Postal Services Bill

HL Deb 08 June 2000 vol 613 cc1242-307

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 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 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 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 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 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 Turville

moved 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 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 Turville

moved 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 Laird

moved 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 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.

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 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 Hendon

moved 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.

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 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 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 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 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 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 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 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 Skelmersdale

moved 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!

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 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 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 Hendon

moved 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"? 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 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 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.

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

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.

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 Hendon

moved 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 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 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 Hendon

moved 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 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 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 Hendon

moved 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.

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.

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 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 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, 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 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 Skelmersdale

moved 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 Hendon

moved 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 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 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 Hendon

moved 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 Hendon

moved 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 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 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 Hendon

moved 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."). 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 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 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 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 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 Haringey

moved 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 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 Hendon

moved 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.

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.

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 Turville

moved 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 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 Hendon

moved 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 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 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 Turville

moved 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 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 Haringey

moved 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 Hendon

moved 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)". 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 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.

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 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 Haringey

moved 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 Haringey

moved 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.