the whole of the rest of the freight industry has to be considered and treated on a fair and common basis.

With that assurance and the fact that we shall arrange a meeting as soon as possible to see whether these misunderstandings can be ironed out, I again ask the noble Baroness to withdraw her amendment.

Baroness Miller of Hendon

My Lords, if I understand correctly what the Minister said on that occasion, even though the Post Office or Parcelforce or whatever will compete head-on with these express postal services, there is no way that the electronic system—I forget whether or not private companies want it—would apply to Parcelforce and the Post Office because they are different systems under different international agreements? Am I correct in saying that?

Lord Sainsbury of Turville

My Lords, as I understand it, they are different systems and therefore will be computerised on a different time-scale. I believe that it is not a situation where there will not be computerisation applied to the postal side, which I believe they wish to have.

Baroness Miller of Hendon

My Lords, I have tried very hard on this. It is a very difficult situation. But I am prepared to accept that there will be a meeting as soon as possible, as the Minister said. I hope that this will provide some comfort to the express postal service. I do not think that I can take the matter any further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 122 [Orders and regulations]:

Lord Sainsbury of Turville moved Amendment No. 13: Page 72, line 43, leave out ("laid before an").

The noble Lord said: My Lords, I apologise for the late tabling of this amendment, but a potential deficiency in the drafting of the Bill was not spotted until yesterday.

This is a technical drafting amendment which removes an uncertainty that might otherwise arise from the interaction between subsection (10) of Clause 122 of the Bill and Section 6(1) of the Statutory Instruments Act 1946. One of the purposes behind subsection (10) is to enable provisions which can, by themselves, be made under the negative resolution procedure to be included in an order with provisions that have to be approved by the affirmative procedure. Such a "combined order" is then subject to the affirmative procedure.

That remains our intention, but we have realised that the words that this amendment seeks to remove are unnecessary and could have, on one interpretation, the unintended and unwanted effect of requiring orders under the Bill following the negative procedure to be laid in draft for 40 days before being made. This was not our intention and, as the subsection otherwise makes clear, such orders were intended to be subject to the normal negative procedure. This amendment removes this uncertainty and clarifies the position. I beg to move.

Lord Skelmersdale

My Lords, I questioned this matter—in part anyway—towards the end of the Report stage. As I understand it, subsection (10) provides that the powers to make orders under the clauses specified can be subject to the negative procedure. However, the subsection also allows these powers to be exercised in affirmative orders, so allowing negative procedure powers to be used in combination with affirmative procedure orders under this or previous legislation. As the noble Lord said, a working definition of this may be "combined orders".

I must admit that these are a new animal to me—I assume they are to most of your Lordships—but none the less I would be the first to agree that they are a convenience to Parliament in circumstances where the Government may want to exercise powers subject to both the affirmative and negative procedures together in relation to a related subject. Without this power it would be necessary to make two sets of orders using different routes. That seems to me to be a total nonsense.

In a very useful letter, for which I thank the Minister, he told me that the Government intended the combined orders to be affirmative orders and follow the normal route for affirmative orders in both Houses of Parliament. However, when I asked a totally off-the-cuff question about the penultimate group of amendments at Report stage, in particular Amendment No. 55, I was told that the powers did not permit the, affirmative procedure powers to be exercised using the negative procedure, nor for negative procedure powers to be used to amend provisions which can only be made following the affirmative procedure". The Minister was quite right; that was exactly what I was concerned about. However, it may or may not have been due to my questioning of subsection (10) and Clause 122 altogether that the draftsman looked at the matter once again and concluded that the words in subsection (10) are, to say the least, somewhat opaque and could be construed as not having the effect of making these combined orders subject to the affirmative resolution. Since I want them to be subject to the affirmative resolution procedure, I hope that this time the Bill is word perfect. I congratulate all involved on the amendment. I hope that the Minister, his department and my reading of the situation coincide and we will not have this back again when the Bill is returned from another place.

Lord Sainsbury of Turville

My Lords, the noble Lord's reading entirely agrees with ours. We would jointly hope that this does not come back as an issue.

On Question, amendment agreed to.

Lord Sainsbury of Turville moved Amendment No. 14: Page 73, line 10, after ("9,") insert ("30(1A),").

On Question, amendment agreed to.

Clause 125 [Interpretation]:

Lord Sainsbury of Turville moved Amendments Nos. 15 to 18.

Page 74, line 10, after ("delivered") insert ("otherwise than electronically"). Page 74, line 10, after ("the") insert ("person or"). Page 74, line 12, at end insert ("; and includes a postal packet containing any such communication,"). Page 75, line 21, at end insert— ("(1A) For the purposes of the definition of "letter" in subsection (1) the reference to a communication to be conveyed and delivered otherwise than electronically shall be construed as a reference to a communication to be conveyed and delivered otherwise than—

  1. (a) by means of a telecommunication system (within the meaning of the Telecommunications Act 1984), or
  2. (b) by other means but while in electronic form.").

On Question, amendments agreed to.

Clause 126 [Index of defined expressions]:

Lord Sainsbury of Turville moved Amendments Nos. 19 and 20.

Page 76, line 18, column 2, at end insert ("and (1A)"). Page 76, line 43, column 2, at end insert ("and (3A)").

On Question, amendments agreed to.

Schedule 2 [The Consumer Council for Postal Services]:

Lord Sainsbury of Turville moved Amendments Nos. 21 to 28.

Page 81, line 7, after (" 54(4)(a)") insert ("and the chairman of any committee for England established under section 54(4)(c)"). Page 81, line 10, after ("chairman") insert ("of the Council"). Page 81, line 18, after (" 54(4)(a)") insert ("and any committee for England established under section 54(4)(c)"). Page 81, line 23, leave out ("or (c)") and insert ("and a regional committee (other than a committee for England) established under section 54(4)(c)"). Page 81, line 32, at end insert ("(other than a committee for England)"). Page 82, line 13, after (" 54(4)(a)") insert (", the chairman of any committee for England established under section 54(4)(c)"). Page 82, line 17, after (" 54(4)(a)") insert (", chairman of any committee for England established under section 54(4)(c)"). Page 82, line 22, after (" 54(4)(a)") insert (" or of any committee for England established under section 54(4)(c)").

On Question, amendments agreed to.

Schedule 5 [Acquisition of Land]:

Lord Sainsbury of Turville moved Amendments Nos. 29 and 30.

Page 90, line 6, at end insert— ("( ) The Secretary of State shall consult the First Minister and the deputy First Minister in Northern Ireland before exercising his power to make an order under this paragraph in respect of land which—

  1. (a) is the property of any public body which has power under any enactment to acquire land compulsorily, or
  2. (b) is declared by or under any enactment to be inalienable,
where representations objecting to the proposal for making the order have been duly made by the owner of the land and not withdrawn."). Page 90, line 13, at end insert (", and public body" means a body established by or under any enactment.").

The noble Lord said: My Lords, Amendment No. 29 relates to the compulsory acquisition provisions in Schedule 5 to the Bill. It inserts into the Bill a requirement requested by the First Minister and Deputy First Minister in Northern Ireland for the Secretary of State to consult them when a universal service provider, in connection with the provision of the universal postal service, wishes compulsorily to acquire land in Northern Ireland that is owned by a public body which also has the power to acquire land compulsorily.

In Northern Ireland there is no corresponding legislation to the Acquisition of Land Act 1981 which protects land acquired by statutory undertakers for the purposes of their undertaking. A different approach is taken in Northern Ireland legislation and, where this legislation provides for the establishment of a statutory body with powers of compulsory acquisition, it generally includes a provision requiring a vesting order to be approved by the Assembly where objections have been made by the owner of the land. Recent examples of such orders are Schedule 3 to the Electricity (Northern Ireland) Order 1992 and Schedule 2 to the Gas (Northern Ireland) Act 1996.

The Government consider that the amendment is appropriate as it would ensure that the protections that currently exist for land owned by certain public bodies in Northern Ireland are reflected in the Bill.

Amendment No. 30, which is consequential to Amendment No. 29, defines "public body" as a body established by or under any enactment. I beg to move.

On Question, amendments agreed to.

6.45 p.m.

Lord Sainsbury of Turville

My Lords, I beg to move that the Bill do now pass.

Moved, That the Bill do now pass.—(Lord Sainsbury of Turville.)

Baroness Miller of Hendon

My Lords, the Government have given way on certain matters. I should like the Minister to know that we are most grateful to him. We had hoped that the Government might have given way on more. Despite misgivings on certain matters we were unable to persuade them. We wish the new Post Office company, and indeed all the other postal services providers which will be allowed to compete in the market, every possible success. I thank all my noble friends and all noble Lords who have supported our amendments. I feel sure that all noble Lords will join me in hoping that the new regime provides a good service to the public and to business. Perhaps a more prosperous and efficient postal service will add to the prosperity of Great Britain plc.

Lord Clarke of Hampstead

My Lords, as one who during the passage of the Bill has spoken in critical terms of the Government's proposals to turn the Post Office into a plc, I want to say that I am still of that opinion. I think that the Government have got it wrong. The purpose of taking up noble Lords' time today is to say that, as a relatively new boy in your Lordships' House, I have been impressed with the way the various stages of the passage of the Bill have taken place and the courtesy which has been shown. It also gives me the opportunity to thank noble Lords who have spoken so highly of Post Office workers.

Many noble Lords know of my interest in this matter. It is gratifying to know that this House is alive and well in tackling the future of the Post Office. Like other noble Lords, I wish it well in whatever form it ends up, but I hope that it maintains its traditions as it has done for centuries. I should like to place on record my thanks to the Minister for his courtesy in dealing with some of my barbed comments over the past few months. I wish the Bill well. I hope that it has a clear passage now and that the Post Office and its staff can carry on doing the job they do so well.

Lord Sainsbury of Turville

My Lords, perhaps I may say how grateful I am to the noble Baroness and other noble Lords who have contributed to the debates on the Bill and who have contributed to what I believe is an effective scrutiny of the Bill. I thank them for that contribution. The debates have shown the strong feelings the British public have for the Post Office, its role and the major contribution it makes to our public life. I believe that the Bill will make a major contribution to the continuing life of this country and also to great commercial success in the future.

On Question, Bill passed, and returned to the Commons with amendments.