HL Deb 08 June 2000 vol 613 cc1323-62

8.30 p.m.

House again in Committee.

Clause 44 [Review and information]:

Baroness Miller of Hendon

moved Amendment No. 35: Page 28, line 35, after ("States") insert ("of the European Community"). The noble Baroness said: In moving Amendment No. 35 I wish to speak also to Amendment No. 36. Clause 44 provides for the commission to gather information about postal services in the United Kingdom and elsewhere. When the clause was considered in Committee in another place, the words "other member States" were not included. Therefore Clause 44(1)(a) and (b) simply referred to, the United Kingdom and elsewhere". My honourable friend the Member for Rutland and Melton proposed amendments to add the words "the European Community" after "United Kingdom". I shall explain in a few moments why he chose to use the words "European Community" rather than "European Union". At first the Minister responsible for competition in the other place rejected the amendment. He did so on the ground that "elsewhere" covers the European Community as well as the rest of the world. However, later in the same debate he relented. He said that a speech by my honourable friend the Member for South West Hertfordshire had almost made him change his mind. He said, We shall reconsider the drafting of the clause so that we can deal with that valid point on Report". The Committee will note the words "valid point". The Government were almost as good as their word and added three words. The two paragraphs now refer to, the United Kingdom, other member States and elsewhere". The three words that were added were "other member States". But unless I have missed a definition somewhere during my repeated reading of the Bill, there is no definition of "member states". Member states are members of what—the EC or the EU, the Commonwealth, the United Nations, NATO, or what?

At a meeting I had with the Minister, which he kindly granted on Monday, it was suggested that the definition was to be found in the Interpretation Act 1978. After that meeting I scoured that Act line by line, not once but three times, the final time running down every page with a ruler. I simply could not find the definition. Perhaps it had been added to the text of that Bill by some later Bill; or perhaps, not being a lawyer, I have stupidly overlooked it anyway.

The point is that if I, actively looking where I was told to look, cannot readily find it, how can arty other ordinary citizen be expected to do so? What is even more to the point, why should anyone wanting to consult the Act have to trawl through the statute book to discover what this provision means?

The words "European Community" and "European Union" are not ineffable phrases to be uttered only by the High Priest. I accept that there are Members on both sides of this Chamber and of the other place who can say them only through clenched teeth, but there is no reason why the Government should be so coy and leave an ambiguity in the Bill. They were not frightened to say exactly what they meant in the Explanatory Notes provided by the Department of Trade and Industry where it states: Clause 44 requires the Commission to keep under review and collect information about the provision of postal services in the United Kingdom, other member States of the European Community and elsewhere". Amendments Nos. 35 and 36 simply plug the hole and say exactly what they are talking about, a:nd more fully cover what the Minister in the other place admitted was a valid point.

The reason I have used the phrase "European Community" rather than "European Union" is that that is the wording that my honourable friend used in his amendment in the other place. He did so because, as he explained, the European Community is one of the components of the European Union.

Pursuant to EU legislation, it is Community institutions which undertake measures which relate to the single market, including the continuing review of postal services. My honourable friend insisted that he was not just engaging in what he called "techno-babble". He just wanted to ensure that the focus of the review and the collection of information entrusted to the commission was well directed. Indeed he could have gone further and pointed out that "European Community" was the phrase used in the Government's own notes to this clause that I have just referred to. All that I ask for is the addition of four little words. They will not bring down the whole edifice of this Bill. Superfluous or not, they will make it clearer to the man in the street and to this Peer at the Dispatch Box.

Earlier I mentioned to the Minister that I was surprised that he did not feel able to humour me on a simple, non-controversial amendment. I hope that on this occasion the Minister will feel able to humour me and accept these two amendments. I beg to move.

Lord Skelmersdale

It is clearly not only men who believe in belt and braces; my noble friend clearly also believes in them.

As a Member of the House—I am sure that there are many others in the Chamber at present—who is a member of one of the sub-committees of the European Union Committee (I sit on Sub-Committee B which considers energy, industry and transport), I am well aware that there is another draft directive from Brussels winging its way towards the committee office. Doubtless I shall consider it in due course.

My noble friend is quite right to say that, thanks to the activities of my honourable friend in another place, this Bill now belatedly refers to member states of the European Community. She rightly says that the technical term ought to be "European Union" but, none the less, some analogous words most certainly ought to be included in the Bill.

Lord Sainsbury of Turville

The term "member States" means member states of the European Communities. This is the legal interpretation of this phrase according to the Interpretation Act 1978. I may have inadvertently wasted some of the noble Baroness's time on this matter. That Act applies the definitions in the European Communities Act 1972. The definition of the term is to be found in Schedule 1. I hope that I can rather belatedly direct the Committee in the right direction.

I do not believe that many people on the Clapham Omnibus seek the definitions we are discussing. However, legislation should be interpreted by reference to the Interpretation Act. We have not defined this term because, where terms or expressions are defined in the Interpretation Act, they are not defined in the Bill. Under the Interpretation Act, the only definition of "member States" refers to member states of the European Communities. All Acts of Parliament must be construed in accordance with the Interpretation Act. This ensures consistent construction of particular words and phrases.

I am sympathetic to the spirit of Amendments Nos. 35 and 36. However, I believe that we should adhere to the proper way of drafting this legislation. I therefore ask that Amendments Nos. 35 and 36 be withdrawn.

Baroness Miller of Hendon

It is very good of the Minister to be sympathetic towards me. However, I do not think that that is quite the same as humouring me. Having said that, I understand how interpretations and words have to be correct.

It is a great pity that I was referred to the Interpretation Act 1978. The noble Lord was right gently to apologise for wasting my time. Research facilities are available to the Opposition as they are to the Government. I am dealing with a large number of amendments and I think my time is extraordinarily precious; I regret having to go up and down three times—and with a ruler no less. In the end I could not believe that it was so impossible to find.

I accept from the Minister that the man on the Clapham omnibus will certainly not trawl through this Bill, the Interpretation Acts and so on; I understand that totally. Having received that information from the Minister, I gladly withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 36 not moved.]

8.45 p.m.

Lord Howie of Troon

moved Amendment No. 37: Page 28, line 37, at end insert ("including comparative information on the efficiency and economy of the provision of such services"). The noble Lord said: I notice that my Amendment No. 37 is grouped with Amendments Nos. 38 and 39; I had not noticed that before.

As the Minister knows, I was asked to table this amendment by the Periodical Publishers Association, of which I happen to be vice-president because of my previous activities as a publisher of engineering magazines, among other things.

It is a very mild amendment. It follows from conversations between the PPA and a variety of organisations, including the Ministry, the commission and other relevant bodies. Unfortunately, I was unable to speak at Second Reading—it would have saved some time today—but I wrote to the Minister stating more or less what I would have said had I spoken in the debate. I gave him to understand that I would very likely bring forward an amendment of this kind. My letter used the same words as I have put down tonight.

I am happy to say that I received an extremely courteous letter from the Minister, which did not surprise me. It dealt with my arguments and threw them into the long grass with considerable vigour. It pointed out that my amendment was not wanted. The letter ended with a well-known Whitehall phrase, with which many members of the Committee will be familiar. It stated: I hope that this reply is helpful". I do not know whether I should like to receive a letter from the Minister when he is trying to be unhelpful. But there we are; I know what he meant. The fundamental argument was that my very modest amendment—it is so modest to be almost feeble; I am slightly ashamed to table such a feeble amendment; I have never done so before—was thought to be too prescriptive. I understand that line of argument, but quite a few parts of the Bill already are prescriptive. For example under Clauses 4 and 5 the commission is obliged to do a number of the things listed. One cannot get more prescriptive than obliging someone to do something. Look also at Clauses 11 to 14, which deal with licensing. To my mind, those clauses are fairly prescriptive.

In any case, what is so terrible about being prescriptive? Is not that what governments are sometimes for? Are they not supposed to be prescriptive? Are they not quite often prescriptive? I understand the Minister's position on this occasion. It is one I have come across before when dealing with Ministers from whatever side of the House I happen to be sitting on at the time. The philosophy is quite simple. The Government—I should blame the Government rather than the Minister—are quite willing to be prescriptive when they want to be, but they are unwilling to be prescriptive when I want them to be. I know that argument; I have come across it many times.

Perhaps I may say something about the background which gives rise to this amendment. It derives from the activities of magazine publishers. Magazine publishing is very big business nowadays—much bigger than it was 20 or 30 years ago—and magazine publishers are important customers of the Post Office. In the region of 700 million magazines are posted every year—and mostly read, I suppose—which costs the industry approximately £250 million in postage. It is the Post Office's third largest revenue stream. That surprised me, but it seems to be the case. So the magazine industry is a very important customer.

Over the past 10 years the cost of deliveries by Royal Mail has risen from about a third of the non-editorial costs to about half. It is a substantial burden on the industry. The PPA believes that economies could be made which could possibly lead to a reduction in these rather heavy postage charges. It would like to see safeguards in the Bill such as would arise from my amendment.

The PPA has had discussions with officials of the commission, which appears to accept that comparisons between the charges of the Post Office and the charges of other deliverers should be made. The commission stated: Because collecting comparative efficiency data will be part of our work we do not in practice see any difficulties with the amendment you now propose". So the commission is happy with the amendment; I am happy with the amendment; the PPA is happy with the amendment; and I am quite sure that the Minister, having had time to think it over, will also be happy with the amendment.

It is a modest amendment which would strengthen the Bill and allay the fears of the magazine industry which is, as I say, one of the Post Office's biggest revenue providers. I beg to move.

Lord Skelmersdale

I rather suspect, from the utterances we have had from the Government Front Bench this afternoon, that the noble Lord, Lord Howie of Troon, will find it better to travel in hope than to arrive. However, we shall see.

The noble Lord is absolutely right: £250 million in postage revenue is a very important source of money to the Post Office. The PPA already has the option of sending its publications in bulk to Germany, Holland, Italy or wherever, and having them sent back to individual addresses in this country. Or, indeed, it could be even braver if it wanted to be and have its magazines printed abroad in, for instance, Malaysia, the Philippines, Hong Kong or where have you—perhaps not Hong Kong, where wages are rather higher than in the other two countries I mentioned—and sent to individual British addresses from there.

But there is another reason that this amendment should be considered with a modicum of favour. The Minister referred earlier—it may have been the noble Lord, Lord McIntosh—to a level playing field. The commission wants to be assured that the British Post Office is operating on a level playing field with its competitors. If anything can be done in terms of efficiency and economy and a spur can be given by the commission as a result of its investigations of post offices in other member states or indeed elsewhere in the universal postal union, that should certainly happen. I am rather worried that the Minister will say that collecting information about the provision of these services could include provision about efficiency and economy, but the provision does not say the commission has to. It can ignore that totally. I agree with the noble Lord, Lord Howie, that that would be a great mistake.

Viscount Goschen

I rise to support the amendment moved so ably by the noble Lord, Lord Howie. As ever, I was entirely swayed by his arguments. He is right that this is a modest but important amendment. It is difficult to understand how it could actually be argued against. There can be only two arguments. One is that it is bad to collect comparative information, so it should not be done, or it is a waste of time and therefore the provision is over-prescriptive. I do not believe that it is either. I think that it would be very difficult for the commission to do its job without performing this specific function. We should make sure that the commission is fully aware by a statutory provision of how important it is to ensure a level playing field and to look at comparative measures of how other operators are performing. It needs to do that in order to perform its job. Placing that requirement on the face of the Bill will just make it clearer. I hope that the Minister does not have "resist" underlined in heavy type on his brief, because I really think that the proposition of the noble Lord, Lord Howie, is modest and sensible.

Baroness Miller of Hendon

The Minister will not be surprised to know that I support the amendment of the noble Lord, Lord Howie. It is grouped with my two amendments, Amendments Nos. 38 and 39, which have practically the same purpose. I note that the noble Lord, Lord Howie, described his amendment as modest. I did not withdraw my amendments and instead left them on the Marshalled List because I thought that they were slightly wider than modest. Perhaps the different characteristics of the noble Lord, Lord Howie, and myself mean that I do not want to have amendments which are quite so modest. However, I want him to know that I support his amendment, although believing that it needs to go a little further.

While on my feet, I should like to speak to Amendments Nos. 38 and 39 which are in the same group. In subsection (4) the commission is told to make the information available to the council and in subsection (5) it is told to make the information available to the Secretary of State. However, the information that it is instructed to gather under subsection (1)(a) and (b) is somewhat limited in scope and in my view somewhat limited in use. The additional requirement is that the commission shall in effect collate and analyse the information so that a useful, indeed a vital, comparison of postal service providers can be made; otherwise, I do not know the purpose of going to all this trouble. It would be a comparison regarded as impartial and distinct from any claims made in advertising or in any application for a new licence by any provider. I really do not believe that any further explanation of Amendment No. 38 is necessary. I simply hope that the Government will regard it as a constructive improvement to the Bill.

Amendment No. 39 is equally short and simple. It is intended to remedy an omission from Clause 45. The clause requires the commission to make an annual report to the Secretary of State. Subsection (2) lists the matters which specifically the annual report must contain. By implication the report can of course also contain anything else that the commission decides at its discretion to include. In addition to the specific items listed in the subsection, there is a sweep-up paragraph (e) authorising the Secretary of State to specify other matters to be included in the report.

What is missing from this wide range of subjects, which I assume the Government in their wisdom intended to be comprehensive, is a report on the information that is gathered under Clause 44(1)(a), which requires the commission to collate information about the operation of postal services. As I pointed out in relation to the amendment I proposed to that clause, the commission reports on the information it has gathered to the Secretary of State. There is nowhere a requirement that these data are necessarily put into the public domain. All the amendment does is to ensure that the commission's annual report contains that information. There is not much point in going to all the trouble of gathering all this information only to find that it stays in one place and benefits no one. I am briefed by the same people who briefed the noble Lord, Lord Howie, but funnily enough I put down my amendment before I received the briefing. I was able to telephone them and say that my amendment was down and that they would see it tomorrow.

Lord Sharman

We seem to have a competition going on this evening in terms of who can be the most diffident and who can be the most modest, which is an encouraging development in this Chamber. I want to make a comment on this matter because I think that these amendments seek to raise the issue of value for money. Value for money is more than just economy and efficiency. It includes effectiveness as well. In that respect we need to look at the amendments in a broader sense. Value for money is what should be concerning us rather than just economy and efficiency. I think that it is a broader issue but it is relevant. I should also say that I am not sure that putting all that information into the public domain is the best thing. That is what the management of the corporation ought to be about. The management should not be concerned with it and the commission should be concerned about it, but I am not sure that the public at large would be able to interpret it.

Lord Sainsbury of Turville

The underlying purpose of these amendments is to require the commission to compare the efficiency and economy of licence holders with other postal operators, most probably by using "benchmarking" which, as discussed in the other place, is a way of carrying out comparative analysis. In principle I see nothing wrong with that. Benchmarking is a valuable business and regulatory tool. I would imagine that the Post Office and the commission will both use if for their own purposes. I am sure that it would be useful for the commission in carrying out its functions under Clause 5(3) on promoting the efficiency and economy of postal operators and in deciding upon any price control mechanism.

However, the effect of these amendments would be to create a very specific duty. They would fetter the discretion of the commission. There is a distinction to be made here between being prescriptive about the duties of the commission and being prescriptive about the way they are carried out. For that reason the wording has been kept more general.

Amendment No. 38 specifies that the commission should carry out such a comparison on an annual basis. I do not think it very helpful to set an arbitrary timescale. We have avoided doing so elsewhere with respect to the commission's and the council's functions as, again, we do not want to fetter their discretion.

We have said many times that our intention in the Bill is to set up an independent regulator. That is what we have sought to do. Of course if the Periodical Publishers Association would like to see benchmarking, and indeed the commission would also, I can see nothing wrong in them getting together and benchmarking. However, there does not seem to be any disagreement about what we would want the commission to do. So on the basis of being helpful in its true sense, rather than the Civil Service sense, I shall take the amendment away and consider it.

Lord Howie of Troon

I am a little disappointed with the Minister's reply because I expected him to turn me down completely. He has now unhinged me. I do not know quite what to say next, but I shall try to think of something while the Committee waits patiently!

I was extremely pleased by the support I received from those on the other side of the Committee. I know all three of them, sensible people as they are. They have gone up in my estimation yet again. On the Liberal Democrat intervention, I was under the impression that value for money was embraced by efficiency and economy, hut perhaps I am wrong. I am not an economist. I am grateful for the Minister's reply, although it has shaken me a little. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendment No. 38 not moved.]

Clause 44 agreed to.

Clause 45 [Annual and other reports: the Commission]:

[Amendment No. 39 not moved.]

9 p.m.

Lord Sainsbury of Turville

moved Amendments Nos. 40 to 43: Page 29, line 31, leave out ("arrange for") and insert ("publish"). Page 29, line 31, leave out ("to be published"). Page 29, line 34, leave out ("arrange for") and insert ("publish"). Page 29, line 34, leave out ("to be published").

On Question, amendments agreed to.

Clause 45, as amended, agreed to.

Clause 46 [Publication of information and advice: the Commission]:

Lord Sainsbury of Turville

moved Amendment No. 44: Page 30, line 3, leave out (", or arrange the publication of,").

On Question, amendment agreed to.

Clause 46, as amended, agreed to.

Clause 47 [Power of the Commission to require information]:

Baroness Miller of Hendon

moved Amendment No. 45: Page 30, line 20, leave out ("any person") and insert ("the Council, a universal service provider or any licence holder under Part II who is not a universal service provider"). The noble Baroness said: In moving Amendment No. 45 I shall also speak to Amendment No. 46. I believe that these are two of the most important amendments to the Bill. They deal with collective provisions seeking to give the commission excessive and unnecessary powers, with draconian penalties in case of any default.

As drawn, the clause flies in the face of the Government's stated policy as outlined in the White Paper. Paragraph 18 on page 24 states: The UK postal market outside the statutory monopoly is a vibrant, competitive market … It is therefore the Government's intention that regulation should focus on those who are operating within the monopoly area, leaving the rest of the market to operate as they do now in a largely unregulated environment The clause as drafted involves anybody, including those persons who are not even in the postal business. Again, I quote from the White Paper at paragraph 32 on page 28: The Regulator will have the power to require information relevant to the exercise of its functions from the Post Office and other operators licensed to operate within the monopoly". Note the phrase, other operators licensed to operate within the monopoly". It does not say "any business", as stated in subsection (2) of Clause 47.

Even since the publication of the White Paper the Secretary of State for Trade and Industry has consistently maintained that the extension of the regulator's powers outside the licensed area is unnecessary. In a letter dated 31st July 1999 to the chairman of the Select Committee on Trade and Industry, the Secretary of State said: I do not believe that it is either right or necessary for the Postal Services Commission to have power to require information from the commercial sector, where it is operating outside the monopoly". If it is unnecessary for the commission to require information from the 4,000 businesses that the Secretary of State says operate in what may loosely be described as the mail delivery industry, why does it require power to acquire documents and powers from anybody operating any business?

The amendments are designed to eliminate that massive over-kill which imports wide powers to intrude into areas where the commission has no business. Clause 47(1) relates to the production of documents by "any person". "Any person" means what it says, even perhaps any one of your Lordships, no matter whether the person served with the notice has any connection, however remote, with either the supply or receipt of postal services. I cannot imagine why the Government have sought such wide-sweeping, all-embracing powers to produce documents of any kind, with the exception of those privileged under subsection (4)(a) of Clause 47.

Briefly, I turn to Clause 47(2) which is the corresponding provision that requires not the production of documents but the supply of information, again by, any person who carries on any business". That is not confined to those businesses involved in the supply or receipt of postal services. It widely covers any business, even the local pizza parlour which runs a delivery service.

My two amendments bring those persons who are required to supply documents and information to the commission exactly into line with Clause 58, where the counterpart provisions require information to be supplied to the Consumer Council by the commission, a universal service provider and any licence holder under Part II who is not a universal service provider, and not any person carrying on any business. There can be absolutely no justification for a distinction between the two categories of persons liable to supply information and documents, especially when under Clause 48 such a person is liable to a criminal conviction and substantial financial penalties and costs.

In the other place it was suggested by my honourable friend the Member for Rutland and Melton that the Bill, as drafted, and the draconian penalties for which it provides, infringed human rights legislation, despite the Secretary of State's certificate to the contrary. In reply the Minister said that, the level of fines have been approved by the Home Office". I suppose that makes it all right then!

I shall now refer to the arguments against the identical amendments when they were tabled in Committee in another place. The Minister for competition conceded that the phrase "any person" had a wide definition. By implication, therefore, we may take it that he conceded that any business had a similar wide connotation. He said that the commission could require people to provide information, if it is investigating the offence of operating in the reserved area without a licence under Clause 6". He went on to list three other purposes for which information might be required. He stated: It can require information only for those specific purposes". That is what he said, but the Bill does not contain such a limitation. It simply refers to any person and to any business with absolutely no limitation.

On being pressed by my honourable friend, the Member for Rutland and Melton, the Minister assured him that the relevant purpose qualified the words "any person" and, I assume by implication, that means that it also qualifies the words "any business" and that the provisions refer only to licence holders and universal service operators or persons suspected of being in breach of the conditions. Why does not the Bill expressly say that, bearing in mind the powers of entry and seizure under a magistrate's warrant that are provided by Clause 49?

The Government may say that the effect of the clause is limited, but so long as "relevant purpose" is not defined, it will be open to an official of the commission to launch a fishing expedition on the basis of Humpty Dumpty's dictum that words can mean precisely what one chooses them to mean.

We do not wish to see the humble owner of a pizza delivery service or even the mighty Tesco being harassed for details of their operations, or being faced with threats of criminal sanctions, or of having to go to court to protect themselves from what I should like to describe as illegal snooping. If, as the Minister in the other place conceded, the effect of these two subsections is limited, then let the Government agree to spell out what are those limitations here and now, in clear language. I do not, of course, expect the Minister to do that tonight, but I certainly would like him to undertake to do it at the next stage of the proceedings. Alternatively, if the Minister does not feel that that is necessary and if he feels more conciliatory, he could accept the amendments tonight and so put the matter beyond any doubt. I beg to move.

Lord Sainsbury of Turville

I agree that it may appear at first sight that this provision gives a large remit to the commission to require information from people who are outside the scope of the reserved area. However, there is a good reason for that. When the provision is examined in detail, one can see that it applies only on a very limited basis.

One of the commission's duties is to license people to operate within the reserved area. It also has the power, contained in Clause 6, to prosecute anyone operating in the reserved area without a licence and not falling within the exceptions set out in Clause 7. Given that the commission has that duty and power, it also needs powers to police the reserved area.

The effect of these amendments would be, first, that anyone operating illegally in the reserved area without a licence would not have to give any information to the commission. Clearly that could be a dangerous loophole. Effectively, that would allow exactly the kind of people from whom we want to get information to get away.

Secondly, Clause 47 allows information to be gathered only "for any relevant purpose". It is worth explaining the relevant purposes for which the commission can require information under Clause 47. It is important to emphasise that the clause applies to "any person", but only for specific and limited purposes, as set out in the clause; namely, investigating the offence of operating without a licence in the reserved area or any proceedings for such an offence, as set out in Clause 6; for the purpose of exercising its functions in relation to breach of licence conditions under the new licensing regime, contained in Clauses 22,23,24 and 30; providing advice and information on public post offices, as set out in Clause 42; collecting information on standards of performance achieved by licence holders and USO providers, as set out in Clause 44(3); or collecting information on behalf of the council for the latter to carry out its function, as set out in Clause 44(4).

I believe that the Committee will see that these purposes are limited and, more important, are vital to the role and duties of the commission. I do not believe that the amendments would be to the benefit of postal users. As I have said, they would allow people operating in the reserved area illegally not to need to give information to the commission. Having set out those points, I very much hope that the noble Baroness will feel able to withdraw her amendment.

Viscount Goschen

I have listened carefully to the reasoned arguments of the noble Lord about why the commission needs to be able to apply this provision to a wide range of people. However, the Minister focused on the issue of operators whom the commission might suspect of operating illegally and thus contravening a number of the provisions he mentioned.

But the drafting of the clause is extremely wide: The Commission may, for any relevant purpose, serve notice on any person". Is there not a strong argument that says that the provision should be more focused, that the type of circumstances should be explained and put on the face of the Bill within the clause to make it clearer in what type of circumstances the commission may exercise the wide powers that are proposed for it?

Lord Sainsbury of Turville

I hope that I have made two points clear. One is that, if accepted, the amendments would leave a substantial loophole which could be exploited by unlicensed operators. Secondly, as I hope I made clear, the power be used only in very specific circumstances. Given those circumstances, the provision is narrowly drawn. I believe it provides the right balance between giving operators enough information and not leaving it open to them to obtain any information that is not relevant.

Baroness Miller of Hendon

I have listened carefully to the Minister's reasonable explanation. I want to read it carefully, because I was concerned with the width of the amendment. If the noble Lord is saying that only unlicensed operators doing something criminal would not be caught if my amendment were accepted, clearly, I shall not press it. However, I shall examine the Minister's response to make sure that the difficulties that I have tried to highlight are covered; or I shall return with a different kind of amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 46 not moved.]

Clause 47 agreed to.

Clause 48 agreed to.

Clause 49 [Powers of entry and seizure]:

9.15 p.m.

Lord Sainsbury of Turville

moved Amendment No. 47: Page 32, line 13, leave out (" 95(2)") and insert ("(Inviolability of mails)(2)"). The noble Lord said: This amendment and those grouped with it are brought forward, as promised in another place, to clarify the provisions in the Bill relating to interference with the mail and the connected provisions concerning inviolability and conditions of transit of postal packets. These amendments have required careful consideration but we hope that they now make all the provisions clear.

Amendment No. 47 is a technical amendment to Clause 49 consequent on the deletion of Clause 95(2) and its replacement by subsection (2) of the new provisions on inviolability in Amendment No. 102.

Amendment No. 74 restricts the offence in Clause 83 in respect of mail bags to intentionally opening. There is no need to cover intentionally delaying a mail bag since, if it contains postal packets, an offence will be committed in any event. Delaying an empty mail bag should be an offence.

Amendment No. 75 amends Clause 83 to include a number of cases where delaying or opening a postal packet or opening a mail bag is not to be an offence: first, if this Bill or another enactment provides appropriate authority; secondly, where there is authority from a directly applicable Community provision; and, thirdly., where the terms and conditions applicable to the packet's transmission by post allow such actions. There is also an exception for delay caused by industrial action in contemplation or furtherance of a trade dispute (as defined in subsection 1D). This was a matter that caused some concern when the clause was debated in another place and we are happy to offer this clarification.

Amendment No. 76 amends Clause 84, which applies to persons other than those engaged in the business of a postal operator, in the same way as Amendment No. 74 amended Clause 83 so that delaying a mail bag is not in itself an offence. Delaying a postal packet in a mail bag will be an offence.

Amendment No. 77 provides for the new exceptions to the offence in Clause 83 set out in subsections (1A) to (1D) in Amendment No. 75 to apply also to the offence in Clause 84.

Amendment No. 78 amends Clause 84 to add a new subsection to make it clear that the offences in Clause 84(2) of opening a postal packet without reasonable excuse and intending to act to a person's detriment, by a person who knows or reasonably suspects the packet has been wrongly delivered to him, will not apply where opening is under the authority of this Act or another enactment; where there is authority from a directly applicable Community provision; or where the terms and conditions applicable to the transmission by post of the packet allow such actions.

Amendment No. 88 deletes subsections (1) to (3) of Clause 95. These provisions are replaced by the new provisions on inviolability of the mail set out in Amendment No. 102.

Amendment No. 102 inserts the provisions concerning inviolability of the mail. It extends the protection previously afforded to postal packets carried by the Post Office to those carried by all postal operators. It provides postal packets in the course of transmission by post with the same immunity from examination, seizure or detention under a relevant power conferred by this Bill or any other enactment; from seizure under distress or in execution (or in Scotland any diligence); and from retention by virtue of a lien that they would have if they were the property of the Crown.

Postal packets carried by the Post Office have always had such protection and the amendment recognises that in today's market, where there are many postal operators, that protection should be extended to all postal packets. There are, however, exceptions to the general presumption that the mail is inviolable and these are set out in subsection (3). Subsection (4) gives the Secretary of State power to modify by order subsection (3) to enable the protections to be extended or narrowed to ensure that they are appropriate now and in the future.

Amendments Nos. 106 to 109 amend Clause 105, which deals with the conditions of transit of postal packets. The amendments clarify what action a postal operator may take in relation to a postal packet which he knows, or reasonably suspects, is being sent by post in contravention of Clause 85 of the Bill. Clause 85 prohibits the sending of certain articles through the post, including indecent or obscene material, and any article, creature or thing of any kind likely to injure a postal operator's employees or other postal packets.

Amendment No. 106 removes the words "if necessary" from Clause 105. On reflection, the Government consider that these words are superfluous as it is likely that a postal operator will always consider it necessary to detain a postal packet if he knows or suspects that it is being sent in contravention of Clause 85.

Amendment No. 107 removes the words "in the post office" from Clause 105. The Government consider that to restrict the opening of postal packets to post offices will not always be appropriate. For example, it would not be appropriate to require that a postal operator should open a postal packet that contains filth or a noxious substance in a post office.

Amendment No. 108 expressly provides that a postal operator can destroy or otherwise dispose of postal packets that it knows or suspects are being sent in contravention of Clause 85. Such a power is considered appropriate to allow the postal operator to destroy or dispose of postal packets that may be a danger to its employees or other postal packets. It also makes it clear that, having detained a postal packet, the postal operator will not be required to keep it indefinitely.

Amendment No. 109 makes it clear that the provisions in Clause 105 should not be regarded as restricting any other powers which the postal operator may have in relation to the packet, for example under the terms and conditions applicable to its transmission by post.

Amendments Nos. 119, 120 and 123 amend the order and regulation-making powers of the Bill to add the new order-making power in subsection (4) of the new clause on inviolability of the mail. Modifications of the new clause can be made by modifying enactments or by a statutory instrument subject to the negative resolution procedure.

This package of amendments clarifies and, we hope, improves the provisions in the Bill which protect postal packets in the course of transmission by post. I beg to move.

On Question, amendment agreed to.

Clause 49, as amended, agreed to.

Clauses 50 and 51 agreed to.

Clause 52 [Provision of advice and information to public authorities and licence holders]:

Baroness Miller of Hendon

moved Amendment No. 48: Page 33, line 24, leave out paragraph (d). The noble Baroness said: I rise to move Amendment No. 48. Clause 52 of the Bill requires the consumer council for postal services to provide advice and information, to represent the views of users and to make proposals to four categories of persons mentioned in subsection (2). One of those four categories is referred to in subsection (2)(d), which this amendment seeks to delete. Before I explain the reasons for the amendment, perhaps I should remind the Committee that the consumer council is, as stated in the White Paper, to act as the public advocate on behalf of all users of Post Office services; to handle and investigate consumer complaints not satisfactorily resolved by the Post Office; to work with licensees, including the Post Office, to reduce complaints and to make sure that they have a proper complaints procedure.

The White Paper continues: The Government wants to see a strong consumer body at the heart of the regulatory system". The White Paper said that the Post Office Users' National Council would be that consumer body that it saw as, championing [consumers'] interests and ensuring that their voice is heard by the Post Office, the Regulator and the Government". The Council will be funded by the Post Office and any licensees.

I am sorry to have troubled your Lordships with such lengthy quotations but I wanted to demonstrate that it is clear that the White Paper envisaged that the function of the Council would only relate to the operation of the Post Office and the licensed area. But subsection (2)(d) goes much further than that. It enables the council to provide advice and information, represent the views of postal users and, most sinister of all, make proposals to "any other person" whose activities may affect the interests of users of relevant postal services. Any other person? Not just the Post Office or licensees? That could involve a wide range of persons—advertising agencies, printers, stationery manufacturers and retailers, just to give a few examples. I believe that is an invitation to empire building and poking of noses. It is not necessary to become involved in that.

My honourable friend the Member for Rutland and Melton pointed out that persons in the unlicensed area who are the recipients of gratuitous advice and proposals from the council will all have to be told the views of users of postal services. They are not obliged to take the slightest bit of notice of anything that is said to them. I can imagine the council knocking on the door of a motor cycle messenger service to offer some advice to a leather-clad helmeted occupant only to be told, in the words of my honourable friend, "push off".

In his reply the Minister for Competition told the Committee in the other place that, it seems reasonable to provide advice and information to everyone involved in providing a postal service, not only licence holders". It seems reasonable to whom? Only to a government who have acquired a reputation for nannying and proffering unwanted advice on all manner of subjects, whether they know anything about it or not. The Minister in the other place conceded that, it is significant that the clause does not place any duties or onus on the people who receive the representations". He admitted that the "push off' provision mentioned by my honourable friend was a part of the clause.

The Minister suggested that there may be an increasing number of unlicensed operators who might be grateful for the council's representations and advice as free market research. I hope that the Minister will be able to find a less fatuous justification for rejecting this amendment, if that is what he is minded to do.

The Government have already admitted that the provision has no effect in law whatsoever. What are the Government doing in asking Parliament to pass legislation that has no effect whatsoever? The Bill has considerably extended the role of the council from that set out in the White Paper so that its remit includes both the regulated and unregulated parts of the industry.

This amendment will restore the role of the council that was put forward in the White Paper. I beg to move.

Lord Sainsbury of Turville

I am grateful to the noble Baroness for giving me the opportunity to explain the purpose of this provision.

The clause sets out some important duties for the council which will help it to fulfil its role of representing the views of users, providing advice and information and making proposals. The council should, therefore, be required to make all these representations to all relevant people who may find this information useful. In particular, it seems reasonable to require the council to provide advice and information and to make representations and proposals to all people who may be involved in providing a postal service and not just licence holders. As the noble Baroness noted, the clause does not put any duty or onus on the people receiving the representation.

I deal now with the question of the "push-off" factor. A good example of someone falling within the category which the amendment seeks to remove would be the providers of essential transport for the conveyance of mail. The noble Baroness may agree that if the council found that relevant information should be given to those people, that should be done.

Those providers would fall within the definition of Clause 52(2)(d), and in the interests of users of postal services it makes sense for them to be given advice and information by the council and to receive representations and proposals about relevant postal issues.

Also unlicensed postal operators may be responsible for art increasing part of the postal market in future if the reserved area were to decrease. For instance, there are already many operators providing a postal service for parcels who are not, and will not be, licensed. In view of those two obvious examples where it would be useful, and where we believe that the council should provide information, I ask the noble Baroness to withdraw the amendment.

9.30 p.m.

Baroness Miller of Hendon

Having suggested matters that should be on the face of the Bill, I am amazed at the number of occasions on which the noble Lord has said that such a provision is totally unnecessary. However, the noble Lord now suggests that there should be included in the Bill a provision which has no effect on an individual if he does not wish to take any notice of it. We wanted to put many interesting provisions on the face of the Bill but the Government considered them unnecessary. It seems extraordinary that the Government legislate now to put a provision in the Bill which has no effect. As did the Minister in another place, the noble Lord admitted that the provision has no effect; no notice need be taken of it. Yet we legislate to put it into the Bill.

In view of what the Minister said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 52 agreed.

Clause 53 [Publication of information to users]:

Lord Sainsbury of Turville

moved Amendment No. 49: Page 33, line 40, leave out (", or arranging the publication of,").

On Question, amendment agreed to.

Clause 53, as amended, agreed to.

Clause 54 [Exercise of functions: general]:

Baroness Miller of Hendon

moved Amendment No. 50: Page 34, line 28, at end insert— () a committee for England,"). The noble Baroness said: In moving the amendment, I speak also to Amendments Nos. 51 to 53.

Clause 54 gives certain directions to the consumer council for postal services as to how it shall exercise its functions. In subsection (4) it is directed in paragraph (a) to establish separate committees for Scotland, Wales and Northern Ireland. There is no corresponding direction—I stress the word "direction"—to set up a committee for that insignificant part of the United Kingdom called England. This is another example of the Government's efforts not only to break up the United Kingdom n but to balkanise them into a series of disparate so-called regions.

For the benefit of the large number of members of the Government of Scottish and Welsh extraction—they are not present in the Chamber today but that will look good in Hansard—England is the large bit of the country that sticks out to the south of Scotland and to the east of Wales. It is the bit of the United Kingdom which constantly pumps money into the other three parts to keep them going.

Subsection (4)(a) states that the council shall establish committees for Scotland, Wales and Northern Ireland. Paragraph (b) permits additional area committees within those three regions. However, the subsection merely permits the council to create a committee or area committee for England; and that would be at its discretion.

Paragraph (c) states that the council, may establish one or more committees for, or for any areas within, England". It "may" establish. Suppose it does not? England would then simply not have the platform from which to provide the input to the council provided for under subsection (5). That is the whole purpose of establishing these committees.

The first three amendments rectify this defect. Amendment No. 50 adds England to the regions of the United Kingdom described in subsection (4)(a) where the council "shall" establish a committee. Amendment No. 51 adds England to the places where area committees may be established under paragraph (b).

Amendment No. 52 deletes paragraph (c) altogether because the other two amendments make that paragraph redundant. The final amendment to this clause is Amendment No. 53. It supplements Clause 54(6) which requires the council to establish at least one office in each of the regions and, at which users of relevant postal services may apply for information". It should be noted that Clause 54(6) requires the council to establish these offices, by post one assumes. However, even the new council will have to concede that these days there are other quicker and cheaper means of communication.

The postal services commission has very commendably already established its own website, which is, I am informed, going to be updated daily. For the benefit of those of your Lordships who are interested I will put it into the record so that it can easily be looked up. It is www.psc.gov.uk. All my uncontroversial amendment does is to require the council to do the same. I beg to move.

The Earl of Mar and Kellie

I must ask the Minister whether it is right that Scotland should ever be referred to as a region? I really do not think that the reference to a regional committee and then to refer to Scotland is at all constitutional. Scotland is, of course, a kingdom in its own right.

Lord Skelmersdale

Be that as it may. I think that it is very strange to establish committees for Scotland, Wales and Northern Ireland—whether they be called regions, areas, kingdoms, provinces, or whatever—and not to establish a committee for England. I am sure the Minister will explain why.

Even if a central London-based English council were established, it cannot reasonably be expected to be aware of or sensitive to the needs of the regions of England. Geography and economic prosperity or decline affect an area's outlook and dictate many of the problems affecting local consumers. That applies to the Post Office in the same way as it does to electricity companies and so forth. For example, a part of Britain may experience another hurricane with postal services being interrupted; there will be a volume of complaints in that area. The council will need to know what is going on and respond according. All kinds of things can happen in various parts of the UK. May I dare to call them sub-regional? Not only is my noble friend absolutely right about that, but we often have arguments in this Chamber about the meaning of the words "may" and "shall". Here, quite clearly, as they are all in the same subsection, they must mean different things. My noble friend, quoting the Bill, said that the council, shall establish … a committee for Scotland … Wales, and … Northern Ireland", but that it only "may establish" one for England. The Minister owes us an explanation of that.

Viscount Goschen

I support the words uttered by my noble friend Lord Skelmersdale. There certainly will be such divisions—and I see the noble Earl, Lord Mar and Kellie, looking at me and waiting for me to use the wrong term. I shall not give him that satisfaction. If we are going to divide the procedure and set up even more committees of the council, England should be given the same basis of "shall" rather than "may".

However, I question whether the additional committees need to be set up at all. We are talking about a postal service and a universal service provider. We are talking about using the same value stamp to send letters from one end of the country to another. Does the Minister have a strong explanation and rationale as to why even more money should be spent on even more committees providing even more reports which will no doubt be filed in something circular by most of the people who receive them?

The Minister has gone to great length to say that we should not be too specific in the Bill. However, the council is given pages and pages of information about what it shall and shall not do. For such a body, we seem to have an overprescriptive set of clauses and I hope that the Minister can give a strong explanation of why that is so. If he cannot, I suspect that more amendments will be moved at the Report stage proposing the deletion of a clause or the given words between the brackets.

Lord Sainsbury of Turville

I can understand the sentiments behind these amendments to require the council to set up a committee for England on the same basis as the committees for Scotland, Wales and Northern Ireland. However, I am not convinced that that is the right approach.

Essentially this is about discretion. The issue is about being prescriptive about duties, but not necessarily about how they are carried out. Our approach in the Bill has been to give the council a clear set of statutory functions, but then to ensure that it has the flexibility and powers to organise itself in the way best suited to deliver the performance of those functions for which it will, after all, be accountable.

We propose that the council will be given as much discretion in the matter of regional representation as we feel is possible. There is nothing in the Bill to stop the council having a single committee for England if that is what it wishes to do and it can convince those that it is required to consult that that is the right approach. In that connection, one should note that in the recent consultation not one of the responses suggested that there should be a committee for England. Preferences have been for a number of committees reporting to the council.

There are good reasons why there should be an exception to this discretion in the matter of setting up at least one committee for Scotland, Wales and Northern Ireland and why the appointment of chairman will be made by the Secretary of State. The recent history of having three separate national councils for those countries should not be completely set aside. Notwithstanding the reserved status of postal matters, there are clear present political reasons why there should be a committee for each of these countries. As was pointed out, it is not necessarily true that the service is the same. The case of a hurricane having a different effect in different parts of the country is an extreme example of different performances.

Lord Skelmersdale

It was meant to be.

Lord Sainsbury of Turville

But it illustrates very well the point that there may be great differences in regional matters and that in this respect people may think in terms of regional performance.

From a practical point of view, England is a larger country than the others and representation by a number of committees for different areas within England may be more appropriate than a single regional committee.

Clause 54 gives the council an explicit regional function. The council must have regard to the needs of users of relevant postal services, including in particular the interests of users in different areas. Clause 54 also requires the council to maintain at least one office in England, Scotland, Wales and Northern Ireland at which users of relevant postal services may apply for information. The office of the council will be in England, in London. We believe that the clause as it stands gives appropriate discretion to the council to decide what the arrangements should be for England but still ensures that there is sufficient protection for users in different areas.

The amendment which provides for an Internet site shows a proper regard for modern communications methods. However, I do not feel that it is necessary. As I made clear previously, I believe that the methods of communication should be left to the council so that it uses what is appropriate at the time.

I am not certain that there is a reference in the Bill to Scotland as a region. I believe that the reference in subsection (5) is to a regional committee rather than to Scotland as a region. If that is not the case, I am sure that the matter will be corrected. On that basis, I do not believe that the amendments would improve the clause and I suggest that they are withdrawn.

9.45 p.m.

Viscount Goschen

I wish to ask a quick question before we proceed further. Because the committees for Scotland, Wales and Northern Ireland come under the heading of "shall" and those that come within England, be it one or more committees, come under "may", can the Minister provide a strong explanation as to why there definitely "shall" be such committees for Scotland, Wales and Northern Ireland but I here only "may" be one for England? I understand that there may be one or more, but should not the clause state "shall" be one or more committees or a sub-division of those committees?

Lord Sainsbury of Turville

I believe that in the case of Scotland, Wales and Northern Ireland there was essentially agreement that there should be a council for each of those regions. However, in the case of England, it was by no means clear whether there should be a committee for England or a series of regional committees. On the whole, there was some feeling that there should be regional committees rather than a national committee.

Viscount Goschen

I hate to take up the time of the Committee and to be boring on this matter, but should it not be "shall"; that is, we should have one or the other? The Minister said that it should not be "shall" because we have not yet made up our minds whether there should be one committee or a sub-division of a number of committees for England. However, by his argument, there should be at least one committee.

Lord Sainsbury of Turville

This is obviously a matter about which there is some feeling. On that basis, I shall take it away for consideration. I believe that the intention was that it would be one way or the other. However, as there is a feeling that we should make it more clear, I shall certainly consider the matter further.

The Earl of Mar and Kellie

The reference to the Scottish committee must make clear that it is a national committee.

Baroness Miller of Hendon

I am grateful to the Minister for saying that he will look at the matter again. Under those circumstances, I am happy to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 51 to 53 not moved]

Clause 54 agreed to.

Clause 55 [Annual and other reports: the Council]:

Lord Sainsbury of Turville

moved Amendments Nos. 54 to 57: Page 35,1ine 7, leave out ("arrange for") and insert ("publish"). Page 35, line 7, leave out ("to be published"). Page 35, line 10, leave out ("arrange for") and insert ("publish"). Page 35,1ine 10, leave out ("to be published").

On Question, amendments agreed to.

Clause 55, as amended, agreed to.

Clause 56 agreed to.

Clause 57 [Power of the Council to investigate other matters]:

Lord Sainsbury of Turville

moved Amendment No. 58: Page 36, leave out line 2. The noble Lord said: In moving Amendment No. 58, I shall speak also to Amendment No. 59. The first amendment is technical and removes an unnecessary definition of public post offices from Clause 57(1)(b). As Clause 42 defines public post offices for the whole of the Bill, that definition also bites on this clause, making the reference to Clause 42 in this clause redundant.

The second amendment removes the requirement on the council to give notice of its intention to carry out an investigation under Clause 57 to the commission and the Secretary of State. That was considered to be unduly onerous and impractical as it would require notification, whatever the scale of the investigation. I beg to move.

On Question, amendment agreed to.

Lord Sainsbury of Turville

moved Amendment No. 59: Page 36, line 3, leave out subsection (2).

On Question, amendment agreed to.

Clause 57, as amended, agreed to.

Clauses 58 to 60 agreed to.

Clause 61 [Forward work programmes]:

Lord Sainsbury of Turville

moved Amendment No. 60: Page 38, line 42, after ("or") insert ("(as the case may be)"). The noble Lord said: This is a technical amendment to make clear that each notice about the forward look programmes required by Clause 61 cannot be published by either the council or the commission but that each must publish a notice relating to its own draft programme. I beg to move.

On Question, amendment agreed to.

Clause 61, as amended, agreed to.

Clause 62 [Transfer of property etc. to nominated company.]:

Baroness Miller of Hendon

moved Amendment No. 61: Page 39, line 8, at end insert— ("() Prior to the nomination of any company by the Secretary of State pursuant to subsection (1) the Secretary of State shall publish an order to be laid before and approved by a resolution of each House of Parliament setting out the contents of the Memorandum and Articles of Association of such company and the other details required to be filed with the Registrar of Companies on the incorporation of a new company."). The noble Baroness said: In moving Amendment No. 61, I shall speak also to Amendment No. 62. These two amendments relate to the incorporation of the proposed new public limited company, which will take over the Post Office corporation and its assets. Amendment No. 61 simply requires Parliament to see in advance the proposed memorandum and articles of association of the new company, as well as the details that have to be filed at the Companies Registry on the incorporation of a new company— such matters as the proposed registered office; annual accounting date; nominal capital, and the amount to be issued; directors, secretary and so forth. None of that is confidential because it will be a matter of public record open to anyone prepared to pay the search fee once the company is on the register.

The Government will be the sole shareholder of the company. They hold the share or shares in trust for the nation. It is only right that as the de facto owners of the company, its representatives in Parliament should have advance knowledge and possibly some input into the corporate structure of their company. That especially applies to the memorandum and articles of association which are traditionally regarded as the contract between the company and its shareholders.

Amendment No. 62 arises because of the curious wording which the Government have inserted at Clause 62(3): The Secretary of State shall consult the Post Office before nominating a company for the purposes of this section". What does the Post Office have to say about the company to which it is about to be sold? I use the word "sold" loosely, but in effect it is a sale. The new company gets the Post Office as a going concern and the owner, the state, gets shares in the new company. That is a common commercial transaction. There is even a special form for filing at the Companies Registry when shares are issued for a consideration other than cash. I refer, for example, to the going concern: the assets and goodwill of a business just about to be incorporated as a limited company, as in this case.

At a meeting with the Minister and his officials, I inquired what the consultation would be about and no one could tell me. I accept that "consultation" is a nebulous operation. However, having carefully listened to what the consultee has had to say, the Government can go off and do whatever they intended to do in any case, subject to the constraints of a potential judicial review if they are behaving too unreasonably. But if there is a consultation between the Post Office and the Government, surely it should not be in secret. Surely, Parliament is entitled to know the nature of the negotiations or discussions between the two sides?

I have expressly excluded in my amendment matters involving commercial confidentiality. Ministers are frequently coming to Parliament to report on the outcome of various negotiations into which they have entered on behalf of the Government. There is no reason why Parliament should not be kept informed about those mysterious consultations. If precedent is followed, they will be leaked to the media anyway. This matter is important. I beg to move.

Lord Sainsbury of Turville

I have no great difficulty with the notion that the memorandum and articles of association of the Post Office company should be published. But I am opposed to a requirement for such documents to be approved by both Houses of Parliament. I shall explain why in a moment.

Equally, I have no great problem with the notion that the Government should make public anything relevant arising from the consultation with the Post Office that is required prior to nominating the company in accordance with subsection (3). But, again as I shall explain later, I have doubts about the usefulness of such an exercise.

With regard to the memorandum and articles of association of the future Post Office company, we will be looking for the company to have provisions akin to any other comparable modern company. The conversion of the Post Office to a plc is a fundamental element of our reforms of the Post Office, aimed at underlining its increased commercial freedom. We do not want the memorandum and articles of association to constrain its commercial freedom.

The memorandum and articles of association will become publicly available in due course as they will have to be filed with the Registrar of Companies. But I can say that the Government are minded to publish them in advance and lay them before Parliament once we have had a chance to discuss them with the likely directors of the new company and have settled the terms. Our willingness to publish the documents is part of our desire for there to be a clear, arm's length relationship between the Government and the Post Office company, as emphasised in our Post Office Reform White Paper. The relationship between the Government (as shareholder) and the directors of the Post Office company will be transparent from the memorandum and articles of association. But the suggestion in Amendment No. 61 that the memorandum and articles of association should be approved by resolution of each House is quite excessive and would run totally against the grain of giving the Post Office greater commercial freedom.

The memorandum and articles of association need to be capable of being amended by the shareholders, after discussion with the directors, as and when the situation may demand. We could not contemplate having to come to Parliament for every change that might be needed. If (as the amendment seems to suggest) only the initial documents need be approved, I can see no great value for the House. A less benign government could secure that approval and then amend the documents the next day without consulting Parliament, and the effect of this amendment would be totally circumvented.

As regards publication of a report on the nature and content of consultations between the Government and the Post Office, I could well imagine the Government making a statement that they had consulted the Post Office about the proposed nomination of a company and the transfer, and confirming that everything was now ready for a named company to be nominated and for the transfer to take place. But anything further than that might well stray into areas of commercial sensitivity, which the noble Baroness quite properly seeks to exclude from prying eyes, or be of such detail as to bore noble Lords to death.

So with the promise that the Government would seek to be open about these matters, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness Miller of Hendon

I do not know whether it is the lateness of the hour which prompted the Minister to go a little way towards what I wanted, and it may be the lateness of the hour that makes me not wish to push him to go any further. Under the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 62 not moved.]

10 p.m.

Baroness Miller of Hendon

moved Amendment No. 63: Page 39, line 22, leave out ("the Treasury or"). The noble Baroness said: In moving Amendment No. 63, I shall speak also to Amendments Nos. 65 to 68, 68A and 68B. These amendments relate to one line in Clause 62, two lines in Clause 63, two lines in Clause 65 and two lines in Clause 66. Despite relating to four different clauses, ail the amendments refer to one matter and all would have the same effect.

The Bill provides for the sole shareholder to be the Government, and Clause 66 actually precludes disposal of any of the shares without the sanction of Parliament. But throughout the four clauses to which I refer, the legislation provides for the shareholder to be the Treasury, the Secretary of State, or both. This may be wrong in law; but it is absolutely wrong in principle. I cannot be sure about the law because I am not a lawyer. However, as I understand it, the Treasury is neither a person nor a corporation; in other words, the Treasury is not a legal entity and, therefore, is unable to be a shareholder. I shall not spend any further time on that technicality because it is late. I am sure that the Committee will appreciate it if I just stick to the point. I shall leave it to the Government's lawyers to sort out that problem. They should look into it.

More important is the matter of principle. The Government are asking us to allow two different departments to have fingers in the same pie. What a recipe for dispute and back-biting that will be, to say nothing of the confusion if two different departments are pulling in different directions and trying to follow two different policies. That leads me to my next point.

There is an enormous potential conflict of interest if the Treasury is to be allowed to interfere in the affairs of the Post Office, even in the limited way that a shareholder is able to do. The White Paper provides for the Post Office company plc. to invest the equivalent of a commercial dividend in gilts or the National Loans Fund; in other words, it will have to make compulsory loans to the Government. Moreover, in the words of the White Paper: Once the Post Office has been established as a publicly-owned plc, it will pay an annual dividend to the Government rather than invest in deposits"— that is, of course, after the normal tax on its profits that a trading company pays to the Inland Revenue.

There is no doubt that any Chancellor of the Exchequer will regard the Post Office plc, and its cash flow, as a milch cow and try to exert pressure as to the amount of dividend to be paid, rather than spent on developing the business.

Then there is the matter of the subsidy that the Government hastily inserted into the Bill during its final stages in the other place. It is now to be found in Clause 102, which we shall be discussing later. However, I am sure that Members of the Committee will be glad to know that we will do so next Thursday, not tonight.

The Government are seeking to give the Treasury a veto over the provisions of this subsidy. So here we would find the company owned by the Treasury asking its shareholder for a subsidy out of public funds. Alternatively, if a case is made out for the subsidy, the Treasury, in derogation from its duty to do its best for the company it owns, might veto it. Indeed, we might reach the farcical situation of the Treasury as a shareholder, tacitly agreeing, if consulted by the directors, that it should apply for a subsidy and then, wearing its other hat as the holder of the nation's money, refusing to part with any money.

Under Clauses 68 and 69 any borrowing by the Post Office is to be made exclusively by the Secretary of State with the Treasury's consent. The funds are to come from the National Loans Fund and the terms are to be approved by the Treasury; in other words, the Treasury is the lender with the Secretary of State merely being the funnel—or the broker—for the loan; and here, I believe, is another major conflict of interest. The bank is lending money to the company that he controls and deciding on the rate of interest, as well as the duration of the loan. Can noble Lords imagine what the banking regulator would say if one of the high street banks indulged in such a practice?

While all of that is going on, the Secretary of State at the DTI is supposed to stand quietly by and watch the Post Office returned to the grip of the Treasury, and its fiscal policy, totally negativing the whole objective of freeing the Post Office from government control and letting it act as a normal commercial company.

There are clear indications of disputes between the DTI and the Treasury over some aspects of this Bill. I shall comment on that matter in much more detail when we reach Clause 102. There is, however, a clear and positive clue in the wording of one of the clauses that we are considering at the moment. Cutting out all the extraneous material, Clause 66(1) states: Neither the Treasury nor the Secretary of State … shall … dispose of any of the issued shares … in the Post Office company … which are held by him". There is only one "him". That "him" was referred to much earlier as the Secretary of State. It is clear that after the clause was drafted the Chancellor, Gordon Brown, decided that he would not allow a government-owned, money-making organisation to exist without his having a grip on it. The draftsmen clearly made a little slip in not correcting that bit of syntax after the Chancellor was slipped in, like a cuckoo into the nest.

I can imagine the annoyance of the Chancellor at seeing the constant cash flow he currently enjoys from the Post Office slowing down to an annual dividend and the compulsory loans to the Government. However, that is no excuse for putting him in the dominant, influential position of a principal shareholder.

I draw the Committee's attention to Clause 62(7)—which I seek to amend with Amendment No. 63—which allows for the Government's share to be held either by the Treasury or by the Secretary of State. Therefore there is no guarantee that the Post Office, which is normally answerable to the DTI, can be under the legal control of the Treasury. Will the Minister tell us, in his response on behalf of the Secretary of State, that Mr Byers welcomes the possibility of his colleague, the Chancellor of the Exchequer, annexing a major responsibility of his department in the course of Mr Brown's empire building? No department seems to be safe from him, as witnessed by his recent intrusion into the affairs of the Department for Education.

It is the responsibility of this Chamber to ensure that there is one, and only one, government department answerable to Parliament for the Post Office once it is turned into a public company and removed from direct ministerial responsibility. I hope that I have set out clearly what I feel to be the problem. Some of my points were prompted by the meeting I had with the Minister last Monday and the confusion that arose in my mind. I very much hope that the Minister will be able to reassure us that what I think will happen will not happen. I beg to move.

Lord Lyell

I have listened to the comments of my noble friend with considerable care. The Minister probably has considerably more expertise in this matter than myself. I declare my interest as a mere accountant. I believe that I last made detailed studies of the Companies Act in 1963–64. However, I believe that the arguments put forward by my noble friend have some merit. I hope that the Minister, and perhaps other Members of the Committee, can assist me in this matter.

Clause 62(7) refers to, the Treasury or the Secretary of State", as does Clause 63(2). Clause 64 states, or, with the consent of the Treasury". I hope that my intervention is not unhelpful.

My noble friend Lady Miller questioned the relationship between the Treasury and the Secretary of State of the relevant department. I hope that the Minister can clarify a point for me. Is there a precedent for the measure we are discussing? If he can tell me that there is a precedent for this measure in what is often called a "golden share", I can research the matter and not delay the House at a later stage of the Bill. But certainly I should like clarification. Although my noble friend attempted to clarify the situation she was beginning to faze me. I am looking for help. I think that the Minister may be able to give me some assistance and I sha11 wait to hear what he has to say.

Lord Skelmersdale

My noble friend perhaps will be delayed a few minutes before he hears what the Minister has to say.

My question on Clause 62 is very simple: why both? I can understand why the Treasury should want to hold the shares; I think it is absolutely right that it should. To that extent, I disagree with my noble friend on the Front Bench. None the less, I think it is extremely dangerous from all kinds of points of view for the shares to be held essentially by both or by a nominee of both. I hope that that is not what is intended by the Bill.

Lord Sainsbury of Turville

Perhaps I may speak to Amendments Nos. 63, 65, 66, 67, 68, 68A and 68B and continue my career of being as helpful as I have been in the past.

The noble Baroness may feel that the issue here is the "dead hand of the Treasury" in matters concerning the Post Office. This view has been aired before in this House and in the other place. I am of course aware that the Treasury is often cast as the villain of the piece in respect of many areas of government policy—indeed, I think my own party has occasionally implied that that may be the case.

But there is a serious point to be made in explaining why we do not believe that it should be left only to the Secretary of State to hold the Government's shares in the Post Office company and its wholly owned or relevant subsidiaries, nor for the Secretary of State to be the only party who can give directions regarding the issue of further shares to the Government after the appointed day.

It may be simply because I have been a finance director for many years of my life that I think the Treasury has the responsibility of being the guardian of public sector finances. It is simply a matter of practicality with large sums of money such as this that the Treasury is inevitably involved. In the same way that if substantial investments were made in a private company, it would not be done by a divisional shareholder without consulting the finance director, who no doubt would have a very strong say in what took place.

The Government's shareholding in the Post Office company and its subsidiaries represents a substantial public sector investment. The Treasury therefore has a legitimate interest in the Government's shareholding in this public sector asset and it should not be excluded from the holding of that asset and should be involved in the giving of directions to increase the size of the asset.

There is a simple practical issue that makes it sensible for the Secretary of State and the Treasury to be able to be shareholders in the Post Office company— that is, that a public limited company must have at least two shareholders. It is quite right that the Treasury is not a sole corporation, but in this case it would be represented by the Treasury Solicitor. So there is a sensible, practical reason for giving the Government flexibility in the management of its shareholding in this way.

Our approach is certainly not unique; a number of previous statutes followed the same route—for example, the Gas Act 1986, the Water Act 1989 and the Electricity Act 1989.

I am sure that the noble Baroness fears the undue interference and influence of the Treasury in the future of the Post Office company and wishes to safeguard against this fear. But whether the Treasury holds any shares or whether its consent is required before directing the issue of further shares to Government is, to some extent, an irrelevance. The Treasury's greatest influence in the future development of the company will be as a provider of finance for growth investment. On this point I hope that our policy is quite clear.

The borrowing regime for the Post Office, both now and when it becomes the Post Office company, was clearly set out in the White Paper. The Post Office company will be expected to finance investments in the core business from retained earnings. But these funds are unlikely to be sufficient to enable the Post Office company to develop its business and to meet the challenges and opportunities of the changing postal market. Therefore, the Post Office company will be allowed to borrow for growth investments.

We have already given effect to our policy to give commercial freedom to the Post Office by giving it greater borrowing powers. As a result the Post Office has already commenced its strategy to expand its international business for the benefit of its customers.

I hope that I have been able to give the noble Baroness comfort that the supposed dead hand of the Treasury is now a myth as far as concerns the Post Office and that the organisational arrangements make sense. On that basis I ask the noble Baroness to withdraw her amendment.

10.15 p.m.

Baroness Miller of Hendon

I certainly do intend to withdraw the amendment. I am not too sure that the Minister was able to give me comfort because at this time of night I could not match what he was saying to what I think the problem is. However, I shall read carefully in Hansard what the noble Lord said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 62 agreed to.

Schedule 3 [Transfer to the Post Office company: supplementary provisions]:

Lord Sainsbury of Turville

moved Amendment No. 64: Page 79, line 31, at end insert— ("Welfare funds

  1. .—(1) This paragraph applies to—
    1. (a) a fund (whether described as a welfare fund, benevolent fund, mutual aid fund or otherwise) whose objects consist in, or include, the provision of benefits in case of need, sickness or distress for Post Office beneficiaries, and
    2. (b) a society or organisation (however described) whose objects are similar.
  2. (2) In sub-paragraph (1) "Post Office beneficiaries" means any or all of the following persons—
    1. (a) persons who are, or have been, engaged in the business of the Post Office,
    2. (b) the relatives or dependants of such persons.
  3. (3) The provisions of the trust deed, rules, regulations or other instrument constituting or regulating a fund, society or organisation to which this paragraph applies may, by resolution of the managers of the fund, society or organisation, be altered as mentioned in sub-paragraph (4).
  4. (4) The provisions may be altered so as—
    1. (a) to permit persons who are, or have been, engaged in the business of the Post Office company, or such persons of a particular description, to become members of, or subscribers to, the fund, society or organisation.
    2. (b) to entitle such persons, or such persons of a particular description, and persons claiming in right of them, to receive benefits from the fund, society or organisation (subject to any terms and conditions specified in the resolution) if, and to the extent that, they would be entitled to receive benefits from it if being engaged in the business of the Post Office company were being engaged in the business of the Post Office.
  5. (5) No alteration may be made that alters the character of the fund, society or organisation.
  6. (6) If a resolution of the managers of a fund, society or organisation to which this paragraph applies so provides—
    1. (a) any references in the trust deed, rules, regulations or other instrument constituting or regulating the fund, society or organisation to the Post Office shall be construed as references (or, if the context so requires, as including references) to the Post Office company, and
    2. (b) any references in that instrument to persons engaged in the business of the Post Office or persons of a particular description so engaged shall be construed as references (or, if the context so requires, as including references) to 1354 persons engaged in the business of the Post Office company or (as the case may be) persons of a corresponding description so engaged.
  7. (7) In this paragraph "managers" in relation to a fund, society or organisation, means the trustees, committee or other persons entrusted with its management.").
The noble Lord said: Amendment No. 64 inserts a new clause into the Bill which is intended to ensure that the managers of welfare and other funds for persons and their relatives and dependants who are or have been engaged in the business of the Post Office have the power to alter these funds to take account of the transfer of the Post Office to the Post Office company. The amendment will maintain the rights of persons eligible for assistance under the existing funds and allow persons and their relatives or dependants who become engaged in the business of the Post Office company to become eligible.

The Government believe that it is appropriate for the trustees to have this power to enable them to continue the good work of these funds in providing assistance for beneficiaries in case of need, sickness or distress. I beg to move.

On Question, amendment agreed to.

Schedule 3, as amended, agreed to.

Clause 63 [Government holding in the Post Office company and certain subsidiaries]:

[Amendments Nos. 65 and 66 not moved.]

Clause 63 agreed to.

Clause 64 agreed to.

Clause 65 [Restriction on issue of shares to third parties]:

[Amendments Nos. 67 and 68 not moved.]

Clause 65 agreed to.

Clause 66 [Restriction on disposals of shares to third parties]:

[Amendments Nos. 68A and 68B not moved.]

Clause 66 agreed to.

Clause 67 [Approved disposals]:

On Question, Whether Clause 67 shall stand part of the Bill?

Lord Clarke of Hampstead

I have waited patiently to register my firm opposition to Clause 67. The Committee may recall my speech at Second Reading in which I prophesied that this was the end of the British Post Office as we have known it and as the Post Office has known itself for 350 years.

On Monday of this week I heard the Secretary of State address a conference where he said that there was nothing to worry about and that the Post Office would remain 100 per cent in public ownership. He even went further and said that the next Labour Party manifesto would guarantee that the Post Office would remain 100 per cent in public ownership, which is a slightly different kind of democracy from the one for which I had responsibility as chairman of the Labour Party where we used to have to wait for conferences to make decisions. He was able to say that the policy forum would be able to guarantee that 100 per cent.

My problem with Clause 67 is that it still allows the disposal of shares to other organisations. I have asked the Minister on a number of occasions how the Government can part with certain assets of the Post Office and be able to say that it is 100 per cent publicly owned. Clearly, that cannot be so if shares are passed over to another organisation.

I know that there is no chance in this world of any body listening to me at this time of night, but I did not want Clause 67 to go through without saying how disappointed I am that a Labour Government has brought our wonderful Post Office to this sorry state. In a few years' time I can see it becoming part of a super-Euro post office. It is a travesty that the Government that I support have brought the Post Office that we have known and loved, and where some of us have earned our living—in my case for 51 years—to such a position.

Lord Skelmersdale

Clause 67 is the key clause in the entire Bill regarding the liberalisation and competitiveness of the Post Office. In the White Paper and on many other occasions we have been told that the object is to enable share swaps, joint ventures and so on. With out Clause 67 that simply could not be done.

I sympathise with the view expressed by the noble Lord, Lord Clarke. The Post Office will not be the same. His key question is how can the Government, knowing that they will have share swaps and so forth, continue to say that the Post Office will be a 100 per cent publicly owned company.

Lord Sainsbury of Turville

This clause sets out the procedure to be followed in order to obtain the approval of Parliament to make share issues or disposals, which would otherwise be prohibited by Clause 66. The parliamentary approval procedure is aimed at ensuring that shares are exchanged or sold only in order to cement commercial strategic alliances.

Subsection (1) requires that a motion, to be moved by or on behalf of the Secretary of State, should receive affirmative resolution of both Houses before any shares can be issued or disposed of. It will be a straightforward motion and there will be no need for anything more elaborate.

Subsection (2) specifies the minimum information to be contained in a motion to be presented for the approval of both Houses. Subsection (3) sets out the pre-conditions to be met before a motion relating to the issue or disposal of shares in the Post Office company may be moved. The conditions are based on our commitment that shares would be exchanged or sold only to cement a joint venture or a strategic alliance. Therefore, five pre-conditions are specified: first, that the company has agreed with the other party to take part in a joint venture or other partnership which it considers to be in its commercial interests; secondly, that it involves the issue or disposal of shares in the Post Office company; thirdly, that the Post Office company has recommended to the Secretary of State that the disposal takes place; fourthly, that the Secretary of State is satisfied that the issue or disposal is for the purpose of securing the proposed arrangement and that it is in the commercial interests of the company; and, fifthly, that the Treasury has given consent to the proposed issue or disposal.

Subsection (4) mirrors subsection (3) in setting the pre-conditions to be met before moving a motion relating to the issue or disposal of shares in a relevant subsidiary in order to enable the Post Office company or a relevant subsidiary to take part in a joint venture or other partnership. The pre-conditions in this case are generally similar to those applicable to the issue or disposal of shares in the Post Office company, although in this case it may be the subsidiary that has agreed to be party to the alliance. However, it must still be the Post Office company that recommends the disposal and whose commercial interests must be considered by the Secretary of State.

It has been suggested by some that the Government intend privatisation by the back door. Of course, that is not the case, but we want to give the Post Office company greater commercial freedom. Looking at the scene in Europe today, everyone can see that it is a necessary requirement. This clause gives the Post Office that freedom. Members will note that this process is not triggered by the shareholder or even the Treasury. It is triggered by the Post Office and by the Post Office alone. It is a matter for the Secretary of State, if he believes that the deal is in the best interest of the Post Office, to put the matter before Parliament for debate. Therefore, every case will be considered on its merits.

Clearly, if there is a swap of shares, it could no longer be said that the Government have a 100 per cent shareholding. However, the Government will, to a great extent, still control the company.

Clause 67 agreed to.

Baroness Miller of Hendon

moved Amendment No. 69: After Clause 67, insert the following new clause— PUBLICATION OF PARTICULARS OF ACQUISITIONS AND DISPOSALS (" .—(1) Where the Post Office company or any relevant subsidiary proposes to acquire or dispose of an undertaking or any interest in an undertaking and—

  1. (a) the gross assets of that undertaking or attributable to that interest are equal to more than 10 per cent. of the gross assets of the Post Office company or the relevant subsidiary; or
  2. (b) the turnover of that undertaking or attributable to that interest is equal to more than 10 per cent. of the turnover of the Post Office company or the relevant subsidiary; or
  3. (c) the net profits of that undertaking or attributable to that interest are equal to more than 10 per cent. of the net profits of the Post Office company or the relevant subsidiary.
the Post Office company or the relevant subsidiary must as soon as practicable publish a notice in accordance with subsection (2). (2) A notice under this subsection must be published in the London Gazette, the Edinburgh Gazette and the Belfast Gazette in such form as the Secretary of State may prescribe and must include —
  1. (a) the name of the undertaking;
  2. (b) a description of the business carried on by the undertaking and, where the transaction is an acquisition or disposal of an interest in the undertaking, a description of the business attributable to that interest;
  3. (c) the effect of the transaction and, in particular, the benefits which the directors expect to accrue to the Post Office company or any relevant subsidiary;
  4. (d) the price (or the monetary value of any other consideration) to be paid or received by the Post Office company or any relevant subsidiary and, in the case of a disposal how the proceeds of the disposal are to be applied; and
  5. (e) if any securities are to be issued as a result of the transaction, the nature and amount of those securities.
(3) In this section "gross assets" means total fixed assets and total current assets."). The noble Baroness said: This amendment is very long because it introduces a new clause, but it is one that is capable of a short explanation. I am very grateful to the noble Lord, Lord Razzall, who, in his speech in the debate on Second Reading at col. 944 of Hansard, alerted noble Lords to the problem which the amendment seeks to redress. I am sorry not to see the noble Lord in his place, given that in this amendment I am attempting to bring forward his suggestion.

The Bill will create a new Post Office. In place of a statutory corporation such as the present Post Office, the BBC or other government-owned corporations before they were privatised, the Post Office will become a public limited company, operating in the same way as many other major public companies, but with one important difference. This company will have only one shareholder: the Government. However, it will have the same financial powers as any other public company and, in many cases, greater powers. However, because it has only one shareholder and because it is not intended that the company should have private or institutional shareholders, its shares will not be listed on any recognised stock exchange.

In turn, this means that the new company will not be subject to the listing and other stock exchange rules governing acquisitions and disposals which apply to quoted companies of a similar size. Many of the listing rules are aimed at investor protection; that is, the protection of existing shareholders as well as potential new investors, whether on the issue of new shares or on the acquisition of existing shares via the Stock Exchange. However, the rules regarding the transparency of acquisitions and disposals, and for relevant information to be brought into the public domain as soon as possible, are also intended to protect the integrity of the market. Furthermore, that makes for good corporate governance.

It should be borne in mind that acquisitions by the new Post Office are most likely to be of an existing publicly quoted company which will itself be obliged to make an announcement at an early stage. As large a corporation as the Post Office will be, with its significant financial power, it should be subject to an obligation to make public disclosure of any substantial transactions into which it enters. This new clause would require the Post Office or any relevant subsidiary through which it conducts its transactions to publish certain details of acquisitions where the assets, turnover or profits of the target company exceed 10 per cent of that of the Post Office or its subsidiary. The same percentage would apply in the case of a disposal by the Post Office. Obviously, details of minor transactions would be excluded from the effect of this clause.

Even the most insignificant of private companies, say a company owned by a husband and wife as the only shareholders and directors, is compelled to go through the procedure of publishing annual reports in which the directors tell themselves, in their capacity as shareholders, what they have been doing. Provision has already been made in the Bill relating to the accounts of the Post Office. Those are contained in Clauses 73 to 78. The letter entitles the Treasury to demand information from the new company. The provisions of this clause are designed to supplement those provisions. They will ensure that the real owners of the company on whose behalf the Government, as the single shareholder, holds the shares—the public—will receive the fullest information at the earliest commercially possible time in the same way as if the Post Office was a normal, publicly quoted company.

The key word here is "transparency". Any normal company has to go through this procedure and I see no reason why this new kind of plc should not do so as well. I await with great interest the response of the noble Lord. I beg to move.

10.30 p.m.

Lord Sainsbury of Turville

Whatever its intention, this amendment would risk putting the Post Office company at a considerable disadvantage compared with its commercial competitors. Far from creating a level playing field, it would create an extremely "unlevel" playing field. No other commercial company would be required to publish its intentions to acquire or dispose of an undertaking in the same way. It would immediately place a major hurdle in the way of the Post Office entering into transactions with another party. Not only would the Post Office be forced to divulge potentially commercially sensitive information about itself, but it would inevitably have to reveal information which could well be prejudicial to the interests of that potential partner. Who would wish to enter into negotiations with the Post Office faced with such a disclosure requirement?

Publicly listed companies are merely required, in certain circumstances, to announce acquisitions, once the terms of such a transaction have been agreed. And the test of the size of the transaction in relation to the gross assets, turnover and net profit, apply to the listed company itself. The noble Baroness's extension to relevant subsidiaries does not follow the listing rules.

In seeking to give the Post Office (and the future Post Office company) the greater commercial freedom that everyone agrees is necessary, we are endeavouring to transform the Post Office company into a commercial company, governed by normal companies' legislation. Although the Government will be the sole shareholder (at least at the outset) and, of course, the Stock Exchange listing rules do not apply, the rules provide a useful benchmark for the relationship between the Government (as shareholder) and the company. Certainly, for completed transactions, it is our intention that the Post Office should provide transparent information on completed acquisitions along the lines of the London Stock Exchange disclosure requirements. Indeed, the Post Office is now doing so. I hope that this gives the kind of assurance that the noble Baroness seeks.

I recognise that the Committee may well be interested (on behalf of the nation for whom the Government hold the shares) in the way in which the Post Office company performs, and especially in the way in which it uses money for major transactions. But the amendment serves no useful purpose in any oversight of the way in which the Government manage their shareholding—it does not give this House (or the other place) any power to comment on a proposed transaction. All it does, in the way that it is drafted, is give commercial competitors the opportunity to spoil a major deal, which the Post Office management had considered in the commercial interest of the company. The actual position, as set out in the White Paper, is that the approval process by government of Post Office proposals for acquisitions and similar transactions cuts in at a far lower level than for similar-sized listed organisations; government approval is required when the Post Office company wants to borrow large sums (over £75 million) for new investments.

If the amendment is aimed at enabling the regulator to check whether a major transaction would disturb the balance between the Post Office company and its less dominant competitors, these provisions are equally unnecessary. The regulator will have adequate powers to ensure that the Post Office company does not abuse its market position without having to rely on such public notices of the Post Office company's intentions.

In addition, the amendment would do nothing to enhance the Government's controls on the disposal of shares in the Post Office company or any relevant subsidiary—such disposals (of whatever size) would fall within the provisions of Clause 67 for which prior parliamentary approval is needed.

I hope that, in the light of what I have said and the assurance I have given on the prompt disclosure of information on acquisitions, the noble Baroness will feel able to withdraw her amendment. We both agree that we should try to create a level playing field. I do not believe that these amendments would do that.

Viscount Goschen

Before the noble Baroness puts her intentions regarding her amendments to the Committee, perhaps the Minister can help me on an entirely related point. My noble friend has correctly highlighted the issue of transparency in terms of providing information on any deals that may be done by the Post Office.

Essentially, we are talking about a privatisation, possibly of a piece of the Post Office, a share swap, or whatever. It will involve the transfer of public equity to the private sector. That is generally considered to be privatisation. In other circumstances, generally if the Government seek to privatise a state asset a competitive process must be undertaken, for example by advertisement in the Official Journal and so on. I understand that the process involves giving a fair opportunity to other bodies that may wish to purchase assets from the Government. Given that we are talking about the transfer of a statutory corporation to a plc, albeit one that is wholly-owned by the Government, can the Minister explain why apparently that privatisation process does not require the same statutory process that applies to any other privatisation?

Lord Sainsbury of Turville

In this case we are not talking about a privatisation which would involve a completely different process. Here we are considering a very limited situation in which there may be a share swap to further the interests of the Post Office in commercial situations. I believe that that is more comparable with an acquisition or merger between two private sector companies. For that reason, both the noble Baroness and I referred to the commercial market and the listing regulations which would apply in those situations. It is not a privatisation in any commercial sense.

Viscount Goschen

Am I mistaken, therefore, in understanding that the Bill permits the disposal of specific assets of the Post Office, not necessarily those involved in a share swap; in other words, that the payment may be in cash rather than equity?

Lord Sainsbury of Turville

As I explained, there is a very clear set of circumstances in which there is simply an ability to undertake what is effectively a merger or acquisition. That arises in the case of a share swap, not in a situation where shares are sold in the market for cash.

Baroness Miller of Hendon

I am disappointed by the reply of the Minister. My understanding is that one of the main purposes of the Bill is to bring more competition into the marketplace, which requires other companies to come in as licensees in due course in particular areas. My understanding—perhaps I am just dim—is that other public limited companies must follow the normal rules of the Stock Exchange and disclose what is necessary and appropriate. The Minister says that that puts the Post Office at a disadvantage. I suggest that if the Post Office is exempt from doing what other companies have to do, it is not a level playing field. It is rather late in the evening and I do not want to go on ad nauseam. I wish to test the opinion of the Committee.

10.37 p.m.

On Question, Whether the said amendment (No. 69') shall be agreed to?

Their Lordships divided: Contents, 5; Not-Contents, 24.

Division No. 2
Goschen, V. Northbrook, L. [Teller]
Henley, L. [Teller] Wilcox, B.
Miller of Hendon, B.
Amos, B. Harrison, L.
Bach, L. Howells of St Davids, B.
Berkeley, L. Lea of Crondall, L.
Burlison, L. McIntosh of Haringey, L.
Carter, L. [Teller] Mallalieu, B.
Dearing, L. Mishcon, L.
Desai, L. Puttnam, L.
Elder, L. Ramsay of Cartvale, B.
Elder, L. RendellofBabergh, B.
Farrington of Ribbleton, B. [Teller] Sainsbury of Turville, L.
Sharman, L.
Gilbert, L. Simon, V.
GrenfeU, L. Whitty, L.
The Deputy Chairman of Committees (Viscount Simon)

As it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 57 I declare the Question not decided and, pursuant to the Standing Order, the House will now resume.

House resumed.