Lords Sitting of 8 June 2000

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Guildford): The CHAIRMAN OF COMMITTEES on the Woolsack.

Criminal Law of Self-defence
Lord Acknerasked Her Majesty's Government:
Whether they are contemplating amending, or otherwise altering, the criminal law of self-defence, and, if not, why not.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, it is well established in English law that a person may use reasonable force in self-defence or in the defence of his or her family or property. What is reasonable in a particular case is ultimately best left to a jury to decide in the light of the circumstances. We remain unconvinced that a change to the law on self-defence is required.
Lord Ackner: My Lords, I hope that your Lordships will forgive me if I do not take time dissembling gratitude for a wholly unsatisfactory Answer. The Minister is no doubt aware of the decision of this House in the case of R v. Clegg, the soldier who shot dead the occupant of a motor car that went past a checkpoint in Northern Ireland.
Does the Minister recall the speech of the noble and learned Lord, Lord Lloyd of Berwick, which was agreed to by all his fellow Law Lords, in which he said that the recommendations for a change in the law were all one way and entitled to great weight? The recommendation to which he referred was, principally, the recommendation of the Criminal Law Revision Committee in its 14th Report in 1980 in which it stated:
"Where a person kills in a situation in which it is reasonable for some force to be used in self-defence or in the prevention of crime but the defendant uses excessive force, he should be liable to be convicted of manslaughter not murder if, at the time of the act, he honestly believed that the force he used was reasonable in the circumstances".
That recommendation—
Noble Lords: Too long!
Lord Ackner: My Lords, that recommendation was approved by your Lordships' Select Committee which considered murder and life imprisonment, of which I was a member, in 1989. How can the Government leave the position in the state it is now?
Lord Bassam of Brighton: My Lords, I did not think, for a moment, that I would satisfy the noble and learned Lord with my response. I have listened carefully to what he said, but we remain of the view that what we have is about right. It has to be a
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judgment taken on what is reasonable, necessary and proportionate in the circumstances. We think it is right that a jury should decide in the light of those circumstances. We believe that that is the best way to conduct such matters. That would also appear to have been the view of much of the judiciary, much of the police service and of many Members from the party opposite, both in government and in opposition.
We fully understand the case and circumstances which have given rise to this extensive debate. However, we believe that we need to stay where we are, and be reasonable, proportionate and sensible in the circumstances. I well understand the fears and concerns that lie behind the Question.
Lord McNally: My Lords, does the Minister agree that one of the most worrying aspects of the recent publicity is not so much the matter of self-defence but the lack of what every citizen expects as of right; that is, proper police protection? That applies particularly to rural areas. It is quite clear that people who live in isolated communities are not given what is their civil right; namely, proper police protection. How do the Government intend to address that problem?
Lord Bassam of Brighton: My Lords, I well understand the point made by the noble Lord. It is for that reason that in setting up the crime fighting fund we added an extra sparsity factor which will benefit the more rural areas. However, we are all subject to the problem of the time that it takes for the police to arrive at an incident. I well remember having exactly the same problem when I was burgled for the fourth and final time in an 18-month period some five or six years ago. I was obliged to apprehend the burglar myself—
Noble Lords: Hear, hear!
Lord Bassam of Brighton: My Lords, I am no "have-a-go hero", but I was somewhat enraged. He spent two years behind bars and had 60 other offences taken into consideration. I hope that lie is now recovering from his heroin addiction as a consequence.
Viscount Astor: My Lords, is the Minister aware that we on this side of the House believe that the law on this should be reviewed?
Lord Bassam of Brighton: My Lords, I am intrigued by that. The Leader of the Opposition may have been of that view, but it certainly does not appear to be shared by the Shadow Home Secretary, She made it plain on the "Today" programme that she believes that the law is entirely adequate.
Lord Goodhart: My Lords, is this not another example of the desirability of getting rid of the mandatory life sentence for murder so that the sentence can be tied to the seriousness of the offence?
Lord Bassam of Brighton: My Lords, I am aware that this runs as a debate, particularly in legal circles, and has done since the sentence of hanging was

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abolished in the mid-1960s. However, there is considerable discretion within the term "life" and in mandatory sentencing. I think it is best to leave things as they are. Successive generations of the judiciary have been happy with that. I believe that the system works well as it is.
Lord Monson: My Lords, is the Minister aware that there is less burglary in rural New England than there is in rural England, and that that is mainly because in rural New England householders need have no inhibitions about defending themselves, their families and their property?
Lord Bassam of Brighton: My Lords, that may well be the case. However, I believe that by and large we live in a civilised society. The murder rate in the United Kingdom is admirably low. I have little doubt that that has much to do with our very tight and restrictive laws on such things as guns. Not everyone shares that view, but I hold it firmly.
Lord Stoddart of Swindon: My Lords, can my noble friend explain why a mandatory life sentence is not mandatory?
Lord Bassam of Brighton: My Lords, it is mandatory, but there is a tariff set. I think that that point is widely understood.

Rice Genome Project
3.9 p.m.
Lord Taverneasked Her Majesty's Government:
What United Kingdom involvement there is in the International Rice Genome Project; and when it will be completed.
Lord McIntosh of Haringey: My Lords, the John Innes Centre in Norwich has been involved in planning the International Rice Genome Sequencing Project, through membership of the steering committee, since its inception in 1997. The centre, together with European Union colleagues, has undertaken preparatory work to sequence part of the rice genome.
Subject to funding, the international project is due to be completed by 2006. The bulk of the work is being carried out in Japan, although the USA, China and other countries are also contributing significantly. The John Innes Centre is co-ordinating a consortium of European laboratories to sequence a considerable part—10 to 15 per cent—of the genome.
Lord Taverne: My Lords, will the Government give every possible support to this vitally important project? It should lead to the development of improved rice with increased nutritional content and much less demand on scarce resources such as land and water. Does the Minister agree that an important breakthrough in the programme was the recent
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decoding of the genetic sequence? Incidentally, that was carried out by Monsanto—a company with which I have no connection—which is often reviled. Does the Minister also agree that on this occasion it should be congratulated on setting an example to other companies in making the benefits of the genome information freely available?
Lord McIntosh of Haringey: My Lords, we are giving every encouragement to that project and shall continue to do so. The noble Lord is quite right that Monsanto made available a working draft of its decoding of the genome. But that is only a working paper; there is still a great deal of work to be done. However, those who are taking part in the sequencing project appreciate Monsanto's gesture in making that information available free of any copyright or patent restriction.
Lord Jenkin of Roding: My Lords, is the Minister aware that the Select Committee on Science and Technology recently drew attention to the splendid speech made by a Brit—Professor Gordon Conway, currently president of the Rockefeller Foundation—which he addressed to the Monsanto board last July? At that time he pointed out that by genetic modification of rice, the yields were already rising dramatically (a 40 to 50 per cent increase) and the nutritional quality improved greatly. Is not the message that if real advantage can be seen, as the third world countries certainly do see, there is nothing to fear from this technology?
Lord McIntosh of Haringey: My Lords, the Government take the view that where it is appropriate and beneficial for this technology to be used in developing countries, all support should be given to that technology.
The Countess of Mar: My Lords, does the Minister agree that it may put a lot of people's minds at rest on this subject if we can be assured that a large bank of existing genetic material is kept of the plants that are being genetically modified? If something goes wrong, we shall then have something to fall back on.
Lord McIntosh of Haringey: My Lords, that is true of all modification, whether it is genetic modification brought about by modern techniques or by any form of breeding. It is desirable to be able to retrace one's steps if any change has been made, however beneficial.
The Earl of Selborne: My Lords, perhaps I may declare an interest as a trustee of the John Innes Foundation. Does the Minister agree that enormous interest has been shown around the world in genome sequencing? Is it not desirable, if possible, for the intellectual property rights to remain within the scientific community, particularly at the national academies of those countries most likely to benefit?
Lord McIntosh of Haringey: My Lords, clearly the important issue of intellectual property rights arises.

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The noble Earl is aware of the controversy in the United States in relation to the patent rights on part of the human genome project between the Sanger Centre and a private developer. Of course, no patent can be taken out on indigenous plants. It is only where there is a degree of invention that that is possible. But it is enormously important that it should not be possible to patent a scientific invention which should be generally available for the benefit of the world.
The Earl of Listowel: My Lords, does the Minister agree that, despite the great benefits from genetic engineering, there may also be great drawbacks? As with nuclear power, from which many people benefit greatly, awful forces may be unleashed by such a development.
Lord McIntosh of Haringey: My Lords, I am not sure that I accept the scientific basis for the analogy which the noble Earl seeks to draw. The case for genetic modification has to stand on its own and not by analogy with nuclear power.

Zimbabwe: Elections
3.14 p.m.
Lord Blakerasked Her Majesty's Government:
Whether the arrangements for international monitoring of the elections in Zimbabwe are satisfactory.
Baroness Ramsay of Cartvale: My Lords, we are pleased that the Government of Zimbabwe have accepted international observers to observe the elections to be held in that country on 24th and 25th June. We are satisfied with the speedy response to send observers from the Commonwealth, the Southern African Development Community, the European Union, South Africa and the United States. The United Nations development programme is co-ordinating the arrangements for the various teams. The first observers arrived over the weekend of 3rd and 4th June and we understand that there will be around 300 observers in total.
Lord Blaker: My Lords, is the noble Baroness aware that the latest measure of intimidation devised by Mr Mugabe's so-called veterans is that, when they encounter a mother carrying a baby and she declines to attend one of Mr Mugabe's party meetings, they seize the baby, raise it in the air and drop it on the ground? As it is only a short time since Mr Mugabe lost the referendum, and the only important political development since that time has been his campaign of intimidation, is it not clear that if he wins the election, it will only be because of that campaign of intimidation? Who will brief the monitors?
Baroness Ramsay of Cartvale: My Lords, as my honourable friend the Minister of State at the Foreign Office, Peter Hain, said on 5th June, neither Britain nor the international community can make this
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election fair; only Robert Mugabe can do that. We are well aware of the stories which the noble Lord, Lord Blaker, mentions. Intimidation is definitely taking place in Zimbabwe; of that there is no doubt. But we shall not pre-empt the observers' verdict or the verdict of the people of Zimbabwe.
It is important to make the point that the opposition parties in Zimbabwe have not walked away from the elections. As they have not walked away from them, then neither should we. But we deplore the pressure that they are put under. It is vital that they be allowed to campaign freely, and we hope that the observers will play their role in trying to make that happen.
Lord Marsh: My Lords, is the noble Baroness aware that in those circumstances, which are well known to the international community and everybody else, the only role that the observers can play is to legitimise the incoming government, which will undoubtedly be led by Mr Mugabe and be a totalitarian, vicious regime?
Baroness Ramsay of Cartvale: My Lords, the more than 300 observers who will be deployed to Zimbabwe will do a good job. They will consist of 160 from the European Union, led by Pierre Schori, an MEP who was a former minister in Sweden for international development. He is extremely experienced in the field of foreign politics. The Commonwealth is sending at least 45 observers and they will be led by General Abubakar, the former head of state of Nigeria. I shall not list the others. As everyone will understand, the figures are fluid.
Noble Lords must not pre-empt everything and say, as the noble Lord, Lord Marsh, implied, that nothing the observers report will be able to be taken seriously enough for people to judge whether or not the elections have been fair. I believe that the observers will do a good job. We shall study with great care the reports they give to the international community on what happened during the elections. That is all the international community can do at this time.
Lord Borrie: My Lords, can my noble friend indicate what arrangements have been made and assurances given for the personal safety of the many observers whom she mentioned will be there?
Baroness Ramsay of Cartvale: My Lords, the United Nations development programme is co-ordinating the teams of observers. The arrangements for each team will be the responsibility of the organisations, such as the European Union and the Commonwealth.
Lord Howell of Guildford: My Lords, first, is it correct that British citizens are being refused admission as observers to Zimbabwe? Secondly, is it not one of the most prominent features of this tragic situation that the Movement for Democratic Change and its leaders are showing such amazing courage in the face of these hideous threats; and, indeed, of actual deaths? Is not by far the most important thing now to ensure that the observers stay on for some weeks after the election, thereby indicating that the international

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community has some interest in protecting these brave people against the reprisals that will certainly come—not just those in the verbal sense but reprisals in terms of murder and mayhem?
Baroness Ramsay of Cartvale: My Lords, I certainly agree with what the noble Lord, Lord Howell, said about the courage of the opposition in Zimbabwe. I believe that those people are showing remarkable courage in the face of unbelievably bad behaviour. We are well aware of President Mugabe's remarks about British observers. Of course, it is for the Commonwealth and the European Commission to make decisions on the composition of their observer team. But, at present, one Briton has been proposed as an observer with the Commonwealth team while the European team has three Britons. It will be up to the organisations, whose teams consist of many different nationalities, to look after that situation. We are not sending a British observers' team as such, but Britons are certainly part of the teams from the various organisations that are going to the country to observe the elections.
Lord Avebury: My Lords, has the noble Baroness observed the report in today's edition of the Harare Financial Gazette, which states that President Mugabe will issue a decree providing that observers will have to undergo a process of accreditation by the Registrar General, whose activities they are supposed to monitor? Does she not think that, under this system, those concerned will be able to refuse to allow particular observers into the country whose background, or origins, they do not like? Has the Minister also noted the claim that tens of thousands of voters are finding that their names have been left off the electoral role?
Baroness Ramsay of Cartvale: Yes, my Lords. I am aware of both those matters. I know that the accreditation situation is being negotiated right now, as we speak. The UNDP, which is co-ordinating the teams, will be involved in the process, as will the UN, the European Union and the Commonwealth Secretariat. The organisations that are sending the observers must be satisfied that their observers will be allowed to do the job that they have been assigned to do.
The Lord Bishop of Guildford: My Lords, does the Minister accept that it is not possible to hold free and fair elections in a culture which has a climate that refuses to accept liberty of opinion and refuses to uphold the rule of law? In the absence of those things, not only can there not be free and fair elections, but also the people themselves are subject to the abuses of political power.
Baroness Ramsay of Cartvale: Yes, my Lords, I hear the wise words of the right reverend Prelate. Of course, Zimbabwe is not the only country in the world in which such remarks can be made. As an international community, we must do whatever we can to try to
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ensure fair and just elections. Given the timescale allowed, the international community has responded to the situation in Zimbabwe very speedily and in considerable numbers in order at least to try to ensure that there is a minimum of fairness. If these elections are judged not to be fair and just by the observers, that message will go out to the international community who will respond fittingly to Zimbabwe.
The Earl of Sandwich: My Lords—
The Duke of Montrose: My Lords—
Noble Lords: Order!
The Attorney-General (Lord Williams of Mostyn): My Lords, I think it is the turn of the Cross-Benches. There may, in any event, be time for the noble Duke.
The Earl of Sandwich: My Lords, following on from what the Minister has just said, does she agree that the success of this election-monitoring process depends on the local trained monitors for 4,000 polling stations? Is there anything that this Government can do to support the Churches and civil society which are in the process of training these very important people?
Baroness Ramsay of Cartvale: My Lords, I am most grateful to the noble Earl for having raised that question. We are giving, and have given, aid to NGOs for the precise purpose of training people to try to carry out fair and just democratic elections.
Noble Lords: Montrose!
The Duke of Montrose: My Lords—
Noble Lords: No!
Lord Williams of Mostyn: My Lords. I believe that the next Question has been called.

Asylum Seekers: Dispersal Policy
3.25 p.m.
Lord Greavesasked Her Majesty's Government:
What action they propose to take in the light of the report by the Audit Commission Another Country—implementing dispersal under the Immigration and Asylum Act 1999.
Lord Bassam of Brighton: My Lords, we greatly welcome the report of the Audit Commission on the dispersal arrangements. The field work for the report was undertaken between October 1999 and March 2000, and draws its conclusions from the effectiveness of dispersal operations under the voluntary arrangements. Therefore, it does not properly reflect the changing nature of the asylum service and the ways in which we are driving new arrangements forward. It makes a useful contribution to the continuing

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development of our policy. Many of the conclusions and recommendations made in the report have been implemented, are being developed, or are under active consideration.
Lord Greaves: My Lords, I thank the Minister for that Answer. The new arrangements came into force on 3rd April. Can the noble Lord tell us why the Government have used only private sector operators since then at both national and local level in England, some of which—such as, Clearsprings (Management) Limited, Adelphi Hotels Limited and Cross Construction of Brierfield in Lancashire—appear to be less than suitable for the purpose? Is it not the case that the new arrangements are proving to be bad for the asylum seekers, bad for the local communities in which they are being settled, and bad for taxpayers who are being asked to fund what appears to be a considerable amount of profiteering by the private sector?
Lord Bassam of Brighton: My Lords, I am afraid that I cannot agree with the noble Lord's conclusions. We believe that the scheme currently in operation is proving to be extremely effective. It is providing valuable accommodation. Not all of the accommodation is in the private sector. The arrangements that have been made are effective and are providing a satisfactory level and quality of accommodation. The National Asylum Support Service fully investigates any complaints made and works very closely on them.
Much attention has been paid to Landmark in Liverpool and its activities. The two tower blocks of self-contained flats were previously used by Liverpool City Council—a well-known Liberal Democrat council—prior to the Government making available useful access to them under the new national scheme.
Lord Alton of Liverpool: My Lords, does the Minister recall that during the proceedings on the 1999 Act many. Members of your Lordships' House raised two specific concerns about the dispersal policy? The first was precisely that hard-to-let properties on sink estates might well be used by councils which might be keen to try to maximise revenue from asylum seekers. Secondly, can the noble Lord give some assurances to the House about the position of unaccompanied minors? Many people are worried that they are being dispersed rather than being placed into a suitable environment. After all, they are children and should have access to people of a similar cultural and linguistic background.
Lord Bassam of Brighton: My Lords, we must obviously try to seek a balance in terms of the quality of accommodation. I do, indeed, recall our important debates on the matter during the passage of the legislation. We are giving most careful consideration to all the accommodation that is being used. We take great care in that respect. Inspections are made, and the services of the local authority involved are made use of, as well as those of the Health and Safety Executive.
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As regards the noble Lord's second point, I can confirm that the treatment and care of minors is one of those matters to which we pay the highest regard. We gave assurances during the passage of the legislation and we shall continue to give such assurances. However, if the noble Lord has knowledge of cases and instances where he feels that the service is falling short of those very high standards, I should be most grateful to learn of them.
Viscount Astor: My Lords, is not the Audit Commission report a shocking indictment of Labour's record on asylum and, indeed, a personal embarrassment to the Home Secretary who claimed that his policy of forced dispersal was an answer to all the problems? Only half the original target has been met in terms of accommodation. Are not local authorities being asked to pick up the tab for this asylum folly? As the noble Lord, Lord Greaves, said, the present shambles is unfair to everyone. It is unfair to local authorities, to taxpayers and to genuine refugees.
Lord Bassam of Brighton: My Lords, I am intrigued by the noble Viscount's observations which verged on a political rant. However, he made serious points. We believe that our dispersal system is working well. It certainly works far better than the voluntary dispersal arrangements which we established with consortia prior to the introduction of the national scheme. We also believe that we are on track with policy. The number of asylum seekers is coming down. The number of applications being considered is increasing in terms of the volume of decisions taken—last month one of the highest-ever figures was recorded in that regard. We now believe that we have a firm grip on the policy. I greatly regret the way in which noble Lords opposite who are members of the Conservative Party have sought to use this issue in a totally shabby way, having left our Government with an absolute shambles of a system. We are now putting a sound system in place which is fair and proper. We are exercising that policy justly and fairly and in the interests of the British public.
Lord Clement-Jones: My Lords, I am sure that the Minister would wish to note—
Noble Lords: Order!

Utilities Bill
3.31 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move the Motion standing in my name on the Order paper. In so doing, as the order of consideration of clauses is somewhat unusual, I ought to say a few words about it. The reason for taking the clauses out of their numerical order in the Bill is because the Bill is largely a rewrite, with amendments, of large parts of the Gas Act and the Electricity Act. We believe that it is for the convenience of the House to be able to

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consider comparable topics at the same time rather than have to move around the Marshalled List, as it were. The proposal we are putting forward has been agreed through the usual channels. It is the same as the procedure adopted in another place. I beg to move.
Moved, That it be an instruction to the Committee of the Whole House to whom the Utilities Bill has been committed that they consider the Bill in the following order:

Clause 1,

Schedule 1,

Clause 2,

Schedule 2,

Clauses 4 to 9,

Clause 13,

Clause 10,

Clause 14,

Clause 11,

Clause 15,

Clause 12,

Clause 16,

Clauses 17 to 28,

Clause 74,

Clause 85,

Clauses 29 to 31,

Clause 73,

Clauses 32 to 39,

Clauses 80 to 82,

Clause 40,

Clause 84,

Clause 41,

Clàuse 86,

Clause 42,

Clause 87,

Clauses 43 to 50,

Schedule 4,

Clause 83,

Clause 51,

Schedule 5,

Clause 52,

Clause 88,

Clause 53,

Clause 89,

Clause 54,

Clause 90,

Clause 55,

Clause 91,

Clause 56,

Clause 92,

Clause 57,

Clause 93,

Clause 58,

Clause 94,

Clause 59,

Clause 95,

Clause 60,

Clause 96,

Clauses 61 to 68,

Clause 97,

Clause 69,

Clause 98,

Clauses 70 to 72,

Clause 101,

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Clauses 75 to 79,

Clauses 99 and 100,

Clause 102,

Clause 3,

Schedule 3,

Clauses 103 to 105,

Schedules 6 to 8,

Clauses 106 and 107.—(Lord McIntosh of Haringey.)
Lord Renton: My Lords, is the noble Lord aware that the decisions of the usual channels have not always been fully approved by Members of your Lordships' House and that taking clauses out of their numerical order often causes confusion in the course of Committee or Report stages? Although on this occasion we shall consider carefully whether the considerable alteration is justified, the Government and the committee which considers these matters should be very reluctant indeed to change the numerical order.
Lord McIntosh of Haringey: My Lords, I am, of course, aware of the points that the noble Lord raises. I respect his judgment in this matter. The usual channels in this case are the relevant Front Benches who are responsible for the large majority of the amendments that are tabled. If we are wrong, the procedure will be seen to be wrong. However, it worked in another place. We believe that it will help the consideration of the Bill. I commend the Motion to the House.
On Question, Motion agreed to.

Postal Services Bill
3.34 p.m.
The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Sainsbury of Turville.)
Baroness Miller of Hendon: My Lords, before we proceed further I wish to ask the Minister a question of which I have given him notice.
I understand that yesterday the Prime Minister made a most interesting speech to the National Federation of Women's Institutes. I very much regret that I was not present to hear it as I might have joined in at some stage or t' other! However, he referred to his concern about sub-post offices—a matter with which I believe everyone in this House is concerned. He also said that the Government intended to make a statement about what they would do to help sub-post offices in the future. As we are about to embark on the first day of the Committee stage of the Postal Services Bill, will the Minister tell us when the statement will be made? Will it affect the Bill? Will it mean more government amendments? Will it make our

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amendments ineffective? Have we wasted much time trying to make everything right? I hope that the Minister, who smiled at me so nicely across the Dispatch Box, will give the House a satisfactory reply.
Lord Skelmersdale: My Lords, I support my noble friend's comments, which are absolutely right. I have it on good authority that the Prime Minister said:
"You have a strong campaign on rural post offices. I want to preserve them too … Later this month we will publish plans that allow people to carry on taking out pensions and benefits in cash and that will protect rural post offices and offer them a new lease of life".
I am not entirely sure—my source did not tell me this—whether he said "We will publish plans" or "I will publish plans". However, it is not surprising that I have my suspicions about that. Nor did my source tell me whether the word "that" in the sentence,
"that will protect rural post offices and offer them a new lease of life",
referred to the taking out of pensions and benefits in cash or to something else. If it refers to something else, again my noble friend is quite right to say that that will affect proceedings on the Bill. It is bound to, at some stage. Have we already wasted much time? Are we about to waste much time second guessing what the Prime Minister or, indeed, the Secretary of State might say by tabling amendments, manuscript amendments and so on, in order to clarify the position? If the noble Lord will clarify the position now, we should all be extremely grateful. That would probably help him too.
Lord Windlesham: My Lords, before the noble Lord replies, the comments of my two noble friends raise the question: what did the Prime Minister say in his speech to the Women's Institute yesterday? Is the noble Lord aware that I have tried to obtain from No 10 Downing Street a transcript of the speech as delivered? I am informed that no such document exists. I already have in my possession the speech as it was intended to be delivered, which, in the way of the Government's presentation, had been issued in advance. Printed in large letters across the top are the words,
"Subject to check on delivery".
Now we are told that the Prime Minister dropped substantial parts from his prepared speech. Which bits stayed in and which were left out?
Lord Clarke of Hampstead: My Lords, I take the point made by the noble Baroness, Lady Miller, about time wasted in preparation. On Monday this week the Secretary of State attended the Communication Workers Union conference. He said that the report from the PIU is imminent. We heard at Second Reading that it hoped to report to the Prime Minister
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soon after Easter. Can we be told whether that report is imminent or whether it will be produced in some weeks' or months' time?
The Earl of Onslow: My Lords, before my ex-house companion at Eton replies, I hope I may say a few words.
Noble Lords: Privilege!
The Earl of Onslow: The only two members of my house who were not thought fit for government office were the noble Lord and myself. They were right about myself but wrong about the noble Lord.
If the Prime Minister implied in his speech that he would change his policy, either the Bill ought to be taken away and redrafted or it is flannel. Which is it?
Baroness Byford: My Lords, again before the noble Lord responds, I agree with the points raised by my noble friends. Unlike, I suspect, other Members of the House, I have been dealing with this particular issue during the passage of the Child Support, Pensions and Social Security Bill. It has raised enormous problems because we have not been able to get any answers. I can tell noble Lords that, for good reasons, there was due to be a meeting this morning with Alan Johnson, where at least some light may have been thrown on the issue. That meeting had to be cancelled. If the Minister can respond to this matter it would be extremely helpful, not only to many of us working on this Bill but also to those of us who have been doing a large amount of work on the other Bill.
Baroness Oppenheim-Barnes: My Lords, before the Minister replies, if he is aware of what the Prime Minister said, perhaps he can tell your Lordships' House before more amendments are tabled and before any amendments are debated. If he does not know what the Prime Minister said—and, more importantly, if he does not know what the Prime Minister meant, which is more likely—there is no case for the Committee stage to proceed.
Lord Sainsbury of Turville: My Lords, it is very nice to see that the Women's Institute has in filtrated this House. I am sure that it will lead to good things.
If the members of the Women's Institute had listened to what the Prime Minister said yesterday, they would have a clearer picture. The position is very clear. The PIU report on post offices will be published shortly. This will, of course, be done with due respect for the parliamentary conventions. These issues do not impinge directly on the Bill before us, although the report may well help inform decisions on whether schemes under Clause 102, the subsidy clause, are needed.
The Chairman of Committees (Lord Boston of Faversham): My Lords, the Question is that the House do now resolve itself into Committee upon the Bill. As

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many as are of that opinion will say "Content"; to the contrary "Not-Content". I think that the "Contents" have it. Clear the Bar.
Division called.
Tellers for the "Not-Contents" have not been appointed pursuant to Standing Order No. 53. A Division therefore cannot take place, and I declare that the "Contents" have it.
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
3.45 p.m.
Clause 1 agreed to.
On Question, Whether Schedule 1 shall be agreed to?
Lord Skelmersdale: If my Motion on the Marshalled List were to be taken at face value it would be a wrecking amendment. Such was never my intention. But recent Rules of the House—which I must confess I do not like one little bit—make it virtually obligatory to announce one's intention to ask general points on a clause or schedule by putting down a Motion that such be opposed. In the good old days, of course, one just stood up and spoke. Be that as it may, I was trying to be good.
I have, or rather had, two questions—both of which have been somewhat pre-empted by the Secretary of State's announcement today. I cannot believe that he was so frightened of what I might say—
Lord McIntosh of Haringey: It would be helpful to the speaker if those who are leaving the Chamber would do so silently.
Lord Skelmersdale: I was saying that I have been pre-empted by an announcement today of the Secretary of State, Mr Byers. I cannot believe that he was so frightened of what the House might say or do, or indeed what I might say or do, that he decided to come clean. That said, it is annoying, to say the least, that not once but twice in the past 24 hours we have been pre-empted by announcements by two members of the Cabinet.
We have had already a short discussion of the Prime Minister's activities yesterday, but I venture to suggest that your Lordships as a whole will not know who the members of the postal services commission are to be. That is one thing that I sought to discover.
The other matter has also disappeared—namely, how can it be that paragraph 1 of the schedule states that,
"The Commission shall consist of…a chairman appointed by the Secretary of State",
and no fewer than three other people appointed by him after consultation with the chairman and the chief executive. However, paragraph 5 goes on to say that
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the commission shall appoint the chief executive. It looks to me as if the chief executive was to have had a hand in appointing himself—which, of course, is all wrong. At this point, perhaps I may say that I am delighted that, unlike in the case of the Financial Services and Markets Bill, there was in the department every intention of having a chairman and a chief executive. On that Bill, I understand, the jury is still out.
I said that I have been pre-empted. Mr Byers announced today that he had appointed not three but five other persons to join with the chairman and chief executive designate. I understand that these are: Mr Robin Aaronson, who is a director of the London office of a firm of business consultants and a trained economist; Ms Julia Kaufmann, who is, of course, currently a director of the BBC's "Children in Need" appeal, but I understand that that is coming to an end; Ms Janet Lewis-Jones, who has a portfolio of appointments which includes the British Board of Film Classification, the Welsh Fourth Channel Authority and the British Waterways Board; and Mr Ken Olisa, who is chairman and chief executive of a company working with IT innovators and investors. He is also governor of the Peabody Trust and, I am sure, of many other organisations. Then, surprise, surprise, there is Mr Tony Cooper, who is a very senior trade unionist. He is general secretary and chief executive officer of the Engineers' & Managers' Association and a member of the TUC General Council.
I should be grateful if the Minister could give us some further information about the appointments. Are there to be any more appointments and has the chairman yet decided on a quorum to put to the first meeting? Will the meeting be during or after the Bill receives Royal Assent? Are we, in short, going to be pre-empted by further announcements on the Post Office during the course of the proceedings on the Bill? I, for one, believe that already the Government are, to say the least, in danger of being accused of contempt of the House, on which of course there are other grounds into which it would be inappropriate to go just now.
The position of the chief executive having a hand in appointing himself also applies to Schedule 2, which deals with the consumer council for postal services. I could have fired the same warning shot across the Minister's bows on that matter by giving notice of my intention to oppose the Question that Schedule 2 be the second schedule to the Bill, but I did not think that that would be right. However, depending on the answer I receive from the Minister, I may have to do something similar by means of a more direct amendment on Report.
Baroness Oppenheim-Barnes: Perhaps I may say to the Minister that I am extremely flattered to be described as a member of the Women's Institute. I am not, but as he described us collectively as that, I might as well say that at all times I found members of the institute to be excellent. I consulted the institute on almost every consumer matter on which I had to have

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a common sense view. I spoke at two of its annual conferences and found that the Women's Institute was very good at listening.
My question about Schedule 1 concerns the terms of appointment. The schedule states that an appointment shall not exceed five years. However, paragraph 3(5) states:
"No person shall be prevented from being a member of the Commission … merely because he has previously been a member of the Commission".
That seems to be a little contradictory. Perhaps the Minister will explain.
Lord Sainsbury of Turville: I should hate it if my comments were thought to be in any way derogatory of the Women's Institute. I was in fact suggesting that it would be a good development for the House if such an infiltration took place.
I was asked about the appointments to the postal services commission. First, perhaps I may say that those appointed seem to be admirable people. I can assure the noble Lord that those are all the appointments to the postal services commission. I was asked about the five-year term. We believe that an appointment should not last longer than that, but there may well be circumstances in which a person does very well on the commission and the Government would wish to appoint him a second time. That would seem to me to be a perfectly reasonable position in these circumstances. The reason is that the person should come up for re-appointment. The appointment should not go on longer, but people should not be excluded from being re-appointed simply because they have already served one term.
Lord Skelmersdale: This is Committee stage so I am allowed to speak again and cross-question the Minister. He did not refer to my point about the anomaly of a chief executive seeming to have a hand in the appointment of himself. I wonder whether the noble Lord can help me on that point.
Lord Sainsbury of Turville: I am not certain that I understand the point that is being made. The commission appoints the chief executive. In that sense, it seems to me to be perfectly sensible that the commission should do that.
Lord Skelmersdale: The chief executive is already a member of the commission. The whole thing seems rather odd.
Lord Sainsbury of Turville: This is not at all an unusual procedure. It is not unusual for a board to appoint a chief executive when that chief executive might well be a member of that board.
Schedule 1 agreed to.
Clause 2 agreed to.
Schedule 2 [The Consumer Council for Postal Services]:
Lord Sainsbury of Turvillemoved Amendment No. 1:
Page 77, line 5, leave out ("Minister for the Civil Service") and insert ("Secretary of State").
The noble Lord said: In moving this amendment, I should like to speak also to Amendment No. 2. The need for these amendments arises as a result of further advice from the Cabinet Office that as primary responsibility for approving the terms and conditions of employment of NDPB staff rests with the individual departmental sponsor Ministers, the Secretary of State and not the Minister for the Civil Service should be specified in these two subsections. I beg to move.
Lord Skelmersdale: I think I am right in saying that "the Secretary of State", when referred to in legislation, means any Secretary of State. Therefore, although the Minister refers to the department in this instance—indeed, one can kick off with the department advising the current Secretary of State or any Secretary of State at the moment for the Department of Trade and Industry—in theory, anyway, any Minister so designated as a Secretary of State could conduct activities under the Bill. Is that not the case?
Lord Harris of Greenwich: Before the Minister replies, perhaps I may point out that all legislation is framed on precisely this basis.
Baroness Miller of Hendon: My only comment on this matter would be—I would not question the advice that would come from the Cabinet Office, and I would accept obviously that that would be brought back here—that the Bill has been through the House of Commons. Why was it not felt necessary to deal with the matter then? Why has this come out as an afterthought, as it were?
Viscount Goschen: Before the Minister responds, can he advise the Committee whether the other references in the Bill to the "Minister for the Civil Service" still stand and are still valid? Can the Minister explain to the Committee whether that is a known statutory position, unlike the term "Secretary of State" which is well understood in legislation? Have there been precedents where the office of Minister for the Civil Service has been referred to?
Baroness Oppenheim-Barnes: This schedule relates to the appointment of the members. Can the Minister say whether any current members of POUNC have been approached to see whether they are willing to be appointed? They have the background knowledge and they have been serving consumers extremely well. I do not think that anyone in either House has paid a tribute to them, so on this occasion I should like to do so. I should like to ask the Minister whether such an idea has been considered.
Lord Sainsbury of Turville: The matter came to the House because we had fresh advice. The Cabinet

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Office plays no role in agreeing terms and conditions for staff of individual NDPBs. That was the situation. Members of the commission were appointed according to the Nolan rules. As I said, I believe that suitable people have been approached. I add my tribute to those people who I think have done an extremely good job; no doubt they were considered in this context.
Viscount Goschen: Perhaps the Minister would be good enough to address the specific points that I made about the position of the Minister for the Civil Service.
Lord Sainsbury of Turville: The noble Viscount asked whether it is usual to refer to the Minister for the Civil Service in these terms. As the provision has now been taken out of the Bill and replaced by the "Secretary of State", I think that the point no longer arises.
4 p.m.
Viscount Goschen: With the greatest respect to the Minister, there are other places in the Bill—for example, line 12 on page 77—where there is reference to the Minister for the Civil Service. I do not believe that that reference is covered by the amendment.
Lord Sainsbury of Turville: I can see no reason that he should not be referred to in legislation in the same way as there is reference to the Secretary of State.
Viscount Goschen: With the greatest respect, there appears to be some confusion. The Minister has said that the references will be changed, but clearly there are some references that are not addressed by the amendment. Does the Minister consider that those references should be changed by further amendments, or does he believe that the references to the Minister for the Civil Service are now correct?
Lord Sainsbury of Turville: With this amendment we are changing the person who makes the decision. The references to the Minister for the Civil Service, as they apply to him, stand; but in this particular case the person who takes the decision has been changed.
Baroness Miller of Hendon: I find the Minister's explanation somewhat confusing. I accept that the Minister may not be confused, but I am. I would be happy if he could clarify the matter for me. My noble friend pointed to the fact that on page 77, in lines 5 and 6, in the paragraph dealing with staff, the Cabinet Office has advised the Minister that the reference to the Minister for the Civil Service to be changed to the Secretary of State. However, only a few lines later it says that,
"The Council shall pay to the Minister for the Civil Service".
So it appears that the Minister for the Civil Service is to be paid, but the Secretary of State will take the decisions. I wonder whether something has been left out of the amendment.
Lord Haskel: Is it possible that this is not a matter of "joined-up government"?
Lord Sainsbury of Turville: This is a simple matter. Previously, the subparagraph stated:
"The appointment shall be on such terms and conditions of service as the Minister for the Civil Service may approve".
but now it will state:
"the Secretary of State may approve".
That is because, under the procedures that now exist, the Secretary of State makes such decisions and not the Minister for the Civil Service.
There is no reason to change other references to the Minister for the Civil Service. In this amendment we are changing the person who will take the decisions. That seems to be a perfectly reasonable thing to do if, as in this case, on the basis of fresh advice, it becomes clear that he is the person who decides. That is not an unreasonable position to take.
Lord Skelmersdale: Can the Minister give us a commitment that references to the Minister for the Civil Service in the Bill will be looked at to ensure that the Bill is drafted as the Government intend?
Lord Sainsbury of Turville: I shall certainly do that. It was unfortunate that we did not get it right first time. We are now correcting the matter and I shall make certain that any other references are correct.
On Question, amendment agreed to.
Lord Sainsbury of Turvillemoved Amendment No. 2:
Page 77, line 6, leave out ("Minister for the Civil Service") and insert ("Secretary of State").
On Question, amendment agreed to.
Schedule 2, as amended, agreed to.
Clause 3 [Duty of the Commission to ensure provision of a universal postal service]:
Lord Lairdmoved Amendment No. 3:
Page 2, line 20, at end insert—
("() Where the Commission has imposed such a condition, it must include a condition that the designs and illustrations on adhesive postage stamps proving the payment of the public tariff (as mentioned in section 4(1)(b)) reflect the entire United Kingdom as well as its history and culture.").
The noble Lord said: I beg to move Amendment No. 3 standing in my name. In any revamping of the postal services we should ensure that items that are collected and in which people have an interest— namely stamps—should advertise the virtues of our country. They should reflect all sections of the United Kingdom, its culture and its history. It is extremely important that, whenever the commission licenses bodies that are likely to undertake those tasks, it ensures that the tasks are undertaken in a way that reminds everyone that it is the postal service of the United Kingdom.
Recently I was distressed—perhaps this is why I have tabled this amendment—to discover that the current postal service has decided not to celebrate the bicentenary of the creation of the United Kingdom in 2001, but instead it has decided to celebrate pond life. I am not against pond life—some of my best friends

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actually like pond life—but that will not capture the ethos of the United Kingdom in the year when we should be celebrating the bicentenary of the creation of the United Kingdom. I want to ensure that, in future, we do not become the laughing stock of postal services around the world, as we have over the issue of pond life.
Baroness Miller of Hendon: I have enjoyed listening to the noble Lord, Lord Laird. Like him, I hope that every thing celebrates the United Kingdom. I feel strongly that we should always celebrate the United Kingdom. However, I have some concerns about this amendment because I fear that it may be too prescriptive and practically impossible to implement.
As far as the design of stamps is concerned, Northern Ireland, Scotland and Wales have their own designs of definitive stamps. The noble Lord may be talking about sets of commemorative stamps that are produced from time to time showing pictures of birds or artists and so on. I believe that it may prove difficult to insist that such commemorative stamps, which may be only four in number, contain such matters. I totally agree about the United Kingdom, but I am concerned about how this measure would be implemented.
Lord Swinfen: No matter from what part of the United Kingdom stamps originate, they all have on them the sovereign's head. That is a unifying factor. There have been rumours—maybe no more than suggestions—that the European Commission wants to produce a European stamp that would be used throughout the EC and may not allow individual nations to use their own stamps. Therefore, I believe that this amendment, or something like it, should be accepted.
Lord Patten: On this amendment, I speak in support of the noble Lord, Lord Laird. He has raised an extremely important point. This is the upper of the two Houses in the Parliament of the United Kingdom. It seems extraordinary, according to answers elicited from Her Majesty's Government by the noble Lord!I follow his lead in this matter—that at present the Government have no intention of celebrating the anniversary of the creation of the United Kingdom in 2001. I cannot imagine another country in the world that would not celebrate such an event. The noble Lord has put his finger on the fact that the Post Office appears to have other priorities. I am the owner of a decent and deep pond in Somerset. I shall conduct a focus group among its inhabitants to see whether they would prefer to have their stamp, or whether they would consider that the history of the United Kingdom is more important.
Perhaps interest groups around the country could be consulted. I pick, entirely at random, the Women's Institute. As the Committee knows, I am not a boastful man, but it may be useful to put on the record that, like my noble friend Lady Oppenheim-Barnes, when I have spoken to that institute I have received a warm reception. I believe that it would consider it extraordinary that Her Majesty's Government do not wish to promote next year's anniversary.
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We do not want the Minister to find himself in difficulties, so if the amendment is imperfectly worded, perhaps he can give the Committee an undertaking to return to the matter on Report. I believe that characteristically the noble Lord has put his finger on the point. I am right behind him.
Lord Skelmersdale: I believe that a nugget can be found here, but I see a slight problem. The noble Lord will be familiar with the hand of Ulster on stamps issued in the Province. No doubt he will also be aware of the reproduction of the Welsh leek and the Scottish thistle on stamps. I cannot see how one can get around the problem without doing away with those symbols.
None the less, I believe that it is absolutely right that the Post Office should consider a special issue to celebrate the bicentenary of the United Kingdom. I hope that it will be one of the first subjects to be debated by the new commission. Incidentally, I have not yet been told when the first meeting of that body is due to take place.
Lord Sainsbury of Turville: I know that the subject of stamps arouses keen interest among many people. However, their design and illustration is not a matter for primary legislation and the proposed amendment would be unnecessarily restrictive. Furthermore, it would be unworkable. I suspect that it would be difficult to reach a consensus on what reflects the entire United Kingdom.
The Government are content for the. Post Office company to choose the themes for its annual stamp programme, as it does at present. What is depicted on stamps is entirely a matter for the company to decide, in consultation with the Stamps Advisory Committee. I should point out that the Post Office undertakes a great deal of research on what people would like to see represented on stamps. For myself, I believe that that is probably a better way of discovering what people want rather than turning it into a political issue, which certain groups might seek to exploit.
The position taken by the Government as regards the Post Office is entirely in line with the established practice followed by successive governments since the establishment of the Post Office in 1969.
I am not aware of any proposals for uniform European stamps. Postage stamps are particular to postal operators and there are no plans to merge all the different EU postal groups. While I understand the interest of the noble Lord in these matters, I hope that he will be able to withdraw his amendment.
Lord Laird: I listened carefully to the Minister's remarks and I take on board many of the points that he makes. However, we wish to see postal services in place that reflect accurately the country they serve. That is not unreasonable. I understand the point made by the Minister on market research, but I believe that no market research projects have been undertaken or focus groups set up—including those for children—recently in Northern Ireland. That is a shame when one considers that Northern Ireland is a part of the

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United Kingdom with its own stamp regime, a point made earlier by several noble Lords. Perhaps the Minister can write to me on the matter.
What we would like to see is a form of design that reflects the entire United Kingdom across the complete range of stamp values. It is a pity that we do not occasionally highlight points that are good about the United Kingdom as a whole. Indeed, sometimes stamps are produced that make me wonder why the sovereign's head is not depicted in red; she must be very embarrassed to have her head put on such stamps. We should select themes and issues that reflect the whole nation in all its diversity and we should emphasise its collective worth and strengths. Whatever postal authority is in place in the future, it should ensure that it looks after the nation as a whole.
I shall reserve the right to hold further consultations on this issue and I may refer to it again in the future. However, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
4.15 p.m.
Clause 4 [Provision of a universal postal service: meaning]:
Baroness Miller of Hendonmoved Amendment No. 4:
Page 2, line 25, leave out ("one delivery of relevant postal packets is") and insert ("two deliveries of relevant postal packets are").
The noble Baroness said: In moving Amendment No. 4, I wish to speak also to Amendment No. 7. I should tell the Minister that both are probing amendments.
The Government are providing for one delivery of mail every working day and one collection of mail every working day. That is what we already expect, although I believe that it cannot always be achieved. The Bill excuses all geographical considerations such as, for example, the remoter parts of the United Kingdom where such a rate of delivery and collection is simply not reasonable or practical. It also excuses "other circumstances".
Those other circumstances are not defined, but common sense suggests that they may include strikes, snowstorms and events of that nature. However, one objective of the Bill is to enable the Post Office to improve and expand its services. The Post Office is of course a labour-intensive industry and a major part of its costs is the wage bill. There is no doubt that postmen work very hard. A great deal of their work is, rather like an iceberg, hidden beneath the surface. It is not a matter only of someone slipping a letter through the letter box. The mail has to be sorted by the postman into the correct order in which he will deliver it from door to door. Nevertheless, especially since the advent of electronic sorting methods—pioneered by the British Post Office—there is now a considerable amount of slack time available to the staff.
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Freed of the Treasury's insatiable demands for money, we hope that the Post Office will be able to improve its services. Were one to ask the public what improvements they most want to see, at the top of the list would be speedier and more frequent collections and deliveries; the one invariably follows from the other.
I am sufficiently old-fashioned to convert prices into pre-decimal money. However, I feel that I must stop saying that kind of thing when speaking from the Dispatch Box. I know that in the past I have said that I will not even use automatic machines. I should get myself modernised! Nevertheless, it is true that I do tend to think of such prices in pre-decimal money. As far as I am concerned, the cost of sending a letter by first-class mail is still five shillings and fourpence. Nowadays the Post Office has to compete with fax transfer, which is quicker, cheaper and much more reliable than the post. It also has to compete with e-mail, which is even faster and cheaper than the fax. The only way in which the Post Office will be able to meet such competition is by offering improved services.
We want the Post Office to be able to meet the new competition. I believe that that is the wish of every Member of the Committee. The current dictionary of buzz words includes the phrase, "value for money". I believe that the value for money to be found in my 5s.4d. is that someone at the Post Office should send my letter on its journey by, at the most, 12 hours after I have put it into the letter box and that letters arriving at my local sorting office should not lie in the pigeonhole for up to a whole day before someone delivers them.
I realise that that costs money, but the Post Office has the money and it could do no better than spend its resources on an improved service to customers. Nothing will be more valuable to customers and it will ensure that the Post Office survives well in the new climate. Furthermore, I think that the situation will certainly improve once the Post Office does not have to pay large dividends to the Treasury. I beg to move.
Lord Clarke of Hampstead: Almost every point made by the noble Baroness in moving the amendment is absolutely right. I am also sure that all postal workers, men and women, will be delighted by her comments on the efforts made by them in their day-to-day work. I offer my general support to the amendment and I welcome the fact that both Amendments Nos. 4 and 7 are probing amendments. That gives us a chance to get matters right because, as pointed out by the noble Baroness, it will not be practicable to deliver twice a day all over the United Kingdom. Reference has been made to pre-decimalisation. I can remember back to before the Post Office cuts. We used to undertake 18 deliveries a week and in certain areas of London we made six collections a day. That of course is no longer possible.
As regards the proposal for a second delivery, only yesterday I heard the regulator addressing a large audience. He stated that he was going to obey the law. Here we are discussing the law, not the wishes of a commission or the hopes of the Post Office

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management. The regulator referred to the law on service standards that will be laid down by Parliament. Some work needs to be done on this provision in order to ensure that two deliveries are practicable. A degree of flexibility will be required. That is for a good reason: a reserve must be provided for when the unexpected happens. A second delivery can ensure that first-class mail that should have caught the first delivery arrives. The first-class mail may not have arrived for the reasons already mentioned, or perhaps there has been an accident involving a vehicle. If we are to retain first and second-class services, the second delivery is another means of dealing with second-class mail. The second delivery makes it possible to deal with any overhang from the first delivery.
I also welcome the reference to "collections" in Amendment No. 7. It is not good enough merely to say that there should be one delivery a day. A good number of businesses depend on several collections a day. In my time we had to work collections in with other jobs to ensure a constant flow of mail throughout the day, not just during a specified time when the streets were full and sorting offices blocked up. Additional thought should be given to this part of the Bill. I suggest that the Minister takes this matter away and looks at it again.
Baroness Oppenheiin-Barnes: I entirely support the principle of my noble friend's amendments. To talk about improving the service assumes that the service is at present acceptable. It is not. At this stage I do not refer to postal workers but to management. Consumers have little or no relevant access to any complaints procedure. I live in a block of flats in central London. On some days of the week that block of flats does not receive any postal delivery whatever, never mind two, and that may go on for two or three days. Therefore, first-class mail takes five days to arrive. A person who has purchased a first-class stamp is entitled to expect his mail to be delivered within that period.
I have more resources and background knowledge than the average consumer to deal with this problem. When it happens I ring up the customer services department of the Post Office and speak to some extremely polite people. They say that the situation is awful and that they will respond immediately. Two days go by but nothing happens. I then ask for the telephone number of the manager who is responsible for deliveries. Finally, I manage to contact that individual and tell him that the whole block of flats has not had a delivery for three days. I also explain that I have spoken to the customer services department, which produces a laugh. Having been asked exactly what the problem is, I tell him that we have not received any mail. His response is that he must ask the postman. I ask what is the point of that because I or anybody can ask the postman. He then asks what kind of investigation I want him to carry out. I point out that he has the means to investigate.
To cut a long story short, I received another telephone call three days later and an interim letter from the chairman of the Post Office to say that he was
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looking into the matter. That was two weeks ago. As I did not receive any mail this morning he may already have replied to me in time for this debate. However, I have not yet received it.
Late one evening I received a telephone call. A small, tired voice said that the Post Office was having trouble with its deliveries and did not know what to do about it. A package of mail for my block of flats had been found and it was intended to send it round by special van. However, he said that he did not know what was happening. He was so despairing that I felt sorry for him and, having thanked him, put down the telephone. However, that was not the end of the story. Three days later I received a call from the users' committee and was told that, following my inquiry of two weeks ago, the Post Office had been contacted and it had been discovered that there was a problem with Saturday deliveries. Why? The Post Office had decided to pay its postmen only half-wages for delivering on a Saturday. I expressed surprise that there were any deliveries at all on Saturday and said that if I was a postman I would not bother.
I seek to illustrate to the Committee the difficulties experienced by the average consumer who is faced with a faulty delivery service which does not keep to its contract and ignores its liabilities. For a number of people late mail means all kinds of financial consequences: cheques do not arrive and bills are not paid. Therefore, I heartily support my noble friend's amendments on the basis that they seek to ensure a better service. I hope that the whole of the Bill is aimed at giving consumers greater access and making the Post Office more accountable.
Lord Monson: I agree with the noble Baroness, Lady Miller, that in an ideal world there should be two deliveries a day. However, to echo the words of the noble Baroness, Lady Oppenheim-Barnes, it is no use having two, three or even four deliveries a day if the letters do not arrive on time. Is the Minister aware—of course he cannot be—that yesterday I received at my home in Kensington an official parliamentary communication with the facsimile signature of the Chief Whip in an A4 envelope post-marked 31st May? In other words, it had taken seven days for that communication to travel less than four miles as the crow flies. That is not by any means an isolated incident. The year before last I received in one batch on about 19th September 31 letters, most of which were first class, which had been forwarded from London just before August bank holiday. Therefore, they took 21 days to arrive. One hears of such incidents the whole time. Surely, although frequency of delivery is a good idea the need for punctuality is a priority.
Viscount Goschen: Further to the points made by the noble Lord, Lord Monson, and my noble friend Lady Oppenheim-Barnes, does the Minister believe it is appropriate that some definition of time performance should be included on the face of the Bill? Does he believe that guidance should be given to the commission on this matter? I agree with the point already made that merely to specify frequency of

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collection and delivery does not ensure a postal service. There are no defined targets in the Bill. Perhaps they are to be found in another part of the Bill, in which case I should be very interested to hear about them from the Minister. If not, does the noble Lord believe that average delivery time targets are appropriate for postal service performance?
Lord Swinfen: Perhaps the Minister can enlarge on the expression "geographical conditions" in Clause 4(1)(a). I realise that someone who lives on the Isle of Sheppey or the Isle of Skye will probably receive only one delivery a day because of the very great distances. I live in the country about seven miles from the main sorting office and one and a half miles from the village post office—I am fortunate still to have one—that delivers my mail. First, what distance from the main sorting office is being considered? At the main sorting office the mail is sorted electronically if it bears the proper post code, which I know is of assistance. Secondly, what is meant in Clause 4(1)(a)(ii) by "from each access point"?
Baroness Strange: I should like to make one brief intervention which is not wholly relevant to the point but is not entirely irrelevant either. I quote the following poem written by my father for a pantomime some years ago:
"Do you remember in 1908.
Long, long ago, long ago,
When the posts were on time,
And the trains never late?
Long, long ago, long ago".
Lord McIntosh of Haringey: I am glad that the noble Baroness, Lady Strange, has taken us back slightly further in her reminiscences than the noble Baroness, Lady Miller, did. I rather thought that noble Baroness, Lady Miller, was going to go the whole hog and tell us that she was dandled on Sir Rowland Hill's knee in the early 1840s and invited to lick a Penny Black stamp and place it on an envelope, but she disappointed me.
Lord Swinfen: Will the noble Lord give way? He cannot be so ungallant as not to think that the noble Baroness is of tender years.
4.30 p.m.
Lord McIntosh of Haringey: My problem is that I did not believe that she could remember before decimalisation of the currency.
The effect of Amendment No. 4 would be to require, as a matter of law and in all but exceptional circumstances, that the universal service is only provided if there are at least two deliveries of relevant postal packets every working day. Amendment No. 7 makes the same requirement for at least two collections every day from each "access point"—which, I say to the noble Lord, Lord Swinfen, is, broadly speaking, a pillar box. As this is the first of a number of amendments dealing with Clause 4 and as
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the issues apply to amendments from Amendment No. 4 to Amendment No. 18, I think it necessary to comment generally on the status of Clause 4 and how the provision will work.
Before turning to the detail of the standards laid down in the clause, I should say that the Government are, and always have been, fully committed to a universal postal service and a uniform tariff. We were the first United Kingdom government to make this a statutory commitment. We did so through the postal services regulations in 1999. Before that, believe it or not, throughout the history of postal services in this country, there was no statutory backing at all for the quality of service provided by the Post Office. Our regulations last year transposed the European Union postal services directive into European law, and it is that directive which is reflected in Clause 4.
The meaning of "universal service" as set out in the Bill is in line with the United Kingdom's obligations under the European Union directive. There is no need for us to change the directive unilaterally. It represents the minimum service that customers in the United Kingdom can expect.
I say that it reflects the minimum level of service. It does not, of course, reflect the level of service which we expect from the Post Office company. Nothing in the Bill will undermine the current levels of service enjoyed by Post Office customers. I say that with due respect to the noble Baroness, Lady Oppenheim-Barnes and the noble Lord, Lord Monson, who are clearly receiving a service that is well below the acceptable standard.
The European Union directive requires the Post Office company, through its licence, to agree and observe the quality of service standards. These will be published, and they will be monitored by the postal services commission and by the consumer council. The commission will have the power to take enforcement action, and to fine the Post Office or the other licence holder for having failed to meet its agreed service standards without reasonable excuse. That provision is new: it had never been the case until last year and the further provision in the Bill. There have never been sanctions against the universal service provider; there has never been any possibility of fines or penalties for failure to perform. That is a real advance and should be recognised as such.
We are setting up the postal services commission in order to establish the terms of the licence with the Post Office company, the universal service provider. I suggest that it is not for the Government to set the new service standards but for the independent regulator. It is certainly the Government's expectation that the standards set in the licence will be at least as demanding as the current quality service targets. I give way to the noble Baroness.
Baroness Oppenheim-Barnes: Will the noble Lord clarify one point. I understand that there will be sanctions and penalties. But how will individual consumers benefit—those who may have suffered

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losses through the Post Office not doing as the commission requires it to do—except perhaps through the future performance of the Post Office?
Lord McIntosh of Haringey: My Lords, the noble Baroness has had a distinguished governmental career in consumer protection. In the short debate on whether the House should dissolve itself into a Committee, she referred to the Post Office Users' National Council. The Bill sets out in some detail the procedures for consumer protection. When we come to that part of the Bill, we can certainly debate that. The whole object of having a consumer council is that individual consumers such as the noble Baroness will have an opportunity to protest and their protests will have to be listened to. I hope that the noble Baroness will feel that that is a significant advance in consumer protection.
The noble Baroness, Lady Miller, asked about "exceptional circumstances". One cannot provide for exceptional circumstances. Almost by definition, one cannot prescribe what they will be. They will have to be considered by the commission on a case-by-case basis. They are likely on the whole to be temporary. Where they can be identified in advance, as they might be in, say, remote islands of the west of Scotland, they must be notified by the operator, not only to the postal services commission, but also to the European Commission. So there is an extra level of protection in certain circumstances.
To return to the point made by the noble Baroness, Lady Oppenheim-Barnes, the Government are replacing the Post Office Users' National Council with a strong national body. I should have said that, until that body is established, complaints should be made to the existing Post Office Users' National Council, which is being reinvigorated with Peter Carr as its new chairman.
I gave a short and perhaps slightly flippant answer to the noble Lord, Lord Swinfen, about what is an "access point" and what are "geographical positions". An access point is defined in Clause 4(6). The term "geographical conditions" has its natural meaning—that is, areas could prove inaccessible because they are very isolated, difficult to reach in bad weather, or otherwise difficult to get to. Examples would be properties at the top of a mountain, or islands where there is an infrequent ferry service. That applies both to deliveries and collections.
My remarks should be taken as applying to all amendments from Amendment No. 4 to Amendment No. 18. I hope it is clear that what we are talking about is minimum standards, not the standards that we actually accept. The Government cannot see any reason to put a gloss on the postal services directive. In particular, there is no justification for prescribing unnecessarily areas which should be operational matters and should be the subject of the licence between the commission and the licensees.
Beyond guaranteeing a single delivery and collection every working day, it is a commercial matter; it is for postal operators to decide how they
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organise their operations best to meet the needs of users, subject to regulatory scrutiny. If that means a minimum of two deliveries or collections, that is best dealt with not on the face of the Bill or by gold-plating the postal services directive, but by the regulator setting additional service standards in the licence. I hope that, on that basis, the noble Baroness will not press the amendments.
Lord Clarke of Hampstead: Before my noble friend sits down, perhaps he can help me. I listened yesterday to Martin Stanley's very clear address to the conference. He said that he will be responsible for service standards. However, he said:
"We do not report to the Minister. We do what the law tells us to do".
If the law refers to "at least one delivery or collection", and someone then makes a complaint that it is not sufficient, he will openly say, "I am obeying the law. That is what Parliament has asked me to provide—a minimum of one delivery". If that is the case, the provision needs to be re-examined.
Lord McIntosh of Haringey: I have not seen the text of the speech, but I suspect that Martin Stanley was being elliptical.
Lord Clarke of Hampstead: It was perfectly clear.
Lord McIntosh of Haringey: It is true that he does not report to the Minister. But when he says that he does what the law tells him to, the law not only sets out the minimum standards in Clause 4 but sets out the basis on which the postal services commission will license the operator to carry out the service. It is that law—namely, the licence contained within the law—to which I am sure Martin Stanley was referring.
Baroness Miller of Hendon: My Lords, I am grateful to the Minister for that long answer. I should say at this stage that when he is talking about the universal service obligation we very much applaud the fact that the Government have decided to put that into law. I say that because I usually find every possible excuse to say why I do not agree with what the Government are doing. They cannot always be wrong. On that basis I feel it is right that I should give credit where credit is due.
I started my discussion on Amendments Nos. 4 and 7 by saying that they were probing amendments because I believe that it is all very well for the Minister to say all we can do is to put down the minimum standards that are necessary. The fact remains that part of the Bill is to deal with competition.
The postal services directives—the new European directives—certainly talk at great length about liberalising the market. If the Post Office that we all love so much and want to survive has to compete with various other bodies in a much more liberal market—a market in which the monopoly area is shrinking and where e-mail, fax and the other factors of human error and late delivery mentioned by the noble Baroness, Lady Oppenheim-Barnes, and the noble Lord, Lord

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Monson, have to be considered—attention will have to be given to issues that the consumer finds extremely important, particularly the point that the noble Lord. Lord Clarke, made just now. I was not privy to what he heard, and certainly I have not seen it. As this is a probing amendment, I shall withdraw it.
Lord McIntosh of Haringey: Before the noble Baroness, Lady Miller, does that—and I know that I am taking a lot of time on a single amendment but I think it is worth it because we are dealing with principles that apply throughout the amendments on Clause 4—she has just said some very remarkable things for a Conservative. She has said that she thinks there is a danger, with increased competition, that the universal service will be put at risk.
Baroness Miller of Hendon: No. I shall read very carefully what I did say. That certainly is not what I meant. What I meant was that we welcome the universal service obligation, but the Post Office itself, the new plc, may be at risk if there is all this competition with everything else and if the Post Office does not put itself into a position where it becomes more valuable to the consumer, particularly with e-mail. I said it was a probing amendment, and I hope that the Minister will take it away to consider. Therefore, we were hoping that there would be some further provision on the face of the Bill to ensure that the Post Office is able to compete in a way that will make it possible for people to continue to use it. That was the point I was making. I hope that the point is very clear in Hansard. I certainly do not say things that I think will be remarkable for a Conservative.
Lord McIntosh of Haringey: I accept that, of course. It may be that I was being elliptical. One has to take the Bill as a whole and take the balance between the service obligation and the reserved area provided in the European Union directive that allows member states to reserve part of the postal market in it as necessary to ensure and fund the provision of the universal postal service. That is the bargain that is struck, so to speak, in the European directive and in this legislation. It allows people acting in this area to cross-subsidise otherwise unprofitable aspects of the universal service such as long-distance deliveries at a uniform tariff. It is a requirement of the European Union postal services directive that the reserved area cannot be any greater than that needed to support the universal postal service. It is a matter, of course, for the regulator to advise the Secretary of State on the appropriate level of the reserved area, but it is clear that we shall be setting the level of the reserved area to ensure that the universal service provider is able to carry out its obligations.
Baroness Miller of Hendon: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.45 p.m.
Lord Skelmersdalemoved Amendment No: 5:
Page 2, line 26, leave out ("working day") and insert ("day except Sundays or Bank Holidays").
The noble Lord said: Members of the Committee who were present on the occasion of Second Reading or who have read Hansard will recall the noble and learned Lord, Lord Brightman, leaping, into the gap to praise the draftsman for Clause 117. I see that the Minister is smiling, so he clearly remembers the event. It is possibly Clause 118, but my memory does not stretch that far and I do not have Hansard with me. None the less, the reason for his praise was a list of definitions incorporated in one or two places in the Bill. One such definition is the phrase "working day" referred to in Clauses 4 (1)(a)(i) and (ii).
Perhaps I have been lax in not doing so earlier and declaring my interest in the use of postal services—I did on Second Reading, but I have not today—namely, as a director of a mail order business.
It is in the interest of everyone who uses postal services that the working day should include Saturday. In Clause 117—at page 69 line 37—that is included. We all rely on having as close as possible to a daily delivery of post, a matter referred to by many Members of the Committee. I believe that it is so important that the universal postal obligation is described in full at the front of the Bill that the words describing "working day" in Clause 117 should be promoted in the Bill to this particular place. I beg to move.
Lord Clarke of Hampstead: Perhaps I may be somewhat pedantic. If this amendment were carried, the Christmas pressure period in the Post Office would be thrown into chaos because in some years one Sunday has to be used and in some years two Sundays are used to clear the mail. I also declare an interest, and I apologise for not doing so earlier.
Lord Monson: I see one other slight problem. The amendment of the noble Lord, Lord Skelmersdale, uses the phrase "bank holiday" whereas the definition in Clause 117 uses "public holiday". Most public holidays are bank holidays but it is conceivable that a one-off occasion occurs where the Government may declare a public holiday in honour of some anniversary which is not a bank holiday. It would obviously be desirable, if this amendment goes any further, for the words "bank holiday" to be changed to "public holiday".
Lord McIntosh of Haringey: I am very much relieved by what the noble Lord, Lord Skelmersdale, has said because my brief tells me to say that his amendment is entirely unnecessary, a definition already being provided in Clause 117. I thought that he was under the illusion that his amendment would strengthen the provisions of the Bill, but since he recognises that it does not, it simply brings the amendment forward from Clause 117 to Clause 4. I think therefore that we are on all fours except as to where it is appropriate to have the full definition of a "working day."
Baroness Miller of Hendon: I should have risen before the Minister.
Amendment No. 5 refers to page 2, line 26. Line 26 of the Bill states:
"at least one delivery of relevant postal packets is made every working day."
My noble friend referred to Clause 117 which states:
"'working day' means—
"(a) in relation to the collection and delivery of letters, any day which is not a Sunday or a public Holiday".
I take note of the point made by the noble Lord, Lord Monson, about a public holiday or bank holiday. Paragraph (b) states:
"in relation to the collection and delivery of postal packets other than letters, any day which is not a Saturday, a Sunday or a public holiday".
Amendment No. 4 refers to postal packets. Therefore the amendment is necessary because the provision is not in the Bill.
Lord McIntosh of Haringey: I am grateful to the noble Baroness for anticipating what I shall say. As we are all agreed, the purpose underlying Amendments Nos. 5 and 8 is to require that deliveries and collections are made every day except Sundays and bank holidays for all postal packets whether parcels or letters; or, to be precise, whether or not they are letters.
In relation to letters, other than bringing forward the full definition, the amendment is unnecessary. The meaning of "working day" is defined in Clause 117. It provides that in relation to letters 'working day" means any day which is not a Sunday or a public holiday. That is unchanged.
In relation to parcels and packets, "working day" means any day which is not a Saturday, Sunday or public holiday. The universal service standard is to provide a five-day parcel service and a six-day letter service. The effect of the amendments would be to bring the requirement for deliveries and collections for parcels and packets into line with that for letters.
This is not in accordance with the European directive on postal services, which requires as a minimum one collection and one delivery every working day on no fewer than five days a week. The minim um standard is met in the requirements we impose for both letters and parcels. But for letters we have gone one step further. It is an element of gold-plating. We require a Saturday collection and delivery. Those requirements are in line with the current practice of the Post Office. The Post Office and other postal operators are free to deliver on other days if there is demand for it. As my noble friend Lord Clarke said, in the Christmas period one has to deliver on Sundays. I used to earn a little pocket money as a schoolboy doing that in the Christmas period.
Lord Clarke of Hampstead: I hope that a schoolboy was never employed by the Post Office. I hope that it was a student.
Lord McIntosh of Haringey: It was as a schoolboy—probably breaking the law. Do not tell the head postmaster in Beaconsfield!
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The Post Office and other operators are free to deliver on other days if there is a demand. As I think will be well known, Parcelforce does not guarantee a Saturday delivery but it does deliver on a Saturday.
I turn to Amendment No. 6 which makes an additional requirement. I understand that it was not spoken to but it is grouped with Amendment No. 5.
Lord Skelmersdale: Amendment No. 6 is grouped with Amendment No. 5 but it has not been spoken to. There is, of course, nothing to stop the Minister speaking to it in advance of anything any other noble Lord may say.
Lord McIntosh of Haringey: I am in the hands of the noble Lord, Lord Skelmersdale, or the noble Baroness, Lady Miller. Perhaps the noble Baroness would like to speak to it now and I can then respond.
Baroness Miller of Hendon: The Minister will be pleased to hear that my speech will be brief.
I should like to speak to Amendments Nos. 6 and 9 together. They modify the requirement for daily collections and deliveries, by providing that they should be before midday, especially for buiinesses depending on their mail. There is nothing more frustrating than to wait for the post to arrive. I listened carefully to the noble Baroness, Lady Oppenheim-Barnes. Although the noble Baroness is not in her place at present, no doubt she will read Hansard tomorrow. She spoke of the frustration involved when domestic mail arrives the third, fourth or even fifth day after collection. In business that is more than frustrating. It is not only time consuming, it costs money. That is important because such post may be more critical than domestic post.
However, in common with a large part of the population, many Members of the Committee leave, as I do, before the domestic mail arrives. My office does not expect to receive the mail until about 11.30. That is late when people want to start work on it. That is why we have tabled Amendments Nos. 6 and 9.
Lady Saltoun of Abernethy: Where I live in Scotland, post is not delivered until after 1 p.m. and often after 2 p.m. Under the Bill, will the operators be obliged to deliver at an earlier time? I do not know how they would manage to do so in a remote district such as Upperglen.
Also, there appears to be no reference to collections on Sunday. Will Sunday collections cease?
Lord McIntosh of Haringey: Let me make it clear, as I did in my response to Amendment No. 4, that there is no intention that there should be any deterioration in quality of service as a result of the Bill. In Clause 4 we are discussing the minimum obligation which is set down in the European Union postal services Directive. If in parts of Scotland that means that there is a single collection and single delivery—I understand that in any remote area that could be after midday—I think that that meets the minimum requirements. As to the

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actual service requirements which will be the subject of the licence, that is a matter for negotiation between the commission and the Post Office company. We shall have to see how successful they are in securing improvements in services which noble Lords around the Chamber have demanded so eloquently.
I have a slight nostalgia for the Financial Services and Markets Bill. At least no one understood that Bill so they could not intervene from personal knowledge. On this Bill it is clear that everyone has personal knowledge and hard luck stories and it is entirely proper that I should listen to them.
Perhaps I may respond to Amendments Nos. 6 and 9. The effect would be that at least one delivery should be by midday and that, under Amendment No. 9, there should be at least one collection of postal packets each working day. The problem is that that is irrespective of what is best for customers. The noble Baroness, Lady Miller, and I have exchanged experiences of small business operators on many occasions. In my experience the most important factor was to receive the first post early in the morning, by 8 a.m. or 8.30. Whether the subsequent post arrived at 11 a.m., 12 p.m. or 1 p.m. was a secondary consideration. There is no specific benefit on insisting on collections before midday. For some customers an evening collection might be more appropriate than a midday collection. Delivery by midday is no use to a business which needs its mail, as mine used to do, by not later than 8.30 in the morning.
In Clause 4 we have set out the minimum standards. The commission will work to secure higher standards. I suggest that the amendments which go beyond the European directive are inappropriate. I hope that noble Lords will not press them.
Lord Skelmersdale: I, for one, am extremely flattered that the Minister prepared such a long answer to an amendment which both he and I admit is unnecessary. I thank him for that.
The Minister did not refer the noble Lady, Lady Saltoun, to Clause 4(1)(a) of the Bill which states that,
"except in such geographical conditions or other circumstances as the Commission considers to be exceptional"
—that presumably covers the example the noble Lady gave—the provisions will be the norm across the country. The noble Lord, Lord Clarke, rather disturbed me. He referred to deliveries on Sundays during the Christmas period, which happen from time to time, and which we welcome. From a rapid glance at the Bill while he was speaking, it appears that they are not covered by the Bill. Will the Minister check that because that would be in all our interests? Unless the Minister wishes to respond now, I beg leave to withdraw my amendment.
Lord McIntosh of Haringey: No, it does not appear in the minimum standards on the face of the Bill, but
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it is one of the issues which the postal services commission will be negotiating with the operators in the licence.
Lord Skelmersdale: It is not that so much, but whether the Bill would allow it if the post office commission, as one would fully expect, continued to cause the Post Office to operate that particular system.
Lord McIntosh of Haringey: Yes.
Lord Skelmersdale: In that case, for the second time, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 to 9 not moved.]
5 p.m.
Baroness Miller of Hendonmoved Amendment No. 10:
Page 2, line 34, after ("tariff") insert ("including first and second-class pricing").
The noble Baroness said: This amendment deals with the question of second-class post. The Bill provides for a uniform tariff country-wide. It is a basic requirement that it should cost no more to post a letter to an address in the next street than to the remotest part of the Western Isles. Londoners, for example, subsidise the cost of deliveries to the Hebrides: and so they should. It costs the same to send a parcel of the same weight to anywhere in the country: and so it should. But there is a service which enables the public and businesses to reduce the expense of posting their mail. It is called second-class mail. In return for agreeing to a less frequent service, with priority given to first-class mail, the cost of a letter can be reduced from 27p to 19p.
Many businesses especially use second-class mail to reduce the cost of sending out non-urgent mail such as circulars and so forth. Millions of letters are mailed at Christmas by second-class mail. Many people would have to reduce the number of Christmas cards they sent if it were not for the second-class facility.
The amendment, which is simple and does not need much explanation, is to ensure that the facility is not withdrawn by the new Post Office company in the interests of boosting its profits. There have been some articles in various newspapers that say the second-class mail might very well be at risk, and I very much hope that the Minister can reassure me that that is not the case. I beg to move.
Viscount Goschen: Perhaps I may add my support to the points made by my noble friend Lady Miller. Clearly, the guarantee of two standards of postal services and two tariffs is extremely helpful both to businesses and private individuals. Does the Minister feel that the wording of Clause 4(1)(b) is conducive towards permitting this? The Bill states:
"in accordance with a public tariff".
Should that not be,
"in accordance with public tariffs which are uniform"?

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In other words, it would specify deliberately on the face of the Bill that there is more than one tariff.
Baroness Byford: I also rise to support my noble friend's point. I, like others, have been quite concerned about the rumours going around that the second-class mail may be withdrawn in the future. Would the noble Lord the Minister clarify that?
Lord McIntosh of Haringey: I start by putting the mind of the noble Viscount, Lord Goschen, at rest. Tariff does not mean a single price. A tariff can have any number of ranges of prices, different speeds of delivery and different weights. That is the nature of a tariff. It is not a single price. There is nothing sinister in the use of the words "a single tariff".
I think that I can also put the minds of the noble Baronesses, Lady Miller and Lady Byford, at rest. There is no intention whatever in this Bill to make it necessary or possible to withdraw the first and second-class post. That is a matter for the operators and the commission. The commission will no doubt make its requirements known to the operators when it is seeking to negotiate a licence.
The common understanding is that the services represent the first and second-class postal services currently provided by the Post Office. We do not believe that it is necessary to make specific reference to the present services of one postal operator in a clause which is designed to be universal.
There is no threat in this Bill to first and second-class post.
Viscount Goschen: I quite accept the noble Lord's clarification of the word "tariff". I am sure it is defined somewhere in law. If it does allow for separate pricing, I am very pleased to hear that. I entirely accept the noble Lord's assurance.
However, does he believe that simply stating that there is an understanding that the first and second-class post will continue is good enough? The Bill is extremely specific in many circumstances—for example, regarding geographical coverage and so forth—but it is not at all specific regarding the provision of first and second-class post. Many people and businesses in this country would consider such a guarantee to be exceptionally important. Would it not be sensible to write that on to the face of the Bill, so that the Minister's assurances that he has no understanding that there are any proposals to withdraw one or other of the services could be turned into concrete legal fact?
Baroness Byford: Perhaps I may also follow my noble friend on that subject? I am slightly anxious that the provision is not on the face of the Bill. Will the noble Lord confirm that if the commission decided to do away with the second-class postal service the commission would have to come back to Parliament for approval, or could it be done without
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Parliamentary approval? If the latter is the case, surely the former option, of having it on the face of the Bill, is desirable.
Lord McIntosh of Haringey: I had hoped that by taking my response to Clause 4 at somewhat inordinate length I had dealt with the issues in all of the amendments, and in particular in this amendment. I am sorry that I failed to do so. The point I tried to make about the whole of Clause 4, and all the amendments to it, is that Clause 4 represents the minimum standards in conformity with the European postal services directive, and no more than that. The actual level of standard will be a matter for the licence between the commission and the operators.
We do not think it appropriate to prescribe on the face of the Bill all of the improvements to the minimum standards, some of which already exist and some of which might result from the negotiations between the commission and the operators.
The basic structure of this part of the Bill is that there is a European Union directive which requires a universal service provision. That is required through a licence. The operator is required to agree on quality standards and to observe quality of service standards. Those quality of service standards are published; they are monitored by the postal services commission and by the consumer council; and, for the first time, as I have said, there are penalties if they are not met.
There is a whole range of other things we would like to have, including first and second-class post, midday delivery, 7.30 a.m. delivery, and collections on Sundays. There are all kinds of things we would all like to have from the postal services, but I suggest that it would be inappropriate to put them all on the face of the Bill in addition to the minimum standards which are required by the European directive.
The whole point is that we are setting up an independent commission whose responsibility it is to ensure that services meet consumers' needs. I am sure the members of the commission who have just been appointed will read what noble Lords have said and will take their passionate defence of first and second-class post very seriously.
Viscount Goschen: The Minister cannot pray in aid the fact that he is putting into effect European Union legislation and that there should be no more and no less. During our debate on Amendment No. 5 he conceded that he had deviated from that course when it had suited him and felt it appropriate. Why not in these circumstances?
We are not talking about a "not before 7.30" provision or some more trifling point. This issue is fundamental and I believe that my noble friend Lady Miller has identified an important omission.
Baroness Byford: Before my noble friend responds, I hope to encourage the Minister to reconsider the proposal. During an earlier discussion, he spoke proudly of the fact that written into the Bill is the responsibility for a universal delivery service. If that is

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so important—and I accept that it is—it is equally important to have on the face of the Bill a requirement for a second-class service.
My noble friend Lady Miller referred to "old money". I am afraid that my brain will not work with the old money, but I know that for many pensioners there is a big difference in the cost of a first-class stamp, at 26p, and the cost of a second-class stamp, at 19p.
I hope that, as a result of our gentle persuasion, the Minister will be willing to take the proposal away and reconsider it. If it is so important to have a universal delivery service on the face of the Bill, I believe that it is even more important to have provision for a second-class stamp and that that will not preclude people from using the service as all Members of the Committee want.
Lord McIntosh of Haringey: I am always responsive to gentle persuasion, but I am afraid that the purpose of Clause 4 is to set out the minimum standards as required by the European directive. I—and I am sure other Members of the Committee—can think of many additional qualities they would like from a postal service, but it would not be appropriate to put them on the face of the Bill.
Baroness Miller of Hendon: I was interested to hear the Minister's view that it would not be proper to gold-plate the European directive which deals with the provisions in Clause 4. I am always hearing that the Government are gold-plating almost every directive which comes across from the EU and that we must go along with it. However, this proposal is something else. Line 11 on page 69 defines "postal services" and a second-class post could easily sit in there.
The Minister made a great deal of saying that we would all like to see many other items on the face of the Bill; for instance, delivery before midday, every day and so forth. I understand why they cannot be included and his explanation that the Bill is designed to deal with the minimum service. But we are talking about something which is already a service; we already have first and second-class post. Old age pensioners in particular rely on the second-class post, but its provision is not in the Bill and the Minister cannot even take away the proposal for consideration. Such concern has been reported in the media and it has been tested.
All that makes me believe that I should test the opinion of the Committee.
Lord Harrison: Clause 4 seeks to enact the EU postal services directive, which specifically mentions the universal service obligation. Earlier today, a Member on the opposite Benches, who has since left his place, raised the spectre of the European Union introducing a "portable" stamp that is usable throughout the EU, letting yet another hare run for the Eurosceptical press to pick up.
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Is it not worth making the point that it is because we have an EU postal service directive that we for the first time, through this Government, are putting into legislation the requirement for a universal service which I beg to suggest will be universally accepted and applauded by the people in this country? Is not the distinction that we are not seeking to gold-plate, because we are enacting the EU postal services directive? I believe that there would be agreement in the Committee that too much legislation, which was lean and mean and originated from Brussels, found gold-plating in this Parliament and that that practice has been unacceptable.
Lord Sharman: I have listened with great interest to what has been said on both sides of the Committee and find it astonishing that there is a focus on one service within the Post Office. It seems to me entirely proper that the Bill should set out the minimum universal postal standard. I can think, for example, of recorded delivery and registered post, both of which are important to many parts of society, but neither of which are set out on the face of the Bill. Therefore, we either go the whole hog and include a list of services which we believe to be part of the universal service, or we quite properly leave it to the postal services commission. That is what I believe we should do.
Lady Saltoun of Abernethy: As regards delivery services, I view any directive of the EU with suspicious eyes. In my experience, those services in Europe are not a patch on ours and often do not involve a delivery to a person's house; letters are left in boxes at the end of roads. I am not impressed with or happy about the idea of relying on the European Union directive.
Baroness Miller of Hendon: Before putting the amendment to the Committee, perhaps I may suggest that the noble Lord, Lord Sharman, looks at page 69, line 23, which gives a definition of registered post. I commend the amendment to the Committee.
5.17 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 62; Not-Contents, 134.

Division No. 1

CONTENTS

Alton of Liverpool, L.

Chadlington, L.

Anelay of St. Johns, B.

Courtown, E.

Astor of Hever, L.

Cox, B.

Attlee, E.

Cumberlege, B.

Blaker, L.

Denham, L.

Blatch, B.

Dixon-Smith, L.

Bowness, L.

Eden of Winton, L.

Brabazon of Tara, L.

Elliott of Morpeth, L.

Brougham and Vaux, L.

Elton, L.

Burnham. L. [Teller]

Flather, B.

Buscombe, B.

Fookes, B.

Byford, B.

Gardner of Parkes, B.

Campbell of Alloway, L.

Goschen, V.

Carnegy of Lour, B.

Hanham, B

1271

Henley, L. [Teller]

Onslow, E.

Higgins, L.

Oppenheim-Barnes, B.

Hogg, B.

Park of Monmouth, B.

Howe, E.

Pearson of Rannoch, L.

Jenkin of Roding, L.

Perry of Southwark, B.

Lucas, L.

Plummer of St. Marylebone, L.

Luke, L.

Rees, L.

Lyell, L.

Renton, L.

Mavhew of Twysden, L.

Saltoun of Abernethy, Ly.

Milier of Hendon, B.

Seccombe, B.

Mowbray and Stourton, L.

Sharpies, B.

Moynihan, L.

Skelmersdale, L.

Murton of Lindisfarne, L.

Strathclyde, L.

Naseby, L.

Thomas of Gwydir, L.

Northbrook, L.

Vivian, L.

Northesk, E.

Wade of Chorlton, L.

Norton of Louth, L.

Young, B.

NOT-CONTENTS

Alii, L.

Hoyle, L.

Amos, B.

Hughes of Woodside, L.

Andrews, B.

Hunt of Chesterton, L.

Archer of Sandwell, L.

Hunt of Kings Heath, L.

Ashley of Stoke, L.

Hylton-Foster, B.

Ashton of Upholland, B.

Jacobs, L.

Bach, L.

Jay of Paddington, B. (Lord Privy Seal)

Barker, B.

Bassam of Brighton, L.

Jeger, B.

Berkeley, L.

Jenkins of Putney, L.

Billingham, B.

Judd, L.

Blackstone, B.

Kennedy of The Shaws, B.

Borrie, L.

Kirkhill, L.

Brookman, L.

Layard, L.

Bruce of Donington, L.

Lea of Crondall, L.

Burlison, L.

Linklater of Butterstone, B.

Carter, L. [Teller]

Lipsey, L.

Chandos, V.

Longford, E.

Christopher, L.

Lovell-Davis, L.

Clarke of Hampstead, L.

Macdonald of Tradeston, L.

Clinton-Davis, L.

Mclntosh of Haringey, L.

Cocks of Hartcliffe, L.

[Teller]

Cohen of Pimlico, B.

Mclntosh of Hudnall, B.

David, B.

MacKenzie of Culkein, L.

Davies of Coity, L.

McNally, L.

Dean of Thornton-le-Fylde, B.

Mallalieu, B.

Desai, L.

Mar and Kellie, E.

Dholakia, L.

Massey of Darwen, B.

Diamond, L.

Milner of Leeds, L.

Donoughue, L.

Mishcon, L.

Dormand of Eiisington, L.

Mitchell, L.

Dubs, L.

Molloy, L.

Elder, L.

Monson, L.

Evans of Watford, L.

Morris of Castle Morris, L.

Farrington of Ribbleton, B.

Morris of Manchester, L.

Filkin, L.

Newby, L.

Gale, B.

Phillips of Sudbury, L.

Geraint, L.

Pitkeathley, B.

Gibson of Market Rasen, B.

Ponsonby of Shulbrede, L.

Gladwin of Clee, L.

Prys-Davies, L.

Goodhart, L.

Puttnam, L.

Gould of Potternewton, B.

Ramsay of Cartvale, B.

Grabiner, L.

Rea, L.

Graham of Edmonton, L.

Redesdale, L.

Greaves, L.

Rendell of Babergh, B.

Grenfell, L.

Richard, L.

Harris of Greenwich, L.

Rodgers of Quarry Bank, L.

Harris of Haringey, L.

Roper, L.

Harris of Richmond, B.

Sainsbury of Turville, L.

Harrison, L.

Sharman, L.

Haskel, L.

Sharp of Guildford, B.

Hayman, B.

Shore of Stepney, L.

Hilton of Eggardon, B.

Simon, V.

Hollis of Heigham, B.

Smith of Clifton, L.

Howells of St Davids, B.

Stoddart of Swindon, L.

Howie of Troon, L.

Stone of Blackheath, L.

1272

Strabolgi, L.

Walker of Doncaster, L.

Taverne, L.

Walmsley, B.

Taylor of Blackburn, L.

Weatherill, L.

Thomas of Walliswood, B.

Wedderbum of Charlton, L.

Thomson of Monifieth, L.

Whitaker, B.

Thornton, B.

Whitty, L.

Tomlinson, L.

Wilkins, B.

Tope, L.

Williams of Crosby, B.

Tordoff, L.

Williams of Elvel, L.

Turnberg, L.

Williams of Mostyn, L.

Turner of Camden, B.

Woolmer of Leeds, L

Uddin, B.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.27 p.m.
Baroness Miller of Hendonmoved Amendment No. 11:
Page 2, line 41, at end insert ("and prices shall be geared to costs").
The noble Baroness said: As the amendment states, it is intended to ensure that prices are geared to costs. The need for the Post Office to link costs to prices was emphasised by the Government in the July 1999 White Paper entitled, Post Office Reform: A world class service for the 21st century:
"The Post Office should not, therefore, charge different prices to different customers, or categories of customers, for the same service where the differences in prices do not reflect the quantity, quality or other characteristics of the service supplied".
The reason was set out clearly earlier in the White Paper at paragraph 26:
"[The regulator] will also need to ensure that there is no abuse of a dominant position, for example by the Post Office using predatory pricing to deter or drive out competition".
The amendment is in line with the requirements of Article 12 of the European Union postal services directive. I have no idea which of the two noble Lords opposite will answer. I suggest that it will probably be the noble Lord, Lord McIntosh, as he seems to be dealing with the whole of Clause 4. Therefore, I believe that he will be pleased that at this stage I am trying to bring the amendment into line with the directive. As he seems to be keen that everything should be ihus—no more, no less—I hope that eventually he will agree with me.
I am sorry to trouble Members of the Committee with another full quotation but it is necessary to illustrate how wide the Bill is from our legally binding EC obligations. Article 12 of the directive provides,
"Member states shall take steps to ensure that the tariffs for each of the services forming part of the provision of the uniform service comply with the following principles:
"prices must be geared to costs; member states may decide that a uniform tariff should be applied throughout their national territory,
"the provision of a uniform tariff does not exclude the right of the universal service provider(s) to conclude individual agreements on prices with customers".
Article 12 of the directive could very well be described as defining the essential ingredient of a universal postal service. The directive emphatically rules that prices of each of the services forming the universal service must be geared to costs. The

1273
amendment incorporates that requirement into the Bill. I am prepared to concede that the phrase "geared to costs" is somewhat ambiguous and that some improved definition is called for even though the words used follow those of the directive.
If the Minister will accept the principle of the amendment, which merely puts into effect, no more, no less, our obligations under EU law and, even more importantly, the Government's own policy as set out in the Government's White Paper, I shall gladly discuss with him some possible improvement in the wording. I beg to move.
5.30 p.m.
Lord McIntosh of Haringey: I am grateful to the noble Baroness, Lady Miller, for her explanation of the amendment. She is right in saying that the provision in Clause 4(2) is in line with the definition of the universal postal service in Article 3 of the EU postal services directive, and the further provisions in the directive at Article 12 regarding tariff principles and transparency of accounts.
We have not included a specific reference in the legislation to prices being geared to costs. That is not because we do not think that such a link should exist—it should—but that it is a matter best enforced by the postal services commission through the licence, as I mentioned earlier in response to amendments to Clause 4.
We intend that the Post Office plc will be granted a licence that will take effect from the first day of the new licensing regime. The licence will be agreed between the Post Office plc and the commission. It will include provisions which satisfy the detailed requirements under the EU postal services directive. A draft outline licence was placed in the House Library on 11th February 2000.
The document illustrates the kind of terms and conditions that the Government expect to see in the Post Office plc's licence. The outline of the proposed licence states at paragraph 5 that the commission is expected to prepare proposals for a price control structure and that the Post Office plc will be obliged to obtain the commission's permission before setting any new prices in relation to the universal postal services.
The commission will take into account the relationship between costs and prices as it is required to do by the directive, which has direct effect on the national regulatory authority. The amendment would not make matters any clearer; it is already clear. Indeed, it could have the unfortunate effect of restricting competition in certain circumstances. While the directive requires that universal postal services are geared to costs, there is no requirement that the ability to negotiate individual prices should be restricted in that way.
The effect of the amendment would be to limit competition. Constraining the universal service provider in the way envisaged by the amendment might prevent volume users of postal services from
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negotiating commercial discounts. That would put the universal postal operator at a competitive disadvantage.
The restriction imposed by the amendment would apply to all the services within the universal service, irrespective of whether such services are within the area to be reserved for licensed postal operators. It would be particularly undesirable for those parts of the universal service, such as parcels and registered post, which are outside the licensed area and subject to full competition.
I am afraid I cannot agree that the amendment would be in the interest of users of postal services. On the basis on which I started out, that is, that the postal services commission will be regulating the prices of universal services in line with the requirements of the directive, I hope that the noble Baroness will withdraw the amendment.
Baroness Miller of Hendon: I have to tell the Minister that I am somewhat disappointed with his answer but not unduly surprised. I find it extraordinary that the Minister feels that the Government cannot put what I propose on to the face of the Bill. He is certain that it will be a matter for the regulator and will be in the licence when it is set out. Therefore, it will be there at some stage.
I find it extraordinary to rely on the fact that something will happen when one considers the words in the Government's own White Paper. We have a directive on the matter, yet we are left in the position that the Government hope that it will be in the licence. It may not be. I do not think that what we say here will have any effect on what the commission decides to put into the licence.
However, I shall read carefully the comments of the Minister. In the course of his detailed answer he mentioned that he thought the proposal would restrict competition. There is no way that any Member of the Committee sitting on this side of the Chamber would wish to restrict competition. We are all for competition. We believe that it is healthy and will make for a better service for the consumer using the services of the Post Office. Whether it is on the face of the Bill or goes into the licence, one would have thought the effect is the same. However, as I have said, at this stage I shall read carefully what the Minister has tried to persuade me to believe will be an excellent position. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendonmoved Amendment No. 12:
Page 3, line 24, leave out ("20") and insert ("10").
The noble Baroness said: I suspect that this is the last amendment that I have tabled to Clause 4, but it is by no means the last amendment I am proposing to the Bill.
The considerable importance of the amendment is not reflected by its brevity. It brings the definition of a "relevant package" down from 20 kilograms to

1275
10 kilograms. In other words, it reduces the Post Office monopoly on packages up to 20 kilograms down to those up to 10 kilograms.
For the benefit of those Members of the Committee who, like me, still think in pounds and ounces, here we go again. Twenty kilograms is 44 pounds. That is the equivalent of the amount of baggage carried free on an economy-class flight. The proposal in the Bill is partially inconsistent with the EU postal services directive which fixes the figure at 10 kilograms but permits individual governments to increase the ceiling to what is proposed in the Bill; namely, 20 kilograms. As drawn, the Bill would subject commercial couriers to unfair competition.
A universal service provider, such as Parcelforce, would be able to cross-subsidise its delivery of packets and packages weighing up to 20 kilograms. I said that the importance of the amendment is not reflected by its brevity. The point I make is that 20 kilograms is an enormous parcel weight. I believe that it should be reduced to 10 kilograms. I shall be interested to hear the Minister's comments.
Viscount Goschen: Perhaps I may follow on from the comments of my noble friend Lady Miller and press the Minister to explain to the House how he would justify the figure of 20 kilograms. My noble friend put forward a powerful argument against having a band between 10 and 20 kilograms. There may well be equally powerful arguments for why that should not be so. However, there is an important issue here about the cross-subsidisation of parcels within the range of nought to 10 kilograms and from 10 to 20 kilograms. I look forward to the Minister's reply.
Lord McIntosh of Haringey: There certainly is a good reason. Let me repeat for the record that the Government are committed to preserving the universal postal service; that is, the delivery of letters and parcels to any part of the United Kingdom at a uniform tariff. We feel that that is enormously important and believe that the public feel it to be important also. That is why we enshrined the universal service obligation in legislation through the Postal Services Regulations 1999.
Amendment No. 12 would reduce the scope of the universal service from that proposed in the Bill. It would halve the maximum weight under the universal postal service obligation from 20 to 10 kilograms—I cannot remember how to work that out in pounds.
The point is that the EU Postal Services Directive allows the Government to extend the scope of the universal postal service for clearance, sorting, transport and distribution of postal packets from 10 to 20 kilograms; in other words, that is already envisaged in the directive and we are taking one of the options available to us. If we extend it in that way we allow domestic users to benefit to the same extent as those posting items to the UK from other member states.
The directive requires member states to deliver within their territories packages received from other member states up to 20 kilograms. When we made the
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postal services regulations in 1999 we took the view that there should be no discrimination between users on the basis of where they were posting packets. And we ensured that postal users in the UK would enjoy a right of universal service that was at the very least as good as that available anywhere else in Europe.
We did not want the situation where we could post to anywhere in the UK from outside the UK, elsewhere in Europe, at the same tariff, whereas, by dint of the 10 to 20 kilogram range being outside the universal postal service, there could be differential charges for different destinations within the United Kingdom. It is for that reason, fundamentally, that this amendment is not to the benefit of postal users and the Government cannot accept it.
Baroness Miller of Hendon: The Minister will not be surprised that I am somewhat disappointed by his reply. I shall read what he said and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 agreed to.
On Question, Whether Clause 6 shall stand part of the Bill?
Lord McNally: I gave notice of my intention to raise this question. I noticed, when reading the Bill, that in Clause 6 there is no reference to how a prosecution might start in Scotland. I am certain that it is intended that Clause 6 should have effect in Scotland. I believe this to be an almost wholly reserved matter and that no devolution issue arises here. I note that in the Explanatory Notes it is said that prosecutions in Scotland will be started by the Lord Advocate. Why therefore does it not say that on the face of the Bill? Or is it intended that the Scottish Parliament should legislate for this element of the Bill?
Lord McIntosh of Haringey: The answer is simple. We have a complicated system of a range of prosecuting authorities in England, Wales and Northern Ireland; in Scotland the system is very simple. In Scotland it is virtually only the Lord Advocate who can initiate prosecutions and therefore it is not necessary to say so in the Bill.
Clause 6 agreed to.
5.45 p.m.
Clause 7 [Exceptions, from section 6]:
Baroness Miller of Hendonmoved Amendment No. 13:
Page 4, line 36, leave out ("£1") and insert ("50 pence").
The noble Baroness said: In moving Amendment No. 13, I shall speak also to Amendment No. 14. I am pleased to say that we have now reached Part II of the Bill and have left Clause 4 behind us.

1277
These amendments are designed to modify the Post Office monopoly by reducing the ceiling in value of money and weight where that monopoly exists. The amendments enable the Government to implement their own policy, which they have reversed since it was first announced.
On 16th September 1999 the Government placed an expensive display advertisement, seven inches by seven inches, in the Sunday Times, seeking candidates for the chairmanship of the postal services commission. It said,
"the Government is granting the Post Office greater commercial freedom but is convinced that successful reform requires more than this. It requires greater competition in the postal market; already a major first step towards liberalisation has been taken with the halving of the monopoly currently enjoyed by the Post Office to 50p from April 1st 2000".
The Government laid an appropriate statutory instrument before Parliament in October.
On 8th December the Government tabled a Motion to revoke their own statutory instrument. The Minister for Competition had the embarrassment of trying to explain away that massive U-turn to the committee in the other place. He produced a reason which I can only describe as pathetic. He said that the Government had been persuaded by an "eloquent and persuasive argument" contained in a report of the Trade and Industry Select Committee, that the regulator should set the limits of the reserved area.
I described the reason as "pathetic" because the report of the Select Committee was published on 14th September 1999, having presumably been in the Minister's hands for some time before that. In any event, 14th September was two days before the advertisement which appeared in the Sunday Times and well before the Government's statutory instrument was first laid before Parliament.
It does not take a detective to see what happened to cause that U-turn. I believe it was pressure from the unions and the Government decided that that is what they would do. It is another example of the Government saying one thing and doing another. If and when the regulator changes the boundaries of the monopoly, the Government will be able to trot out their usual excuse, "Its not my fault, guy".
I turn now to Amendment No. 14. I believe that there is an even blacker cloud looming on this horizon. On 30th May it was announced that the Dutch Internal Market Commissioner at the EC is planning to reduce the monopolies enjoyed by the post offices of the 15 individual member states down to a nominal 50 grams. That is about one envelope and a couple of sheets of A4 paper. The chief executive of the Post Office, Mr John Roberts, reacted by pointing out that that proposal would jeopardise existing services, forcing it to charge more for mail delivered to remote areas. He said that the proposals would risk damaging postal services throughout the EC.
While the Conservatives support the greater liberalisation of postal services, we remain committed to the maintenance of the universal service obligation.
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My honourable friend, the Shadow Secretary of Trade and Industry in the other place, tabled numerous Questions today on this very point, one even asking the Secretary of State for Trade and Industry if he would support a levy on postal licence holders to create a fund to support the universal service obligation. We would not like to see domestic customers facing the higher prices that have been the case in some of the more, so-called, "liberalised" regimes elsewhere.
In view of the dire warning from Mr Roberts that I just quoted, I suggest to the Government that, although they and the unions—and perhaps many people—do not much like the present amendment that I have tabled, it might be better than nothing. It would reduce slowly and gradually the monopoly area, which is what the Post Office said that it could live with. I believe that it would be a very good thing to bring in certain disciplines. I suspect and very much hope that the Government will be able to tell us that they will push this directive aside for as long as they can, but, in the end, it will no doubt be brought forward. We must ensure that our Post Office is prepared for this development. If we protect the Post Office in a way that is too easy, we shall make its position very difficult. I believe that my amendment is just one step forward: it is not the giant leap that we may be ordered to take at some stage.
In its 1997 manifesto, the Labour Party said that,
"effective competition can bring value and quality to consumers … In utility industries"—
I assume that postal services could marginally be described as one of the latter—
"we will promote competition wherever possible".
As I have already said, we admire competition, but we do not want it thrust forward in a way that makes it impossible for the Post Office to live within it. That is why we are reintroducing these two amendments that were introduced in the other place. We hope that the Government will be able to accept them. It would help to make life easier for the Post Office if they were to accept these modest amendments now, thereby preparing it for what might happen in the future. I beg to move.
Lord Skelmersdale: I wonder whether the Minister recognises the following words:
"A number of very different postal markets are now fully liberalised: Sweden, Finland, New Zealand and Argentina have all abolished their monopolies … As a first step the Government is halving the monopoly from £1 to 50p. … An order under section 69 of the British Telecommunications Act 1981 has been laid and with Parliamentary approval this reduction in the monopoly will take effect from 1 April 2000".
Those words appear in the department's White Paper on the Post Office.
As my noble friend Lady Miller said, the Government were forced to back off from their proposal to reduce the monopoly to 50 pence—as, indeed, we established in this Chamber when I laid a Prayer against the second order negating, as my noble friend pointed out, the first order—in order to avoid defeat at the Labour Party conference in Bournemouth. Speaking at a fringe meeting at the

1279
conference, the CWU's spokesman, Derek Hodgson, warned that the union also wanted a commitment in Labour's next election manifesto not to privatise the Post Office. He was quoted in the Daily Telegraph as saying:
"If they don't back off, they have got a tight on their hands and they have got a light that they can't possibly win".
The situation has become even more confused during the past month. In a recent article in The Times Graham Corbett, the new Post Office regulator, said that he would consider the abolition of the monopoly on letters and parcels costing under £1a plan that was immediately attacked as "backdoor privatisation". He also hinted at job cuts, saying that he expected the business to be more efficient and that the most obvious way of curbing costs would be to reduce the Post Office's 160,000-strong labour force. He continued thereafter, but the remainder of the article is not really germane to this matter. I believe that any reasonable man—certainly a visitor from the planet Mars—would ask: what on earth is going on? Is it not about time that the Government stood up and were counted?
Lord Sainsbury of Turville: As the noble Baroness made clear, she is well aware of the twelfth report of the Trade and Industry Committee published on 14th September 1999. In that report, the committee recommended that the Government consider withdrawing the Postal Privilege (Suspension) Order 1999, which would have reduced the monopoly to 50 pence in price and 150 grams in weight from 1st April this year, so that the postal services commission could consider evidence put to it of the effect of a reduction in the monopoly threshold and recommend to the Government an appropriate threshold. After very careful consideration the Government accepted that recommendation. I believe that that shows very clearly that we take both the Trade and Industry Committee and the postal services commission very seriously.
We shall be remitting the issue to the commission as soon as possible and urging it to treat this as a high priority. Having accepted the recommendation of the Trade and Industry Committee, it would clearly be wrong to accept an amendment to the Bill that would reduce the scope of the reserved area before the commission has even begun to consider evidence and consult interested parties.
The overriding duty of the commission is to ensure the provision of a universal postal service—the delivery of letters and parcels to any part of the United Kingdom at a uniform tariff. It is vitally important that all users, wherever they work or live in the UK, should be assured of these essential services. The Government place an enormous weight on the value of this obligation. We believe that greater competition must not undermine these services. We recognise that this is what users of postal services expect.
However, we do not believe that greater competition is incompatible with the provision of a universal postal service at a uniform tariff. We remain totally committed to greater competition in postal markets. Greater competition in postal markets will be a spur to
1280
efficiency, which should bring benefits for consumers in terms of choice, price and quality, while universal service obligations are maintained.
As far as concerns the European Commission, we expect a proposal to be issued formally within the next few days. There will then be a substantive discussion between member states and the Commission about the issue that it raises. In general terms we welcome the framework proposed by the European Commission that the first stage of liberalisation should be a reduction in the price/weight threshold and that there should then be time to adjust to that reduction and a further review of its impact before any decisions are made about the next phase. But we shall need to give careful consideration to the price/weight threshold and, in particular, to determine an appropriate level proposed for a first step. As I said, the key objective is to ensure the maintenance of a universal service and to promote the interests of consumers.
We are giving the commission a free hand to decide on what changes to the reserved area are compatible with the provision of a universal postal service; indeed, it could come forward with a recommendation for 50p or 150 grams, as proposed in the amendments. However, the commission might find in favour of a completely different figure. Under the existing Postal Services Directive, the reserved area can only be set at a level necessary to ensure the maintenance of the universal service. I am sure that the commission will do a thorough job and consult all interested parties. We should leave the commission to get on with its work and not seek to prejudge it. Therefore, I ask the noble Baroness to withdraw her amendment.
Viscount Goschen: I heard what the Minister said about remitting the issue to the commission, but perhaps he could clarify the following point.. Should the commission decide, for example, to reduce the weight from 350 grams to 150 grams, can the noble Lord explain by what means that could take legal effect?
Lord Monson: While the Minister is considering his response to that question, can he tell the Committee, first, the earliest and the latest date, respectively, when the commission might be expected to report? Secondly, can he say whether the abolition of the Post Office monopoly in certain thinly populated Scandinavian countries mentioned by Conservative noble Lords has led to any deterioration in services for people living in outlying areas?
Lord Sainsbury of Turville: As regards the universal service obligation, the situation remains the same. Therefore, there has not been any deterioration in that sense. As I understand it, it is for the commission to determine its own views. That will then become the standard which the people involved in the licences will have to accept. It would be put into effect by way of the affirmative order procedure under Clause 8.
Baroness Miller of Hendon: With regret, I have to tell the Minister that I find his answer unsatisfactory,

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particularly because he referred to the report of the Trade and Industry Committee published on 14th September. That was the critical point I was making. The report was published on 14th September. It is important that the noble Lord has a note of that date, because that is what I am talking about.
In my opinion the Secretary of State probably had that report earlier as, invariably, reports are given to Secretaries of State before they are published. However, if that is not the case and he received it only on 14th September, the Government cannot use that as an excuse for not modifying the monopoly when the advertisement to engage a regulator, which appeared on 16th September, refers to the "halving of the monopoly". Therefore that information was in the hands of the Secretary of State on 14th September. The statutory instrument was not laid until October. If the Government wished to change their mind, they must give a better reason than the information contained in the Select Committee report. That has nothing to do with it. The Government had that in their possession certainly six to eight weeks before the statutory instrument was laid.
The real reason for the Government's change of mind was as my noble friend indicated; namely, that at the trade union meeting it was made absolutely clear that all hell would be let loose—that is not a phrase that is suitable for the House of Lords; I shall rephrase it—or that there would be trouble if the measure was not revoked. That is the important point. The very least I expect the Government to do is to admit that they gave in to the trade unions, because that is exactly what they did. There are no two ways about it. It has nothing to do with the report. If it concerned the report, the Government would not have submitted the advertisement that I have mentioned. I regret that I have to inform the Minister that his reply is unsatisfactory. He should know that we on this side of the Committee are aware of the relevant dates and that I shall challenge him, albeit charmingly. I challenge him because these are important matters. It is necessary to be honest with each other across the Dispatch Box and to say what the position is.
The noble Lord has talked about protecting the universal service obligation. We also want to protect it. However, we make the point that eventually the monopoly will be modified. The Chief Executive of the Post Office, Mr John Roberts, said that the Post Office would be able to cope with the change if it was introduced gradually and it was given time to absorb it. However, it will not be able to cope if a European directive suddenly imposes it.
I understand that the Minister said that the regulator can include the measure in the licence, if he so wishes, and that the Government will leave the matter to him to decide. However, that may cause difficulties. I remember that no sooner had Mr Graham Corbett been appointed than he said that he would get rid of the monopoly altogether. That has never been denied by the Government. People in the Chamber and elsewhere are entitled to know whether the monopoly will be protected. If it is decided to get
1282
rid of the monopoly altogether, what will the Government say to the Post Office when they did not help to prepare it for the change by accepting our amendment?
The Minister has made quite clear that he does not intend to accept our amendment today. I think that he is wrong in that. Had we not lost the previous Division so heavily I would have pressed this amendment to a Division. However, I do not wish to lose this amendment as it is an important measure that seeks to protect the Post Office. I hope that the Minister will get his dates and his information right and give the correct reason for the Government's withdrawing the statutory instrument. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 14 not moved.]
6 p.m.
Lord Skelmersdalemoved Amendment No. 15:
Page 5, line 1, leave out paragraph (d).
The noble Lord said: We now move to the part of Clause 7 which covers derogations from the Post Office monopoly. Some of them are straightforward. The first two are unlikely to involve any money changing hands. However, I am concerned about Clause 7(2)(d) which states that the monopoly is not broken by,
"the conveyance of an overseas letter out of the United Kingdom"
by anyone other than the Post Office, as I read it. One rather wonders why that is the case. At the moment it is perfectly normal for Post Office Counters to issue, for example, air mail cards and air letters. As I understand it, they are totally within the province of the Post Office. They are delivered by the Post Office and sent to Heathrow, Gatwick or wherever and are transmitted out of the country. That is done by the Post Office. With the exception of emergency circumstances—we shall discuss those later in the Bill—I cannot see why the conveyance of an overseas letter out of the United Kingdom is not the prerogative of the British Post Office. I beg to move.
Lord Sainsbury of Turville: I find this amendment rather surprising given that it has been a longstanding, practice that all overseas letters are exempt from the reserved area. Clause 7(2)(d) simply updates the position that has existed for many years that all outward bound overseas letters are exempt from the reserved area. In previous legislation the exemption referred to carriage via an aircraft out of the United Kingdom, but it was also interpreted by the Post Office as applying to mail carried by sea as well as through the Channel Tunnel in more recent times.
The Government received representations from the competitors to the Post Office for overseas letters and consulted the Post Office on this change. I can see nothing objectionable in this provision and ask the noble Lord to withdraw his amendment.
Lord Skelmersdale: I am grateful to the noble Lord. I have been educated this afternoon and therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendonmoved Amendment No. 16:
Page 5, line 47. at end insert—
("(q) the conveyance and delivery of election addresses").
The noble Baroness said: In moving Amendment No. 16 I wish to speak also to Amendment No. 17. Clause 7 contains a series of exceptions from the restrictions on the provision of postal services contained in Clause 6. Surprisingly, election addresses are not directly included in this list.
An election address is defined in Amendment No. 17 as,
"a communication provided for by section 91 of the Representation of the People Act 1983".
Therefore there is no possibility of confusion there.
Election addresses are currently delivered by the Post Office. I thought at first that they might be covered by stretching the meaning of Clause 7(2)(c), but even if the Post Office could be described as a "messenger", election addresses are not delivered singly unless there is only one elector in a house. Much as it would like us to think it is, the Post Office could not claim to be
"a personal friend of the sender",
as described in Clause 7(2)(b). Therefore I suggest that election addresses are not covered in that clause.
It might he argued that an election address is not a letter. However, as election addresses these days usually contain a facsimile letter which begins with the words, "Dear elector" and ends with the words "Yours sincerely"—if the people concerned are desperate to get your vote they are even more polite—I believe that they constitute letters.
However, this simple, non-controversial and certainly non-destructive amendment, which the Minister need not he frightened of, would put the matter beyond doubt and beyond argument. It would enable carriers other than the Post Office to tender for this business in the appropriate way. I hope that the Government will accept it as a wholly constructive contribution to the Bill. I sense from across the Dispatch Box that the Minister would like to please me in respect of a measure that would not harm the Bill. This amendment might well be that measure. I beg to move.
Lord Lucas: I wonder whether the Minister can enlighten me on a couple of related aspects of this clause. If he wishes, I shall address these matters at the clause stand part stage, but they are close enough to what my noble friend seeks for me to introduce them into this debate.
As I understand it, the kind of activities which would ordinarily take place now by way of people distributing letters and circulars on behalf of clubs, societies or political parties of which they are
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members, or businesses which are touting for business, will be permitted under this clause hut, in the second case, they will be limited generally to occasions where such letters are not personalised.
Clause 7(1)(c) states:
"the conveyance and delivery of a single letter by a messenger".
I take it that that means that a messenger can carry a large number of messages but only one for each person—in other words, a messenger can be sent to deliver a press announcement to 150 different addresses and provided that only one was delivered to each person, or perhaps delivered to each address, that would be all right. Or are we really trying to put motor-cycle messengers out of business entirely by saying that they can carry only one letter on their pillion at any time?
I do not see where in the clause is the mechanism for the delivery of press announcements or for the delivery, for example, of letters from a local Conservative association to its members by people who cannot be considered as "friends.' under subsection (2)(b); or for some larger club, when it has membership correspondence to send out, getting its members to do the deliveries rather than paying postage. I should like an assurance from the Minister that that is allowed under this clause, and perhaps he could show me where.
So far as concerns commercial deliveries, as far as I can see, the ordinary stuffing of leaflets through a door is clearly no problem because the correspondence is not addressed in a particular way; but if anything is personalised by a business—suppose, for instance, it had gone through the electoral register for names and addresses and so on—that correspondence would be caught and covered. That seems fair enough to me.
But perhaps the Minister can tell me what would happen if I, as a company, generate a circular and provide it to a direct mail organisation to carry out the personalisation and make the delivery. Under the terms of Clause 117, is that letter—which has come from and been created by the direct mail organisation, although it contains no mention of the organisation's existence—their letter; or is it my letter, in which case, as I have had nothing to do with sticking the address on it, can I be said to be the sender? Does that kind of disconnection from the function of addressing and creating the letter allow someone to get round the inhibitions in this clause?
Viscount Goschen: I agree with my noble friend Lord Lucas that there is some very vague drafting contained within this clause. However, having said that, the Government or the draftsmen have clearly gone to considerable lengths to try to include every eventuality with a number of derogations.
As to the points addressed by the amendments, I hope that the Minister will be able to give my noble friend Lady Miller some satisfaction in connection with the delivery of election addresses. We know that there has been a certain reluctance on the part of the Government in this House to facilitate the delivery of election addresses. But we now know that the

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Government have had a change of heart—which is, of course, entirely welcome because we believe in putting such matters to the people as well as possible.
Further to the points raised by my noble friend Lord Lucas, subsection (2)(i) contains the words,
"the conveyance and delivery of letters by a person who has a business in those letters".
I, too, am interested in where the difference lies. Where a company employs an agent, does that agent still have a business interest in those letters? Clearly an agent does have an interest of some kind because it is being paid to perform that function. But I feel that the wording of that paragraph is open to abuse and I should welcome clarification from the Minister on that point.
Lord Sainsbury of Turville: I do not think that the amendment is either destructive or controversial; it is simply unnecessary in this context.
As the noble Baroness is probably aware, this Bill was amended in another place to ensure that the one free postal communication provided for by Section 91 of the Representation of the People Act 1983 would continue to be provided free of charge by a universal service provider. Given that Section 91 of the 1983 Act provides for only one communication, and that it will continue to be provided for free, I am not sure what purpose could be served by this amendment.
Presently, where candidates want to send more than one postal communication during an election, they must pay normal postage. While I can see some advantage in them being able to put out this service to competitive tender, I cannot see what the justification would be for politicians being able to do so when equally, if not more, important communications from, for example, health authorities, charity appeals and so on were subject to normal postage.
Clause 7(2)(c) is not designed to allow the conveyance of more than an individual letter. Leaflets not addressed to an individual are not covered. Direct mail falling within the limits of the reserved area would be a letter and therefore would be covered. The noble Lord gave a number of specific examples and I shall be happy to write to him on those points.
With that assurance, I hope that the noble Baroness will feel able to withdraw her amendment.
6.15 p.m.
Baroness Miller of Hendon: The Minister said that he felt that the amendment was unnecessary. I often respond that if it is not necessary, it does not matter if it goes in; and if it goes in, it does not matter because it is not necessary. The noble Lord could have humoured me. However, I am absolutely certain that I will find another occasion during the course of the evening when maybe on a non-controversial, non-destructive, simple amendment the noble Lord may choose to humour me. In that spirit, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 17 not moved.]
Clause 7 agreed to.
Clauses 8 to 12 agreed to.
Clause 13 [Licences: conditions and other provisions]:
Baroness Miller of Hendonmoved Amendment No. 18:
Page 9, line 17, at end insert—
("() Licence fees paid pursuant to subsection (2) shall be applied only for the purposes of enabling the Commission to perform its duties under sections 11 to 14 of this Act.").
The noble Baroness said: As the marginal note makes quite clear, Clause 13 relates to conditions and other provisions in licences. The amendment I am asking the Committee to consider was not considered in another place.
Clause 13(2) quite rightly provides for the commission to be able to charge for the grant of a licence. Obviously the cost of this will be not merely the cost of typing the physical piece of paper but will entail the work of investigating the applicant, the legal expenses of drafting and negotiating the licence, future renewal of licences, supervision of the licensee and a contribution towards the infrastructure costs of the commission. I do not believe that there can be any argument with any of that.
I am even prepared to assume the inference of the word "reasonable" as an adjectival qualification of the fees. I should have been inclined to include that word as an amendment, but my experience of the major Bills I have debated on behalf of the Opposition in your Lordships' House is that asking for the word "reasonable" to be included anywhere produces a Pavlovian reaction on the part of the Government and the response that the use of the word is "unnecessary". We have had that reaction tonight, although it was nothing to do with the word "reasonable". As if this Government or any of its agencies could in any way ever be unreasonable.
Amendment No. 18 seeks to restrict the use to which the commission may put the licence fees that it charges to the cost of its licensing functions. Whatever those costs are, that is fine, but that is what the fees should be used for. In other words, the licence fees that it charges should be restricted to its actual licensing functions. What must not happen is for the commission to charge more than the actual cost and then to use the surplus money for other purposes. I shall not speculate on what those other purposes might be. One could be some form of self-advertising, such as has been indulged in by the Independent Television Commission, or a campaign like that of the Milk Marketing Board—not "Drinka pinta milka day", but "Post a piece of mail a day". I am sure that there are many fertile minds in the commission who could find a use for the excess funds. In fact, to adapt a well known proverb, "The devil does find work for idle hands".
The amendment follows the precedent set in the Broadcasting Act 1990 as to the use of licence fees payable under that Act. Therefore, I hope that the Minister will give that some consideration. I beg to move.
Lord McIntosh of Haringey: I have a slight problem with the wording of the amendment. I am still not sure, having heard the noble Baroness, what the intention of the amendment is. She may be able to help me when she replies. We think that it is intended to restrict the ability of the commission to collecting licence fees only for the purpose of performing its duties under Clauses 11 to 14. That may be what she said. However, the effect of the amendment is to allow the licence fee to be collected according to the terms of the licence, but to restrict the use to which the licence fee can be put to the performance of duties under Clauses 11 to 14. It does not matter very much because I can see that the intent behind the amendment is good. The intent is to get an assurance from us that the licence fee is not a form of taxation. I can give the noble Baroness that assurance.
The clause, as drafted, allows the commission to recover its costs in line with normal practice. Perhaps I may give the example of the utilities sector. The noble Baroness, Lady Miller, quoted one piece of legislation as a precedent, but I should like to quote as precedents the Electricity Act 1989, the Water Industry Act 1991 and the Gas Act 1995, which were passed by the previous government and drafted in much the same way as this clause. The clause allows the commission to recover its costs in line with normal practice. Therefore, "licence fee" can include the costs not just of administering the licence in its crudest form—that is dealt with in Clauses 11 to 14 of the Bill— but also the associated costs of regulation that the commission must hear; for example, Clause 15 is about references to the Competition Commission. Clearly, that is a cost which the postal services commission will have to incur. It seems to us entirely proper that these costs, or, for example, the costs of monitoring international development for their potential impact on the universal service, should be paid for out of the licence fee.
The amendment would prevent the commission in effect from carrying out those functions. I hope that the noble Baroness will not press the amendment.
Baroness Miller of Hendon: I shall certainly read carefully what the Minister has said. It is interesting that he referred to Clause 15 and said that if the commission was too closely restricted in what it could do with the licence fee it would pre-empt the costs that would be involved in referring matters to the Competition Commission. I think that that is interesting because Clause 15 is a brand new clause that had to be included in the Bill because of the discussions in the other place, but the actual wording of the clause regarding the costs of the licence was already there. However, I accept what the Minister is saying. I shall read his words carefully in case I am still not happy. But it may be that he has managed to give me some small comfort. I take pleasure in withdrawing the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendonmoved Amendment No. 19:
Page 9, line 17, at end insert—
("(2A) Every licence granted for the provision of a universal postal service shall contain an express provision prohibiting the licencee from imposing any condition (save as provided in subsection (2B)) on the addressee of mail and in particular (without limiting the effect of this subsection)—
(a) requiring the addressee to provide a receptacle for the receipt of mail anywhere other than at the main doer of the building to which the mail is addressed; and
(b) in the case of a building in multiple occupation, requiring the installation of individual postal boxes in the lobby or elsewhere.
(2B) Notwithstanding the provisions of subsection (2A) a licencee shall be entitled to impose reasonable conditions on the manner and place of delivery where there is any hazard to the postal worker required to make the delivery.").
The noble Baroness said: The purpose of Amendment No. 19 is to require the commission, by law, to impose a condition on the licensed holders of universal service licences. That condition is to prevent licence holders from requiring householders, or others, to install a postbox at the front boundary of a property, or, in the case of a block of flats or offices, having to install banks of letter boxes in the entrance lobby of a building. In the case of, say, farmhouses, the building may be some distance from the highway. Even in a town the front door and the letter box may be at the end of a long drive, up a steep flight of steps, or both, as I can personally attest to, as I am sure can many Members of the Committee, after 30 years of canvassing and leaflet delivery.
If it is thought fanciful that a licence holder would try to impose such a condition as a means of reducing the cost of making deliveries, perhaps I ma3, tell the Committee what has happened in my own borough, and, I suspect, in most people's boroughs. Despite the statutory obligation on the local council to remove household refuse, several years ago my council insisted that refuse was placed in the so-called wheelie bins, which have to be positioned precisely at the boundary otherwise the rubbish is not collected. Either the street has to be cluttered up with unsightly refuse bins or we have the job of lugging the wheelie bins from the back of the house on collection days. In some roads that looks absolutely appalling. It is also a not so subtle way of rationing the amount of refuse that a householder can require to be collected, because the council takes away only what you have managed to put into the bin.
I do not think that it is beyond the realms of possibility that it will eventually occur to licence holders that, since labour is the largest part of their costs, they could save a great deal of money if the postman did not even have to step off the roadway in order to deliver mail. If the box was right there at the edge of the street it would save time, be quicker and so forth. I say nothing of the risks of theft and vandalism if letter boxes are sited at the front gate.
My proposed new subsection (2B) in Clause 13 is intended to ensure that the licensee is not required to send his postmen and postwomen to hazardous addresses such as building sites, or, more usually, to

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where there are ferocious dogs. It is possible that the Minister will tell us that under Clause 13(3) it really is a matter for the commission to decide on the conditions in the licences. But I am not sure that that is right. Clause 4 of the Bill sets out certain minimum requirements for the provision of a universal postal service, as the Minister told us on several occasions when dealing with all our Clause 4 amendments. That clause, drafted by the Government, sets a precedent for statutory guidance on the conditions to be included in licences. The Post Office itself has been able to perform its functions of providing a universal pre-paid delivery service for 160 years—160 years next month—without imposing any conditions such as are addressed by this amendment. Amendment No. 19 simply ensures that the addressees of mail shall not be put to expense or run security risks in order to receive their letters merely to enhance the profits of licence holders. I beg to move.
Lord Harrison: Is it possible to find another bin in which to post the spelling as proposed in this amendment of "liceneee" with a "c". The word should be spelt with an "s". It is not just this amendment that has that fault. Others on the Marshalled List of amendments have that misspelling.
Lord McIntosh of Haringey: I was hoping that my noble friend Lord Clarke would give us the benefit of his experience on this matter. I was only a temporary postman at Christmas many years ago and so I do not have anything like my noble friend's knowledge of the subject.
The amendment would prevent licence holders from imposing any condition on the addressee of mail. In particular it refers to whether the mail should be delivered at the front door or in a postal box in the lobby of a building in multi-occupation. It refers to any condition except as provided in subsection (2B). I would draw the attention of the noble Baroness, Lady Miller, to Clause 89. It provides for a scheme in relation to services provided by a universal service provider which determines the charges, the other terms and conditions and the proposed procedures for dealing with complaints. I hope that the noble Baroness will agree—she certainly has not tabled any amendments that show any disagreement—that this is a valuable provision in the Bill. But, in effect, it would be wiped out by Amendment No. 19.
The amendment would cover all the services of the universal service provider, not just those concerned with the universal service. As I said, it would override the provision for schemes in Clause 89. The thrust of the amendment, as presented, is directed at delivery to the main door or to the lobby of a house in multiple occupation. The delivery of mail to a box at the front of a property, or a requirement that the point of delivery of letters is at a maximum distance from the nearest road is a common condition in many administrations overseas, for example, in New Zealand and the United States. But there are no
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proposals from the Post Office, the postal services commission or the Government to have such a scheme in the UK.
For most people in the UK the normal point of delivery is the front door and we expect that to continue to be the case. If a universal service provider were to propose such a radical departure, we would expect the commission to take a close interest in the matter and to act accordingly. In other words, that is one of the conditions that could well be in the licence. I am sure that the commission, acting responsibly, will seek to ensure either that it does not happen or that if it happens a suitable penalty is imposed.
However, we have a policy of giving the commission as much flexibility as possible on the terms and conditions of the licence and we believe that this amendment is too prescriptive. I hope that the noble Baroness will not press it.
Baroness Miller of Hendon: I am happy to tell the Minister not to worry because I do not intend to press the amendment. I have clearly said that the Post Office has managed to perform its functions very well without requiring anybody to put up a post-box. The Minister made the point that abroad, certainly in America, one can see post-boxes placed at a distance away from the houses. Especially in films one sees postmen throwing mail across gardens.
For the reasons that I have mentioned, such as postmen having to walk as far as they do, new licence holders may decide that they want to follow the American custom rather than the custom employed presently whereby postmen put mail through our letterboxes. The Minister has said that that will be a matter for the commission and that he does not want to make matters too difficult for the commission. My next amendment, Amendment No. 20, will try to alter that because I would be deeply aggrieved if that were not in the licence. I have seen a draft licence—of course, nothing like that is in it, although the commission has not yet considered the matter—but I would be deeply aggrieved if we had the continental or American style of mail delivery imposed upon us and we lost our letterboxes. Like the Minister, I am sorry that the noble Lord, Lord Clarke, did not give us the benefit of his wisdom, but I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Miller of Hendonmoved Amendment No. 20:
Page 9, line 23, at end insert—
("()The Secretary of State may by order prescribe such general provisions and general conditions as he shall deem appropriate to be included by the Commission in all licences or categories of licences or licences to be granted to particular classes of licensees.
() Every licence granted by the Commission shall contain the reservation of the power to amend it to conform to any requirements of a direction made by the Secretary of State after the issue of the licence.").

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The noble Baroness said: Throughout the course of the proceedings on this Bill in the other place and in your Lordships' House the Government's response to amendments to improve the working of the Bill has been, and no doubt will be in relation to later amendments, to accept, with varying degrees of enthusiasm, the principle involved and to say that the matter is something that should be left to the commission to include in any licence. But that is only partially satisfactory.
There may be matters regarding the potential conduct of the business of a universal service provider or a licensee on which Parliament would wish to have some say, but it will have been deterred from doing so because of assurances by the Government that the particular concern would or could be dealt with better within the licence. Similarly, on reflection, the Government may want to ensure that a particular policy is followed by the commission. It could cover cases, as discussed under Amendment No. 11, on which the Government may have a view as to what the commission should have in its licence.
This amendment is not prescriptive because it gives the Government the entirely discretionary power to direct the commission to include particular provisions in licences. They can exercise that power as they think fit. To ensure that there is the proverbial level playing field between early and late licensees, the amendment requires the commission to reserve the power to alter any licence retrospectively. The power to intervene in the contents of licences will be exercisable only by order.
If this amendment is accepted, a further amendment will be needed to Clause 114(9) so as to include it in the category of orders requiring a positive resolution of both Houses. That will ensure that Parliament fully investigates any proposed ministerial intervention.
The last thing the Opposition want is for the Government to intervene in the day-to-day running of the Post Office and the businesses of the licensees. As we are putting the postal business under the supervision of the regulator, by all and every means let him get on with regulating. We are putting an essential industry into the hands of a commissioner who will have the powerful discretion to regulate it and any new, similar companies that he may choose to permit to participate in this area.
We are handing over an institution that has been an agency, first, of the King and then of the Government for some 500 years and which has existed as a general post office for 340 years. There will be no parliamentary control and no direct accountability. I believe that it is essential, certainly during an initial running-in period and until all the possible wrinkles have been ironed out, to ensure that the regulator—the commissioner—does not do or does not fail to do something that is undesirable in the form of the licences that he issues that could otherwise be cured only by fresh, primary legislation. It is essential to leave some reserved power in the hands of the Secretary of State in case something important has been overlooked in the drafting of the Bill. That is not
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impossible considering the number of amendments and new clauses that the Government introduced during the passage of the Bill in the other place.
As I mentioned, I have seen a pro forma of the proposed licence. I am sure that when fleshed out it will prove to be a workable document. However, due to the lack of research facilities, I have not had the opportunity to check the draft against, say, licences of utilities like rail or TV licences, so I cannot comment on it in that respect. We do not want some universal service provider or licensee to boast, in the notorious phrase of a TV executive in the early days of independent television, that he has received a licence to print money.
The object of the amendment is simply to ensure that the Government retain some element of control so that if something goes wrong the Secretary of State will not be able, as the Government do from time to time, to disclaim responsibility.
If the noble Lord, Lord McIntosh, is to respond—I can usually tell who will respond by seeing which noble Lord is looking up as I come towards the end of my speech—I remind him that this amendment is non-prescriptive because it need never be used. If the Secretary of State and Parliament consider that whatever the commission has put into the licence is totally adequate, then nothing needs to be done. But if something is left out, it would be difficult to find time for new legislation. We already have great difficulty in dealing with the legislation already passing through the House. I beg to move.
Lord Clarke of Hampstead: I have resisted the temptation to tell the Committee all about the difficulties of delivering mail to tower blocks and country mansions, and about the problems involved in bending down to letter boxes situated at the bottom of doors because I did not think those matters would be important to our proceedings. However, I think that the amendment before us is important.
This amendment will cover the points that we have only just discussed on the previous amendment. It is necessary to include what I would describe as a catch-all authority for the Secretary of State because I am worried about maintaining high standards of service in areas other than simple delivery and collection. I refer, for example, to the redirection service, the provision for people to collect their mail, access to hours of opening for sorting offices and so forth. These matters should be taken account when granting licences to operators who will be in competition with the Post Office and who may not wish to offer such services.
Detailed provision needs to be made for specialised services. For example, how many times should an operator attempt to deliver a letter? Will the Post Office still be obliged to make several attempts using form 739, or will they be able to say, "We've tried once, now it's too bad"? There is also the complex question of the redirection or disposal of undelivered mail that is held in sorting offices.
I think that this is a common-sense amendment because it provides for circumstances that may arise but have been overlooked. That would not be

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surprising, given the drafting of the Bill and the number of amendments being tabled by the Government. However, I shall again resist the temptation to be critical, save to say that I think we should look at this proposition very carefully and see whether the Secretary of State could be vested with a degree of authority in order to ensure that the necessary requirements are placed on the licensee.
Lord Bowness: I support the amendment that has been moved by my noble friend. Can the Minister explain, when he comes to reply—and, I suspect, resists the amendment—why there is a fallback position allowing the Secretary of State to intervene in the case of modifications proposed by the commission, but not, as I read it, such a reserve power for the granting of the licence? I believe that I have interpreted the provision correctly, but I hope that I shall be put right if I have not. If that is the case, I shall certainly support my noble friend. It seems to me, if reserve powers are to be provided in order to deal with any modifications, that powers should also be in place to oversee the granting of the original licence.
Lord Skelmersdale: My noble friend Lady Miller referred to a model licence which, I gather, was made available to Members of the Standing Committee in another place. My noble friend appears to be remarkably privileged. I do not know whether noble Lords on the Liberal Democrat Benches have received copies of the model licence, but I most certainly have not. It would be extremely useful to be able to see it.
Baroness Miller of Hendon: Perhaps I may intervene. I did not receive the model licence. Indeed, in the debate on Second Reading I made the point that everyone else seemed to have seen the model licence—or rather, the draft licence—but that I had not. I said at the time that I wished I had been able to see it. Subsequently someone did send me a copy, but I do not think that it was circulated to all Members.
Lord McIntosh of Haringey: A copy of the draft licence was placed in the Library of this House on 9th February.
Baroness Miller of Hendon: I wished only to make the point that, although my noble friend thought that I had had a form of privileged access to the draft licence, in fact I had not. I raised the issue on Second Reading, but I cannot recall whether it was mentioned at the time that a copy had been placed in the Library. However, as I have said, someone was kind enough to send me a copy of a draft licence—which was indeed a rough draft and did not tell me very much.
Lord Skelmersdale: I am grateful for that information. I shall now trawl the Library in search of a copy of what my noble friend has referred to as the draft licence. Although I have not seen it, I would probably call it a model licence.
Lord McIntosh of Haringey: It is called an outline of a proposed licence. I shall ensure that it is sent to every
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noble Lord who is taking part in this debate and, indeed, to all noble Lords who took part in the debate on Second Reading.
Lord Skelmersdale: I am extremely grateful to the Minister. From my point of view it is far easier if the noble Lord can arrange to send me a copy rather than having to search for it in the Library.
I think that my noble friend Lady Miller and my noble friend Lord Bowness, who is in his place behind me, are right to say that we should start these proceedings with some form of standard conditions, whether or not they are contained within the draft licence. It would be sensible for Parliament, especially in light of the fact that it has insisted on being involved in any changes to the standard conditions, to be involved in drawing up the standard conditions themselves, whatever form their initiation may take.
6.45 p.m.
Lord McIntosh of Haringey: I am grateful to all noble Lords who have taken part in this short debate. The amendment would allow the Secretary of State to specify general provisions which could be included in all licences or licences of certain categories and that the commission should have a general condition in every licence allowing it to amend a licence to include general conditions specified by the Secretary of State.
It may be that the intention here is to provide all licence holders with a level playing field and, on the face of it, that seems to be an admirable objective. However, I should like to explore the proposition a little more. I realise that a power of this type would mirror the situation in the Utilities Bill where the Secretary of State has a general power to impose standard conditions on a licence. The purpose of that is rather different, as those who are to take part next week in our debates on the Utilities Bill may discover. In those circumstances, the standard conditions could be varied by the Secretary of State without the consent of all of the licensees. In other words, if only a small minority, say, less than 10 per cent, objected to a change in a standard condition, that small minority could be overruled in the interests of the large majority. It is for that reason that standard conditions have been proposed in the Utilities Bill.
However, in reality the situation is not analogous. We expect there to be a far smaller number of licence holders in postal services than in the utilities. Indeed, it is more than likely, in the short term at least, that we shall see only one universal service provider.
However, we have made provision in Clauses 100 and 101 for the Secretary of State to intervene in the interests of national security to give directions, to ensure compliance with Community obligations and to comply with international obligations. Other than in those limited but important circumstances, we believe that the independent regulator should have the responsibility for licence conditions, including any general ones that the regulator might wish to stipulate.
We are dealing here with a situation where the first licensee of the commission will be the Post Office plc, in which the Government are shareholders. Because of

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that, we feel that it is far more likely that we shall achieve a level playing field between licence holders if the independent regulator is in charge of the licence conditions rather than the Secretary of State, who also represents the largest shareholders in the licensee. He would have virtually unlimited powers to intervene.
In the case of postal services, where the Post Office will remain in public hands and, we expect, will be a licence holder, we think that it is particularly appropriate that the roles of government as regulator and shareholder should be kept apart as far as possible. That is why we have set up an independent commission to deal with licence conditions.
If the noble Baroness, Lady Miller, intended to create a level playing field here—she did not quite say that—I have every sympathy with that aim. However, surely the most effective way to deal with this is to leave it in the hands of the independent regulator.
Baroness Miller of Hendon: The second part of my amendment certainly did seek to create a level playing field, thus ensuring that operators who apply for a licence later do not secure better terms than those who apply earlier. That essentially was the purpose of the amendment.
I have listened carefully to the Minister's remarks and I am grateful to him for telling the Committee that there is to be a general power for the utilities. As I mentioned earlier, I have not had the opportunity to research each individual case.
I think that what the Minister has said will be acceptable, but I should like to read the account to be entirely sure of that. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringeymoved Amendment No. 21:
Page 9, line 26, after ("lie") insert ("or, in Scotland, be competent").
The noble Lord said: In moving this amendment, I should like to speak also to Amendments Nos. 28, 29, 83, 84 and 105. These are small technical amendments designed to ensure the Bill's compatibility with Scottish law, which I hope will not cause Members of the Committee any concern.
Amendments Nos. 21 and 83 simply add the Scottish legal equivalent of the term "lie" to Clauses 13 and 90 where no action shall lie in respect of licence holders or universal service providers. These corrections to the Bill make it correct for the purposes of Scots law.
Amendments Nos. 28, 29, 83 and 105 change the reference in the Bill to a penalty or charge being recovered as a civil debt by making it clear that recovery is to be by this method only in England, Wales and Northern Ireland. Scottish law does not require the method of recovery of debt to be enunciated and these amendments will ensure that the Bill is silent on the method of recovery to be used in
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Scotland. The amendments merely bring the Bill into line with the normal practice with regard to the law in Scotland. I beg to move.
On Question, amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 agreed to.
Clause 15 [References to the Competition Commission]:
Baroness Miller of Hendonmoved Amendment No. 22:
Page 10, line 21, after ("may") insert ("at any time, and at least once every three years after the last such reference, shall").
The noble Baroness said: In moving this amendment, I wish to speak also to Amendments Nos. 23 and 24. As I have mentioned, Clause 15 was inserted into the Bill as an afterthought, following the Committee stage in another place and shows all the signs of the Government legislating on the hoof.
We believe it is appropriate that there should be the facility to refer the activities of those providing postal services to the Competition Commission. I should perhaps remind the Committee that I am a former member of the Competition Commission, although in my day it was called the Monopolies and Mergers Commission. I should also reassure Members of the Committee that I am not trying to drum up business for my former colleagues.
Postal service providers will, of necessity, be few in number and the temptation to indulge in anticompetitive practices will surely be there. I question whether the powers in this clause include overseas providers to the commission. Perhaps the Minister can tell us. If they do not, then this is a matter calling for a further amendment so as to ensure that overseas providers have to play by the same rules as our domestic ones. The new, belated clause requires some fine tuning.
Amendment No. 22 supports the power of the postal services commission to refer matters to the Competition Commission at any time it considers it appropriate to do so. It adds a requirement that there shall be an automatic referral to the Competition Commission once every three years for it to conduct an overview of this vital public service.
I cast no aspersions on any intended members of the postal services commission, or indeed on any of the regulators of other industries. But there is always a danger that they may become so involved with the organisations they supervise that they accept as reasonable practices that may not prove so in terms of independent review.
I also call to mind occasions when complaints about a particular industry have not been referred to the Competition Commission when there has been a reasonable demand that they should be on the grounds that the initiative should come from the Office of Fair Trading, which, for whatever reasons, has taken a different view. This small amendment simply requires the Competition Commission to look at the industry at least once every three years.

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Amendment No. 23 deletes the words "specified in the reference" so that, once a matter is in the hands of the Competition Commission, it may look further afield if it thinks it appropriate without being told that it is not within its immediate terms of reference. That is especially appropriate bearing in mind that, under the previous amendment, once postal services are placed before the Competition Commission, it need not look at them again for three years.
I accept that under Clause 15(2) the postal services commission can supplement a reference that is already under way. That is the point of my amendment—namely, to strengthen the subsection by ensuring that the power to vary references to the Competition Commission does not apply to the automatic triennial that I have proposed.
Amendment No. 24 is purely consequential on Amendment No. 23. The three amendments are entirely constructive. They are designed to strengthen the powers in the clause and I hope that the Government will be able to accept them. I beg to move.
Lord Newby: For a moment I thought that we were again debating the Financial Services and Markets Bill. There, too, we heard a proposal for an automatic review of the workings and codes established by the FSA. The view that we took then, which we take also in relation to this amendment, is that review is fine when there is a purpose to it, but to have automatic reviews every three years—to pluck the plant up by the roots, whether or not there is any suggestion that it might be necessary—seems to us a superfluous requirement.
Clause 15 enables the commission to make a reference whenever it wants. It is a flexible provision. If there is no suggestion that a reference is necessary, the commission will not make one. That is by far the most sensible way to proceed in this case rather than putting in place an unnecessary and onerous triennial provision.
Lord Sainsbury of Turville: I should like to speak to Amendments Nos. 22 to 24. The amendment before the Committee would have the effect of subjecting every licence holder to a Competition Commission inquiry at least once every three years. It is a welcome variation on an amendment moved in another place that would have restricted the postal services commission to only these references, but it would still leave an unsatisfactory state of affairs and I shall be asking the noble Baroness to withdraw the amendment.
The aim behind the amendment seems entirely laudable; namely, to subject licence holders to regular regulatory review. However, that rather ignores the fact that the postal services commission will subject licence holders to more regular and detailed review. It is the postal services commission that is best placed to carry out this function, not the Competition Commission.
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Furthermore, I would not wish to devalue the effect of a Competition Commission reference so that it becomes a regular chore. I strongly agree with the noble Lord, Lord Newby. A reference is an extremely serious matter; it will take considerable management time and will carry an estimated cost of £1 million plus for the company involved. It seems unjust and burdensome that a company with model relations with the regulator should have to be subjected to this. Similarly, why should a burden like this apply to a new entrant with perhaps limited resources?
The noble Baroness is concerned about the question of regulatory capture. There is always a concern that, however well-intentioned regulators and the regulated are, they can fall into a cosy relationship. However, we believe that the postal services commission, especially with its panel of commissioners rather than one regulator, will be highly effective.
Perhaps I may deal also with the question of the overseas postal operator. If such an operator applies for and receives a licence to operate in the UK postal services market, he will be subject to the competition provisions in the Bill. All postal operations are subject to general competition law outside the Bill.
Therefore, while I applaud the intention behind the amendment, I believe that the Bill as drafted puts in place a much more even system of regulation than that suggested by the amendment. For the reasons I have outlined, I hope that the noble Baroness will withdraw the amendment.
Baroness Miller of Hendon: I accept the Minister's explanation and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 23 and 24 not moved.]
Clause 15 agreed to.
Clauses 16 to 19 agreed to.
7 p.m.
Clause 20 [Application of competition legislation to references etc.]:
Lord Sainsbury of Turvillemoved Amendment No. 25:
Page 15, line 42, at end insert—
("(6) Section 82(1) and (2) of the 1973 Act (prejudicial information and absolute privilege) shall apply to notices given by the Competition Commission under section 19(6) or (8) above as it applies to reports made by the Competition Commission under that Act.").
The noble Lord said: This is a small technical amendment which will extend the relevant parts of Section 82 of the Fair Trading Act to the notices issued by the Competition Commission under Clause 19. This means that the Competition Commission will be required to have regard to the need to exclude, so far as practicable, any matter which relates to the private affairs of an individual, where the publication of that matter would or might, in its opinion, seriously and prejudicially affect the interests of that individual; and any matter which relates specifically to the affairs of a

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particular body of persons, whether corporate or uncorporate, where publication of that matter would or might, in the opinion of the Competition Commission, seriously and prejudicially affect the interests of that body, unless in its opinion the inclusion of that matter relating specifically to that body is necessary for the purposes of the report. The amendment also extends to the commission absolute privilege for the purposes of the law of defamation and allows it to publish notices in the same honest and open manner as its reports. I beg to move.
On Question, amendment agreed to.
Clause 20, as amended, agreed to.
Clauses 21 to 29 agreed to.
Clause 30 [Financial penalties]:
Baroness Miller of Hendonmoved Amendment No. 26:
Page 21, line 9, at end insert—
("(3)) No penalty imposed by the Commission under this section may exceed 10 per cent of the turnover of the licence holder (determined in accordance with such provisions as may be specified in an order made by the Secretary of State.").
The noble Baroness said: I shall be brief in explaining the purpose of Amendment No. 26. When the Bill was in Committee in the other place the clause was not examined at all. I suspect that that was because the timetabling was much more difficult in another place, which is not able to go through every clause line by line as is our practice. It is important that we debate these matters, even if they are very small. The clause gives the commission the power to impose financial sanctions in the form of a penalty. It is right that Parliament should look at that sanction and decide whether it really intends to give the regulator absolute unfettered power to impose any penalty that he thinks fit without limit for any offence, serious or trivial. Some Acts of Parliament provide for unlimited penalties but they are for criminal offences, not for what in essence are actions similar to a breach of contract where the perpetrator's licence may be revoked straight away and his business is closed down, or his licence is not renewed in future, and in addition he is liable to pay a penalty.
I believe that an unlimited penalty is not called for and is grossly excessive. The amendment that we propose follows, word for word, an identical provision in the Government's own Competition Act 1998. I believe that in the interests of consistency the Government should follow their own recent precedent and not allow such an unfettered discretion for what may turn out to be—we know not—quite a small offence. If it was a serious offence undoubtedly the licence holder would lose his licence and his business would be finished, and he would also face a penalty. But Parliament should decide what the penalty should be; it should not be unfettered. I beg to move.
Lord Dearing: Having sat peacefully for four hours and heard the noble Baroness, with great charm, again and again move amendments which have not been received kindly, I now stand up to support this amendment, which I believe has substance. This is a low
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margin business and a 10 per cent penalty could easily equal three years' profits. Unless this provision is moderated I believe that it may kill a entrant to the marketplace. Therefore, in the interests of competition I believe that there should be moderation in this matter. As the Government are a shareholder a 10 per cent fine on the Post Office may amount to £500 million. Perhaps that is a worthy limit.
Lord Sainsbury of Turville: The power to impose penalties is there to ensure compliance with licence conditions and other obligations. The amount of penalty must be reasonable in all the circumstances of the case. The Bill does not specify a limit on the penalty that can be imposed under these provisions. Perhaps I should attempt to damp down some of the wilder speculation about the scale of penalty that is likely to be imposed. The clause is quite clear that the penalty must be reasonable in all the circumstances of the case. The penalty could be very large but only if the breach in question had been sufficiently serious, and had done enough harm, to warrant a heavy penalty. In other cases where the breach was less serious the amount involved would be smaller.
To ensure transparency, the commission is required to publish its policies with regard to calculating the amount of a penalty and to have regard to them when imposing a penalty. Such policies may include, for example, having regard to the need to secure compliance, the consequences of the breach and deterrence of future breaches. In addition, there are detailed procedural requirements for the imposition of a penalty, including requirements on the commission to publicise its intentions, provide notices with prescribed information and receive and consider comments from interested parties. There are also procedures for modifying the penalty and notifying the company concerned and interested parties of the final decision on the imposition of a penalty. The licence holder may apply to the commission to pay a penalty in instalments.
The licence holder may also make an application to the court to question the validity of a penalty order on prescribed grounds; that any of the relevant procedural requirements have not been complied with and that has substantially prejudiced the licence holder's interests; that the imposition of the penalty is not within the commission's powers; or that it is unreasonable to require the penalty, or any portion of it, to be paid by the date by which it is required to be paid. The requirement to pay a penalty is suspended until the case is determined. The court may quash o r reduce the penalty or extend the timescale to pay. I t may also require interest to be paid on the penalty or on any reduced penalty that it may substitute.
It is important to stress that under these procedures a licence holder will be able to challenge the amount of any penalty, because the commission has power under Clause 30 only to impose a penalty that is of such amount as is reasonable. If the amount is unreasonable the imposition of the penalty will not be within the power of the commission under that clause. Accordingly, if a licence holder challenges the amount

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of a penalty on the grounds that its imposition is not within the commission's power under Clause 30 the court will have to consider whether it is reasonable. If it does not consider that it is reasonable it may quash or lower the penalty as it thinks appropriate.
The Government believe that the interests of consumers should be at the heart of regulation. That objective cannot be fulfilled unless the commission has the necessary powers to enforce the obligations that companies have taken on in respect of consumers. At the same time, the powers that they propose are appropriately framed by due process, the requirements of transparency and the right of companies to challenge the imposition of a penalty in the courts. On that basis, I commend these provisions to the Committee.
Baroness Miller of Hendon: I thank the noble Lord, Lord Dearing, who has spoken in support of this small amendment. It is extraordinary that under the Bill,
"the Commission may impose on the licence holder a penalty of such amount as is reasonable".
Given the number of times that we have tried to insert "reasonable" into clauses only to be told that it has no meaning because it is a purely subjective matter, it is extraordinary that in this case that term is regarded as appropriate. A breach of a contract—which is what this would be, a breach of a licence—is a breach of a contract. It is not a criminal offence in the sense of harming someone. Practically every criminal offence one knows of has an upward and outward limit as to what the penalty can be. One would have thought that the penalty suggested in this amendment is more than sufficient. I am amazed that the Government feel that it is appropriate to leave this in the hands of the regulator.
I understand what the Minister said—that we are trying to do this for the benefit of the consumer. It is not as though we are talking of danger to health, to life or to limb; we are talking of postal services. A breach would probably mean immediate loss of the licence, loss of the business and the penalty. As to the idea that it can be an unlimited penalty so long as it is reasonable, I ask reasonable to whom? For an individual to have to go to the courts is somewhat unfortunate. However, it seems that the Government have made up their mind. I beg leave to withdraw that amendment.
Amendment, by leave, withdrawn.
Clause 30 agreed to.
Clauses 31 to 34 agreed to.
Clause 35 [Interest and payments by instalment]:
Lord Sainsbury of Turvillemoved Amendment No. 27:
Page 23, line 35, leave out ("by the Commission").
The noble Lord said: This is a minor technical amendment designed to correct a small error in the drafting of the Bill, namely that the date required
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under Clause 36(1)(c) may be specified either by the commission or may have been specified by the courts following appeal under Clause 36.
Under the clause as amended, the date that applies can be the commission's or the court's if a successful appeal had been made by the licence holder. I beg to move.
On Question, amendment agreed to.
Clause 35, as amended, agreed to.
Clause 36 agreed to.
Clause 37 [Recovery of penalties]:
Lord McIntosh of Haringeymoved Amendments Nos. 28 and 29:
Page 25, line 8, leave out from ("holder") to end of line.
Page 25, line 9, at end insert ("and in England and Wales and Northern Ireland such penalty and interest may be recovered as a civil debt due to the Commission").
On Question, amendments agreed to.
Clause 37 agreed to.
Clause 38 [Register]:
7.15 p.m.
Baroness Miller of Hendonmoved Amendment No. 30:
Page 25, line 30, at end insert ("including that person's commercial interests").
The noble Baroness said: In moving the amendment, I speak also to Amendments Nos. 31 and 32.
Clause 38 relates to the creation and maintenance of a public register of licences. The first three amendments relate to subsection (5). Amendment No. 30 slightly modifies subsection (5) which authorises the commission to exclude from the register material which,
"would or might seriously and prejudicially affect the person's interests".
I believe that I may have made a mistake. Amendment No 32 that does not relate to subsection (5); it relates to subsection (8). The amendment was drafted in the Public Bill Office; it was simply a paving amendment. I did not correct my note accordingly.
Amendment No. 30 slightly modifies subsection (5) which authorises the commission to exclude from the register material which,
"would or might seriously and prejudicially affect the person's interests".
The need to protect commercial interests was also recognised elsewhere in the White Paper, referring to the Post Office's five-year plan. It states:
"The aim will be to report [to Parliament] once the Strategic Plan has been approved (though commercially confidential details of the Plan will not be revealed)".

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This concept of commercial confidentiality was also reinforced by the 12th Report of the Select Committee on Trade and Industry when it was considering major acquisitions by the Post Office. It states:
"We recommend the greatest possible degree of transparency compatible with the genuine requirements of commercial confidentiality when considering this and future purchases by the Post Office".
The subsection we are considering does not say what is meant by "interests". It could perhaps be argued that it merely refers to personal interests or social interests. The amendment that I have down makes it abundantly clear that commercial interests are included.
In the White Paper the Government stated:
"The Regulator will have the power … to publish information for the benefit of consumers and in the interests of good regulation, subject to tests relating to substantial harm, including … commercial confidentiality and public interest".
This amendment has the objective of clarifying the clause, not detracting from it in any way.
Indeed, in subsection (7) it recognises the need to protect a person's commercial interests, although I think it would work only if the Secretary of State was to get advanced notice of the intended contents of the register, because it would be too late after the publication.
The amendment secures the protection of confidential commercial information that licensees may have disclosed to the regulator as part of the application process. It is entirely consistent with the objective stated in the White Pa per which the draftsman has not fully covered in the present wording of the section.
When a similar amendment was put to the committee in the other place the Minister for Competition argued against it on the grounds that he thought that the rights of individuals are protected sufficiently by the clause as drafted. Dotting the "i"s and crossing the "t"s will do no harm whatsoever and it will put the matter beyond doubt. I should ask the Minister to let me know when he replies as to where would be the harm if this were to be absolutely clarified.
The Minister had a more cogent argument against the amendment in the other place, where other amendments to this clause put down by my honourable friends would have deleted certain provisions and would have limited the commission's discretion. I will not trouble the Committee with the details, but it is sufficient to say that I would be nowhere near as ambitious as my honourable friends in the other place. I have focused my amendment on the very narrow issue of commercial interests.
With that concession from us in mind, I hope the Government will now find it possible to accept that the mild, clarifying Amendment No. 31 provides a right of appeal to the Secretary of State by anyone who objects to an entry in the register. This follows my remarks about subsection (7). The Secretary of State has the power to order the commission not to enter material that he considers is against the public interest or an individual's commercial interests. However, there is
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nothing in the Bill to encourage the Secretary of State to make a decision on any problem or even to consider it. The object of Amendment No. 31 is simply to provide the machinery to start the Secretary of State's thought processes or to bring a problem to his attention.
The whole machinery of objection and the removal of material from the register seems to be accompanied by the sound of slamming of stable doors. Once the material has entered the public domain through publication the damage would already have been done. The Government should provide machinery for consultation and objections to be dealt with in confidence before publication, perhaps introducing amendments at the next stage of the Bill. The Minister will understand that I seek only to make a helpful suggestion. It is not for me to do the Government's drafting. Perhaps the Minister will wish to consider the amendment.
Finally, Amendment No. 32 provides another means of enabling public access to the register by electronic means. Public registers such as the Companies Register are already accessible via the Internet. There is no reason why the new commission should not begin by providing data instantly by what will be a common means of publication. I am sure that the omission from the Bill of a similar provision is merely an oversight. I beg to move.
Lord Sharman: I am uncertain why a person's interests do not include commercial interests.
More importantly, if the amendment were accepted, I do not understand why it is possible to charge a fee for access to the register by conventional means whereas there is no provision for charging a fee for access by electronic means. The assumption may be that provision of information electronically incurs no cost, which it does. I should like access to be on a comparable basis, whether electronically or conventionally. That clarification would be helpful.
Baroness Miller of Hendon: The noble Lord asks me to comment on why a person's interests should not include commercial interests. The White Paper refers to commercial interests. One assumes, therefore, that the word "interests" was not considered sufficient. I seek to reinforce the wording of the Bill. Nowhere does it state that interests include commercial interests. However, the White Paper and the Select Committee report refer to commercial interests.
As regards reference to the Internet, I seek to suggest that we embrace the modern idiom with regard to the Post Office. That is hard for me to do, I hasten to say. However, I felt that it was an appropriate amendment.
Lord Sainsbury of Turville: I can see that the main reason behind the amendments is to ensure that there are adequate safeguards to protect the rights of individuals. That is something on which we can all agree. However, we believe that the rights of individuals are sufficiently protected by Clause 38 as drafted.

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We believe that there is no need to refer explicitly on the face of the legislation to a person's commercial interests (as proposed by Amendment No. 30). The clause as drafted refers to a person's interests. We believe that this subsumes his commercial and all other interests. However, we shall check whether that is a correct interpretation. It is clearly the intention underlying the provision.
Amendment No. 31 is undesirable. It would undermine the independence of the commission by substituting for its discretion what would amount to a formal mechanism for persons to appeal to the Secretary of State if they object to an entry, with a view to the Secretary of State directing the commission not to make an entry or to delete an entry if he so decides. There is no restriction on the grounds on which such objections may be made. Such a procedure would be an unnecessary bureaucratic burden on the Secretary of State and would limit the discretion and independence of the commission without substantively increasing the protection of individuals.
There is already power in subsection (7) for the Secretary of State to direct the commission not to enter in the register anything that he considers would be against the public interest or any person's commercial interests.
Inevitably this procedure would also result in delays in getting information on the register and of the register containing less up-to-date information than is appropriate in the interests of good, fair and open regulation. The presumption must be that entries are made. It should be only in exceptional circumstances that an entry is not made, and provision for that is provided for fully in the clause as drafted.
As the appointed regulator of the postal market, with clear duties and day-to-day responsibility for regulation, no one is better placed than the commission to weigh up the merits of an entry in the register and to decide what is in the public interest in relation to the keeping of this register.
Amendment No. 32 is different in that it seeks to promote access to information on the register rather than limit the extent of that information. Clause 38(2) provides for the register to be kept in such form as the commission considers appropriate and I have no doubt that the commission will wish to consider whether the register should be placed on the Internet. But I do not believe that we should prescribe this possibility on the face of the legislation. It is interesting to consider what the legislation would have said if it had been produced five years ago. It would not have referred to the Internet. We cannot rule out something completely different in five or 10 years. Therefore to insert into the legislation the specific technology to be used is unnecessary and restrictive.
Clause 38 as drafted provides adequate safeguards for individuals. Subject to the one point which we shall consider, I ask the honourable Member to withdraw the amendment.
Baroness Miller of Hendon: I sometimes wish that I were an honourable Member of another place. It is not
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that I do not wish to be in this Chamber, with the standard of debate and the admirable way in which the Minister deals with the debate. It could never be matched in another place. However, it would have been nice if some constituency had wanted me at some stage or another—but what can I say?
I am grateful to the Minister for agreeing that he will consider whether the phrase "a person's interests" includes his commercial interests. It is a small point, but if the wording does not include commercial interests it is a valuable consideration.
In speaking to Amendment No. 31, I believed that the Minister might refer to subsection (7) which provides that the Secretary of State may direct the commission not to enter information. I do not think that is quite the same as giving someone the opportunity to appeal if he believes that information prejudicial to his commercial interests may be entered in the register. The Minister was kind enough to say that he will consider Amendment No. 30. I shall not move Amendment No. 31.
I agree with the Minister on Amendment No. 32. As the noble Lord pointed out, Clause 38(2) provides that,
"the register shall be kept in such form as the Commission considers appropriate".
What is appropriate at one time may not be so at another. Perhaps it would be too prescriptive to have such a provision in the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31 and 32 not moved.]
Clause 38 agreed to.
Clauses 39 to 42 agreed to.
Clause 43 [Duties in relation to social and environmental matters]:
Lord McIntosh of Haringeymoved Amendment No. 33:
Page 28, line 29, leave out ("arrange for") and insert ("publish").
The noble Lord said: In moving Amendment No. 33, I wish to speak also to Amendments Nos. 34, 40 to 44, 49 and 54 to 57. These are genuinely minor drafting amendments to change the language used to describe the functions of the Secretary of State, the commission and the council with respect to publishing information. The existing wording used both "publishing" and "arranging to publish". We consider that there is a possibility that it might be interpreted as implying two different activities. We do not intend any difference between the use of the two phrases. To make things clear, all occurrences of the words "arranging to publish" have been replaced with "publishing". "Publishing" should be taken to mean that the person or body in question can either publish the information themselves or arrange for it to be published. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringeymoved Amendment No. 34:
Page 28, line 30, leave out ("to be published").
On Question, amendment agreed to.
Clause 43, as amended, agreed to.
Baroness Amos: I beg to move that the House do now resume. In moving this Motion, perhaps I may suggest that the Committee stage begins again not before 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Tobin Tax
7.31 p.m.
Lord Juddrose to ask Her Majesty's Government whether they will undertake an official inquiry into the practicability of an international tax on currency transfers (Tobin Tax) as a means of mobilising funds for world development.
The noble Lord said: My Lords, I ask this Question with some trepidation because others who will speak have a great deal of highly relevant expertise. It will therefore be particularly important to hear from them.
At the outset, I must declare an interest. I am an unremunerated member of the OXFAM association and a former director of that organisation. OXFAM, together with other kindred development NGOs, has demonstrated a good deal of interest in the virtues of the so-called Tobin tax, first proposed by Nobel prize-winning economist James Tobin in the 1970s.
In this context, I believe special mention should be made of War on Want which has been playing a leading role in the discussion. As, indeed, War on Want have eloquently spelt out, speculators gambling on currency movements care little about the human costs of what they do. They ruthlessly exploit a financial system which has conspicuously failed to work in the interests of the poor of the world. When the system goes into crisis, the remedies for recovery advocated by the IMF are often the final calamity for the most vulnerable people.
The existing global financial system is just not designed to withstand or resist globalised speculative shock waves. As we have recently seen in Thailand, Indonesia, Russia, Brazil and elsewhere, huge speculative flows mean that economies can collapse like a house of cards within days or even hours. There is no international institution with the funds to intervene to counter speculation. At the same time, in this age of liberalisation, only a very small number of countries still have capital controls at their disposal.
Ironically, as George Soros himself has put it:
"Financial markets are inherently unstable. They have acted like a wrecking ball, knocking over one economy after another. The swings cannot be avoided altogether but they need to be brought under control".
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Like many others, I believe what needs to be examined by government is whether a Tobin tax on foreign exchange transactions could not at least alleviate some of the most damaging excesses of financial markets: whether it might not be able both to play a part in calming speculation and also in mobilising potentially billions of pounds in the fight for the elimination of poverty, whether that poverty be in the developing world, or, to our shame, in wealthy nations of the world like our own.
It has been estimated that, even allowing for the calming effect, a 0.25 per cent tax could possibly yield as much as 250 billion dollars per year.
In the 1998 crisis it has been estimated that during the first few months 10 million people lost their jobs, with millions more subsequently pushed into poverty and debt. In Brazil, for example, 30 billion dollars in capital fled the country in just a few weeks, deeply damaging future long-term investment prospects. More generally, in affected countries, as governments seek to prop up their currency, debts increase and grim cuts in already minimal health, education and welfare programmes, coupled with unemployment, cruelly punish the weak.
At this point I should perhaps underline the background. With the encouraging exception of DfID here in the UK, international aid flows have deteriorated in the past decade from approximately 70 billion dollars to approximately 50 billion dollars per year. Indeed, OECD has calculated that they have fallen 15 per cent in the past two years.
There seem to be three principal reasons for the increasing interest in what a Tobin tax might have to offer. First, the volume of foreign exchange trading has by far outstripped the amount necessary to finance trade in goods and services. Approaching 2 trillion US dollars a day is being traded and only five per went—I repeat, only five per cent—of this is necessary for financing trade in goods and services The rest is speculative. It is sobering to contrast this with 1975 when 80 per cent of transactions were trade related.
Secondly, globalisation and deregulation have exacerbated volatility. Pessimism and optimism unrelated to economic realities cause violent fluctuations. It is these which aggravate the social havoc and human misery.
Thirdly, a Tobin tax is seen as a useful and effective way to assist in raising the resources for economic and social development.
There are obviously questions a government review would need to examine. What would really be the effect on world trade? Would it be adverse or would it indeed be beneficial because greater confidence about exchange rate levels would permit better planning and forecasting of trade transactions? Advocates of the tax argue that as trade is essential for economic growth a small tax of 0.25 per cent is unlikely to prove restrictive. It is just as well to remember that some 40 per cent of current trade takes the form of shipments between the branches of trans-nationals, financed by

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bookkeeping entries rather than currency conversion. Consequently, most of these transactions are not liable to tax.
There is the question of what transactions should be subject to tax. To be effective, its scope would almost certainly need to be wide. Virtually all foreign exchange transactions would surely have to be covered, including spot and forward transactions, foreign exchange swaps, and contracts involving the right to purchase currency at a future date. Clearly, definitions would need to be revised from time to time if innovative methods of evasion became evident.
What about collection? Over 80 per cent of foreign exchange transactions occur in no more than nine countries. In 1998 32 per cent were negotiated in London. Is there not therefore a case to concentrate it initially on the nine and a few others? What kind of international agreement would make most sense? What kind of national supportive legislation is required? Would the national central banks have a key role? Would the continuous linking settlement bank be relevant?
This brings us to the application and administration of the revenue. What should be the respective roles of the international financial institutions, of the mainstream UN system, and of the regional organisations and banks?
Here I would just underline that Jubilee 2000, which has been so warmly commended by the Government, has estimated that to wipe out the south's unpayable debt requires 160 billion dollars. It is illuminating to compare this figure with the 250 billion dollars a year a Tobin tax of only 0.25 per cent might yield.
I touch briefly on evasion. Would speculators find a way to avoid payment? Income, value added, property and inheritance taxes all suffer some evasion, but they still prove worthwhile sources of revenue. In any case, electronic tracing will become constantly more effective. Even if speculators were tempted to achieve evasion by more complicated methods of transaction, the costs and risks involved could well prove a disincentive when compared with the cost of a small tax itself. As for havens, if transactions were to be taxed at the site of deals this would complicate the attractions of relocation. Anyway, the cost of relocation would again have to be weighed against the cost of a minimal tax level.
It is also worth considering whether, if necessary, higher levels of tax could be imposed as a deterrent at the point at which transactions made via havens entered into the official world markets.
The question remains as to whether a Tobin tax would have prevented the last crisis in south-east Asia. In my view, there can be no doubt that other regulatory measures would have been necessary. But, equally, I am certain that a Tobin tax could have played a vital part. For the future, there is also the concept of the so-called "Spahn mechanism", which would involve a two-tier system; a minimal normal rate and a higher rate to be triggered at times of turbulence.
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People have asked about job losses in the City of London. Those have to be contrasted with the potentially immense social benefits around the world and the continuing life and death issues if we do not take action. They also should be seen against what anyway happened on Black Wednesday.
I have raised these questions—and there are many others—not because the Government have not yet committed themselves in principle—I wish that they had—but because I believe that there is a groundswell internationally in favour of some kind of Tobin tax. It is a groundswell strengthened by a sense of moral outrage at what goes unchallenged today. It is therefore sensible to start looking constructively at the issues involved. This Government have established an enviable reputation for their commitment on international development and related financial challenges such as debt. To take forward an inquiry of the kind I propose would be to build on that record. Either, in the end, we are for social responsibility or we are not.
7.41 p.m.
The Lord Bishop of Oxford: My Lords, I am grateful to the noble Lord, Lord Judd, for initiating this debate on a subject which is both important and timely. I fully recognise that in a free market currency transactions are essential. But the percentage of those transactions which are at present related to trade and industry is tiny. As the noble Lord emphasises, it amounts to perhaps as little as 5 per cent. The rest is simply short-term speculation.
James Tobin's original suggestion for a tax on currency transaction was to counteract some of the volatility caused by this speculation. That may be a necessary and laudable aim, but it is one primarily for economists to debate. My concern is that money could be made available from such a tax to support different aspects of the work of the United Nations and, in particular, development projects.
If people want to speculate, in a free society that is up to them. But a free society can only be truly free if it is set within a moral framework whose purpose is to serve society as a whole. Taxation is an essential and legitimate means of ensuring that some of the wealth generated by the market goes to help those least able to benefit by it—and, indeed, sometimes those who are suffering most as a direct result of it. We accept that a percentage of the profits which come from betting on horses goes to benefit the racing industry. Is it any less appropriate for a percentage of the profits on short-term financial transactions to go to the benefit of the human project as a whole?
Such a tax would not in any way hinder essential currency transactions for it would be small—perhaps as little as 0.1 per cent—and it would bite only on short-term transactions. About 80 per cent of transactions involve round-trips of fewer than seven days and more than 40 per cent involve round-trips of two days or fewer.
Of course, inevitably, a number of questions have been raised. Is it really feasible to enact this kind of tax? We already have a stamp duty on shares and

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stocks which are traded on the market—in fact, a bigger one, at 0.5 per cent, than what is envisaged for the Tobin tax.
Then it is thought that the diversity and complexity of the world's financial markets would make it impossible to collect such a tax. But in fact the main financial centres are relatively few. The UK has approximately 32 per cent of the market; the United States has 18 per cent; Japan has 8 per cent; Singapore has 7 per cent; Germany has 5 per cent; Switzerland has 4 per cent; Hong Kong has 4 per cent; and France has 4 per cent. That is a very limited number which it would be possible to involve in the tax.
Of course, people would try to find ways around such a tax. No doubt some rogues would arise. But as the Canadian Greens wrote, referring to the G7 Halifax meeting which discussed the Tobin tax proposals:
"Piracy for the most part was brought under control when nations co-operated to bring the open seas under the rule of law. Should we not be preparing a foundation for renewed order before the financial pirates have appropriated all of the world's wealth?".
I believe that the noble Lord, Lord Judd, dealt most convincingly with that point.
Would governments be motivated to bring about such a tax? If they received 50 per cent of the taxation for their own country, as has been suggested, I believe that they would be. Furthermore, I believe that nation states will increasingly see it as being in their interest to achieve international co-operation in controlling the world's financial institutions. Some governments have already begun to see this. For example, the Canadian House of Commons, by 164 votes to 83, voted,
"That in the opinion of the House the Government should enact tax on financial transactions in concert with the international community".
The nations of the world have already shown that when it comes to the remission of unsustainable debt of the poorest countries, significant action can be taken. The Jubilee 2000 campaign, initiated by the Churches and supported so strongly by the Chancellor of the Exchequer, has achieved, although not everything yet, what most people would have regarded as impossible a few years ago. Then it was thought as belonging to Never Never Land; a fairytale. Discussion of the Tobin tax is at an early stage and may arouse the same kind of feelings. But there is no reason to believe that a similar political will cannot be engendered. I believe that it can and should be.
7.46 p.m.
Lord Grenfell: My Lords, I thank my noble friend Lord Judd for introducing the debate. It comes as no surprise that someone who has been so long and so profoundly committed to global economic and social development—as has been the right reverend Prelate the Bishop of Oxford, who spoke most impressively— should focus our attention on this tax.
Earlier this month, the World Bank, my former employer, published an alarming report on the prospects for Africa in the 21st century. Earlier this week, the Bank for International Settlements warned
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that the recent high volatility in the equity and exchange markets looked likely to continue. A few days before that, the Financial Stability Forum warned some of the leading offshore financial centres that they would have to improve standards of supervision and transparency.
In their differing ways, these are all developments relevant to a discussion on instituting an international tax on currency transactions as a means of mobilising funds for international world development. Many of these issues have been extensively addressed in OXFAM GB's thoughtful discussion paper. I congratulate OXFAM on producing such a useful document.
In six minutes it is impossible to do justice to such a complex proposal, which has already been extensively explored over the past 22 years. The best one can do is to state one's position as succinctly as possible and hope that noble Lords will take it on trust that one's conclusions are based on a careful weighing of the arguments of experts on both sides of the issue and including therein the moral argument.
Of course, the Tobin tax, globally accepted and successfully implemented, could provide very substantial new funds for development purposes. I think in particular of the 250 billion dollars that could be realised from a 0.25 per cent tax and what that could do to reduce the crippling debt burden of the poorer countries in place of the painfully slow and inadequately funded multilateral arrangements currently in place.
Mobilising funds for development was not, as has been pointed out, the primary objective of Professor Tobin's original proposal in 1978. He saw it as a byproduct. But if there were a single justification for it today, that would be it. I say that because I am as sure as I can be that, as a means of discouraging volatile short-term trading and its destabilising effects and as a means of enhancing national control over tax policy, the tax simply cannot pass the test. And, left with the revenue mobilisation as a sole objective, in my view it cannot pass that test either because, regrettably, it cannot be implemented effectively as an international tax.
As a means of discouraging short-term trading, I agree that such a tax, if set high enough, would make the round-trip movement of large sums of money in and out of countries more costly. However, the cost to traders of moving to non-tax jurisdictions is also high, and if the tax is low they will not readily be deterred from unproductive but profitable speculation. Further, investors who speculate in, say, a possible 15 per cent devaluation of a currency will not be deterred by a Tobin tax, even if set as high as 0.25 per cent. Those are the speculative operations that do most or the damage.
I happen to be among those who believe, although many do not, that reducing the volume of short-term trading, which in turn reduces liquidity, carries the serious risk of increasing and not decreasing volatility I believe that the more players there are in the market,

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the wider and more diverse the views on where the market is likely to go and the lower the risk of the herd mentality infecting the whole market.
And what about delivering more policy autonomy? As most experts on the proposal believe that the tax rate should not exceed 0.25 per cent and probably should be closer to 0.1 per cent, it is hard to see that a tax at that level will provide policy-makers with more than a minute margin of extra autonomy.
In short, I do not see a Tobin tax delivering on the objectives set by its proposer, even if it can be implemented. And can it be implemented? Again, I fear not—at least, not effectively. First, it can be implemented successfully only if it is universally accepted. It has been suggested that by taxing at the point of the deal and imposing extra heavy penalties on transactions which are destined for non-tax jurisdictions, the system can work with less than global adherence.
However, we have been through all that with the EU's proposed withholding tax on cross-border savings. Less than universal adherence means ineffectual implementation. It has been suggested that a commitment to levy the tax should be a condition of membership in the United Nations and its agencies, especially the World Bank and the IMF. However, to impose that retroactively seems to me to be a politically impossible task.
I am not suggesting that all further exploration of the practicality of a Tobin tax, or a variation thereof, is useless. Far from it. It could be that in time developments in electronic tracing will render it more feasible. Perhaps one day tax havens will be only a bad memory of the less socially responsible financial landscape. Who knows? But at present I do not believe that finding the way to make this kind of transaction tax-feasible and effective is an immediate prospect. Perhaps it never will be. However, some of the best minds in economics are focused on it and perhaps one day they will come up with the solution.
In the meantime, reducing the developing country debt burden and raising the necessary finance for global development needs remain huge challenges. If a Tobin tax cannot help us to meet them, as I believe to be the case at present, then higher levels of aid and debt relief, greater market access for developing country products, and steadier flows of productive investment funds must be secured and sustained. I wish sincerely that a Tobin tax were feasible but I fear that it is not, and I must be realistic about that. Nonetheless, I thank my noble friend sincerely for keeping us thinking about this serious issue.
7.54 p.m.
Lord Joffe: My Lords, I add my thanks to the noble Lord, Lord Judd, for raising this important matter. In his eloquent speech, the noble Lord made a powerful case for an official inquiry into the practicability of an international currency tax and I support that case, declaring at the same time an interest as chair of Oxfam.
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Oxfam, whose objective is to eliminate poverty, is acutely aware of the adverse effect on the economies of developing countries of currency speculation and the damaging capital flows which result. The damage caused impacts in several ways, some of which have been touched upon by the noble Lord, Lord Judd. It contributes to the collapse of the economies of the countries, leading to large-scale unemployment.
The crash in Asia, which was partially caused and exacerbated by currency speculation, inevitably hits the poorest first. In Indonesia, for example, between 1996 and 1998 the number of people who lived in poverty doubled to 40 million. It adversely affects long-term investment, and the noble Lord, Lord Judd, has already drawn attention to the 30 billion dollars which fled Brazil. Alongside that, the IMF programmes which follow the currency crises often focus on cuts in welfare programmes so that the poorest are hit again.
As the noble Lord, Lord Judd, pointed out, one of the aims of the tax is to help to deter speculation, which causes sharp exchange rate fluctuations and serious damage to economies. I accept, as the noble Lord, Lord Grenfell, pointed out, that the tax itself will not solve the problem of stabilising financial markets. That would require a range of policy measures at national and international level. However, there can be no doubt that such a tax would be an important component of those measures and a move in the right direction.
I am not an economist and therefore I hesitate to contradict the noble Lord, Lord Grenfell, on his views of the efficacy of the tax. However, many eminent economists have a quite contrary view. The importance of the proposal by the noble Lord, Lord Judd, is that the measures should form the subject of an official inquiry so that all views on the tax, its effectiveness and the possibility of its implementation will be explored carefully.
I believe that there is consensus that the Tobin tax, if implemented and equitably applied, could transform the level of overseas aid. Again, as the noble Lord, Lord Judd, pointed out, that aid is, and in the past year has been, cut significantly by countries, with the honourable exception of the United Kingdom Government, which, to their great credit, increased their budget.
It seems particularly appropriate that the United Kingdom Government should take the lead in inquiring into the practicability of such a tax because, by a considerable margin, London is the world's biggest foreign exchange market. The idea of an international tax initially may sound wildly Utopian. However, other similar ideas which were thought to be Utopian, such as debt relief, the banning of landmines and the sale of gold stocks, seemed Utopian at the time that they were first raised. Yet they are now regarded as sensible and mainstream and are backed by politicians and international institutions alike. After 20 years, there is a growing interest in the Tobin tax by economists and others, and the proposed inquiry might well recommend that its time has come.
7.58 p.m.
Lord Rea: My Lords, I am very pleased that my noble friend has asked this Unstarred Question, and I am particularly pleased with the way in which he has phrased it. Sensibly, he asks for an inquiry, which may just be acceptable to the Government, rather than for the adoption of the Tobin tax, which certainly would not. He and other noble Lords have spoken on the subject most expertly, particularly my noble friend Lord Grenfell, who has the position of banker within his experience.
So far as I am aware, this is the first time that your Lordships have debated in any detail a proposal to harness the enormous sums of money which are transferred every day in the currency market and to use them for productive purposes.
As has been pointed out, Professor Tobin did not design his tax primarily to raise revenue but to act as a deterrent to currency speculation which, even in the mid-seventies, 20 to 25 years ago, was a serious destabilising factor. But, as has been pointed out by other noble Lords, the activity has grown massively since then, especially since the mid-1980s. Today's 1.8 trillion dollars which is exchanged every day, is nearly 10 times greater than the 188 billion dollars of 1986. The growth is due, among other things, to the ending of fixed parities, the liberalisation of financial markets and electronic trading.
The annual sums involved are some 55 times greater than the total value of world trade in goods and services and 18 times greater than the global turnover in equity markets, which is huge enough: 21 trillion dollars in 1995. It is no wonder that currency speculation has been a major factor in the economic crises of recent years which other noble Lords have mentioned; for instance, the tiger economies of South-East Asia, Brazil and Russia and, of course, ourselves in 1992 on Black Wednesday.
The inquiry for which my noble friend asks would explore the practicability of levying the tax. There would be many problems to overcome; not least that it would have to gain international acceptance, which is a long way off at present. But I suggest that Professor Tobin would not put forward an unworkable plan. His Nobel prize was awarded not for the currency exchange tax proposal which he made in 1978. It was made three years later in 1981 for,
"his analysis of financial markets and their relations to expenditure decisions, employment, production and prices".
the very building blocks of modern economics.
He looked at the possible difficulties of introducing the tax—many of which have been mentioned by noble Lords—such as evasion, piracy, tax havens and how to administer the tax. Those who now promote the tax know of those problems but can show that they are surmountable, given the international will to make it work.
My noble friend and all who have spoken tonight are concerned with the tax being an opportunity to realise a sizeable sum of money which could be used for world development and the elimination of poverty. Again, there will be snags, not only in collecting the tax
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but in allocating and distributing it. The countries where the largest amount of transactions take place—ourselves and the United States—might feel that they have a right to the revenue, or at least to decide on its allocation. But as international collaboration will be essential in imposing the tax, some form of international distribution of the product would be the fairest outcome. As the right reverend Prelate stated, funding the United Nations through the tax is one possibility. That is not particularly popular with the United States at present. There are other, rather more realistic, suggestions which recognise that the countries collecting the tax should be allowed to keep varying proportions of it according to their state of development, with the poorest keeping the most.
To my mind, the most important reason for putting this tax concept on to the official agenda is that it would start the process of considering how to capture a modest share of the wealth which swings rapidly round the world from one country to another, making rich people richer, for the benefit of world society as a whole. Globalisation has allowed capital to escape from national confines. Multinational corporations are now more powerful than all but the largest countries and, through their friends in high places, are setting the rules. I refer, for instance, to the World Trade Organisation and the multilateral agencies. At present, they are having a bonanza, growing ever wealthier while the gap between the rich and the poor widens.
I suggest that a small tax on the most obvious speculators, the short-term currency dealers, is a feasible first step. I hope that my noble friend on the Front Bench will agree seriously to consider backing the Tobin tax, or one very similar, as a positive step towards a fairer world.
8.4 p.m.
Lord Taverne: My Lords, I deeply regret that such a vitally important issue is one for which we have so little time, so I shall make a few short points.
First, I find the idea of the Tobin tax an attractive way of increasing the amount of aid which goes to the developing world. The noble Lord, Lord Judd, in his excellent introductory speech, said that it is an absolute scandal that the amount of aid is declining. There has been a great deal of waste. However, that is a matter which can be remedied. I believe that every single person in this House could think or any number of forms of aid which would make an enormous difference to the rest of the world. It is an attractive idea to have such a potentially large source of revenue, especially if one arranged, as an incentive, for half the proceeds to go to the country collecting it.
Secondly, I do not take the view that we should not intervene in markets. Sometimes it is argued that markets are efficient and that, with floating exchange rates, one should not intervene. It seems to rue that markets are not efficient. Floating currencies tend to overshoot. One only has to look at the present situation to see that periods of great misalignment are frequent. Not only does one have the example of the

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pound and the euro at present; there is the way in which the dollar and the mark moved between 1980 and 1985. The value of the mark halved, although German policy was stable. American policy at that stage was rather lax. Again, if one looks at the period between 1990 to 1995, the dollar halved against the yen, although the Japanese at that stage were already increasing the asset bubble and the United States' policy at that time was rather stable. The market moved completely against economic fundamentals.
There is an idea that international liquidity is a case of Mr Soros carefully considering factors which he has to weigh, and intervening intelligently and rationally. International trade consists of a lot of young men in braces yelling gibberish. They would not know an economic theory if they saw one.
Thirdly, I am rather sceptical about the idea of a great exodus if the major centres were to adopt a Tobin tax. After all, we are not here dealing with a 20 per cent withholding tax but with a proposal for a 0.1 to 0.5 per cent tax. If that is a good idea, I see no reason that the United Kingdom should not join Canada in seeking to convince others to adopt this tax.
If the Tobin tax worked, that would be great. But, for the reasons advanced by the noble Lord, Lord Grenfell, who knows much more about this than I do, there are a large number of practical problems. I have done a limited amount of reading about the tax, but I am not sure that some of the questions raised have ever really been answered by its advocates. First, would a tax of between 0.1 per cent and 0.5 per cent act as a stabiliser? At times of panic and turbulence, people expect to make far higher margins. It might be the case that there is to be a higher rate only at times of misalignment. However, there is, at present, a constant time of misalignment.
Fourthly, who do we tax? Do we tax the market makers and those who provide liquidity and may provide a service? We would probably have to do that because the tax could not be confined to speculators. What do we tax? Do we tax spot transactions? They would be likely to move into derivatives. I am advised that the ingenious people in the City would soon devise new instruments that could be used or invented to circumvent the tax.
If we are successful in throwing grit into the international wheels of monetary movements, is it wise to decrease liquidity? That is a question raised by the noble Lord, Lord Grenfell, and one to which I do not know the answer.
I do not want to be negative about this. I am somewhat sceptical, in the light of those questions, whether the tax would achieve its objectives of stabilising currencies. But I am not sure that that is necessarily an answer to the question. Perhaps we are putting the wrong question. Perhaps the question should not be: will this tax stabilise international currency? But, putting it the other way round, is there evidence that the tax will cause positive harm? If it did not cause positive harm, it would be an attractive way—if we could convince others to do so—of raising
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the money for what we are all agreed are the most worthwhile of ends. It would have the great advantage of providing an independent mechanism for raising such funds with an incentive for countries to raise funds for themselves as well, and it would no longer make us dependent on the generosity of individual nations, which has not been greatly evidenced in the past.
8.10 p.m.
The Earl of Northesk: My Lords, I join other noble Lords in congratulating the noble Lord, Lord Judd, on securing this debate.
The arguments in favour of a Tobin tax are tantalising. Who could disagree with the view that:
"Other reforms of the international economic architecture are needed but the Tobin Tax is a start … It would help calm the markets and reduce purely speculative transfers without interfering in legitimate trade and, as a bonus, it could generate cash to undo some of the harm done by the global gamblers".
If only it were that simple. As Richard Colbey put it:
"Attractive though such a tax may seem, the difficulties in implementing it would be enormous".
But it is not only its implementation that causes difficulties. As the noble Lord, Lord Grenfell, pointed out, it is all but impossible that it would achieve its two primary and substantive objectives.
Like the noble Lord, Lord Grenfell, I pay tribute to Oxfam for its work in this area and for the contributions from some of its stalwarts in today's debate. It pointed out that,
"Economists are divided as to whether a currency transaction tax significantly reduces systemic instability in foreign exchange markets … the beneficial effect of the tax on its own should not be overstated".
And,
"The most politically viable tax proposal would allow revenue-collecting governments to keep most of the money, with perhaps a small contribution going to development … it is probably necessary to sacrifice to some degree the development financing aspect, keeping the proposals and expectations modest".
But what of the practicability of the tax? The noble Lord, Lord Judd, alluded to the work of Paul Bernd Spahn in this area. He observed that,
"As a pure transaction tax, the Tobin tax would not be effective … [it] would impair the operations of the international financial markets and create liquidity problems without deterring speculation".
He goes on to suggest four crucial areas where the effectiveness of the tax is constrained. The first is the tax base. In order to limit financial market distortions, a Tobin tax would have to be imposed on all foreign exchange trading. But such a base would not be able to distinguish between speculative trades—its real target—and normal trading. Perversely, the effect of that could be to create, rather than prevent, currency instability and reduce the capacity of international financial markets to engender economic growth in less developed nations.
The second area is taxable transactions. The presumption is that a Tobin tax would apply to all spot transactions involving foreign currencies. The first point here is substitutability. To avoid the tax, all the

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markets would have to do would be to switch to alternative trading mechanisms, notably derivatives. As E.V.K. Fitzgerald observed,
"Ironically, it is the sophisticated traders who will be best equipped to use alternate instruments to avoid the tax; the same traders who are the prime target of the tax".
Moreover, as Rodney Schmidt puts it,
"unless a world-wide uniform tax is imposed on all instruments for transacting in foreign currency, the tax will be largely ineffective".
And, as a corollary to global coverage, it would be necessary to obtain international consensus. Were a tax to be introduced piecemeal, those participating in foreign exchange markets could simply transfer their operations to jurisdictions where it was not levied. That would neutralise the desired objective of stability in the currency markets.
This issue cannot simply be reduced to a matter of political will. It is unrealistic to expect the world's major financial centres to view the prospect of a tax, which could see a loss of jobs, a fall in international trade and a mass relocation of their industry, with equanimity.
The third area is the tax rate. As the noble Lord, Lord Judd, and others explained, what is proposed is a rate as little as 0.25 per cent on the value of currency trades. Although that would generate considerable revenue, there has to be doubt about the efficacy of such a small tax. The size and volume of foreign exchange markets are such that the potential returns from trading would outweigh a transaction cost set at such a low rate. Bluntly, at such a level it would be unlikely to deter speculative trading.
The fourth area is the distribution of tax revenues. If we accept that the tax is international in character, requiring international co-ordination to set and enforce the rules, by inference the revenue it raises must also be international in character. That logic justifies the concept that the proceeds of the tax should be hypothecated for "world development". Inevitably, that runs into the buffers of whether or not nation states should retain authority over their own tax revenues. It also raises the prospect of conferring considerable power on the international organisation to which the tax revenues were assigned, which would inevitably arouse national resentments. Nor is it possible to be entirely sanguine about the effectiveness of supra-national organisations in delivering aid to where it is needed. I have in mind particularly that both the UN and the EU have been exposed to criticism on that front in recent times.
By no means do we on these Benches belittle the worthy ambitions of those who advocate a Tobin tax. Nor do we gainsay the moral imperative that underpins it. In its own terms, there is no more deserving cause than the desire to do what we can to reduce levels of poverty and deprivation in the world. But the reality is that a Tobin tax struggles vainly to live up to its promise. While we could all wish it were not so, there really is no pot of gold at the end of this particular rainbow at the moment.
8.16 p.m.
Lord McIntosh of Haringey: My Lords, as the noble Lord, Lord Taverne, said, this has been a short but well-informed debate and I congratulate my noble friend Lord Judd on inspiring these excellent contributions.
In the time available I should like, first, to agree with everybody who talked about the dangers of currency market instability; then to talk about the benefits of globalisation but to worry as to whether or not the benefits have converted themselves into an effective policy for reducing poverty. Then I want to talk about what we, the British Government, and through us the international community, are doing about strengthening the international financial architecture, about debt relief and aid programmes. Then I should like to turn to the Tobin tax itself; its economic implications; whether it would achieve its goal of reducing instability; and how it could be implemented, if at all. I want to conclude by referring to the wording of the Question and the research for which it calls.
Let me start with the agreement. Of course it is an enormously valuable objective to reduce international market instability. All of the figures quoted in relation to currency transactions and the way in which they dwarf not just world trade in goods and services, but also equity transactions, show how enormously they have increased since James Tobin first proposed the tax in 1978. The size of the currency transaction markets increases the danger of the kind of recent turmoil we saw in the Asian markets and, as the noble Lord, Lord Joffe, reminded us, subsequently in Brazil. Those crises certainly highlight the weaknesses in the global financial system.
So we share the desire for more stable capital markets which are better placed to deliver the economic growth and development that poorer countries need. I was as amused as the noble Lord, Lord Taverne, by my noble friend Lord Judd quoting Soros on the dangers of instability. I thought that that was the poacher turned preacher, rather than gamekeeper, in this case. It is certainly true that it would quite irresponsible for us not to look for every possible policy tool to deliver greater stability. It would be irresponsible not to consider the Tobin tax as one option for that purpose.
However, more fundamentally, it is important that we should avoid the fashionable temptation to knock globalisation. The increases in cross-border activities that we saw in the last half of what we must now call the last century—trade, capital flows and foreign direct investment—have produced rapid rises in global output and wealth. It is very difficult to argue that they have not at the very least permitted, if not caused, such rapid rises in global output and wealth. In the past 20 years alone, world trade rose from 2,000 billion dollars a year to 5,500 billion dollars a year. World foreign direct investment inflows rose from 55 billion dollars to 640 billion dollars. At the same time, world GDP rose from 10,000 billion dollars to almost 30,000 billion dollars. For every trade or investment transaction there is a corresponding capital flow.

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Trade or investment transactions take place in an atmosphere—a sea, if you like—of currency flows. So the GDP growth that we have experienced would not have been possible without the oxygen of open capital markets.
However, it is disappointing that the benefits of globalisation have not been translated into comparable falls in poverty. Yes, the number of people in developing and transitional economies in abject poverty has declined; but the falls have been terribly small in comparison with what ought to have happened. That is why I want to say something about what the Government are doing with our international partners on measures to spread the benefits of globalisation more fairly. However, I wish to do so in the context of saying that it would be quite wrong to retreat from globalisation and to deny the poorest countries the development opportunities from which we have benefited.
National governments depend for investment funds on the day-to-day confidence of international investors. So they must pursue consistent and credible policies that guarantee stability. In 1998, the G7 took international action rather rapidly and very decisively to deal with the financial crises of that year. We held the G7 presidency that year and took a leading role in developing long-term disciplines to promote greater stability—a new framework of rules that effectively and fairly met the demands of the global market place—which had to be agreed nationally and applied internationally.
Over the past 18 months we have made significant progress in four key reforms of the international financial architecture: first, a framework of internationally agreed codes and standards, to be implemented by all countries that participate in the international financial system; secondly, global financial regulation, to make the international and national bodies responsible for financial sector supervision work together more effectively—the Financial Stability Forum was established in April of last year and it could become the world's early warning system for regional and global financial market risk; thirdly, a new framework for crisis prevention and crisis resolution, based on a partnership between the public and private sectors; and, fourthly, a framework of new social principles. The Financial Secretary to the Treasury, Stephen Timms, set out the detail of those reforms in a debate on the Tobin tax in another place on 18th April.
I turn now to other government measures. The right reverend Prelate the Bishop of Oxford referred to debt relief and the work of Jubilee 2000. I also pay tribute to those involved in that work, but the advance that has been made has come about more particularly because of action by the IMF and the World Bank, under very considerable pressure from our Chancellor of the Exchequer. The heavily indebted poor countries (HIPC) agreement reached at Cologne last year set out to cancel 100 billion dollars of developing countries' debt. We are working for faster, wider and deeper debt relief. Our initiative is to give 100 per cent debt relief
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to every country that qualifies under the HIPC initiative. We are still at the forefront of efforts to persuade our international partners to meet these agreed targets. We know that this is necessary in order to break the vicious circle of debt, poverty and economic decline and, instead, create a virtuous circle of debt relief, poverty reduction and economic development.
On aid programmes, I was glad to have recognition from my noble friend Lord Judd of the outstanding way in which DfID has performed during the past three years. But I am sorry to have to agree with him that other countries have not performed in the same way. In addition to the increase in budget, we have focused our programmes on the poorest people in the poorest countries. Our bilateral programmes are structured to deliver our key goal of halving the proportion of people in absolute poverty by 2015. Between 1999–2000 and 2001–02 the aid budget will rise by 28 per cent in real terms.
We are also taking forward the reform agenda at the international institutions, including the comprehensive development framework being developed by the World Bank. If we add this to the implementation of the social principles to which I have already referred, we can see that this is the right approach towards reducing the proportion of people living in extreme poverty. So strengthening the international financial architecture, relieving debt and improving development aid are proper responses to the challenges that have been so movingly described. They will help to achieve our shared objective of more stable financial markets, consistent with economic growth.
But what about the Tobin tax? Problems arise with economic implications with regard to its ability to reduce instability and, of course, with its implementation. I am afraid that there is a danger that it could introduce serious economic distortions to the international financial system. The problem is that some currency transactions reflect pure speculation and contribute to financial crises, while others help economic adjustment and stabilise markets. But a Tobin tax could not distinguish which was which; the danger is that it would slow the adjustment of financial markets and slow recovery from a crisis. Artificially slowing market adjustments to genuine price shocks might actually have a higher economic cost than rapid adjustment.
As to reducing instability, I believe that many of the advocates of a Tobin tax have actually moved away from that argument, because it is not clear that a modest tax would actually have much effect. Indeed, enough has been said by other speakers tonight, so there is no need for me to expand on that point. However, it might actually increase market stability. The latter depends on efficiency and price transparency, which, in turn, depend on capital liquidity. A tax which successfully reduced the overall number of trades—which is what would be necessary if we were going to reduce instability—could diminish liquidity, reduce market efficiency and transparency and actually increase volatility.

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What about implementation? I am afraid that a number of noble Lords—starting with the noble Lord, Lord Grenfell, continuing with the noble Lord, Lord Taverne, and then the noble Earl, Lord Northesk—really put the boot into the tax rather more forcefully than I am prepared to do. But I am afraid it is not good enough to point out, like my noble friend Lord Judd, that 80 per cent of these transactions are in nine countries. Currencies can be traded anywhere in the world; capital markets can move quickly. If we had a tax, a serious one, traders would simply move their activities to regimes which might perhaps be located offshore. Driving the markets offshore to less well-regulated financial centres would add to the instability of the financial system. Therefore, we would need to have international agreement. Even if we did not, the situation would encourage traders to develop derivatives or other financial instruments that could be traded without tax liability. From that, we might move to derivatives of derivatives, and so on. I am sorry, I would like to think that it would work but I cannot believe that it can.
We are, of course, pleased to see that War on Want and Oxfam are engaged in this debate. We are pleased that the debate has encouraged so much academic research. However, we must live in the real world. There is not a multilateral mechanism for establishing a Tobin tax. We shall keep in touch with developments in the debate but we are not convinced that an official inquiry of the kind asked for would be a good use of public resources.
Lord Judd: My Lords, before my noble friend sits down, will he say whether the Government are prepared to consider an inquiry?
Lord McIntosh of Haringey: My Lords, I have just said that I am sorry to say that we are not convinced that an official inquiry would be a good use of public resources.

Postal Services Bill
8.30 p.m.
House again in Committee.
Clause 44 [Review and information]:
Baroness Miller of Hendonmoved Amendment No. 35:
Page 28, line 35, after ("States") insert ("of the European Community").
The noble Baroness said: In moving Amendment No. 35 I wish to speak also to Amendment No. 36. Clause 44 provides for the commission to gather information about postal services in the United Kingdom and elsewhere. When the clause was considered in Committee in another place, the words "other member States" were not included. Therefore Clause 44(1)(a) and (b) simply referred to,
"the United Kingdom and elsewhere".
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My honourable friend the Member for Rutland and Melton proposed amendments to add the words "the European Community" after "United Kingdom". I shall explain in a few moments why he chose to use the words "European Community" rather than "European Union". At first the Minister responsible for competition in the other place rejected the amendment. He did so on the ground that "elsewhere" covers the European Community as well as the rest of the world. However, later in the same debate he relented. He said that a speech by my honourable friend the Member for South West Hertfordshire had almost made him change his mind. He said,
"We shall reconsider the drafting of the clause so that we can deal with that valid point on Report".
The Committee will note the words "valid point". The Government were almost as good as their word and added three words. The two paragraphs now refer to,
"the United Kingdom, other member States and elsewhere".
The three words that were added were "other member States". But unless I have missed a definition somewhere during my repeated reading of the Bill, there is no definition of "member states". Member states are members of what—the EC or the EU, the Commonwealth, the United Nations, NATO, or what?
At a meeting I had with the Minister, which he kindly granted on Monday, it was suggested that the definition was to be found in the Interpretation Act 1978. After that meeting I scoured that Act line by line, not once but three times, the final time running down every page with a ruler. I simply could not find the definition. Perhaps it had been added to the text of that Bill by some later Bill; or perhaps, not being a lawyer, I have stupidly overlooked it anyway.
The point is that if I, actively looking where I was told to look, cannot readily find it, how can arty other ordinary citizen be expected to do so? What is even more to the point, why should anyone wanting to consult the Act have to trawl through the statute book to discover what this provision means?
The words "European Community" and "European Union" are not ineffable phrases to be uttered only by the High Priest. I accept that there are Members on both sides of this Chamber and of the other place who can say them only through clenched teeth, but there is no reason why the Government should be so coy and leave an ambiguity in the Bill. They were not frightened to say exactly what they meant in the Explanatory Notes provided by the Department of Trade and Industry where it states:
"Clause 44 requires the Commission to keep under review and collect information about the provision of postal services in the United Kingdom, other member States of the European Community and elsewhere".
Amendments Nos. 35 and 36 simply plug the hole and say exactly what they are talking about, a:nd more fully cover what the Minister in the other place admitted was a valid point.
The reason I have used the phrase "European Community" rather than "European Union" is that that is the wording that my honourable friend used in

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his amendment in the other place. He did so because, as he explained, the European Community is one of the components of the European Union.
Pursuant to EU legislation, it is Community institutions which undertake measures which relate to the single market, including the continuing review of postal services. My honourable friend insisted that he was not just engaging in what he called "techno-babble". He just wanted to ensure that the focus of the review and the collection of information entrusted to the commission was well directed. Indeed he could have gone further and pointed out that "European Community" was the phrase used in the Government's own notes to this clause that I have just referred to. All that I ask for is the addition of four little words. They will not bring down the whole edifice of this Bill. Superfluous or not, they will make it clearer to the man in the street and to this Peer at the Dispatch Box.
Earlier I mentioned to the Minister that I was surprised that he did not feel able to humour me on a simple, non-controversial amendment. I hope that on this occasion the Minister will feel able to humour me and accept these two amendments. I beg to move.
Lord Skelmersdale: It is clearly not only men who believe in belt and braces; my noble friend clearly also believes in them.
As a Member of the House—I am sure that there are many others in the Chamber at present—who is a member of one of the sub-committees of the European Union Committee (I sit on Sub-Committee B which considers energy, industry and transport), I am well aware that there is another draft directive from Brussels winging its way towards the committee office. Doubtless I shall consider it in due course.
My noble friend is quite right to say that, thanks to the activities of my honourable friend in another place, this Bill now belatedly refers to member states of the European Community. She rightly says that the technical term ought to be "European Union" but, none the less, some analogous words most certainly ought to be included in the Bill.
Lord Sainsbury of Turville: The term "member States" means member states of the European Communities. This is the legal interpretation of this phrase according to the Interpretation Act 1978. I may have inadvertently wasted some of the noble Baroness's time on this matter. That Act applies the definitions in the European Communities Act 1972. The definition of the term is to be found in Schedule 1. I hope that I can rather belatedly direct the Committee in the right direction.
I do not believe that many people on the Clapham Omnibus seek the definitions we are discussing. However, legislation should be interpreted by reference to the Interpretation Act. We have not defined this term because, where terms or expressions are defined in the Interpretation Act, they are not defined in the Bill. Under the Interpretation Act, the only definition of "member States" refers to member
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states of the European Communities. All Acts of Parliament must be construed in accordance with the Interpretation Act. This ensures consistent construction of particular words and phrases.
I am sympathetic to the spirit of Amendments Nos. 35 and 36. However, I believe that we should adhere to the proper way of drafting this legislation. I therefore ask that Amendments Nos. 35 and 36 be withdrawn.
Baroness Miller of Hendon: It is very good of the Minister to be sympathetic towards me. However, I do not think that that is quite the same as humouring me. Having said that, I understand how interpretations and words have to be correct.
It is a great pity that I was referred to the Interpretation Act 1978. The noble Lord was right gently to apologise for wasting my time. Research facilities are available to the Opposition as they are to the Government. I am dealing with a large number of amendments and I think my time is extraordinarily precious; I regret having to go up and down three times—and with a ruler no less. In the end I could not believe that it was so impossible to find.
I accept from the Minister that the man on the Clapham omnibus will certainly not trawl through this Bill, the Interpretation Acts and so on; I understand that totally. Having received that information from the Minister, I gladly withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 36 not moved.]
8.45 p.m.
Lord Howie of Troonmoved Amendment No. 37:
Page 28, line 37, at end insert ("including comparative information on the efficiency and economy of the provision of such services").
The noble Lord said: I notice that my Amendment No. 37 is grouped with Amendments Nos. 38 and 39; I had not noticed that before.
As the Minister knows, I was asked to table this amendment by the Periodical Publishers Association, of which I happen to be vice-president because of my previous activities as a publisher of engineering magazines, among other things.
It is a very mild amendment. It follows from conversations between the PPA and a variety of organisations, including the Ministry, the commission and other relevant bodies. Unfortunately, I was unable to speak at Second Reading—it would have saved some time today—but I wrote to the Minister stating more or less what I would have said had I spoken in the debate. I gave him to understand that I would very likely bring forward an amendment of this kind. My letter used the same words as I have put down tonight.
I am happy to say that I received an extremely courteous letter from the Minister, which did not surprise me. It dealt with my arguments and threw them into the long grass with considerable vigour. It pointed out that my amendment was not wanted. The

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letter ended with a well-known Whitehall phrase, with which many members of the Committee will be familiar. It stated:
"I hope that this reply is helpful".
I do not know whether I should like to receive a letter from the Minister when he is trying to be unhelpful. But there we are; I know what he meant. The fundamental argument was that my very modest amendment—it is so modest to be almost feeble; I am slightly ashamed to table such a feeble amendment; I have never done so before—was thought to be too prescriptive. I understand that line of argument, but quite a few parts of the Bill already are prescriptive. For example under Clauses 4 and 5 the commission is obliged to do a number of the things listed. One cannot get more prescriptive than obliging someone to do something. Look also at Clauses 11 to 14, which deal with licensing. To my mind, those clauses are fairly prescriptive.
In any case, what is so terrible about being prescriptive? Is not that what governments are sometimes for? Are they not supposed to be prescriptive? Are they not quite often prescriptive? I understand the Minister's position on this occasion. It is one I have come across before when dealing with Ministers from whatever side of the House I happen to be sitting on at the time. The philosophy is quite simple. The Government—I should blame the Government rather than the Minister—are quite willing to be prescriptive when they want to be, but they are unwilling to be prescriptive when I want them to be. I know that argument; I have come across it many times.
Perhaps I may say something about the background which gives rise to this amendment. It derives from the activities of magazine publishers. Magazine publishing is very big business nowadays—much bigger than it was 20 or 30 years ago—and magazine publishers are important customers of the Post Office. In the region of 700 million magazines are posted every year—and mostly read, I suppose—which costs the industry approximately £250 million in postage. It is the Post Office's third largest revenue stream. That surprised me, but it seems to be the case. So the magazine industry is a very important customer.
Over the past 10 years the cost of deliveries by Royal Mail has risen from about a third of the non-editorial costs to about half. It is a substantial burden on the industry. The PPA believes that economies could be made which could possibly lead to a reduction in these rather heavy postage charges. It would like to see safeguards in the Bill such as would arise from my amendment.
The PPA has had discussions with officials of the commission, which appears to accept that comparisons between the charges of the Post Office and the charges of other deliverers should be made. The commission stated:
"Because collecting comparative efficiency data will be part of our work we do not in practice see any difficulties with the amendment you now propose".
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So the commission is happy with the amendment; I am happy with the amendment; the PPA is happy with the amendment; and I am quite sure that the Minister, having had time to think it over, will also be happy with the amendment.
It is a modest amendment which would strengthen the Bill and allay the fears of the magazine industry which is, as I say, one of the Post Office's biggest revenue providers. I beg to move.
Lord Skelmersdale: I rather suspect, from the utterances we have had from the Government Front Bench this afternoon, that the noble Lord, Lord Howie of Troon, will find it better to travel in hope than to arrive. However, we shall see.
The noble Lord is absolutely right: £250 million in postage revenue is a very important source of money to the Post Office. The PPA already has the option of sending its publications in bulk to Germany, Holland, Italy or wherever, and having them sent back to individual addresses in this country. Or, indeed, it could be even braver if it wanted to be and have its magazines printed abroad in, for instance, Malaysia, the Philippines, Hong Kong or where have you—perhaps not Hong Kong, where wages are rather higher than in the other two countries I mentioned—and sent to individual British addresses from there.
But there is another reason that this amendment should be considered with a modicum of favour. The Minister referred earlier—it may have been the noble Lord, Lord McIntosh—to a level playing field. The commission wants to be assured that the British Post Office is operating on a level playing field with its competitors. If anything can be done in terms of efficiency and economy and a spur can be given by the commission as a result of its investigations of post offices in other member states or indeed elsewhere in the universal postal union, that should certainly happen. I am rather worried that the Minister will say that collecting information about the provision of these services could include provision about efficiency and economy, but the provision does not say the commission has to. It can ignore that totally. I agree with the noble Lord, Lord Howie, that that would be a great mistake.
Viscount Goschen: I rise to support the amendment moved so ably by the noble Lord, Lord Howie. As ever, I was entirely swayed by his arguments. He is right that this is a modest but important amendment. It is difficult to understand how it could actually be argued against. There can be only two arguments. One is that it is bad to collect comparative information, so it should not be done, or it is a waste of time and therefore the provision is over-prescriptive. I do not believe that it is either. I think that it would be very difficult for the commission to do its job without performing this specific function. We should make sure that the commission is fully aware by a statutory provision of how important it is to ensure a level playing field and to look at comparative measures of how other operators are performing. It needs to do that in order to perform its job. Placing that

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requirement on the face of the Bill will just make it clearer. I hope that the Minister does not have "resist" underlined in heavy type on his brief, because I really think that the proposition of the noble Lord, Lord Howie, is modest and sensible.
Baroness Miller of Hendon: The Minister will not be surprised to know that I support the amendment of the noble Lord, Lord Howie. It is grouped with my two amendments, Amendments Nos. 38 and 39, which have practically the same purpose. I note that the noble Lord, Lord Howie, described his amendment as modest. I did not withdraw my amendments and instead left them on the Marshalled List because I thought that they were slightly wider than modest. Perhaps the different characteristics of the noble Lord, Lord Howie, and myself mean that I do not want to have amendments which are quite so modest. However, I want him to know that I support his amendment, although believing that it needs to go a little further.
While on my feet, I should like to speak to Amendments Nos. 38 and 39 which are in the same group. In subsection (4) the commission is told to make the information available to the council and in subsection (5) it is told to make the information available to the Secretary of State. However, the information that it is instructed to gather under subsection (1)(a) and (b) is somewhat limited in scope and in my view somewhat limited in use. The additional requirement is that the commission shall in effect collate and analyse the information so that a useful, indeed a vital, comparison of postal service providers can be made; otherwise, I do not know the purpose of going to all this trouble. It would be a comparison regarded as impartial and distinct from any claims made in advertising or in any application for a new licence by any provider. I really do not believe that any further explanation of Amendment No. 38 is necessary. I simply hope that the Government will regard it as a constructive improvement to the Bill.
Amendment No. 39 is equally short and simple. It is intended to remedy an omission from Clause 45. The clause requires the commission to make an annual report to the Secretary of State. Subsection (2) lists the matters which specifically the annual report must contain. By implication the report can of course also contain anything else that the commission decides at its discretion to include. In addition to the specific items listed in the subsection, there is a sweep-up paragraph (e) authorising the Secretary of State to specify other matters to be included in the report.
What is missing from this wide range of subjects, which I assume the Government in their wisdom intended to be comprehensive, is a report on the information that is gathered under Clause 44(1)(a), which requires the commission to collate information about the operation of postal services. As I pointed out in relation to the amendment I proposed to that clause, the commission reports on the information it has gathered to the Secretary of State. There is nowhere a
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requirement that these data are necessarily put into the public domain. All the amendment does is to ensure that the commission's annual report contains that information. There is not much point in going to all the trouble of gathering all this information only to find that it stays in one place and benefits no one. I am briefed by the same people who briefed the noble Lord, Lord Howie, but funnily enough I put down my amendment before I received the briefing. I was able to telephone them and say that my amendment was down and that they would see it tomorrow.
Lord Sharman: We seem to have a competition going on this evening in terms of who can be the most diffident and who can be the most modest, which is an encouraging development in this Chamber. I want to make a comment on this matter because I think that these amendments seek to raise the issue of value for money. Value for money is more than just economy and efficiency. It includes effectiveness as well. In that respect we need to look at the amendments in a broader sense. Value for money is what should be concerning us rather than just economy and efficiency. I think that it is a broader issue but it is relevant. I should also say that I am not sure that putting all that information into the public domain is the best thing. That is what the management of the corporation ought to be about. The management should not be concerned with it and the commission should be concerned about it, but I am not sure that the public at large would be able to interpret it.
Lord Sainsbury of Turville: The underlying purpose of these amendments is to require the commission to compare the efficiency and economy of licence holders with other postal operators, most probably by using "benchmarking" which, as discussed in the other place, is a way of carrying out comparative analysis. In principle I see nothing wrong with that. Benchmarking is a valuable business and regulatory tool. I would imagine that the Post Office and the commission will both use if for their own purposes. I am sure that it would be useful for the commission in carrying out its functions under Clause 5(3) on promoting the efficiency and economy of postal operators and in deciding upon any price control mechanism.
However, the effect of these amendments would be to create a very specific duty. They would fetter the discretion of the commission. There is a distinction to be made here between being prescriptive about the duties of the commission and being prescriptive about the way they are carried out. For that reason the wording has been kept more general.
Amendment No. 38 specifies that the commission should carry out such a comparison on an annual basis. I do not think it very helpful to set an arbitrary timescale. We have avoided doing so elsewhere with respect to the commission's and the council's functions as, again, we do not want to fetter their discretion.
We have said many times that our intention in the Bill is to set up an independent regulator. That is what we have sought to do. Of course if the Periodical Publishers Association would like to see

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benchmarking, and indeed the commission would also, I can see nothing wrong in them getting together and benchmarking. However, there does not seem to be any disagreement about what we would want the commission to do. So on the basis of being helpful in its true sense, rather than the Civil Service sense, I shall take the amendment away and consider it.
Lord Howie of Troon: I am a little disappointed with the Minister's reply because I expected him to turn me down completely. He has now unhinged me. I do not know quite what to say next, but I shall try to think of something while the Committee waits patiently!
I was extremely pleased by the support I received from those on the other side of the Committee. I know all three of them, sensible people as they are. They have gone up in my estimation yet again. On the Liberal Democrat intervention, I was under the impression that value for money was embraced by efficiency and economy, hut perhaps I am wrong. I am not an economist. I am grateful for the Minister's reply, although it has shaken me a little. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 38 not moved.]
Clause 44 agreed to.
Clause 45 [Annual and other reports: the Commission]:
[Amendment No. 39 not moved.]
9 p.m.
Lord Sainsbury of Turvillemoved Amendments Nos. 40 to 43:
Page 29, line 31, leave out ("arrange for") and insert ("publish").
Page 29, line 31, leave out ("to be published").
Page 29, line 34, leave out ("arrange for") and insert ("publish").
Page 29, line 34, leave out ("to be published").
On Question, amendments agreed to.
Clause 45, as amended, agreed to.
Clause 46 [Publication of information and advice: the Commission]:
Lord Sainsbury of Turvillemoved Amendment No. 44:
Page 30, line 3, leave out (", or arrange the publication of,").
On Question, amendment agreed to.
Clause 46, as amended, agreed to.
Clause 47 [Power of the Commission to require information]:
Baroness Miller of Hendonmoved Amendment No. 45:
Page 30, line 20, leave out ("any person") and insert ("the Council, a universal service provider or any licence holder under Part II who is not a universal service provider").
The noble Baroness said: In moving Amendment No. 45 I shall also speak to Amendment No. 46. I believe that these are two of the most important amendments to the Bill. They deal with collective
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provisions seeking to give the commission excessive and unnecessary powers, with draconian penalties in case of any default.
As drawn, the clause flies in the face of the Government's stated policy as outlined in the White Paper. Paragraph 18 on page 24 states:
"The UK postal market outside the statutory monopoly is a vibrant, competitive market … It is therefore the Government's intention that regulation should focus on those who are operating within the monopoly area, leaving the rest of the market to operate as they do now in a largely unregulated environment"
The clause as drafted involves anybody, including those persons who are not even in the postal business. Again, I quote from the White Paper at paragraph 32 on page 28:
"The Regulator will have the power to require information relevant to the exercise of its functions from the Post Office and other operators licensed to operate within the monopoly".
Note the phrase,
"other operators licensed to operate within the monopoly".
It does not say "any business", as stated in subsection (2) of Clause 47.
Even since the publication of the White Paper the Secretary of State for Trade and Industry has consistently maintained that the extension of the regulator's powers outside the licensed area is unnecessary. In a letter dated 31st July 1999 to the chairman of the Select Committee on Trade and Industry, the Secretary of State said:
"I do not believe that it is either right or necessary for the Postal Services Commission to have power to require information from the commercial sector, where it is operating outside the monopoly".
If it is unnecessary for the commission to require information from the 4,000 businesses that the Secretary of State says operate in what may loosely be described as the mail delivery industry, why does it require power to acquire documents and powers from anybody operating any business?
The amendments are designed to eliminate that massive over-kill which imports wide powers to intrude into areas where the commission has no business. Clause 47(1) relates to the production of documents by "any person". "Any person" means what it says, even perhaps any one of your Lordships, no matter whether the person served with the notice has any connection, however remote, with either the supply or receipt of postal services. I cannot imagine why the Government have sought such wide-sweeping, all-embracing powers to produce documents of any kind, with the exception of those privileged under subsection (4)(a) of Clause 47.
Briefly, I turn to Clause 47(2) which is the corresponding provision that requires not the production of documents but the supply of information, again by,
"any person who carries on any business".
That is not confined to those businesses involved in the supply or receipt of postal services. It widely covers any business, even the local pizza parlour which runs a delivery service.

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My two amendments bring those persons who are required to supply documents and information to the commission exactly into line with Clause 58, where the counterpart provisions require information to be supplied to the Consumer Council by the commission, a universal service provider and any licence holder under Part II who is not a universal service provider, and not any person carrying on any business. There can be absolutely no justification for a distinction between the two categories of persons liable to supply information and documents, especially when under Clause 48 such a person is liable to a criminal conviction and substantial financial penalties and costs.
In the other place it was suggested by my honourable friend the Member for Rutland and Melton that the Bill, as drafted, and the draconian penalties for which it provides, infringed human rights legislation, despite the Secretary of State's certificate to the contrary. In reply the Minister said that,
"the level of fines have been approved by the Home Office".
I suppose that makes it all right then!
I shall now refer to the arguments against the identical amendments when they were tabled in Committee in another place. The Minister for competition conceded that the phrase "any person" had a wide definition. By implication, therefore, we may take it that he conceded that any business had a similar wide connotation. He said that the commission could require people to provide information,
"if it is investigating the offence of operating in the reserved area without a licence under Clause 6".
He went on to list three other purposes for which information might be required. He stated:
"It can require information only for those specific purposes".
That is what he said, but the Bill does not contain such a limitation. It simply refers to any person and to any business with absolutely no limitation.
On being pressed by my honourable friend, the Member for Rutland and Melton, the Minister assured him that the relevant purpose qualified the words "any person" and, I assume by implication, that means that it also qualifies the words "any business" and that the provisions refer only to licence holders and universal service operators or persons suspected of being in breach of the conditions. Why does not the Bill expressly say that, bearing in mind the powers of entry and seizure under a magistrate's warrant that are provided by Clause 49?
The Government may say that the effect of the clause is limited, but so long as "relevant purpose" is not defined, it will be open to an official of the commission to launch a fishing expedition on the basis of Humpty Dumpty's dictum that words can mean precisely what one chooses them to mean.
We do not wish to see the humble owner of a pizza delivery service or even the mighty Tesco being harassed for details of their operations, or being faced with threats of criminal sanctions, or of having to go to court to protect themselves from what I should like
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to describe as illegal snooping. If, as the Minister in the other place conceded, the effect of these two subsections is limited, then let the Government agree to spell out what are those limitations here and now, in clear language. I do not, of course, expect the Minister to do that tonight, but I certainly would like him to undertake to do it at the next stage of the proceedings. Alternatively, if the Minister does not feel that that is necessary and if he feels more conciliatory, he could accept the amendments tonight and so put the matter beyond any doubt. I beg to move.
Lord Sainsbury of Turville: I agree that it may appear at first sight that this provision gives a large remit to the commission to require information from people who are outside the scope of the reserved area. However, there is a good reason for that. When the provision is examined in detail, one can see that it applies only on a very limited basis.
One of the commission's duties is to license people to operate within the reserved area. It also has the power, contained in Clause 6, to prosecute anyone operating in the reserved area without a licence and not falling within the exceptions set out in Clause 7. Given that the commission has that duty and power, it also needs powers to police the reserved area.
The effect of these amendments would be, first, that anyone operating illegally in the reserved area without a licence would not have to give any information to the commission. Clearly that could be a dangerous loophole. Effectively, that would allow exactly the kind of people from whom we want to get information to get away.
Secondly, Clause 47 allows information to be gathered only "for any relevant purpose". It is worth explaining the relevant purposes for which the commission can require information under Clause 47. It is important to emphasise that the clause applies to "any person", but only for specific and limited purposes, as set out in the clause; namely, investigating the offence of operating without a licence in the reserved area or any proceedings for such an offence, as set out in Clause 6; for the purpose of exercising its functions in relation to breach of licence conditions under the new licensing regime, contained in Clauses 22,23,24 and 30; providing advice and information on public post offices, as set out in Clause 42; collecting information on standards of performance achieved by licence holders and USO providers, as set out in Clause 44(3); or collecting information on behalf of the council for the latter to carry out its function, as set out in Clause 44(4).
I believe that the Committee will see that these purposes are limited and, more important, are vital to the role and duties of the commission. I do not believe that the amendments would be to the benefit of postal users. As I have said, they would allow people operating in the reserved area illegally not to need to give information to the commission. Having set out those points, I very much hope that the noble Baroness will feel able to withdraw her amendment.
Viscount Goschen: I have listened carefully to the reasoned arguments of the noble Lord about why the

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commission needs to be able to apply this provision to a wide range of people. However, the Minister focused on the issue of operators whom the commission might suspect of operating illegally and thus contravening a number of the provisions he mentioned.
But the drafting of the clause is extremely wide:
"The Commission may, for any relevant purpose, serve notice on any person".
Is there not a strong argument that says that the provision should be more focused, that the type of circumstances should be explained and put on the face of the Bill within the clause to make it clearer in what type of circumstances the commission may exercise the wide powers that are proposed for it?
Lord Sainsbury of Turville: I hope that I have made two points clear. One is that, if accepted, the amendments would leave a substantial loophole which could be exploited by unlicensed operators. Secondly, as I hope I made clear, the power be used only in very specific circumstances. Given those circumstances, the provision is narrowly drawn. I believe it provides the right balance between giving operators enough information and not leaving it open to them to obtain any information that is not relevant.
Baroness Miller of Hendon: I have listened carefully to the Minister's reasonable explanation. I want to read it carefully, because I was concerned with the width of the amendment. If the noble Lord is saying that only unlicensed operators doing something criminal would not be caught if my amendment were accepted, clearly, I shall not press it. However, I shall examine the Minister's response to make sure that the difficulties that I have tried to highlight are covered; or I shall return with a different kind of amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 46 not moved.]
Clause 47 agreed to.
Clause 48 agreed to.
Clause 49 [Powers of entry and seizure]:
9.15 p.m.
Lord Sainsbury of Turvillemoved Amendment No. 47:
Page 32, line 13, leave out (" 95(2)") and insert ("(Inviolability of mails)(2)").
The noble Lord said: This amendment and those grouped with it are brought forward, as promised in another place, to clarify the provisions in the Bill relating to interference with the mail and the connected provisions concerning inviolability and conditions of transit of postal packets. These amendments have required careful consideration but we hope that they now make all the provisions clear.
Amendment No. 47 is a technical amendment to Clause 49 consequent on the deletion of Clause 95(2) and its replacement by subsection (2) of the new provisions on inviolability in Amendment No. 102.
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Amendment No. 74 restricts the offence in Clause 83 in respect of mail bags to intentionally opening. There is no need to cover intentionally delaying a mail bag since, if it contains postal packets, an offence will be committed in any event. Delaying an empty mail bag should be an offence.
Amendment No. 75 amends Clause 83 to include a number of cases where delaying or opening a postal packet or opening a mail bag is not to be an offence: first, if this Bill or another enactment provides appropriate authority; secondly, where there is authority from a directly applicable Community provision; and, thirdly., where the terms and conditions applicable to the packet's transmission by post allow such actions. There is also an exception for delay caused by industrial action in contemplation or furtherance of a trade dispute (as defined in subsection 1D). This was a matter that caused some concern when the clause was debated in another place and we are happy to offer this clarification.
Amendment No. 76 amends Clause 84, which applies to persons other than those engaged in the business of a postal operator, in the same way as Amendment No. 74 amended Clause 83 so that delaying a mail bag is not in itself an offence. Delaying a postal packet in a mail bag will be an offence.
Amendment No. 77 provides for the new exceptions to the offence in Clause 83 set out in subsections (1A) to (1D) in Amendment No. 75 to apply also to the offence in Clause 84.
Amendment No. 78 amends Clause 84 to add a new subsection to make it clear that the offences in Clause 84(2) of opening a postal packet without reasonable excuse and intending to act to a person's detriment, by a person who knows or reasonably suspects the packet has been wrongly delivered to him, will not apply where opening is under the authority of this Act or another enactment; where there is authority from a directly applicable Community provision; or where the terms and conditions applicable to the transmission by post of the packet allow such actions.
Amendment No. 88 deletes subsections (1) to (3) of Clause 95. These provisions are replaced by the new provisions on inviolability of the mail set out in Amendment No. 102.
Amendment No. 102 inserts the provisions concerning inviolability of the mail. It extends the protection previously afforded to postal packets carried by the Post Office to those carried by all postal operators. It provides postal packets in the course of transmission by post with the same immunity from examination, seizure or detention under a relevant power conferred by this Bill or any other enactment; from seizure under distress or in execution (or in Scotland any diligence); and from retention by virtue of a lien that they would have if they were the property of the Crown.
Postal packets carried by the Post Office have always had such protection and the amendment recognises that in today's market, where there are many postal operators, that protection should be extended to all postal packets. There are, however,

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exceptions to the general presumption that the mail is inviolable and these are set out in subsection (3). Subsection (4) gives the Secretary of State power to modify by order subsection (3) to enable the protections to be extended or narrowed to ensure that they are appropriate now and in the future.
Amendments Nos. 106 to 109 amend Clause 105, which deals with the conditions of transit of postal packets. The amendments clarify what action a postal operator may take in relation to a postal packet which he knows, or reasonably suspects, is being sent by post in contravention of Clause 85 of the Bill. Clause 85 prohibits the sending of certain articles through the post, including indecent or obscene material, and any article, creature or thing of any kind likely to injure a postal operator's employees or other postal packets.
Amendment No. 106 removes the words "if necessary" from Clause 105. On reflection, the Government consider that these words are superfluous as it is likely that a postal operator will always consider it necessary to detain a postal packet if he knows or suspects that it is being sent in contravention of Clause 85.
Amendment No. 107 removes the words "in the post office" from Clause 105. The Government consider that to restrict the opening of postal packets to post offices will not always be appropriate. For example, it would not be appropriate to require that a postal operator should open a postal packet that contains filth or a noxious substance in a post office.
Amendment No. 108 expressly provides that a postal operator can destroy or otherwise dispose of postal packets that it knows or suspects are being sent in contravention of Clause 85. Such a power is considered appropriate to allow the postal operator to destroy or dispose of postal packets that may be a danger to its employees or other postal packets. It also makes it clear that, having detained a postal packet, the postal operator will not be required to keep it indefinitely.
Amendment No. 109 makes it clear that the provisions in Clause 105 should not be regarded as restricting any other powers which the postal operator may have in relation to the packet, for example under the terms and conditions applicable to its transmission by post.
Amendments Nos. 119, 120 and 123 amend the order and regulation-making powers of the Bill to add the new order-making power in subsection (4) of the new clause on inviolability of the mail. Modifications of the new clause can be made by modifying enactments or by a statutory instrument subject to the negative resolution procedure.
This package of amendments clarifies and, we hope, improves the provisions in the Bill which protect postal packets in the course of transmission by post. I beg to move.
On Question, amendment agreed to.
Clause 49, as amended, agreed to.
Clauses 50 and 51 agreed to.
Clause 52 [Provision of advice and information to public authorities and licence holders]:
Baroness Miller of Hendonmoved Amendment No. 48:
Page 33, line 24, leave out paragraph (d).
The noble Baroness said: I rise to move Amendment No. 48. Clause 52 of the Bill requires the consumer council for postal services to provide advice and information, to represent the views of users and to make proposals to four categories of persons mentioned in subsection (2). One of those four categories is referred to in subsection (2)(d), which this amendment seeks to delete. Before I explain the reasons for the amendment, perhaps I should remind the Committee that the consumer council is, as stated in the White Paper, to act as the public advocate on behalf of all users of Post Office services; to handle and investigate consumer complaints not satisfactorily resolved by the Post Office; to work with licensees, including the Post Office, to reduce complaints and to make sure that they have a proper complaints procedure.
The White Paper continues:
"The Government wants to see a strong consumer body at the heart of the regulatory system".
The White Paper said that the Post Office Users' National Council would be that consumer body that it saw as,
"championing [consumers'] interests and ensuring that their voice is heard by the Post Office, the Regulator and the Government".
The Council will be funded by the Post Office and any licensees.
I am sorry to have troubled your Lordships with such lengthy quotations but I wanted to demonstrate that it is clear that the White Paper envisaged that the function of the Council would only relate to the operation of the Post Office and the licensed area. But subsection (2)(d) goes much further than that. It enables the council to provide advice and information, represent the views of postal users and, most sinister of all, make proposals to "any other person" whose activities may affect the interests of users of relevant postal services. Any other person? Not just the Post Office or licensees? That could involve a wide range of persons—advertising agencies, printers, stationery manufacturers and retailers, just to give a few examples. I believe that is an invitation to empire building and poking of noses. It is not necessary to become involved in that.
My honourable friend the Member for Rutland and Melton pointed out that persons in the unlicensed area who are the recipients of gratuitous advice and proposals from the council will all have to be told the views of users of postal services. They are not obliged to take the slightest bit of notice of anything that is said to them. I can imagine the council knocking on the door of a motor cycle messenger service to offer some advice to a leather-clad helmeted occupant only to be told, in the words of my honourable friend, "push off".

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In his reply the Minister for Competition told the Committee in the other place that,
"it seems reasonable to provide advice and information to everyone involved in providing a postal service, not only licence holders".
It seems reasonable to whom? Only to a government who have acquired a reputation for nannying and proffering unwanted advice on all manner of subjects, whether they know anything about it or not. The Minister in the other place conceded that,
"it is significant that the clause does not place any duties or onus on the people who receive the representations".
He admitted that the "push off' provision mentioned by my honourable friend was a part of the clause.
The Minister suggested that there may be an increasing number of unlicensed operators who might be grateful for the council's representations and advice as free market research. I hope that the Minister will be able to find a less fatuous justification for rejecting this amendment, if that is what he is minded to do.
The Government have already admitted that the provision has no effect in law whatsoever. What are the Government doing in asking Parliament to pass legislation that has no effect whatsoever? The Bill has considerably extended the role of the council from that set out in the White Paper so that its remit includes both the regulated and unregulated parts of the industry.
This amendment will restore the role of the council that was put forward in the White Paper. I beg to move.
Lord Sainsbury of Turville: I am grateful to the noble Baroness for giving me the opportunity to explain the purpose of this provision.
The clause sets out some important duties for the council which will help it to fulfil its role of representing the views of users, providing advice and information and making proposals. The council should, therefore, be required to make all these representations to all relevant people who may find this information useful. In particular, it seems reasonable to require the council to provide advice and information and to make representations and proposals to all people who may be involved in providing a postal service and not just licence holders. As the noble Baroness noted, the clause does not put any duty or onus on the people receiving the representation.
I deal now with the question of the "push-off" factor. A good example of someone falling within the category which the amendment seeks to remove would be the providers of essential transport for the conveyance of mail. The noble Baroness may agree that if the council found that relevant information should be given to those people, that should be done.
Those providers would fall within the definition of Clause 52(2)(d), and in the interests of users of postal services it makes sense for them to be given advice and information by the council and to receive representations and proposals about relevant postal issues.
Also unlicensed postal operators may be responsible for art increasing part of the postal market in future if the reserved area were to decrease. For instance, there
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are already many operators providing a postal service for parcels who are not, and will not be, licensed. In view of those two obvious examples where it would be useful, and where we believe that the council should provide information, I ask the noble Baroness to withdraw the amendment.
9.30 p.m.
Baroness Miller of Hendon: Having suggested matters that should be on the face of the Bill, I am amazed at the number of occasions on which the noble Lord has said that such a provision is totally unnecessary. However, the noble Lord now suggests that there should be included in the Bill a provision which has no effect on an individual if he does not wish to take any notice of it. We wanted to put many interesting provisions on the face of the Bill but the Government considered them unnecessary. It seems extraordinary that the Government legislate now to put a provision in the Bill which has no effect. As did the Minister in another place, the noble Lord admitted that the provision has no effect; no notice need be taken of it. Yet we legislate to put it into the Bill.
In view of what the Minister said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 52 agreed.
Clause 53 [Publication of information to users]:
Lord Sainsbury of Turvillemoved Amendment No. 49:
Page 33, line 40, leave out (", or arranging the publication of,").
On Question, amendment agreed to.
Clause 53, as amended, agreed to.
Clause 54 [Exercise of functions: general]:
Baroness Miller of Hendonmoved Amendment No. 50:
Page 34, line 28, at end insert—
"() a committee for England,").
The noble Baroness said: In moving the amendment, I speak also to Amendments Nos. 51 to 53.
Clause 54 gives certain directions to the consumer council for postal services as to how it shall exercise its functions. In subsection (4) it is directed in paragraph (a) to establish separate committees for Scotland, Wales and Northern Ireland. There is no corresponding direction—I stress the word "direction"—to set up a committee for that insignificant part of the United Kingdom called England. This is another example of the Government's efforts not only to break up the United Kingdom n but to balkanise them into a series of disparate so-called regions.
For the benefit of the large number of members of the Government of Scottish and Welsh extraction—they are not present in the Chamber today but that will look good in Hansard—England is the large bit of the country that sticks out to the south of Scotland and to the east of Wales. It is the bit of the United Kingdom which constantly pumps money into the other three parts to keep them going.

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Subsection (4)(a) states that the council shall establish committees for Scotland, Wales and Northern Ireland. Paragraph (b) permits additional area committees within those three regions. However, the subsection merely permits the council to create a committee or area committee for England; and that would be at its discretion.
Paragraph (c) states that the council,
"may establish one or more committees for, or for any areas within, England".
It "may" establish. Suppose it does not? England would then simply not have the platform from which to provide the input to the council provided for under subsection (5). That is the whole purpose of establishing these committees.
The first three amendments rectify this defect. Amendment No. 50 adds England to the regions of the United Kingdom described in subsection (4)(a) where the council "shall" establish a committee. Amendment No. 51 adds England to the places where area committees may be established under paragraph (b).
Amendment No. 52 deletes paragraph (c) altogether because the other two amendments make that paragraph redundant. The final amendment to this clause is Amendment No. 53. It supplements Clause 54(6) which requires the council to establish at least one office in each of the regions and,
"at which users of relevant postal services may apply for information".
It should be noted that Clause 54(6) requires the council to establish these offices, by post one assumes. However, even the new council will have to concede that these days there are other quicker and cheaper means of communication.
The postal services commission has very commendably already established its own website, which is, I am informed, going to be updated daily. For the benefit of those of your Lordships who are interested I will put it into the record so that it can easily be looked up. It is www.psc.gov.uk. All my uncontroversial amendment does is to require the council to do the same. I beg to move.
The Earl of Mar and Kellie: I must ask the Minister whether it is right that Scotland should ever be referred to as a region? I really do not think that the reference to a regional committee and then to refer to Scotland is at all constitutional. Scotland is, of course, a kingdom in its own right.
Lord Skelmersdale: Be that as it may. I think that it is very strange to establish committees for Scotland, Wales and Northern Ireland—whether they be called regions, areas, kingdoms, provinces, or whatever—and not to establish a committee for England. I am sure the Minister will explain why.
Even if a central London-based English council were established, it cannot reasonably be expected to be aware of or sensitive to the needs of the regions of England. Geography and economic prosperity or decline affect an area's outlook and dictate many of the
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problems affecting local consumers. That applies to the Post Office in the same way as it does to electricity companies and so forth. For example, a part of Britain may experience another hurricane with postal services being interrupted; there will be a volume of complaints in that area. The council will need to know what is going on and respond according. All kinds of things can happen in various parts of the UK. May I dare to call them sub-regional? Not only is my noble friend absolutely right about that, but we often have arguments in this Chamber about the meaning of the words "may" and "shall". Here, quite clearly, as they are all in the same subsection, they must mean different things. My noble friend, quoting the Bill, said that the council,
"shall establish … a committee for Scotland … Wales, and … Northern Ireland",
but that it only "may establish" one for England. The Minister owes us an explanation of that.
Viscount Goschen: I support the words uttered by my noble friend Lord Skelmersdale. There certainly will be such divisions—and I see the noble Earl, Lord Mar and Kellie, looking at me and waiting for me to use the wrong term. I shall not give him that satisfaction. If we are going to divide the procedure and set up even more committees of the council, England should be given the same basis of "shall" rather than "may".
However, I question whether the additional committees need to be set up at all. We are talking about a postal service and a universal service provider. We are talking about using the same value stamp to send letters from one end of the country to another. Does the Minister have a strong explanation and rationale as to why even more money should be spent on even more committees providing even more reports which will no doubt be filed in something circular by most of the people who receive them?
The Minister has gone to great length to say that we should not be too specific in the Bill. However, the council is given pages and pages of information about what it shall and shall not do. For such a body, we seem to have an overprescriptive set of clauses and I hope that the Minister can give a strong explanation of why that is so. If he cannot, I suspect that more amendments will be moved at the Report stage proposing the deletion of a clause or the given words between the brackets.
Lord Sainsbury of Turville: I can understand the sentiments behind these amendments to require the council to set up a committee for England on the same basis as the committees for Scotland, Wales and Northern Ireland. However, I am not convinced that that is the right approach.
Essentially this is about discretion. The issue is about being prescriptive about duties, but not necessarily about how they are carried out. Our approach in the Bill has been to give the council a clear set of statutory functions, but then to ensure that it has the flexibility and powers to organise itself in the way best suited to deliver the performance of those functions for which it will, after all, be accountable.

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We propose that the council will be given as much discretion in the matter of regional representation as we feel is possible. There is nothing in the Bill to stop the council having a single committee for England if that is what it wishes to do and it can convince those that it is required to consult that that is the right approach. In that connection, one should note that in the recent consultation not one of the responses suggested that there should be a committee for England. Preferences have been for a number of committees reporting to the council.
There are good reasons why there should be an exception to this discretion in the matter of setting up at least one committee for Scotland, Wales and Northern Ireland and why the appointment of chairman will be made by the Secretary of State. The recent history of having three separate national councils for those countries should not be completely set aside. Notwithstanding the reserved status of postal matters, there are clear present political reasons why there should be a committee for each of these countries. As was pointed out, it is not necessarily true that the service is the same. The case of a hurricane having a different effect in different parts of the country is an extreme example of different performances.
Lord Skelmersdale: It was meant to be.
Lord Sainsbury of Turville: But it illustrates very well the point that there may be great differences in regional matters and that in this respect people may think in terms of regional performance.
From a practical point of view, England is a larger country than the others and representation by a number of committees for different areas within England may be more appropriate than a single regional committee.
Clause 54 gives the council an explicit regional function. The council must have regard to the needs of users of relevant postal services, including in particular the interests of users in different areas. Clause 54 also requires the council to maintain at least one office in England, Scotland, Wales and Northern Ireland at which users of relevant postal services may apply for information. The office of the council will be in England, in London. We believe that the clause as it stands gives appropriate discretion to the council to decide what the arrangements should be for England but still ensures that there is sufficient protection for users in different areas.
The amendment which provides for an Internet site shows a proper regard for modern communications methods. However, I do not feel that it is necessary. As I made clear previously, I believe that the methods of communication should be left to the council so that it uses what is appropriate at the time.
I am not certain that there is a reference in the Bill to Scotland as a region. I believe that the reference in subsection (5) is to a regional committee rather than to Scotland as a region. If that is not the case, I am sure that the matter will be corrected. On that basis, I do not believe that the amendments would improve the clause and I suggest that they are withdrawn.
9.45 p.m.
Viscount Goschen: I wish to ask a quick question before we proceed further. Because the committees for Scotland, Wales and Northern Ireland come under the heading of "shall" and those that come within England, be it one or more committees, come under "may", can the Minister provide a strong explanation as to why there definitely "shall" be such committees for Scotland, Wales and Northern Ireland but I here only "may" be one for England? I understand that there may be one or more, but should not the clause state "shall" be one or more committees or a sub-division of those committees?
Lord Sainsbury of Turville: I believe that in the case of Scotland, Wales and Northern Ireland there was essentially agreement that there should be a council for each of those regions. However, in the case of England, it was by no means clear whether there should be a committee for England or a series of regional committees. On the whole, there was some feeling that there should be regional committees rather than a national committee.
Viscount Goschen: I hate to take up the time of the Committee and to be boring on this matter, but should it not be "shall"; that is, we should have one or the other? The Minister said that it should not be "shall" because we have not yet made up our minds whether there should be one committee or a sub-division of a number of committees for England. However, by his argument, there should be at least one committee.
Lord Sainsbury of Turville: This is obviously a matter about which there is some feeling. On that basis, I shall take it away for consideration. I believe that the intention was that it would be one way or the other. However, as there is a feeling that we should make it more clear, I shall certainly consider the matter further.
The Earl of Mar and Kellie: The reference to the Scottish committee must make clear that it is a national committee.
Baroness Miller of Hendon: I am grateful to the Minister for saying that he will look at the matter again. Under those circumstances, I am happy to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 51 to 53 not moved]
Clause 54 agreed to.
Clause 55 [Annual and other reports: the Council]:
Lord Sainsbury of Turvillemoved Amendments Nos. 54 to 57:
Page 35,1ine 7, leave out ("arrange for") and insert ("publish").
Page 35, line 7, leave out ("to be published").
Page 35, line 10, leave out ("arrange for") and insert ("publish").
Page 35,1ine 10, leave out ("to be published").
On Question, amendments agreed to.
Clause 55, as amended, agreed to.
Clause 56 agreed to.
Clause 57 [Power of the Council to investigate other matters]:
Lord Sainsbury of Turvillemoved Amendment No. 58:
Page 36, leave out line 2.
The noble Lord said: In moving Amendment No. 58, I shall speak also to Amendment No. 59. The first amendment is technical and removes an unnecessary definition of public post offices from Clause 57(1)(b). As Clause 42 defines public post offices for the whole of the Bill, that definition also bites on this clause, making the reference to Clause 42 in this clause redundant.
The second amendment removes the requirement on the council to give notice of its intention to carry out an investigation under Clause 57 to the commission and the Secretary of State. That was considered to be unduly onerous and impractical as it would require notification, whatever the scale of the investigation. I beg to move.
On Question, amendment agreed to.
Lord Sainsbury of Turvillemoved Amendment No. 59:
Page 36, line 3, leave out subsection (2).
On Question, amendment agreed to.
Clause 57, as amended, agreed to.
Clauses 58 to 60 agreed to.
Clause 61 [Forward work programmes]:
Lord Sainsbury of Turvillemoved Amendment No. 60:
Page 38, line 42, after ("or") insert ("(as the case may be)").
The noble Lord said: This is a technical amendment to make clear that each notice about the forward look programmes required by Clause 61 cannot be published by either the council or the commission but that each must publish a notice relating to its own draft programme. I beg to move.
On Question, amendment agreed to.
Clause 61, as amended, agreed to.
Clause 62 [Transfer of property etc. to nominated company.]:
Baroness Miller of Hendonmoved Amendment No. 61:
Page 39, line 8, at end insert—
("() Prior to the nomination of any company by the Secretary of State pursuant to subsection (1) the Secretary of State shall publish an order to be laid before and approved by a resolution of each House of Parliament setting out the contents of the Memorandum and Articles of Association of such company and the other details required to be filed with the Registrar of Companies on the incorporation of a new company.").
The noble Baroness said: In moving Amendment No. 61, I shall speak also to Amendment No. 62. These two amendments relate to the incorporation of
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the proposed new public limited company, which will take over the Post Office corporation and its assets. Amendment No. 61 simply requires Parliament to see in advance the proposed memorandum and articles of association of the new company, as well as the details that have to be filed at the Companies Registry on the incorporation of a new company— such matters as the proposed registered office; annual accounting date; nominal capital, and the amount to be issued; directors, secretary and so forth. None of that is confidential because it will be a matter of public record open to anyone prepared to pay the search fee once the company is on the register.
The Government will be the sole shareholder of the company. They hold the share or shares in trust for the nation. It is only right that as the de facto owners of the company, its representatives in Parliament should have advance knowledge and possibly some input into the corporate structure of their company. That especially applies to the memorandum and articles of association which are traditionally regarded as the contract between the company and its shareholders.
Amendment No. 62 arises because of the curious wording which the Government have inserted at Clause 62(3):
"The Secretary of State shall consult the Post Office before nominating a company for the purposes of this section".
What does the Post Office have to say about the company to which it is about to be sold? I use the word "sold" loosely, but in effect it is a sale. The new company gets the Post Office as a going concern and the owner, the state, gets shares in the new company. That is a common commercial transaction. There is even a special form for filing at the Companies Registry when shares are issued for a consideration other than cash. I refer, for example, to the going concern: the assets and goodwill of a business just about to be incorporated as a limited company, as in this case.
At a meeting with the Minister and his officials, I inquired what the consultation would be about and no one could tell me. I accept that "consultation" is a nebulous operation. However, having carefully listened to what the consultee has had to say, the Government can go off and do whatever they intended to do in any case, subject to the constraints of a potential judicial review if they are behaving too unreasonably. But if there is a consultation between the Post Office and the Government, surely it should not be in secret. Surely, Parliament is entitled to know the nature of the negotiations or discussions between the two sides?

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I have expressly excluded in my amendment matters involving commercial confidentiality. Ministers are frequently coming to Parliament to report on the outcome of various negotiations into which they have entered on behalf of the Government. There is no reason why Parliament should not be kept informed about those mysterious consultations. If precedent is followed, they will be leaked to the media anyway. This matter is important. I beg to move.
Lord Sainsbury of Turville: I have no great difficulty with the notion that the memorandum and articles of association of the Post Office company should be published. But I am opposed to a requirement for such documents to be approved by both Houses of Parliament. I shall explain why in a moment.
Equally, I have no great problem with the notion that the Government should make public anything relevant arising from the consultation with the Post Office that is required prior to nominating the company in accordance with subsection (3). But, again as I shall explain later, I have doubts about the usefulness of such an exercise.
With regard to the memorandum and articles of association of the future Post Office company, we will be looking for the company to have provisions akin to any other comparable modern company. The conversion of the Post Office to a plc is a fundamental element of our reforms of the Post Office, aimed at underlining its increased commercial freedom. We do not want the memorandum and articles of association to constrain its commercial freedom.
The memorandum and articles of association will become publicly available in due course as they will have to be filed with the Registrar of Companies. But I can say that the Government are minded to publish them in advance and lay them before Parliament once we have had a chance to discuss them with the likely directors of the new company and have settled the terms. Our willingness to publish the documents is part of our desire for there to be a clear, arm's length relationship between the Government and the Post Office company, as emphasised in our Post Office Reform White Paper. The relationship between the Government (as shareholder) and the directors of the Post Office company will be transparent from the memorandum and articles of association. But the suggestion in Amendment No. 61 that the memorandum and articles of association should be approved by resolution of each House is quite excessive and would run totally against the grain of giving the Post Office greater commercial freedom.
The memorandum and articles of association need to be capable of being amended by the shareholders, after discussion with the directors, as and when the situation may demand. We could not contemplate having to come to Parliament for every change that might be needed. If (as the amendment seems to suggest) only the initial documents need be approved, I can see no great value for the House. A less benign
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government could secure that approval and then amend the documents the next day without consulting Parliament, and the effect of this amendment would be totally circumvented.
As regards publication of a report on the nature and content of consultations between the Government and the Post Office, I could well imagine the Government making a statement that they had consulted the Post Office about the proposed nomination of a company and the transfer, and confirming that everything was now ready for a named company to be nominated and for the transfer to take place. But anything further than that might well stray into areas of commercial sensitivity, which the noble Baroness quite properly seeks to exclude from prying eyes, or be of such detail as to bore noble Lords to death.
So with the promise that the Government would seek to be open about these matters, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Miller of Hendon: I do not know whether it is the lateness of the hour which prompted the Minister to go a little way towards what I wanted, and it may be the lateness of the hour that makes me not wish to push him to go any further. Under the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 62 not moved.]
10 p.m.
Baroness Miller of Hendonmoved Amendment No. 63:
Page 39, line 22, leave out ("the Treasury or").
The noble Baroness said: In moving Amendment No. 63, I shall speak also to Amendments Nos. 65 to 68, 68A and 68B. These amendments relate to one line in Clause 62, two lines in Clause 63, two lines in Clause 65 and two lines in Clause 66. Despite relating to four different clauses, ail the amendments refer to one matter and all would have the same effect.
The Bill provides for the sole shareholder to be the Government, and Clause 66 actually precludes disposal of any of the shares without the sanction of Parliament. But throughout the four clauses to which I refer, the legislation provides for the shareholder to be the Treasury, the Secretary of State, or both. This may be wrong in law; but it is absolutely wrong in principle. I cannot be sure about the law because I am not a lawyer. However, as I understand it, the Treasury is neither a person nor a corporation; in other words, the Treasury is not a legal entity and,

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therefore, is unable to be a shareholder. I shall not spend any further time on that technicality because it is late. I am sure that the Committee will appreciate it if I just stick to the point. I shall leave it to the Government's lawyers to sort out that problem. They should look into it.
More important is the matter of principle. The Government are asking us to allow two different departments to have fingers in the same pie. What a recipe for dispute and back-biting that will be, to say nothing of the confusion if two different departments are pulling in different directions and trying to follow two different policies. That leads me to my next point.
There is an enormous potential conflict of interest if the Treasury is to be allowed to interfere in the affairs of the Post Office, even in the limited way that a shareholder is able to do. The White Paper provides for the Post Office company plc. to invest the equivalent of a commercial dividend in gilts or the National Loans Fund; in other words, it will have to make compulsory loans to the Government. Moreover, in the words of the White Paper:
"Once the Post Office has been established as a publicly-owned plc, it will pay an annual dividend to the Government rather than invest in deposits"—
that is, of course, after the normal tax on its profits that a trading company pays to the Inland Revenue.
There is no doubt that any Chancellor of the Exchequer will regard the Post Office plc, and its cash flow, as a milch cow and try to exert pressure as to the amount of dividend to be paid, rather than spent on developing the business.
Then there is the matter of the subsidy that the Government hastily inserted into the Bill during its final stages in the other place. It is now to be found in Clause 102, which we shall be discussing later. However, I am sure that Members of the Committee will be glad to know that we will do so next Thursday, not tonight.
The Government are seeking to give the Treasury a veto over the provisions of this subsidy. So here we would find the company owned by the Treasury asking its shareholder for a subsidy out of public funds. Alternatively, if a case is made out for the subsidy, the Treasury, in derogation from its duty to do its best for the company it owns, might veto it. Indeed, we might reach the farcical situation of the Treasury as a shareholder, tacitly agreeing, if consulted by the directors, that it should apply for a subsidy and then, wearing its other hat as the holder of the nation's money, refusing to part with any money.
Under Clauses 68 and 69 any borrowing by the Post Office is to be made exclusively by the Secretary of State with the Treasury's consent. The funds are to come from the National Loans Fund and the terms are to be approved by the Treasury; in other words, the Treasury is the lender with the Secretary of State merely being the funnel—or the broker—for the loan; and here, I believe, is another major conflict of interest. The bank is lending money to the company that he controls and
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deciding on the rate of interest, as well as the duration of the loan. Can noble Lords imagine what the banking regulator would say if one of the high street banks indulged in such a practice?
While all of that is going on, the Secretary of State at the DTI is supposed to stand quietly by and watch the Post Office returned to the grip of the Treasury, and its fiscal policy, totally negativing the whole objective of freeing the Post Office from government control and letting it act as a normal commercial company.
There are clear indications of disputes between the DTI and the Treasury over some aspects of this Bill. I shall comment on that matter in much more detail when we reach Clause 102. There is, however, a clear and positive clue in the wording of one of the clauses that we are considering at the moment. Cutting out all the extraneous material, Clause 66(1) states:
"Neither the Treasury nor the Secretary of State … shall … dispose of any of the issued shares … in the Post Office company … which are held by him".
There is only one "him". That "him" was referred to much earlier as the Secretary of State. It is clear that after the clause was drafted the Chancellor, Gordon Brown, decided that he would not allow a government-owned, money-making organisation to exist without his having a grip on it. The draftsmen clearly made a little slip in not correcting that bit of syntax after the Chancellor was slipped in, like a cuckoo into the nest.
I can imagine the annoyance of the Chancellor at seeing the constant cash flow he currently enjoys from the Post Office slowing down to an annual dividend and the compulsory loans to the Government. However, that is no excuse for putting him in the dominant, influential position of a principal shareholder.
I draw the Committee's attention to Clause 62(7)—which I seek to amend with Amendment No. 63—which allows for the Government's share to be held either by the Treasury or by the Secretary of State. Therefore there is no guarantee that the Post Office, which is normally answerable to the DTI, can be under the legal control of the Treasury. Will the Minister tell us, in his response on behalf of the Secretary of State, that Mr Byers welcomes the possibility of his colleague, the Chancellor of the Exchequer, annexing a major responsibility of his department in the course of Mr Brown's empire building? No department seems to be safe from him, as witnessed by his recent intrusion into the affairs of the Department for Education.
It is the responsibility of this Chamber to ensure that there is one, and only one, government department answerable to Parliament for the Post Office once it is turned into a public company and removed from direct ministerial responsibility. I hope that I have set out clearly what I feel to be the problem. Some of my points were prompted by the meeting I had with the Minister last Monday and the confusion that arose in my mind. I very much hope that the Minister will be able to reassure us that what I think will happen will not happen. I beg to move.
Lord Lyell: I have listened to the comments of my noble friend with considerable care. The Minister

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probably has considerably more expertise in this matter than myself. I declare my interest as a mere accountant. I believe that I last made detailed studies of the Companies Act in 1963–64. However, I believe that the arguments put forward by my noble friend have some merit. I hope that the Minister, and perhaps other Members of the Committee, can assist me in this matter.
Clause 62(7) refers to,
"the Treasury or the Secretary of State",
as does Clause 63(2). Clause 64 states,
"or, with the consent of the Treasury".
I hope that my intervention is not unhelpful.
My noble friend Lady Miller questioned the relationship between the Treasury and the Secretary of State of the relevant department. I hope that the Minister can clarify a point for me. Is there a precedent for the measure we are discussing? If he can tell me that there is a precedent for this measure in what is often called a "golden share", I can research the matter and not delay the House at a later stage of the Bill. But certainly I should like clarification. Although my noble friend attempted to clarify the situation she was beginning to faze me. I am looking for help. I think that the Minister may be able to give me some assistance and I sha11 wait to hear what he has to say.
Lord Skelmersdale: My noble friend perhaps will be delayed a few minutes before he hears what the Minister has to say.
My question on Clause 62 is very simple: why both? I can understand why the Treasury should want to hold the shares; I think it is absolutely right that it should. To that extent, I disagree with my noble friend on the Front Bench. None the less, I think it is extremely dangerous from all kinds of points of view for the shares to be held essentially by both or by a nominee of both. I hope that that is not what is intended by the Bill.
Lord Sainsbury of Turville: Perhaps I may speak to Amendments Nos. 63, 65, 66, 67, 68, 68A and 68B and continue my career of being as helpful as I have been in the past.
The noble Baroness may feel that the issue here is the "dead hand of the Treasury" in matters concerning the Post Office. This view has been aired before in this House and in the other place. I am of course aware that the Treasury is often cast as the villain of the piece in respect of many areas of government policy—indeed, I think my own party has occasionally implied that that may be the case.
But there is a serious point to be made in explaining why we do not believe that it should be left only to the Secretary of State to hold the Government's shares in the Post Office company and its wholly owned or relevant subsidiaries, nor for the Secretary of State to be the only party who can give directions regarding the issue of further shares to the Government after the appointed day.
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It may be simply because I have been a finance director for many years of my life that I think the Treasury has the responsibility of being the guardian of public sector finances. It is simply a matter of practicality with large sums of money such as this that the Treasury is inevitably involved. In the same way that if substantial investments were made in a private company, it would not be done by a divisional shareholder without consulting the finance director, who no doubt would have a very strong say in what took place.
The Government's shareholding in the Post Office company and its subsidiaries represents a substantial public sector investment. The Treasury therefore has a legitimate interest in the Government's shareholding in this public sector asset and it should not be excluded from the holding of that asset and should be involved in the giving of directions to increase the size of the asset.
There is a simple practical issue that makes it sensible for the Secretary of State and the Treasury to be able to be shareholders in the Post Office company— that is, that a public limited company must have at least two shareholders. It is quite right that the Treasury is not a sole corporation, but in this case it would be represented by the Treasury Solicitor. So there is a sensible, practical reason for giving the Government flexibility in the management of its shareholding in this way.
Our approach is certainly not unique; a number of previous statutes followed the same route—for example, the Gas Act 1986, the Water Act 1989 and the Electricity Act 1989.
I am sure that the noble Baroness fears the undue interference and influence of the Treasury in the future of the Post Office company and wishes to safeguard against this fear. But whether the Treasury holds any shares or whether its consent is required before directing the issue of further shares to Government is, to some extent, an irrelevance. The Treasury's greatest influence in the future development of the company will be as a provider of finance for growth investment. On this point I hope that our policy is quite clear.
The borrowing regime for the Post Office, both now and when it becomes the Post Office company, was clearly set out in the White Paper. The Post Office company will be expected to finance investments in the core business from retained earnings. But these funds are unlikely to be sufficient to enable the Post Office company to develop its business and to meet the challenges and opportunities of the changing postal market. Therefore, the Post Office company will be allowed to borrow for growth investments.
We have already given effect to our policy to give commercial freedom to the Post Office by giving it greater borrowing powers. As a result the Post Office has already commenced its strategy to expand its international business for the benefit of its customers.
I hope that I have been able to give the noble Baroness comfort that the supposed dead hand of the Treasury is now a myth as far as concerns the Post

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Office and that the organisational arrangements make sense. On that basis I ask the noble Baroness to withdraw her amendment.
10.15 p.m.
Baroness Miller of Hendon: I certainly do intend to withdraw the amendment. I am not too sure that the Minister was able to give me comfort because at this time of night I could not match what he was saying to what I think the problem is. However, I shall read carefully in Hansard what the noble Lord said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 62 agreed to.
Schedule 3 [Transfer to the Post Office company: supplementary provisions]:
Lord Sainsbury of Turvillemoved Amendment No. 64:
Page 79, line 31, at end insert—
("Welfare funds

.—(1) This paragraph applies to—

(a) a fund (whether described as a welfare fund, benevolent fund, mutual aid fund or otherwise) whose objects consist in, or include, the provision of benefits in case of need, sickness or distress for Post Office beneficiaries, and

(b) a society or organisation (however described) whose objects are similar.

(2) In sub-paragraph (1) "Post Office beneficiaries" means any or all of the following persons—

(a) persons who are, or have been, engaged in the business of the Post Office,

(b) the relatives or dependants of such persons.

(3) The provisions of the trust deed, rules, regulations or other instrument constituting or regulating a fund, society or organisation to which this paragraph applies may, by resolution of the managers of the fund, society or organisation, be altered as mentioned in sub-paragraph (4).

(4) The provisions may be altered so as—

(a) to permit persons who are, or have been, engaged in the business of the Post Office company, or such persons of a particular description, to become members of, or subscribers to, the fund, society or organisation.

(b) to entitle such persons, or such persons of a particular description, and persons claiming in right of them, to receive benefits from the fund, society or organisation (subject to any terms and conditions specified in the resolution) if, and to the extent that, they would be entitled to receive benefits from it if being engaged in the business of the Post Office company were being engaged in the business of the Post Office.

(5) No alteration may be made that alters the character of the fund, society or organisation.

(6) If a resolution of the managers of a fund, society or organisation to which this paragraph applies so provides—

(a) any references in the trust deed, rules, regulations or other instrument constituting or regulating the fund, society or organisation to the Post Office shall be construed as references (or, if the context so requires, as including references) to the Post Office company, and

(b) any references in that instrument to persons engaged in the business of the Post Office or persons of a particular description so engaged shall be construed as references (or, if the context so requires, as including references) to
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persons engaged in the business of the Post Office company or (as the case may be) persons of a corresponding description so engaged.

(7) In this paragraph "managers" in relation to a fund, society or organisation, means the trustees, committee or other persons entrusted with its management.").

The noble Lord said: Amendment No. 64 inserts a new clause into the Bill which is intended to ensure that the managers of welfare and other funds for persons and their relatives and dependants who are or have been engaged in the business of the Post Office have the power to alter these funds to take account of the transfer of the Post Office to the Post Office company. The amendment will maintain the rights of persons eligible for assistance under the existing funds and allow persons and their relatives or dependants who become engaged in the business of the Post Office company to become eligible.
The Government believe that it is appropriate for the trustees to have this power to enable them to continue the good work of these funds in providing assistance for beneficiaries in case of need, sickness or distress. I beg to move.
On Question, amendment agreed to.
Schedule 3, as amended, agreed to.
Clause 63 [Government holding in the Post Office company and certain subsidiaries]:
[Amendments Nos. 65 and 66 not moved.]
Clause 63 agreed to.
Clause 64 agreed to.
Clause 65 [Restriction on issue of shares to third parties]:
[Amendments Nos. 67 and 68 not moved.]
Clause 65 agreed to.
Clause 66 [Restriction on disposals of shares to third parties]:
[Amendments Nos. 68A and 68B not moved.]
Clause 66 agreed to.
Clause 67 [Approved disposals]:
On Question, Whether Clause 67 shall stand part of the Bill?
Lord Clarke of Hampstead: I have waited patiently to register my firm opposition to Clause 67. The Committee may recall my speech at Second Reading in which I prophesied that this was the end of the British Post Office as we have known it and as the Post Office has known itself for 350 years.
On Monday of this week I heard the Secretary of State address a conference where he said that there was nothing to worry about and that the Post Office would remain 100 per cent in public ownership. He even went further and said that the next Labour Party manifesto would guarantee that the Post Office would remain 100 per cent in public ownership, which is a slightly different kind of democracy from the one for which I had responsibility as chairman of the Labour Party where we used to have to wait for conferences to make decisions. He was able to say that the policy forum would be able to guarantee that 100 per cent.

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My problem with Clause 67 is that it still allows the disposal of shares to other organisations. I have asked the Minister on a number of occasions how the Government can part with certain assets of the Post Office and be able to say that it is 100 per cent publicly owned. Clearly, that cannot be so if shares are passed over to another organisation.
I know that there is no chance in this world of any body listening to me at this time of night, but I did not want Clause 67 to go through without saying how disappointed I am that a Labour Government has brought our wonderful Post Office to this sorry state. In a few years' time I can see it becoming part of a super-Euro post office. It is a travesty that the Government that I support have brought the Post Office that we have known and loved, and where some of us have earned our living—in my case for 51 years—to such a position.
Lord Skelmersdale: Clause 67 is the key clause in the entire Bill regarding the liberalisation and competitiveness of the Post Office. In the White Paper and on many other occasions we have been told that the object is to enable share swaps, joint ventures and so on. With out Clause 67 that simply could not be done.
I sympathise with the view expressed by the noble Lord, Lord Clarke. The Post Office will not be the same. His key question is how can the Government, knowing that they will have share swaps and so forth, continue to say that the Post Office will be a 100 per cent publicly owned company.
Lord Sainsbury of Turville: This clause sets out the procedure to be followed in order to obtain the approval of Parliament to make share issues or disposals, which would otherwise be prohibited by Clause 66. The parliamentary approval procedure is aimed at ensuring that shares are exchanged or sold only in order to cement commercial strategic alliances.
Subsection (1) requires that a motion, to be moved by or on behalf of the Secretary of State, should receive affirmative resolution of both Houses before any shares can be issued or disposed of. It will be a straightforward motion and there will be no need for anything more elaborate.
Subsection (2) specifies the minimum information to be contained in a motion to be presented for the approval of both Houses. Subsection (3) sets out the pre-conditions to be met before a motion relating to the issue or disposal of shares in the Post Office company may be moved. The conditions are based on our commitment that shares would be exchanged or sold only to cement a joint venture or a strategic alliance. Therefore, five pre-conditions are specified: first, that the company has agreed with the other party to take part in a joint venture or other partnership which it considers to be in its commercial interests; secondly, that it involves the issue or disposal of shares in the Post Office company; thirdly, that the Post Office company has recommended to the Secretary of State that the disposal takes place; fourthly, that the Secretary of State is satisfied that the issue or disposal is for the purpose of securing the proposed arrangement and that
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it is in the commercial interests of the company; and, fifthly, that the Treasury has given consent to the proposed issue or disposal.
Subsection (4) mirrors subsection (3) in setting the pre-conditions to be met before moving a motion relating to the issue or disposal of shares in a relevant subsidiary in order to enable the Post Office company or a relevant subsidiary to take part in a joint venture or other partnership. The pre-conditions in this case are generally similar to those applicable to the issue or disposal of shares in the Post Office company, although in this case it may be the subsidiary that has agreed to be party to the alliance. However, it must still be the Post Office company that recommends the disposal and whose commercial interests must be considered by the Secretary of State.
It has been suggested by some that the Government intend privatisation by the back door. Of course, that is not the case, but we want to give the Post Office company greater commercial freedom. Looking at the scene in Europe today, everyone can see that it is a necessary requirement. This clause gives the Post Office that freedom. Members will note that this process is not triggered by the shareholder or even the Treasury. It is triggered by the Post Office and by the Post Office alone. It is a matter for the Secretary of State, if he believes that the deal is in the best interest of the Post Office, to put the matter before Parliament for debate. Therefore, every case will be considered on its merits.
Clearly, if there is a swap of shares, it could no longer be said that the Government have a 100 per cent shareholding. However, the Government will, to a great extent, still control the company.
Clause 67 agreed to.
Baroness Miller of Hendonmoved Amendment No. 69:
After Clause 67, insert the following new clause—
PUBLICATION OF PARTICULARS OF ACQUISITIONS AND DISPOSALS
(" .—(1) Where the Post Office company or any relevant subsidiary proposes to acquire or dispose of an undertaking or any interest in an undertaking and—

(a) the gross assets of that undertaking or attributable to that interest are equal to more than 10 per cent. of the gross assets of the Post Office company or the relevant subsidiary; or

(b) the turnover of that undertaking or attributable to that interest is equal to more than 10 per cent. of the turnover of the Post Office company or the relevant subsidiary; or

(c) the net profits of that undertaking or attributable to that interest are equal to more than 10 per cent. of the net profits of the Post Office company or the relevant subsidiary.

the Post Office company or the relevant subsidiary must as soon as practicable publish a notice in accordance with subsection (2).
(2) A notice under this subsection must be published in the London Gazette, the Edinburgh Gazette and the Belfast Gazette in

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such form as the Secretary of State may prescribe and must include —

(a) the name of the undertaking;

(b) a description of the business carried on by the undertaking and, where the transaction is an acquisition or disposal of an interest in the undertaking, a description of the business attributable to that interest;

(c) the effect of the transaction and, in particular, the benefits which the directors expect to accrue to the Post Office company or any relevant subsidiary;

(d) the price (or the monetary value of any other consideration) to be paid or received by the Post Office company or any relevant subsidiary and, in the case of a disposal how the proceeds of the disposal are to be applied; and

(e) if any securities are to be issued as a result of the transaction, the nature and amount of those securities.

(3) In this section "gross assets" means total fixed assets and total current assets.").
The noble Baroness said: This amendment is very long because it introduces a new clause, but it is one that is capable of a short explanation. I am very grateful to the noble Lord, Lord Razzall, who, in his speech in the debate on Second Reading at col. 944 of Hansard, alerted noble Lords to the problem which the amendment seeks to redress. I am sorry not to see the noble Lord in his place, given that in this amendment I am attempting to bring forward his suggestion.
The Bill will create a new Post Office. In place of a statutory corporation such as the present Post Office, the BBC or other government-owned corporations before they were privatised, the Post Office will become a public limited company, operating in the same way as many other major public companies, but with one important difference. This company will have only one shareholder: the Government. However, it will have the same financial powers as any other public company and, in many cases, greater powers. However, because it has only one shareholder and because it is not intended that the company should have private or institutional shareholders, its shares will not be listed on any recognised stock exchange.
In turn, this means that the new company will not be subject to the listing and other stock exchange rules governing acquisitions and disposals which apply to quoted companies of a similar size. Many of the listing rules are aimed at investor protection; that is, the protection of existing shareholders as well as potential new investors, whether on the issue of new shares or on the acquisition of existing shares via the Stock Exchange. However, the rules regarding the transparency of acquisitions and disposals, and for relevant information to be brought into the public domain as soon as possible, are also intended to protect the integrity of the market. Furthermore, that makes for good corporate governance.
It should be borne in mind that acquisitions by the new Post Office are most likely to be of an existing publicly quoted company which will itself be obliged to make an announcement at an early stage. As large a corporation as the Post Office will be, with its significant financial power, it should be subject to an obligation to make public disclosure of any substantial transactions into which it enters. This new clause would
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require the Post Office or any relevant subsidiary through which it conducts its transactions to publish certain details of acquisitions where the assets, turnover or profits of the target company exceed 10 per cent of that of the Post Office or its subsidiary. The same percentage would apply in the case of a disposal by the Post Office. Obviously, details of minor transactions would be excluded from the effect of this clause.
Even the most insignificant of private companies, say a company owned by a husband and wife as the only shareholders and directors, is compelled to go through the procedure of publishing annual reports in which the directors tell themselves, in their capacity as shareholders, what they have been doing. Provision has already been made in the Bill relating to the accounts of the Post Office. Those are contained in Clauses 73 to 78. The letter entitles the Treasury to demand information from the new company. The provisions of this clause are designed to supplement those provisions. They will ensure that the real owners of the company on whose behalf the Government, as the single shareholder, holds the shares—the public—will receive the fullest information at the earliest commercially possible time in the same way as if the Post Office was a normal, publicly quoted company.
The key word here is "transparency". Any normal company has to go through this procedure and I see no reason why this new kind of plc should not do so as well. I await with great interest the response of the noble Lord. I beg to move.
10.30 p.m.
Lord Sainsbury of Turville: Whatever its intention, this amendment would risk putting the Post Office company at a considerable disadvantage compared with its commercial competitors. Far from creating a level playing field, it would create an extremely "unlevel" playing field. No other commercial company would be required to publish its intentions to acquire or dispose of an undertaking in the same way. It would immediately place a major hurdle in the way of the Post Office entering into transactions with another party. Not only would the Post Office be forced to divulge potentially commercially sensitive information about itself, but it would inevitably have to reveal information which could well be prejudicial to the interests of that potential partner. Who would wish to enter into negotiations with the Post Office faced with such a disclosure requirement?
Publicly listed companies are merely required, in certain circumstances, to announce acquisitions, once the terms of such a transaction have been agreed. And the test of the size of the transaction in relation to the gross assets, turnover and net profit, apply to the listed company itself. The noble Baroness's extension to relevant subsidiaries does not follow the listing rules.
In seeking to give the Post Office (and the future Post Office company) the greater commercial freedom that everyone agrees is necessary, we are endeavouring to transform the Post Office company into a commercial company, governed by normal companies' legislation. Although the Government will be the sole shareholder

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(at least at the outset) and, of course, the Stock Exchange listing rules do not apply, the rules provide a useful benchmark for the relationship between the Government (as shareholder) and the company. Certainly, for completed transactions, it is our intention that the Post Office should provide transparent information on completed acquisitions along the lines of the London Stock Exchange disclosure requirements. Indeed, the Post Office is now doing so. I hope that this gives the kind of assurance that the noble Baroness seeks.
I recognise that the Committee may well be interested (on behalf of the nation for whom the Government hold the shares) in the way in which the Post Office company performs, and especially in the way in which it uses money for major transactions. But the amendment serves no useful purpose in any oversight of the way in which the Government manage their shareholding—it does not give this House (or the other place) any power to comment on a proposed transaction. All it does, in the way that it is drafted, is give commercial competitors the opportunity to spoil a major deal, which the Post Office management had considered in the commercial interest of the company. The actual position, as set out in the White Paper, is that the approval process by government of Post Office proposals for acquisitions and similar transactions cuts in at a far lower level than for similar-sized listed organisations; government approval is required when the Post Office company wants to borrow large sums (over £75 million) for new investments.
If the amendment is aimed at enabling the regulator to check whether a major transaction would disturb the balance between the Post Office company and its less dominant competitors, these provisions are equally unnecessary. The regulator will have adequate powers to ensure that the Post Office company does not abuse its market position without having to rely on such public notices of the Post Office company's intentions.
In addition, the amendment would do nothing to enhance the Government's controls on the disposal of shares in the Post Office company or any relevant subsidiary—such disposals (of whatever size) would fall within the provisions of Clause 67 for which prior parliamentary approval is needed.
I hope that, in the light of what I have said and the assurance I have given on the prompt disclosure of information on acquisitions, the noble Baroness will feel able to withdraw her amendment. We both agree that we should try to create a level playing field. I do not believe that these amendments would do that.
Viscount Goschen: Before the noble Baroness puts her intentions regarding her amendments to the Committee, perhaps the Minister can help me on an entirely related point. My noble friend has correctly highlighted the issue of transparency in terms of providing information on any deals that may be done by the Post Office.
Essentially, we are talking about a privatisation, possibly of a piece of the Post Office, a share swap, or whatever. It will involve the transfer of public equity to the private sector. That is generally considered to be
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privatisation. In other circumstances, generally if the Government seek to privatise a state asset a competitive process must be undertaken, for example by advertisement in the Official Journal and so on. I understand that the process involves giving a fair opportunity to other bodies that may wish to purchase assets from the Government. Given that we are talking about the transfer of a statutory corporation to a plc, albeit one that is wholly-owned by the Government, can the Minister explain why apparently that privatisation process does not require the same statutory process that applies to any other privatisation?
Lord Sainsbury of Turville: In this case we are not talking about a privatisation which would involve a completely different process. Here we are considering a very limited situation in which there may be a share swap to further the interests of the Post Office in commercial situations. I believe that that is more comparable with an acquisition or merger between two private sector companies. For that reason, both the noble Baroness and I referred to the commercial market and the listing regulations which would apply in those situations. It is not a privatisation in any commercial sense.
Viscount Goschen: Am I mistaken, therefore, in understanding that the Bill permits the disposal of specific assets of the Post Office, not necessarily those involved in a share swap; in other words, that the payment may be in cash rather than equity?
Lord Sainsbury of Turville: As I explained, there is a very clear set of circumstances in which there is simply an ability to undertake what is effectively a merger or acquisition. That arises in the case of a share swap, not in a situation where shares are sold in the market for cash.
Baroness Miller of Hendon: I am disappointed by the reply of the Minister. My understanding is that one of the main purposes of the Bill is to bring more competition into the marketplace, which requires other companies to come in as licensees in due course in particular areas. My understanding—perhaps I am just dim—is that other public limited companies must follow the normal rules of the Stock Exchange and disclose what is necessary and appropriate. The Minister says that that puts the Post Office at a disadvantage. I suggest that if the Post Office is exempt from doing what other companies have to do, it is not a level playing field. It is rather late in the evening and I do not want to go on ad nauseam. I wish to test the opinion of the Committee.
10.37 p.m.
On Question, Whether the said amendment (No. 69') shall be agreed to?
Their Lordships divided: Contents, 5; Not-Contents, 24.

Division No. 2

CONTENTS

Goschen, V.

Northbrook, L. [Teller]

Henley, L. [Teller]

Wilcox, B.

Miller of Hendon, B.

NOT-CONTENTS

Amos, B.

Harrison, L.

Bach, L.

Howells of St Davids, B.

Berkeley, L.

Lea of Crondall, L.

Burlison, L.

McIntosh of Haringey, L.

Carter, L. [Teller]

Mallalieu, B.

Dearing, L.

Mishcon, L.

Desai, L.

Puttnam, L.

Elder, L.

Ramsay of Cartvale, B.

Elder, L.

RendellofBabergh, B.

Farrington of Ribbleton, B. [Teller]

Sainsbury of Turville, L.

Sharman, L.

Gilbert, L.

Simon, V.

GrenfeU, L.

Whitty, L.

The Deputy Chairman of Committees (Viscount Simon): As it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 57 I declare the Question not decided and, pursuant to the Standing Order, the House will now resume.
House resumed.

Alliance & Leicester Group Treasury plc (Transfer) Bill [H.L.]
Reported from the Unopposed Bill Committee with amendments.
House adjourned at twelve minutes before eleven o'clock.