Lords Sitting of 29 June 2000

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

Royal Ulster Constabulary
Lord Laird Lord Laird asked Her Majesty's Government:
Whether they will review the levels of compensation and pension paid to the families of Royal Ulster Constabulary members murdered before 1982.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, while Her Majesty's Government have every sympathy for the families of officers of the Royal Ulster Constabulary murdered before or, indeed, after 1982, they do not, at this time, intend to review levels of compensation or pension then paid. However, noble Lords will wish to know that the report of the Independent Commission on Policing in Northern Ireland, commonly referred to as the Patten report, bears recommendations in respect of aid for widows and others in similar circumstances; for example, disabled officers. Those recommendations have been accepted by Her Majesty's Government and are being taken forward in discussions with widows' representatives that were initiated in May.
Lord Laird: My Lords, I thank the Minister for his reply. Does he agree that widows and families of RUC officers have paid the highest possible price in defence of all citizens of the United Kingdom? Does he agree that it is both immoral and indefensible that particularly those widowed before 1982 should be required to live on the poverty line, with little recognition of their sacrifice and their plight, while the Government seem more intent on releasing and supporting those who committed the murders?
Lord Falconer of Thoroton: My Lords, I agree that the widows and relatives of those RUC officers who have been murdered during the course of the Troubles have paid the highest price. We are second to none in our admiration of them. On the pensions, the position is that pre and post-1982 widows receive a pension of 50 per cent of the salary of their husbands at the time of their deaths. That is increased in line with inflation. Inevitably, as time has gone on, inflation has not kept pace with the increases in earnings of serving police officers. As I indicated in my Answer, the Patten report recognises that there is a problem and suggested the setting up of a fund. We accept that recommendation. In April or May next year a fund will he set up with assets in it. I cannot say that that will deal with all the problems, but it will make some contribution to them.
Baroness Park of Monmouth: My Lords, does the Minister agree that he has answered the Question on
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pensions but not on compensation? I seem to remember that the Bloomfield report took evidence from the Disabled Police Officers Association that the level of compensation that police officers received for injuries incurred in the course of their duty was much less than they would have received if they had suffered an industrial injury. However, at that time they did not have the legal expertise or the power to support their case to acquire the sort of compensation that they should receive. Is the compensation being reviewed as well?
Lord Falconer of Thoroton: My Lords, the fund that the Patten report recommended should be set up would not just deal with the position of widows but would also address the position of disabled officers. As I believe I made clear in my Answer, at the moment the Government have no plans to review either the level of compensation for those who are disabled or for widows.
Lord Elton: My Lords, can the Minister do something to relieve my ignorance, which may be shared by other noble Lords? Surely, a person who is murdered while he is a police officer stops qualifying for pension before the pension policy has matured. Therefore, is it not the case that the widow receives 50 per cent of a pension that is less than she would have received had the officer continued to work until the normal retirement date?
Lord Falconer of Thoroton: My Lords, that would depend on the age of the officer at the time of the murder. The widows receive 50 per cent of the earnings at the time, increased in line with inflation.
Lord Rogan: My Lords, is the Minister aware that we are talking of only 80 pre-1982 widows. Naturally, over time that number will decrease. Will the Minister reconsider whether to look at some means, independent of Patten, whereby the pre-1982 widows' pensions can be augmented to a more equitable level compared with the pensions of the post-1982 widows, some of which are five times the pre-1982 level of pension?
Lord Falconer of Thoroton: My Lords, in terms of the level of pension, whether pre-1982 or post-1982, there is no difference in principle. The reason why the position worsens is that the earnings of the officers are increased only by inflation and not by any increases that have occurred to the officers' earnings. As a result, the longer the time since the death occurred, the less is the position of the widow. The year of 1982 is riot a magic figure in that respect.
Lord Hylton: My Lords, does the noble and learned Lord agree that the right solution is to take care of anomalies in compassionate cases through the proposed foundation for the RUC?
Lord Falconer of Thoroton: My Lords, precisely how the Patten money—if I may call it that—is distributed

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is a matter for the commission. One issue that the Patten money will address is the penury of some of the widows.
Lord Glentoran: My Lords, can the noble and learned Lord assure the House that he fully understands that serious divisions exist in this matter? The widows of officers killed in the troubles pre-1972 received a gratuity of only twice salary, whereas those later and currently receive five times salary. Also, as I understand it, the pension for widows was reduced by the amount of the industrial death benefit.
The difference between those receiving a gratuity between 1969 and 1972 and those receiving it today is a factor of five. Can the Minister assure the House that under the new legislation, and in view of the Secretary of State's statement that there will be generous compensation factors for the force after Patten, those anomalies will be taken into due account in the process of passing the new Northern Ireland peace legislation.
Lord Falconer of Thoroton: My Lords, the noble Lord referred to 1972. I believe the change occurred in 1982. The gratuity negotiated effectively across all of the UK, including Northern Ireland police associations, was five times for any death which occurred as a result of service, not just as the result of murder in the course of terrorist activities. It was increased from two times salary to five times in 1982.
The pension arrangements are the same both pre and post-1982. The Patten report does not specifically include anything about that. Separately, the Government indicated that they will set up the fund that Patten recommended and, as I indicated, the money should be available in the spring of next year. I cannot give any assurances in relation to precisely how that money will be spent. It is intended to address the distress and penury of the widows and disabled policemen.

Sri Lanka
3.14 p.m.
Lord Eden of Winton Lord Eden of Winton asked Her Majesty's Government:
Whether they are taking any action in relation to the situation in Sri Lanka.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Scotland of Asthal): My Lords, we are deeply concerned about the tragic situation in Sri Lanka and called upon the Sri Lankan Government and the LTTE to cease hostilities and begin negotiations immediately. We have held discussions with Norway, India, the United States, our EU partners and the Sri Lankan Government. We fully support Norway's efforts to facilitate peace talks. We have reminded both parties
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of their responsibility to ensure the safety of the civilian population in conflict zones, particularly the Jaffna peninsula.
Lord Eden of Winton: My Lords, I am grateful to the Minister for that reply. Is it not the case that all proposals so far put forward by the Sri Lankan Government have been rejected by the Liberation Tigers of Tamil Eelam, greatly to the tragedy of the Tamil and Sinhalese people? Is there any scope here for a wider Commonwealth initiative alongside that of India to back up the efforts being made by Norway to find a solution? Will the British Government take action to stop organisations in this country from sending financial aid and other support to the Tamil separatists and insurgents? The longer they receive assistance of that kind, the longer the conflict will continue.
Baroness Scotland of Asthal: My Lords, the Government are extremely concerned about that situation. We have spoken to our partners around the world in relation to this issue. The view is that Norway has been accepted by the parties as the appropriate negotiator during this period and we will give it our full support. Obviously, if and when it seems appropriate for a more active or different participation from any of our partners, ourselves or others in the Commonwealth, to take a greater lead, that will be given concrete consideration.
I share the noble Lord's concern about the terrorist groups who are allegedly giving support. That is something we condemn and we in this country are taking every opportunity to ensure the terrorists do not succeed. It is of significance that the Terrorism Bill will be passing through this House in due course.
Lord Avebury: My Lords, does the Minister agree that the LTTE has an office in London? It collects money via that office, contributions being solicited from Tamil businessmen. The Sri Lankan authorities allege that those moneys are used to finance the military activities of the LTTE in Sri Lanka. Will the Government consider doing more to combat those activities? Will they discuss the issue with the Canadian authorities who have a similar problem in their country?
In relation to the negotiations and the facilitation by Norway, does the noble Baroness agree that Mr Prabhakaran recently showed himself to be completely intransigent and unwilling to negotiate because he believes he is winning the military struggle? Will not the Government, as the noble Lord, Lord Eden, suggested, consult other Commonwealth countries to see what further measures can be taken to bring this tragic conflict to an end?
Baroness Scotland of Asthal: My Lords, perhaps I can first deal with the noble Lord's last point. We have consulted our partners. There is unanimity in relation to how this matter should be dealt with. It is important to establish who will be the most effective interlocutor.

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Norway was identified for that role. It is discharging that role with due diligence and it is important that we support it in that regard.
In relation to the activities of the LTTE in the UK, we are aware of the assertions that money is being collected. We remain determined that the UK should not be used as a base for supporting terrorism overseas in any way. The Government do not accept that terrorists feel welcome in the UK or that we will not take appropriate action. Where police investigations yield credible evidence that terrorist crimes have been committed, action is taken either under the criminal law, supported as necessary by the existing prevention of terrorism legislation or Immigration Act powers.
So we hear the assertion. If there is evidence that what the noble Lord says is true, the police will investigate. We will do that with vigour.
Viscount Waverley: My Lords, can the Minister tell the House how many asylum seekers there are in the UK from this conflict area? I am given to understand that the Sri Lankan authorities are concerned that it is via the asylum seekers' road that much of these funds actually goes back into Sri Lanka.
Baroness Scotland of Asthal: My Lords, I cannot give your Lordships specific figures in relation to the number of asylum seekers. However, I can say that each asylum application will continue to be dealt with on its individual merits, in line with our obligations under the 1951 convention and its 1967 protocol. We shall look at these applications most carefully. Noble Lords can be assured that it is only in those cases where we feel that asylum is merited that such granting will take place.
Lord Howell of Guildford: My Lords, further to the comments of my noble friend Lord Eden and the noble Lord, Lord Avebury, is the Minister aware —I am sure she is—that there is very great concern about the Tamil network operations in this country, as in Canada? Does she accept that we really must press for action to be taken to overcome the very strong feeling in Sri Lanka that, inadvertently—but, nevertheless, actually—-we are aiding and abetting these organised groups which are planning violent atrocities on a very undesirable scale?
Baroness Scotland of Asthal: My Lords, if that were to be happening, it would, of course, be a disgraceful state of affairs. However, I can assure noble Lords that we do adhere to the rule of law in this country. We must have evidence before individuals can be arrested and dealt with. Moreover, where there is such evidence, the police authorities here will prosecute. I am sure that no one in this House would seek to suggest that this country should behave illegally or improperly in arresting those on either suspicion or assertion, and against whom there is no cogent evidence.

International Criminal Court
3.21 p.m.
Lord Goodhart Lord Goodhart asked Her Majesty's Government:
When they will bring forward legislation to ratify the International Criminal Court.
Baroness Scotland of Asthal: My Lords, the legislation to enable ratification of the Rome Statute of the International Criminal Court will be published as soon as practicable in this parliamentary Session, and introduced as soon as the parliamentary timetable allows.
Lord Goodhart: My Lords, I am grateful for the fact that the legislation will be published. However, given that the treaty requires 30 ratifications, can the Minister say how many countries have already ratified the treaty? Is it not essential that this country, especially in view of the fact that we are one of the five permanent members of the Security Council, should set an example to other countries by ratifying the treaty as soon as possible? Is it reasonable, therefore, to expect that the Bill will be brought forward early in the next Session? Further, would it perhaps be suitable for this legislation to be dealt with in the Moses Room, as that would enable it to become law sooner?
Baroness Scotland of Asthal: My Lords, I can tell the noble Lord that 12 countries have ratified the treaty to date. Of course, it would be wholly inappropriate for me to say anything as to when the legislation will be introduced. However, I can certainly commend to the House some of the comments made by the noble Lord. If, as I believe, there is unanimity in this House on the matter, I am sure that we would all wish this particular Bill Godspeed.
Lord Archer of Sandwell: My Lords, can my noble, friend the Minister confirm that it continues to be the policy of the Government to maintain inviolate the existing text of the treaty and to persuade the American Government—if we can—that, if they have nothing to regret, they have nothing to fear?
Baroness Scotland of Asthal: My Lords, I can certainly confirm that Her Majesty's Government are robust in their support of the International Criminal Court and that we shall continue to do all that we can to persuade our American colleagues that the text is an appropriate one with which they can concur. We shall continue to talk with them because it is of great importance that they should feel able to support the ICC in due course.
Lord Avebury: My Lords, does the Minister agree that the proposals put forward by the Americans are unacceptable? Therefore, will the Government take the lead not only in persuading our other allies to reject

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those proposals but also, if they do come before the preparatory committee, in ensuring that they are rejected?
Baroness Scotland of Asthal: My Lords, it is right to tell your Lordships' House that Her Majesty's Government have some concerns about the way in which the USA is approaching this proposal; and, indeed, we are discussing the matter with those concerned in some detail. The preparatory conference is taking place at present and, obviously, such matters are still under consideration. I can reassure the House that the Government's commitment to this Bill and to the ICC remains firm.
Lord Lloyd of Berwick: My Lords, can the Minister confirm that if the court had been up and running earlier many of the problems that arose in the Pinochet case would have been resolved?
Baroness Scotland of Asthal: My Lords, I do not know whether the court could have been up and running so quickly, but these are issues that we hope will be amenable to being dealt with by the ICC in the future. Indeed, there would be great benefit in that development.
Lord Lamont of Lerwick: My Lords, before we establish a new criminal court, would it not be advisable to be absolutely satisfied with the existing ad hoc tribunals, especially those in relation to Rwanda and Yugoslavia? Can the Minister tell the House whether the Government regard it as satisfactory that part of the financing for these bodies should come from the private sector? Is that really acceptable for a court? Further, do not the Government have to be clear about their own attitude to international law? For example, how will establishment of this court be compatible with a speech made by the Minister of State at the Foreign Office, Mr Peter Hain, in which he called for immunity from prosecution for war crimes for Jonas Savimbi?
Baroness Scotland of Asthal: My Lords, as regards financing, the ICC and how it will be financed will be a matter for discussion and consultation with all the parties. I am not able to give the noble Lord a definitive answer as to how that will be done. Indeed, it would not be appropriate for me to do so at this stage. I should point out that the other tribunals have had to engage in some very difficult issues and, so far, they have produced credible results.
We are moving to a different stage with the ICC. We hope that it will provide a certain cogency and coherence that has not been present before. We are hopeful that such matters will become a little easier to resolve once the ICC is up and running. I can tell the noble Lord that our own attitude towards international law is absolutely clear. Mr Muvunyi has been arrested and is awaiting trial. He will be transferred, as is appropriate, in due course.

Human Genetic Code
3.27 p.m.
Baroness Sharp of Guildford Baroness Sharp of Guildford asked Her Majesty's Government:
What are the immediate next steps they plan to take in the light of the unravelling of the human genetic code announced on 26th June.
The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the Government will work actively to ensure that the promised benefits are delivered. In the last comprehensive spending review, the Government increased the budgets of the relevant research councils by £142 million over the period to 2002 in order to expand research into human genetics. Work on post-genomics will continue to be a major priority for the future. The Government are also very conscious of the important social and ethical issues that this scientific breakthrough will raise. We set up the Human Genetics Commission earlier this year to consider these issues and to consult widely with the public.
Baroness Sharp of Guildford: My Lords, I thank the Minister for that Answer. Does the noble Lord agree that one of the most pleasing aspects of this breakthrough, which was the result of teamwork on the part of 18 countries, is that the knowledge derived from the project has been kept within the public domain? However, is the Minister confident that we can maintain that position? Can he tell us what is the current position of the American courts; for example, will they be able to withstand the pressures for patenting that are placed upon them?
Further, given that the British contribution to the project was funded by the Wellcome Foundation and that two-thirds of the American contribution was funded by the Federal Government, is the Minister confident that our universities and research institutes are in a position to be able to exploit the wealth of material that is now available to scientists in this country, rather than losing them overseas?
Lord Sainsbury of Turville: My Lords, the noble Baroness has asked several supplementary questions. As regards the public domain, the answer is no. All that can be guaranteed is that the partners to the Bermuda Agreement who agreed in 1998 that they would make such information public will continue to do so. That is the policy of the Federal Government and, indeed, of the Wellcome Foundation. Other bodies that gain information about the human genome through their own efforts can take whatever decisions they wish about making it public.
That, of course, is a completely different question from that of patenting, which was addressed by the Blair/Clinton declaration on the human genome. One must ensure that someone cannot obtain a patent unless he puts the information into the public domain. The main issue there is to define exactly where a patent can be issued. Everyone has agreed that one cannot

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patent the broad data and that utility and invention must be involved. However, the question is how one defines that. That will be a difficult issue.
As regards university exploitation, our universities are in good shape to undertake that. We have given them extra money. They are in a position to undertake the next stage of research to develop medical benefits from the information.
Lord Alton of Liverpool: My Lords, I accept what the Minister said about the imperative for good science and good ethics to march hand in hand. However, does not he agree that the process would have greater credibility if the Human Genetics Advisory Commission had at least one dissenting voice among its membership? It will not be accepted as a credible body to examine the ethics of genetics as regards future human cloning unless it has dissenting voices in its membership. Does not the Minister accept that civil liberties issues—confidentiality, privacy, and the big vested interests of the insurance industry, which has so much to gain from some of the measures that are being prornoted—also need to be weighed in the balance? Will he set himself entirely against eugenic practices that may emerge from the advances?
Lord Sainsbury of Turville: My Lords, the Human Genetics Commission has only just been set up. Therefore, it is too early to ask whether its membership includes dissenting voices. However, given the fact that the noble Baroness, Lady Kennedy of The Shaws, is its chairman, and given her performance in this Chamber on a number of occasions, we can be certain that there will be at least one dissenting voice! It is absolutely clear that the matters the noble Lord raised with regard to eugenics will not be tolerated under our system.
Lord Walton of Detchant: My Lords, does the Minister agree that the potential benefits for human health arising out of this development are enormous but that in the first instance it is likely within the not too distant future that genes which confer susceptibility to various diseases will be identified, thus allowing measures to be taken where appropriate in preventive medicine, and that in the longer term the prospect of gene therapy being used to cure some at present fatal disorders will also arise? Does the Minister also agree that the legal issue is important? The discovery of a human gene can be patented only if there is, as he said, an element of invention involved.
Lord Sainsbury of Turville: My Lords, I totally agree that the benefits of this development are huge. It will enable us soon to identify genes which confer susceptibility to various diseases. That enables preventive measures to be taken. In the long term there is the possibility of gene therapy. While we should be conscious of those benefits we should proceed carefully as regards the ethical and social issues that are involved.
Lord Clement-Jones: My Lords, the noble Lord, Lord Walton, mentioned the benign effects of genetic
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testing. However, many of us are concerned about genetic testing for insurance purposes. Only last week the Government's Genetics and Insurance Committee published its application form for use by insurance companies when applying for approval of certain genetic tests. Should we not consider whether those tests should be used at all? Have not the Government already sold the pass?
Lord Sainsbury of Turville: My Lords, noble Lords will be aware that genetic tests are currently used.. Anyone who has undergone a medical for life insurance purposes is asked questions, the sole purpose of which is to determine whether he or she has any genetic susceptibility. The issue of genetic testing for insurance purposes is an extremely complicated one. Again, we need to proceed carefully in that area. The Government have set up the Genetics and Insurance Committee to assess whether any of the tests have actuarial predictability to enable them to be used. The Association of British Insurers has agreed that if the tests fail that assessment they will not be adopted.
There are other important social issues that need to be addressed. We have asked the Human Genetics Commission to keep those issues under review. It is not a simple matter of being able to abandon the tests easily, given that they already exist. There is also the following difficult issue; namely, that if people were able to keep the results of the tests secret, one would have what is called in the trade "adverse selection" in the sense that people would be able to obtain life insurance of a high value without the insuring company having access to the relevant information.
Lord Elton: My Lords, the noble Lord has revealed that there are international agreements, at least in a narrow range, on matters of patentability. However, on the more worrying issues of eugenics there is no international agreement. Is this not an area in which we should be concerned outside our own shores as well as in this country?
Lord Sainsbury of Turville: My Lords, there are some patenting agreements but, as a whole, this is an area where each country has its own patenting laws. That is one of the difficulties in that there is not a universal agreement on these issues. However, there is a European directive on patenting and therefore there is a common European position on this matter.
I think that everyone would wish to see an agreement established on eugenics. However, there is no such agreement at present. I do not think that at the moment it is a particular issue.

Transport Bill
3.36 p.m.
Lord Carter: My Lords, on behalf of my noble friend Lord Macdonald of Tradeston I beg to move the Motion standing in his name on the Order Paper.

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Moved, That it be an instruction to the Committee of the Whole House to whom the Transport Bill has been recommitted that they consider the Bill in the following order:

Clauses 1 to 30,

Schedules 1 and 2,

Clauses 31 to 33,

Schedule 3,

Clauses 34 to 36,

Schedule 4,

Clause 37,

Schedule 5,

Clauses 38 to 63,

Schedule 6,

Clause 64,

Schedule 7,

Clauses 65 to 96,

Schedule 8,

Clauses 97 to 101,

Schedule 9,

Clauses 102 to 152,

Schedule 10,

Clauses 153 to 160,

Schedule 11,

Clauses 161 to 190,

Schedule 12,

Clauses 191 to 198,

Schedule 13,

Clauses 199 to 203,

Schedule 14,

Clauses 204 to 210,

Schedule 15,

Clauses 211 to 214,

Schedule 16,

Clause 215,

Schedule 17,

Clause 216,

Schedule 18,

Clause 217,

Schedule 19,

Clause 218,

Schedule 20,

Clause 219,

Schedule 21,

Clauses 220 to 226,

Schedule 22,

Clauses 227 and 228,

Schedule 23,

Clauses 229 and 230,

Schedule 24,

Clauses 231 to 238,

Schedule 25,

Clauses 239 to 248,

Schedule 26,

Clauses 249 and 250,

Schedule 27,

Clause 251,

Schedule 28,

Clauses 252 to 254,

Schedule 29,

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Clauses 255 to 259,

Schedule 30,

Clauses 260 to 265.—(Lord Carter.)

On Question, Motion agreed to.

Utilities Bill
3.36 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clause 1,

Schedule 1,

Clause 2,

Schedule 2,

Clause 3,

Schedule 3,

Clauses 4 to 51,

Schedule 4,

Clause 52,

Schedule 5,

Clauses 53 to 107,

Schedules 6 to 8,

Clauses 108 and 109.—(Lord McIntosh of Haringey.)

On Question Motion agreed to.

Trustee Bill [H.L.]
3.37 p.m.
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to notify the House that, having been informed of the purport of the Trustee Bill, have consented to place their prerogative and interests so far as they are affected by the Bill at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Schedule 2 [Minor and consequential amendments]:
The Lord Chancellor The Lord Chancellor moved Amendment No. 1:
Page 26, leave out lines 33 to 41.
The noble and learned Lord said: My Lords, as I indicated on Report, it has become necessary to introduce amendments at this late stage to take into account the coming into force of the Cathedrals Measure 1999 since the original publication of this Bill. I was grateful on that occasion to the noble Lords, Lord Kingsland and Lord Goodhart, for their generous indications that they were unlikely to find fault with them.
The provisions of the 1999 Measure are brought into force through some rather complex transitional provisions which mean, in effect, that the investment powers under the Cathedrals Measure 1963, which

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before the coming into force of the 1999 Measure applied to all cathedrals, will continue to have effect in respect of cathedrals which do not, for the time being, attract the provisions of the 1999 Measure. Once a cathedral attracts the 1999 provisions, the 1963 provisions will cease to have effect in relation to that cathedral. This group of four amendments sets out to achieve that end in respect of the powers of investment granted to cathedral bodies which, under both Measures, are derived from the 1961 Trustee Investments Act. With your Lordships' leave, I shall speak to these four amendments together.
Amendment No. I simply removes from Part III of Schedule 2 the amendment which was originally to be made to the 1963 Measure. Amendment No. 2 makes an amendment to the 1999 Measure, substantially similar to that removed by the Government's first amendment today, substituting the general power of investment in this Bill for the powers in the Trustee Investments Act 1961.
Amendment No. 3 makes provision such that for as long as the 1963 Measure continues to apply to any cathedral, the powers of investment that derive from it shall be the general power of investment under this Bill. Amendment No. 4 is entirely consequential and adds to Part II of Schedule 4 the details of the repeal carried out by Amendment No. 2. I beg to move.
Lord Goodhart: My Lords, I am happy to tell the noble and learned Lord the Lord Chancellor that my lengthy researches into the Cathedrals Measures of 1963 and 1999 have convinced me that these amendments are wholly appropriate.
Viscount Bridgeman: My Lords, my noble friend Lord Kingsland has also indicated his agreement to this amendment. I am happy to agree.
Earl Ferrers: My Lords, perhaps I may ask the noble and learned Lord the Lord Chancellor a question. I am the High Steward of Norwich Cathedral but I was not aware of these Measures. Will the noble and learned Lord be kind enough to say how they will affect Norwich Cathedral?
The Lord Chancellor: My Lords, as always, I shall be happy to correspond with the noble Earl and to give him the guidance that he seeks—at no cost to himself.
On Question, amendment agreed to.
The Lord Chancellor The Lord Chancellor moved Amendments Nos. 2 to 4:
Page 27, line 19, at end insert—
("The Cathedrals Measure 1999 (No. 1)
In section 16 (cathedral moneys: investment powers, etc.), in subsection (1)—
(a) for paragraph (c) substitute—
"(c) power to invest in any investments in which trustees may invest under the general power of investment in section 3 of the Trustee Act 2000 (as restricted by sections 4 and 5 of that Act),", and.
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(b) omit the words from "and the powers" to the end of the subsection.").
Page 28, line 19. at end insert—
("The Cathedrals Measure 1963 (No. 2)
While section 21 of the Cathedrals Measure 1963 (investment powers, etc. of capitular bodies) continues to apply in relation to any cathedral, that section shall have effect as if—
(a) in subsection (1), for paragraph (c) and the words from "and the powers" to the end of the subsection there were substituted—
"(c) power to invest in any investments in which trustees may invest under the general power of investment in section 3 of the Trustee Act 2000 (as restricted by sections 4 and 5 of that Act).", and.
(b) in subsection (5), for "subsections (2) and (3) of section six of the Trustee Investments Act 1961" there were substituted "section 5 of the Trustee Act 2000".").

Page 29, line 31, at end insert—

("1999 No. 1.

The Cathedrals Measure 1999.

In section 16(1).the words from "and the powers" to the end of the subsection.")

The noble and learned Lord said: My Lords, I have already spoken to these amendments. If beg to move.
On Question, amendments agreed to.
The Lord Chancellor: My Lords, I beg to move that this Bill do now pass.
Lord Dahrendorf: My Lords, perhaps I may ask for your indulgence to make a very brief statement. As a Member of the Delegated Powers and Deregulation Committee I am exposed, if that is the word, to all Rills which come to your Lordships' House. This encourages me to make one comparative comment. The Bill, which I hope will pass shortly, is fairly short, well focused and quite clear. It is a Bill which reduces burdens rather than adds new ones. The noble and learned Lord the Lord Chancellor has been not only courteous throughout the passage of the Bill, but he and his department were ready to listen and to engage in open discussion. The amendments moved were not afterthoughts or remedies of bad drafting, but the result of debate—and they were produced on time. The result is that some of us are left with a feeling of considerable satisfaction. I am, certainly, and I participated throughout.
I want to thank the noble and learned Lord the Lord Chancellor for reminding us that such sentiments are possible at the end of the debate on a Bill. I wonder whether he will find it possible to inform some of his ministerial colleagues of this practice.
The Lord Chancellor: My Lords, the noble Lord is very kind. He has succeeded in cheering me up. I shall draw his words to the attention of my colleagues.
On Question, Bill passed, and sent to the Commons

Postal Services Bill
3.43 p.m.
Report received.
Schedule 2 [The Consumer Council for Postal Services]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 1:
Page 79, line 30, at end insert—
(" . A regional committee shall establish adequate procedures to enable representations to be made to it by all users or recipients of postal services, including members of the public and businesses, and to examine and report to the Council on matters of concern to them.").
The noble Baroness said: My Lords, this is a probing amendment which I am bringing forward at this late stage—for which I ask the indulgence of the House—because of a problem that has only just been brought to my attention.
At a time when the rural postal network is under threat from increasing use of automatic credit transfers, when the Royal Mail is failing to meet its service quality targets, when it is under the great pressure of losing revenue from the new competition generated by this Bill, from e-mail and from fax, the well-established Post Office advisory committees, known as POUNC, are being abolished and replaced by a new consumer council for postal services.
The regulator, the new postal services commission and the new consumer council will have considerable powers and duties to supervise both the Post Office and any other licensees. The new consumers council is proposing to disband the 140 locally-based voluntary committees that have existed since the 1960s and to replace them with paid regional committees.
These new arrangements give rise to several concerns. First, the increase in cost. Local Post Office advisory committees established by POUNC currently cost £650,000 per year to run. The new consumer council and its regional committees are estimated to cost around £2.5 million per year. That is an increase of 450 per cent.
The second concern is that it replaces volunteers with professional, paid members, which may not always be an advantage. This is because grass roots input from a large and diverse number of consumers—750, I believe—is being replaced by a handful of paid individuals. The current volunteers are drawn from a cross-section of business and private users and voluntary organisations.
Thirdly, and most important of all, although the new regional committees will be larger—and, presumably, more powerful and influential—the disadvantage is that there will be a loss of local contacts and local knowledge of local problems; for example, closures and relocation of post offices, siting of letter boxes, local delivery and collection problems, and so on.
I also wonder whether this could possibly be the thin edge of the wedge, leading to adverse effects and even the abolition of the local telecommunications advisory
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committees, which have a similar role in telecoms and which, in most cases, share members, staff, resources and funding with the local Post Office advisory committees.
This modest amendment does nothing to reduce the powers and duties of the commission, or of the consumer council or of any of the regional subcommittees that the council establishes under Clause 54(4). But they are too remote. All that the amendment seeks to ensure is that there is local access to enable local people to raise local problems—and to raise them locally rather than in some distant office. I beg to move.
Lord Sainsbury of Turville: My Lords, I have listened carefully to the noble Baroness. I am not certain that her amendment deals with the particular issue she raised. Essentially, it demands procedures for representations; that would add to rather than reduce the complexity of the issue of paid committees.
I am entirely sympathetic to the view—which is the point of the amendment—that any committee of a council should establish adequate procedures to fulfil its role of the provision of advice and information to the council about relevant postal issues affecting the area for which it is established, as required by Clause 54(5)(a). However, Clause 54(5)(b) gives the council an important discretion as to what other purposes any committee should have.
It needs to be borne in mind that the term "regional committee" in the Bill includes both committees established for a whole country and any areas within that. This amendment presupposes that they all should have the same role in receiving, examining and reporting on representations. The council may find it sensible to arrange matters so that some committees reported to others on certain matters rather than to the council itself in the first instance. The council should be left with the flexibility to decide on these matters in the best way calculated to ensuring that it can fulfil its duty in Clause 54(1) of having regard to the different interests of different users of relevant postal services in different areas.
This amendment, for example, would force a regional committee to examine and report to the council on complaints by users or recipients of postal services should they make such representations to it. The council has the power to delegate its functions to committees. Clause 56 requires the council to investigate complaints which have not been satisfactorily dealt with by the provider of the relevant postal service and any delegation of that role should be left to its discretion. The amendment would force the council to give this function to committees. The council may wish the committees to have a mainly advisory rule and not to play a significant part in operational matters dealing with complaints.
The noble Baroness raised the question of cost. The amendment could lead to increased cost for the council, as all its committees would be forced to have resources to examine and report on representations on any matters put to it. The amendment also refers to

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"postal services". The noble Baroness has previously expressed concern about the council having too wide a role. I hope she will agree that the remit of any "regional committees" should be limited to "relevant postal services", as defined in Clause 51, and its functions in relation to public post offices in Clause 57. As drafted, the amendment does not link the matters of concern to postal services but merely states that users or recipients of postal services are the persons who are entitled to make representations. Therefore, I ask the noble Baroness to withdraw her amendment.
Baroness Miller of Hendon: My Lords, I thank the Minister for his courteous answer and also for the fact that he had some sympathy with my amendment. I am not altogether sure that I understand the point that if my proposal were to be adopted and there were more voluntary people that would cost more. I shall certainly read the Minister's comments carefully. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 2:
Page 79, line 35, after ("and") insert (", subject to sub-paragraph (5),").
The noble Lord said: My Lords, in moving Amendment No. 2, I wish to speak also to Amendments Nos. 3, 45, 46, 67 and 73. Amendments Nos. 2 and 3 disapply the requirement for giving notice on proposals to set up committees for England or for areas within England, Scotland, Wales and Northern Ireland under Clause 54(4)(b) or (c). Since POUNC has conducted a wide-ranging consultation on regional representation this spring, these amendments seek to avoid duplication of this consultation within what is likely to be less than a 12 month period which would delay the establishment of the committees.
Amendment No. 45 introduces transitional provisions to ensure the smooth transition from the existing regime of four councils to the new consumer council for postal services. Subsections (1) and (2) enable the Secretary of State to make an order to transfer property, rights and liabilities. Subsection (3) applies the provisions in paragraphs 1 and 7 of Schedule 3 to POUNC and the CCPS to allow the certain actions of POUNC to be continued by the new council and to protect third party rights. Subsections (4) and (5) preserve the employment rights of any staff seconded from the Civil Service to POUNC at the time of the transfer that choose to transfer to the CCPS. Subsection (6) defines what is meant by the term "Country Council" in this section.
Amendment No. 46 is required to allow both the Post Office company and the CCPS to operate properly. The Post Office company will obtain all its rights, property, and so on, by virtue of Clause 62, and all information belonging to the Post Office will transfer over to the Post Office company under this clause. Similarly, the CCPS will obtain information under the transfer envisaged by Amendment No. 45. Therefore, that information will be caught by Schedule 7 and without this amendment the Post
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Office and the CCPS would be prevented under the terms of that schedule from disclosing that information. That may well prevent the Post Office company and the CCPS from legitimately carrying out their business. Therefore, we have made exceptions to the general prohibition on disclosure of information in this schedule.
Amendment No. 67 is needed in consequence of paragraph 9 of Schedule 2 to the Bill which concerns pensions. It adds the Consumer Council for Postal Services to Schedule 1 to the Superannuation Act 1972.
Amendment No. 73 repeals the reference to the Post Office Users' Council in Section 14 of the Chronically Sick and Disabled Persons Act 1970. That provision is no longer necessary as it is superseded by paragraph 1(3) of Schedule 2. I beg to move.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 3:
Page 80, line 2, at end insert—
("(5) The requirements of sub-paragraphs (2) to (4) do not apply to the establishment of any committee within the period of two months beginning with the day on which section 54(4) comes into force.").
On Question, amendment agreed to.
Clause 4 [Provision of a universal postal service: meaning]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 4:
Page 2, line 32, leave out from beginning to ("are") in line 33 and insert ("the service of conveying relevant postal packets from one place to another by post and the incidental services of receiving, collecting, sorting and delivering such packets").
The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendments Nos. 9, 16, 17, 22, 23, 24, 25, 26, 57, 58, 59, 60, 61, 62 and 63. These are drafting amendments intended to tidy up and clarify the Bill. They deal primarily with the definitions of postal services, postal operator, post office, universal postal service post office and related consequential amendments. Together they ensure that references throughout the Bill are consistent. They narrow the definition of postal services, postal operator and post office to prevent catching persons or places only involved in the provision of related postal services; for example, the sale of stamps by a newsagent or the sale of envelopes by a stationer. These amendments ensure that these related services are caught only if they are provided in conjunction with the conveying, receiving, sorting, collecting and delivering of such packets. I beg to move.
On Question, amendment agreed to.
The Chairman of Committees (Lord Boston of Faversham): My Lords, in calling Amendment No. 4A, I must point out that there is a mistake in the final line as printed. The final line of the amendment should be deleted and,
"community of 10,000 people or less",
should be inserted. I am very grateful to the noble Lord, Lord Skelmersdale, for pointing out this mistake to me.
Clause 5 [Other duties of the Commission in the consumer interest:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 4A:
Page 3, line 37, at end insert—
("( ) The Commission shall exercise its functions in the manner which it considers best calculated to ensure the maintenance of a network of rural post offices at a level comparable with that which existed on the day on which this Act was passed.
( ) In this section, a rural post office means a post office serving a community of 10,000 people or less.")
The noble Baroness said: My Lords, I must apologise to the House because it is somewhat unusual to bring forward an amendment at this late stage. The amendment was tabled at the last minute, yesterday evening. On the other hand, it was equally unusual, I suggest, for a Statement, such as we heard yesterday, to be made so close to the Report stage. That will explain why there is the mistake in the bottom line; it was all done in rather a rush. Therefore, I ask the indulgence of the House. As I say to the Minister on many occasions, I hope that he will humour me on this amendment and not be cross.
Perhaps I may say at the outset that we welcome the fact that the Government have a package designed to help sub-post offices. We know the value of these rural post offices to their local communities. We know, too, that it is essential that we try to do everything we can to keep them. The Minister said yesterday that the Government are committed to ensuring that the rural post office network is maintained. That is what the amendment seeks to achieve.
We have suggested on numerous occasions that matters ought to be on the face of the Bill and the Minister answers in the same way—very politely but always the same answer—that this is a matter for the regulator to decide and that it does not need to be on the face of the Bill. The intention that these rural sub-post offices should be retained is an admirable one. Many questions were asked yesterday about how that would happen but no satisfactory answers were given. Therefore, it is possible that it will not happen. We want to ensure that it does.
I do not wish to repeat many of the questions asked yesterday by my noble friend Lady Buscombe and indeed one which certainly will be addressed by my noble friend Lady Byford. However, by way of example, we should like to know from where the money is to come. Much was said by the Government about how the banks' expertise would form a part of the package. Does that mean that the banks intend to put money into this, or will that expertise comprise
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only expert help and assistance? More specifically, with regard to this amendment, what does an "unavoidable closure" mean? That phrase is rather loose and we are a little concerned about it.
In Committee we made it clear that we are not seeking subsidies. What we want—I believe the wish is shared by all noble Lords in this House and, indeed, the Government—is to ensure that all sub-post offices will be in a position to handle sufficient business to enable them to function profitably. However, we acknowledged at the time that the new clause introduced to deal with subsidies was probably necessary in the event that, if all else failed, a permissive power would be in place to deal with the problem, should it arise. However, I made much of the fact that the new clause was added only after a rally of 2,000 sub-postmasters in Westminster Hall and the submission of a petition comprising 3 million signatures to the Prime Minister at 10 Downing Street. It struck me at the time that the clause was introduced as a response to a problem that suddenly became apparent. The Government felt that it was necessary to take some action.
The transformation of sub-post offices into universal banks will, I assume, require further primary legislation after this Bill has been enacted. We feel, however, that unless some form of provision is put on to the face of this Bill, what has been promised will happen may not happen. If the Government are certain that they do intend to pursue this course, then they should have no difficulty about adding a few words to the legislation before us today.
In our amendment we have been modest in the terms that were so ably corrected by the Chairman of Committees, the noble Lord, Lord Boston of Faversham. We have asked only to consider a community of not more than 10,000 people, which matches the description given in yesterday's Statement. I beg to move.
4 p.m.
Lord Skelmersdale: My Lords, because I, too, have put my name to this amendment, perhaps I may be allowed to utter a few words in support of it. Ever since the Government's decision to reverse the previous government's intentions on the payment of social security benefits through post offices, the future of sub-post offices has been the subject of a longstanding debate. After all that has been written and said on the issue, it boils down to a simple question: can they survive the introduction of payments by automated credit transfer to the 85 per cent of the population with bank accounts? To put it another way, can they survive on the minority that insists on being paid in cash? The Government believe that the sub-post offices can do so; they have stated that over and over again. Indeed, we heard that repeated in the Government's Statement made yesterday when the Minister introduced us to the long-awaited Performance and Innovation Unit report on modernising the Post Office network.

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The report concludes that it may be necessary to provide subsidies. After a great deal of argument and persuasion in another place, the Government have provided a power in what is now Clause 103 so to do. However, that is simply not enough. Yesterday the Minister was asked twice whether the findings of the report would necessitate introducing amendments to this Bill. To be fair to the Minister—I try to be fair to him on occasion—he told us, as he had told us previously, that it would not be necessary. However, now that I have had an opportunity to read the report, 1 must say that I disagree with him.
Each one of us, regardless of on which side of the debate we stand, agrees, in the words of 1066 and All That, that rural sub-post offices are, "a good thing". Several noble Lords, not least my noble friend Lady Byford, have waxed lyrical on the subject, and quite rightly so. Their practical and social functions cement present-day rural life even more than do, I am afraid, the churches or even village pubs. I believe that we are all agreed on that.
The PIU report makes it quite clear that sub-post offices should be preserved—not in aspic, but to prevent any avoidable closures. Noble Lords have only to turn to the Executive Summary to see the sixth bullet point where it states that:
"Rural post offices should he protected".
On further reading, on page 85 it states that:
"The Government should place a formal requirement on the Post Office to maintain the rural network, and to prevent any avoidable closures of rural post offices".
It goes on to say that the Government,
"needs to send a clear signal",
to that effect.
What could be clearer than to put on to the face of the Bill words such as those set down in this amendment?
Lord Monson: My Lords, it is difficult to form a view on the amendment because it does not appear on the Marshalled List. I am told that no Supplementary Marshalled Lists containing Amendments Nos. 4A, 17A and 20A are available either in the Prince's Chamber, the Peers' Lobby or the Printed Paper Office. If a few spare copies are to be had, I hope that they can be distributed and so solve this problem.I apologise for intervening on this point, but we appear to have run out of copies.
Lord Razzall: My Lords, while copies of the Supplementary Marshalled List are distributed to noble Lords who do not have them, perhaps I may take the opportunity to put forward the view from these Benches as regards the amendment tabled by the noble Baroness, Lady Miller of Hendon.
It was a great pity that the noble Baroness was unable to be in the House yesterday, obviously through no fault of her own. A lengthy discussion followed the Government's Statement and a number of comments were made. I speak on behalf of the party that campaigned consistently for the preservation of rural and urban sub-post offices during the closure
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programme that was initiated by the then Conservative government as a result of their decision to introduce automated credit transfer systems. However, from the tone of the speeches from the Conservative Benches, one would not think that this move had ever had anything to do with their administration. I find that somewhat ironic. However, in his remarks yesterday, the noble Lord, Lord Sainsbury, was good enough to say that only one opposition party has campaigned consistently for the preservation of rural and urban post offices.
Having said that, we raised a number of questions on yesterday's Statement. I do not share the implication behind the Conservative amendment that we do not trust the Government on this matter. I take the view that the Government and the Minister have made a number of key commitments as regards the preservation of the sub-post office network. Indeed, the only missing element is a commitment to the money that will be needed to fund the subsidies. If the network is to be preserved in the way indicated by both the Minister and Mr Byers, that will require a very substantial contribution of funds from the Comprehensive Spending Review. I have taken it that both Mr Byers and the noble Lord, Lord Sainsbury, are confident that that commitment will be made.
A further concern, which I expressed yesterday on behalf of my colleagues, is that the tests that will be applicable in relation to maintaining, in particular, the rural sub-post office network, are slightly opaque. The first test—if no one is available to run the sub-post office then clearly the Government cannot be expected to subsidise that operation—is clear. However, in relation to the second test, detailed yesterday in the Statement—the commercial viability of ancillary retail services—I am worried that many rural sub-post offices will probably offer only very marginal services of that kind. If we are to preserve the rural sub-post office network, for all the reasons acknowledged by the Government when they accepted the PIU report, then it may well be that some rural sub-post offices will need to be subsidised during the six-year period, even if the ancillary retail side of their trade is not profitable.
Despite the fact that I object—"resent" is to put it a little too strongly—to the tone of the Conservative Opposition with regard to this matter, because I still have concerns over the second test, I can confirm that we on these Benches support the amendment.
Earl Russell: My Lords, I agree with my noble friend Lord Razzall about the genuineness of the Government's good intentions. We have been offered a gift-horse. But it is the duty of all opposition parties to look a gift-horse in the mouth. That is what we are for!
Lord Razzall: I think it is about being beware of Greeks!
Earl Russell: I think Greeks can wait for another day. I shall confine my remarks to the issue of those who are on social security benefits, that being the main area of my responsibility. We welcome warmly an

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assurance in the report that people on benefit will continue to be able to receive cash at post offices. That was the point of our argument last Tuesday. We welcome that assurance most emphatically. But a second part to that assurance is needed, and it is precisely what the amendment addresses; namely, the assurance can be made good only provided we are satisfied that there will be a post offices at which the benefit can be claimed.
For those on benefit, access cannot be measured merely in miles. It must be measured in means of transport. The Minister said that customers were voting with their feet in changing to ACT. I shall leave out the question as to whether that statement was just a little rhetorical. What I want to stress is that it does not apply to claimants of income support—who are doing anything but voting with their feet. They are sticking firmly with the Post Office. It is at least a plausible hypothesis that a large number are doing so because, if you are on income support, it is highly unusual to be able to afford to run a car. If you do, you are probably not able to eat, which tends to diminish your availability for work. So, for people on income support, the ability to go to a post office which they can reach, on foot if necessary, can be vital. That is also true of a number of pensioners. I think in particular of my next door neighbour who suffers from emphysema and serious heart disease. I sometimes see her setting out for the nearest sub-post office. It is a key moment of her day because it gets her out of the house, but you can see that it is a real struggle for her to walk. We do not want to make that struggle any worse. So the question is: what sort of network are we assured of in the report?
Like the noble Baroness, Lady Miller of Hendon, I noted the phrase "unavoidable closures" and I, too, pricked up my ears. I noted also the point made yesterday by my noble friend Lord Razzall that none of this is to come into effect until autumn 2001. So, given the present rate of closure, we wonder how much of a post office network will be there in autumn 2001 and whether the Government have any measures up their sleeve for interim preservation.
When examined in detail, the funding arrangements in the PIU report appear slightly Heath-Robinson. For example, we read that it is possible that local authorities might be induced to provide a top-up to government funding. Nothing is said about standard spending assessments. The report concludes, at page 89, that "further work is needed". I do not dissent from that.
The report also mentions supporting the rural network "in case" it should be necessary. At present, 60 per cent of rural post offices are losing money. "In case" it should prove to be necessary? Are not those words caution-conspicuous even by the standards of Her Majesty's Treasury?
I understand that provision has been made for sub-postmasters to continue to benefit from a piecework payment for benefit transactions. Is there any provision in the Government's arrangements for the payments to the sub-postmaster to be uprated
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annually in line with inflation? If there is not, that payment will wither on the vine. Sub-postmasters need to be secure in terms of a reasonable prospect for their future in order to be able to plan. Without that assurance, they will find it very difficult.
Finally, the report indicates, at page 91, that after many different bodies have been consulted, the Government will further assess the right level of public support. It sets out the time-consuming process. We assumed yesterday that we should hear about this in the Comprehensive Spending Review. Will the Minister confirm that that is definitely the case? Can he make any definite statement about the level of Post Office network that the Government will commit themselves to preserving? Without such a definite statement, we still do not know whether we have got what we wanted. I hope that we have.
4.15 p.m.
Baroness Byford: My Lords, I support the amendment standing in the name of my noble friend Lady Miller, and also the comments made by the noble Earl, Lord Russell. Perhaps I should declare an interest. I am patron of VIRSA, which has done a large amount of work with the Post Office and also in relation to small village shops. I should like to raise one or two items which I hope the Minister will be able to confirm.
In the Statement yesterday, and in the report to which we have referred, there is mention of the money that will come in to the various sectors within the Post Office service. Perhaps I may go through them in reverse order. Money will be made available for rural sub-post offices, and, perhaps to a lesser extent and in a different way, money will be made available for post offices which are situated outside towns and, like rural post offices, suffer greater deprivation than those in towns. No comment is made on commercial centres, which are obviously commercially viable at present. Will the Minister clarify this point? Will the commercial centre continue to supply subsidies in the way it has done, or is this new money? Will the money come from the Government—about which we cannot yet be told—or do the Government expect the post offices to put money for the new system up-front—some £250 million, I believe—bearing in mind that the Post Office service has already had to call on some of its reserves over the past year and has made a loss for the first time in 24 years?
Perhaps I may also take up the point made by the noble Earl on a minimum level of Post Office network. Earlier this week, when we debated this issue in relation to the Child Support, Pensions and Social Security Bill, the noble Baroness Lady Hollis again used the expression, "provided there are rural sub-post offices". Perhaps I may press the noble Lord further on that point. The noble Earl used the word "level", and I have written down the word "density". They relate to the same concern. What is the base-line, density, or level of network anticipated by the Government? What slightly worried me in the social security debate on the same matter was that the noble Baroness, Lady Hollis, went on to talk about the fact that our country

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is better served in terms of post office provision than some other countries. She said that, by comparison with France, Germany and the rest of the world, we had more post offices per population. That sounded slight warning bells and set me thinking: does that mean that the Government are going to settle for fewer post offices that we presently have? If so, I should be grateful for some clarity.
Perhaps I may take up a further point raised by the noble Earl on claimants choosing to have their benefit paid directly into the local post office rather than using an available banking facility. In the same debate the noble Baroness, Lady Gale, referred to the fact that 50 per cent of new pensioners choose to use ACT. But, equally, that indicates that 50 per cent do not currently choose to use ACT. The figure of 54 per cent was quoted for those in receipt of child benefit who choose to use the new system—which, again, suggests that 46 per cent do not. The Government cannot have it all ways.
I am well aware that this is not Committee stage; therefore, it is difficult for us to come back on these points. I hope the Minister will clarify at least a couple of the issues that I have raised in addition to that mentioned by my noble friend.
From a personal point of view, I hope that the Minister can give us more clarity. My question to him yesterday following the Statement was very brief. The noble Lord answered readily when I asked whether it was government money, Post Office money or tax money. He said that he thought it was government money. I hope we may have a little more clarity in his response today.
Viscount Goschen: My Lords, I support the amendment moved by my noble friend Lady Miller of Hendon from the Front Bench.
Yesterday's Statement was welcome in that it gave some detail about how the Government see the preservation of rural post offices. The Minister gave a fair amount of detail about that in the accompanying booklet produced yesterday by the Performance and Innovation Unit. I still maintain, as does my noble friend Lord Skelmersdale, that it is extraordinary that that report should be released three-quarters of the way through the parliamentary consideration of the Bill. My noble friend asked whether the Bill required any amendment. I am with him; I think that the Bill does now require amendment.
The noble Lord may say that the Government did not know when the PIU would produce its report. It would have been sensible to wait until the PIU had reported, or for one of his officials to have telephoned the unit and ask when the Government should programme the parliamentary consideration of the Bill.
None the less, I do not agree with the noble Lord, Lord Razzall, on two points, one of course being his description of Conservative Party policy on the issue and the second being his great belief in the administration under which we now find ourselves. Of course, we trust the Minister and his colleagues on the Front Bench implicitly, but we should not legislate on
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the basis of words in government Statements. The amendment converts those sentiments into clear instructions to the commission. It would be very difficult, given the wide consensus in this House and in another place in favour of preserving a strong network of rural post offices, for the commission not to be so instructed, so I support my noble friend.
Lord Dearing: My Lords, I declare an interest, as a pensioner of the Post Office.
I congratulate the Government on their immediate and positive response to the PIU report. It is such an excellent report in its recommendations on rural sub-post offices that it would be well to see the Government's wishes incorporated in legislation. By definition, all Members of this House are honourable Members, but over the passage of time what is said in good faith may have diminished commitment, whereas if something is in a Bill the government of the day have to explain, and persuade the House, if there is such a diminished commitment.
Therefore, although I understand the immense drafting difficulties in giving a legal interpretation, I hope that the Minister will consider what the noble Baroness, Lady Miller of Hendon, proposes in her amended amendment, not with a view to saying yes today, but with a view to saying that he will think about how to give more substance to the intentions of all Members of this honourable House.
I wish to mention one qualification, following what the noble Baroness, Lady Byford, said about the suburban sub-post offices outside areas of deprivation, areas which are well covered by the government Statement and the PIU report. It seems from the wording of the Secretary of State's Statement and the recommendation in section 8 of the PIU report, which explicitly envisages reductions by the Post Office in the number of these sub-post offices, that they should be bigger and better, and perhaps more vibrant. Perhaps the Government would he mindful of people of very mature years in straitened circumstances—there are many such people in suburban areas that are not areas of deprivation— who find it difficult to walk far and who live where there is limited public transport.
The question of hurt to people is not limited to the rural areas. There is also the question of hurt to the viability of the whole of a little shopping parade struggling to maintain services to its local community. If the post office in such a parade is closed, the viability of the other shops is imperilled, as is the service to people of modest means without cars. I hope that the Government will reflect very carefully on whether guidance can be given to the Post Office on handling such situations. I also hope that if for social reasons, rather than economic reasons, such an office should be maintained, the Government will exercise their powers to provide support.
Lord Sainsbury of Turville: I shall deal with the amendment first, because it is not only inappropriate, but technically deficient, and then with the whole series of issues raised that were not specifically directed

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to the amendment, including the question of real concern to noble Lords, which is that we deliver on our commitments to support rural post offices and encourage investment in other post offices.
The effect of the amendment would be to require the commission to exercise its functions in a manner which it considers best calculated to ensure the maintenance of a network of rural post offices at a level comparable to that which exists on the day the Bill is passed. That duty does not fit easily with the commission's duties under Clauses 3 and 5, which are respectively to ensure the provision of a universal service and otherwise to further the interests of users of postal services where appropriate by promoting effective competition between postal operators.
In so far as any problems with the network have an impact or potential impact on the maintenance of the universal postal service, it will, of course, be for the commission to take action to ensure that the situation is remedied in line with its duty as set out in Clause 3.
However, where the issues or problems do not affect the provision of the universal service, but nevertheless undermine access to public post offices and the government and other services available through them, it is a matter for the commission, acting not as an independent regulator but in its role as an expert body providing information and advice to the Government, as required by the Government. It is important that these roles should be seen as distinct. It is not for the regulator to provide financial assistance to rural post offices; that is clearly, as in the whole structure of the Bill, the responsibility of the Government.
Clause 42 imposes a duty on the commission to provide, in consultation with the Consumer Council, advice and information to the Secretary of State about the number and location of public post offices of such description as the Secretary of State may specify and their accessibility to users of postal and other services. The provisions of Clause 42, together with the requirement in Clause 45(2)(e) to report annually to the Secretary of State on such matters as the Secretary of State may require, provide all that is needed of the commission in respect of the postal network, where the issues go far beyond the maintenance of a universal postal service.
I hope that I have made the point very clear: if the amendment were made it would totally change the structure of the commission's role, in an undesirable way. The commission, which has very clear duties set down, would be given a responsibility which is not its responsibility, but clearly the Government's.
Lord Skelmersdale: My Lords, before the Minister leaves that point, will he clear up a matter that causes me some confusion as a result of what he has just said? What is the connection between the provision of any post offices and universal service provision? I see nothing about buildings or services of that type in the universal service provisions.
4.30 p.m.
Lord Sainsbury of Turville: My Lords, that was exactly the point I sought to make. In this context the commission is concerned with the provision of a universal postal service, not buildings that may require financial assistance. Throughout the debate many noble Lords have said that there should be clarity about responsibilities in this area and that the commission should focus on competitive issues and universal service provision. Therefore, in the context of this Bill it would be a grave mistake to give the commission a financial responsibility which is really that of the Government.
I deal with other issues. I have a great deal of sympathy with noble Lords who seek information and greater clarity in this area, which I shall try to provide at this stage in so far as it is possible to do so. The noble Lord, Lord Skelmersdale, spoke about amending the Bill. He did not give a specific reason, other than in the context of the bank. It is not thought that a universal bank will require further primary legislation. Like any other company, the Post Office company will be able to become a bank provided it satisfies the relevant banking legislation. Therefore, I do not believe that at this stage any amendment is required.
I turn to unavoidable closures, which I had hoped was dealt with yesterday in the Statement and in my responses. In the PIU report and Statement it is made clear that we are talking about only two circumstances: first, those cases in which there is no one to carry out the tasks; secondly, those cases where someone runs a post office and decides to retire and there is no building in which to carry on those activities. I believe that those can rightly be described as unavoidable circumstances. Other than that, we have given a clear commitment to keep open all rural post offices which serve a population of 10,000. That is a clear commitment which covers exactly the concerns which have been raised.
As to people voting with their feet, I was guilty of a modest rhetorical flourish. I should have said that people have exercised their right of choice in this matter and an increasing proportion of them, as might be expected, have moved to a credit transfer system. That is one of the problems with which we are concerned. As to the financial side, I can only repeat what I said before. This matter will be set out in the Comprehensive Spending Review, from which it will be seen that this is a serious financial commitment to achieve our aim.
I deal finally with the whole question of the subsidy scheme. That matter must return to this House for an affirmative vote. That is the moment when the House can express a view on the nature and size of the scheme and whether it will achieve what is intended. I have great sympathy with those who want to know at this stage precisely what has been said about the financial side. However, the House will have the opportunity to express its view, and we believe that that is the appropriate way to do it. To insert this amendment and distort the role of the commission, which is to look after the interests of users and to ensure universal

1087
service provision, and the role of government, which is concerned with the social implications of the Post Office, will lead to great confusion that noble Lords on both sides of the House would not want.
On many occasions it has been said that any financial assistance that is provided should be clearly understood by everyone and not lead to any confusion of roles. While I have a great deal of sympathy for the points made in the debate, I do not believe that this amendment, which is technically deficient, is the way to achieve the intended purpose, and I ask the noble Baroness to withdraw it.
The Earl of Caithness: My Lords, before the noble Lord sits down, perhaps he will clarify his response to my noble friend Lord Skelmersdale which I found difficult to follow. The Minister referred to Clause 42 which provides that,
"The Commission shall provide advice and information to the Secretary of State about—
(a) the number and location of public post offices of such descriptions as the Secretary of State may specify".
If the Secretary of State does not specify rural post offices, the commission cannot report to him. How does that clause tie in with Clause 3(1) where it is provided that,
"The Commission shall exercise its functions in the manner which it considers is best calculated to ensure the provision of a universal postal service"?
If there is no rural post office, there cannot be a universal postal service.
Lord Sainsbury of Turville: My Lords, there are two distinct points here. The universal service is concerned with the posting and receiving of letters. The nature of sub-post offices is, in that context, a different issue, and that is why such a distinction is drawn. There is a clear responsibility on the commission to report on what is happening in the network.
Baroness Byford: My Lords, before the noble Lord sits down, does it follow from his response to my noble friend Lord Caithness that benefit payments, in whatever form, do not fall within the universal service provision?
Lord Sainsbury of Turville: My Lords, as I understand it, the universal service provision is about the moving of letters between places, not the payment of social benefits, which is a separate issue.
Baroness Miller of Hendon: My Lords, I thank the Minister for his reply. I also thank other noble Lords in the House who have supported my amendment. I am extremely disappointed by the Minister's reply, in that he believes that my amendment is technically deficient. The Government said of every single item that I raised that they could not deal with it because it was a matter for the regulator. In particular, I note the remarks of the noble Lord, Lord Razzall. We are very friendly over here, even though we have differences—I do not quite know the word—from time to time. The noble Lord thought that I was being too conservative
1088
in my disbelief about the Government's position if this matter was not on the face of the Bill. The noble Lord, Lord Dearing, provided a much gentler interpretation. He said very firmly that governments say one thing but, as time goes by, legislation is not passed. The intention is diminished because circumstances change.
I believe that the commission should do whatever the Government tell it to do. If the Government wanted to tell the commission to maintain the network, they could do so. Let us assume that the Minister is correct and the amendment will upset the Bill, which is not our desire. Can the Minister assure the House today that the Government will table an amendment at Third Reading which makes clear on the face of the Bill that the network of rural post offices will be maintained? If so, that would satisfy noble Lords and, clearly, it would be right to withdraw the amendment. Perhaps the Minister will reply to that.
Lord Sainsbury of Turville: My Lords, I cannot give that commitment. In any case, I do not believe that that is the appropriate way to deal with the matter. I assume that if I was sitting on the Benches opposite I would also be distrustful. However, the Statement made in this House could not have been clearer. We have made clear that the basis of the scheme is the maintenance of the rural post office network where there is a population of 10,000. We shall present a scheme of financial assistance. That was a clear commitment. We shall bring back a scheme of financial assistance to achieve that. At that point this House will have an opportunity to consider the issue. It will then be appropriate to do so. The Postal Services Bill is supposed to last for an extremely long time. In this Bill we should not impose on the commission a duty to do something which it is not set up to do. The Bill is about the status of the Post Office. I assure the House that we shall bring forward the scheme. That will be the opportunity to discuss this issue.
The proposed amendment relates to the responsibility of the commission. One cannot then relate it to some other issue. I give the assurance that we shall bring forward the scheme. However, the amendment relates to the role of the commission. It cannot then be related to some other issue.
Baroness Miller of Hendon: My Lords, if I had made the mistake of placing the burden on the commission, I gave the Minister the opportunity to bring back an appropriate amendment. However, the Minister continues to talk about the amendment and the commission. Therefore, I shall not waste any more of your Lordships' time.
The second part of Amendment No. 4A should refer to,
"a community of 10,000 people or less".
I should like to test the opinion of the House.
The Deputy Speaker (Baroness Gardner of Parkes): My Lords, before putting the Question, I make clear to the House the statement made by the Chairman of Committees. In place of a,
"community of not less than 7,500 people",
the second part of Amendment No. 4A, in the supplementary amendments to the Marshalled List, inserts,
"community of 10,000 people or less".
4.42 p.m.
On Question, Whether the said amendment (No. 4A) shall be agreed to?
Their Lordships divided: Contents, 104; Not-Contents, 116.

Division No. 1

CONTENTS

Addington, L.

Jenkin of Roding, L.

Alton of Liverpool, L.

Laird, L.

Arran, E.

Lamont of Lerwick, L.

Astor of Hever, L.

Lang of Monkton, L.

Attlee, E.

Linklater of Butterstone, B.

Avebury, L.

Liverpool, E.

Biffen, L.

Lyell, L.

Blatch, B.

McColl of Dulwich, L.

Brabazon of Tara, L.

Mackay of Ardbrecknish, L.

Brougham and Vaux, L.

Mackie of Benshie, L.

Burnham, L.

McNally, L.

Buscombe, B.

Mar and Kellie, E.

Butterworth, L.

Marlesford, L.

Byford, B.

Miller of Hendon, B.

Caithness, E.

Montagu of Beaulieu, L.

Campbell of Alloway, L.

Moynihan, L.

Campbell of Croy, L.

Newby, L.

Carnegy of Lour, B.

Northbrook, L.

Clark of Kempston, L.

O'Cathain, B.

Clement-Jones, L.

Oakeshott of Seagrove Bay, L.

Colwyn, L.

Park of Monmouth, B.

Cope of Berkeley, L.

Perry of Southwark, B.

Craigavon, V.

Phillips of Sudbury, L.

Crickhowell, L.

Platt of Writtle, B.

Cumberlege, B.

Plummer of St. Marylebone, L.

Dacre of Glanton, L.

Rawlings, B.

Denham, L.

Razzall, L.

Dixon-Smith, L.

Redesdale, L.

Elton, L.

Renton, L.

Falkland, V.

Roberts of Conwy, L.

Ferrers, E.

Rodgers of Quarry Bank, L.

Fraser of Carmyllie, L.

Russell, E. [Teller]

Gardner of Parkes, B.

Seccombe, B.

Geddes, L.

Sharp of Guildford, B.

Geraint, L.

Simon of Glaisdale, L.

Glenarthur, L.

Skelmersdale, L.

Glentoran, L.

Smith of Clifton, L.

Goodhart, L.

Stewartby, L.

Goschen, V.

Swinfen, L.

Hanham, B.

Thomas of Gwydir, L.

Harris of Greenwich, L.

Thomas of Walliswood, B.

Harris of Peckham, L.

Thomson of Monifieth, L.

Harris of Richmond, B.

Tordoff, L.

Hayhoe, L.

Trefgarne, L.

Henley, L. [Teller]

Trumpington, B.

Higgins, L.

Wallace of Saltaire, L.

Hodgson of Astley Abbotts, L.

Walmsley, B.

Holderness, L.

Watson of Richmond, L.

Hooper, B.

Weatherill, L.

Hooson, L.

Wigoder, L.

Howe, E.

Wilcox, B.

Hylton-Foster, B.

Young, B.

1090

NOT-CONTENTS

Acton, L.

Irvine of Lairg, L. (Lord Chancellor)

Ahmed, L.

Alli, L.

Janner of Braunstone, L.

Amos, B.

Jay of Paddington, B. (Lord Privy Seal)

Andrews, B.

Archer of Sandwell, L.

Jeger, B.

Ashley of Stoke, L.

Jenkins of Putney, L.

Ashton of Upholland, B.

Layard, L.

Bach, L.

Lea of Crondall, L.

Bassam of Brighton, L.

Levy, L.

Bernstein of Craigweil, L.

Lipsey, L.

Billingham, B.

Lockwood, B.

Blackstone, B.

Longford, E.

Borrie, L.

Macdonald of Tradeston, L.

Bragg, L.

McIntosh of Haringey, L. [Teller]

Brooke of Alverthorpe, L.

Burlison, L.

McIntosh of Hudnall, B.

Carter, L. [Teller]

MacKenzie of Culkein, L.

Castle of Blackburn, B.

Mackenzie of Framwellgate, L.

Christopher, L.

Mallalieu, B.

Clarke of Hampstead, L.

Marsh, L.

Cledwyn of Penrhos, L.

Massey of Darwen, B.

Cocks of Hartcliffe, L.

Milner of Leeds, L.

Cohen of Pimlico, B.

Mishcon, L.

Crawley, B.

Mitchell, L.

David, B.

Molloy, L.

Davies of Coity, L.

Morris of Castle Morris, L.

Dean of Thornton-le-Fylde, B.

Morris of Manchester, L.

Desai, L.

Nicol, B.

Diamond, L.

Pitkeathley, B.

Donoughue, L.

Plant of Highfield, L.

Dormand of Easington, L.

Prys-Davies, L.

Dubs, L.

Puttnam, L.

Elder, L.

Ramsay of Cartvale, B.

Evans of Parkside, L.

Rea, L.

Falconer of Thoroton, L.

Rendell of Babergh, B.

Farrington of Ribbleton, B.

Richard, L.

Faulkner of Worcester, L.

Rogan, L.

Fitt, L.

Sainsbury of Turville, L.

Sawyer, L.

Gale, B.

Scotland of Asthal, B.

Gibson of Market Rasen, B.

Serota, B.

Gilbert, L.

Shepherd, L.

Gladwin of Clee, L.

Shore of Stepney, L.

Gordon of Strathblane, L.

Simon, V.

Goudie, B.

Stoddart of Swindon, L.

Gould of Potternewton, B.

Stone of Blackheath, L.

Graham of Edmonton, L.

Strabolgi, L.

Grenfell, L.

Symons of Vernham Dean, B.

Hardy of Wath, L.

Tomlinson, L.

Harrison, L.

Turner of Camden, B.

Hayman, B.

Uddin, B.

Hilton of Eggardon, B.

Wedderburn of Charlton, L.

Hollis of Heigham, B.

Whitaker, B.

Howells of St. Davids, B.

Whitty, L.

Howie of Troon, L.

Wilkins, B.

Hoyle, L.

Williams of Elvel, L.

Hughes of Woodside, L.

Williams of Mostyn, L.

Hunt of Chesterton, L.

Woolmer of Leeds, L.

Hunt of Kings Heath, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.53 p.m.
Clause 7 [Exceptions from section 6]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 5:
Page 4, line 36, leave out ("£1") and insert ("50 pence").
The noble Baroness said: My Lords, I am returning to this amendment which I moved in Committee because I said then that I was totally unsatisfied with

1091
the reply given to me by the noble Lord, Lord Sainsbury, on behalf of the Government. I am sure that he will forgive me for saying that I was unsatisfied because I said it previously and of course there is nothing personal in it.
I want to remind your Lordships of the chronological sequence of events. The timing is crucial. In July 1999, the Government stated in their White Paper in unequivocal and entirely plain words:
"the Government will take a major first step towards liberalisation by halving the monopoly currently enjoyed by the Post Office to 50p … on items weighing over 150 grammes".
That could not be plainer.
On 16th September 1999, the Government placed an expensive display advertisement, seven inches by seven inches, in the Sunday Times. They were seeking candidates for the office of chairman of the Postal Services Commission. The advertisement stated:
"the Government is granting the Post Office greater commercial freedom but is convinced that successful reform requires more than this. It requires greater competition in the postal market; already a major first step towards liberalisation has been taken with the halving of the monopoly currently enjoyed by the Post Office to 50p from April 1st 2000".
Let me repeat those words:
"already, a major first step … with the halving of the monopoly currently enjoyed by the Post Office".
So at that stage, the Government's intentions are absolutely clear and unambiguous.
Matching words with actions, the Government laid an appropriate statutory instrument before Parliament to carry those intentions into effect. On 8th December, the Government tabled a Motion to revoke their own statutory instrument. Their feeble excuse—I believe that I described it thus last time—for that volte face was that the Trade and Industry Select Committee had recommended that the reduction should be further considered by the new commission.
The Select Committee's report was published on 14th September 1999, two days before the advertisement which appeared for a chairman of the commission. That is why on the previous occasion I said to the Minister that the excuse was feeble. The fact is, I cannot believe that the Government had no idea what was in that report and saw it only on 14th September. I am certain that they must have had the information before then.
It may be that the Minister's department was not so efficient. I know that sometimes it is difficult because when I asked about the PIU report on Tuesday, I was told that those concerned had no idea whether it was coming out on Wednesday. Therefore, I suppose it is possible. Nevertheless, the report was published and in the public domain two days before the advertisement.
I pointed that out in Committee and the Minister did not deny it. Indeed, today he nodded his head as I repeated it. Therefore, going ahead with the advertisement clearly shows that at that stage the Secretary of State was not going to follow the recommendation; the Government were going to go along with liberalising the market. And why should
1092
he? The whole thrust of the Government's policy as regards the Post Office is to reduce the monopoly. The European directive will force the Government to do so anyway.
The sequence of events, which I have just described as crucial, makes the whole sad story very clear. I apologise to the House for having to bring it back again in order to clarify the position, but when on the previous occasion I begged the Minister to tell me the real reason—not this reason—no answer was forthcoming.
I remind your Lordships that we had a White Paper announcing a reduction in the monopoly; followed by a statutory instrument carrying that policy into effect even before and totally independent of the passage of the Bill; followed in turn by an advertisement for a chairman telling candidates that their brief would be to preside over a reduced monopoly. And then, suddenly, the Government revoke their own draft order and say that that is to do with something else.
Quite clearly, there is a different reason. They might well have been got at by the trade unions. They could have been. From where else could the idea have originated? But perhaps I am wrong and perhaps the Minister will nominate a candidate other than the unions, which I suspect. But what he cannot continue to say is that it was the report of the Trade and Industry Select Committee which caused their change of mind, because its report was in the hands of the Secretary of State well before the advertisement was published.
The excuse becomes even more incredible when it is noted that the report was made public on 14th September and the Motion to revoke the order was laid before Parliament on 8th December; that is, three months after the report was published and who knows how much longer after the Secretary of State received it.
It is clear that, as so often happens, the Government decided to shuffle the responsibility for what might be regarded by some as an unpopular decision on to someone else and say, "It's not my fault, guy. This will be a matter for the commission and I can't deal with it". But I must tell the Minister here and now that I hope to receive from him a proper and frank explanation of the Government's deviation from their own policy which they had announced and for which they had begun the legislative and administrative processes in the briefing of a potential regulator.
When I moved this amendment in Committee, I said that, because a reduction in the monopoly would occur, we believed that our proposal would be more helpful to the Post Office as it would enable it to compete, having got used to the change gradually. The chief executive, Mr Roberts, said that the Post Office could handle the change if it occurred in that manner. We believe that it would be very difficult for the Post Office if the change occurred suddenly and in one fell swoop. I should be most grateful if the Minister would tell me what the position really is. I beg to move.
5 p.m.
Lord Sainsbury of Turville: My Lords, these two amendments show an enthusiasm for the repetition of arguments which I am not altogether certain that I share. The noble Baroness raised exactly the same point in Committee and, I believe, received an extremely lengthy answer. However, I am happy to repeat that answer for noble Lords who may not have been present. If there is a certain sense of boredom in the House, I cannot be held totally responsible.
I am sure that the noble Baroness will be aware of the 12th Report of the Trade and Industry Select Committee, published on 14th September 1999. In the report, the committee recommended that the Government consider withdrawing the Postal Privilege (Suspension) Order 1999 which would have reduced the monopoly to 50p in price and 150 grams in weight from 1st April this year so that the Postal Services Commission could consider evidence put to it of the effect of a reduction in the monopoly threshold and recommend to government an appropriate threshold. After careful consideration, the Government accepted that recommendation.
Baroness Miller of Hendon: My Lords, I thank the noble Lord for giving way. Will the Minister accept that the advertisement was published after the report was received? That is the point that I am making. If the Government were giving the matter such careful consideration, why did they place the advertisement?
Lord Sainsbury of Turville: My Lords, perhaps I may go through the sequence of events and all will become clear.
The chronology was as follows. The Postal Privilege (Suspension) Order 1999, intended to reduce the monopoly to 50p, was laid on 8th July 1999 and was to come into force on 1st April 2000. The Sunday Times advertisement for the post of chairman, which mentions the 50p order, was first issued on Sunday, 19th September 1999. The Trade and Industry Select Committee's 12th report on the 1999 Post Office White Paper, which recommended that the Government consider withdrawal of the order so that the Postal Services Commission could consider the matter, was ordered to be printed on 14th September 1999 but published on Tuesday, 21st September 1999.
The Government wrote to the Trade and Industry Select Committee on 29th September 1999 accepting its recommendation to refer the matter to the PSC. The Postal Privilege (Suspension) Order 1999 (Revocation) Order 1999, which stopped the reduction to 50p from 1st April 2000, was laid on 20th October, coming into force on 1st December 1999. On 22nd November 1999 the Government sent their full response to all the recommendations of the Trade and Industry Select Committee on the Post Office White Paper.
We shall remit the issue to the commission as soon as possible and urge it to treat it as a high priority. Having accepted the Trade and Industry Select Committee's recommendation, I believe that it would be wrong to accept an amendment to the Bill which
1094
would reduce the scope of the reserved area before the commission has begun even to consider evidence and consult interested parties.
The overriding duty of the commission is to ensure the provision of a universal postal service; that is, the delivery of letters and parcels to any part of the United Kingdom at a uniform tariff. It is vitally important that all users, wherever they work or live in the UK, should be assured of those essential services. The Government place an enormous weight on the value of that obligation and we believe that greater competition must not undermine the services. We recognise that users of postal services expect that.
However, we do not believe that greater competition is incompatible with the provision of the universal postal service at a uniform tariff. We remain totally committed to greater competition in postal markets. Greater competition in postal markets will be a spur for efficiency, and that should bring benefits for consumers in terms of choice, price and quality while universal service obligations are maintained.
We are giving the commission a free hand to decide what changes to the reserved area are compatible with the provision of a universal postal service. The commission may come forward with a recommendation for 50p or 150 grams, as proposed in these amendments. They may find in favour of a completely different figure. Under the existing postal services directive, the reserved area can be set only at a level which is necessary to ensure the maintenance of the universal service. I am sure that the commission will do a thorough job and will consult all interested parties. We should leave it to get on with its work and not seek to prejudge it. Therefore, I would ask the noble Baroness, having made her point, to withdraw the amendment.
Baroness Miller of Hendon: My Lords, as the House unfortunately had to listen again not only to me but to virtually the same answer from the Minister, I shall certainly not inflict any more upon noble Lords. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Clause 13 [Licences: conditions and other provisions]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 7:
Page 9, line 13, at end insert—
("( ) A licence shall include provisions covering the following matters—

(a) minimum standards for collection and delivery of relevant postal packets no less demanding than the quality service standards as in effect on the day on which this Act is passed, including a single collection and delivery every day;

(b) compliance with the standards set by Directive 97/67/EC of the European Parliament dated 15th December 1997 and any amendment, modification, or re-enactment thereof for the time being and from time to time in force;

(c) delivery of mail to the front door of the building to which it is addressed (or, in the case of a building in multiple occupation, to suitable postal boxes at or within the front door) or to such other place as the occupiers may revocably consent.").

The noble Baroness said: My Lords, this is a new amendment. I thought it necessary to introduce it at this late stage because, having looked at the report of the Committee stage debates, I found that many of the answers to amendments that I had tabled in Committee were quite unsatisfactory.
To do the Government credit, they were not unsympathetic to those amendments; indeed, they seem to have agreed with the principles contained in them. However, their response was to say that the matter is best dealt with by the regulator in the licence or licences that he will grant to the Post Office or other operators. The Minister said that it would be for the regulator to ensure that the matter is covered by the licence.
I do not agree with that abdication of the Government's responsibility to provide a full and explicit legislative framework for the new, major commercial concern. In addition, although the Government accept the principle that certain commitments and constraints must be imposed on the Post Office, I do not agree with their decision that those commitments and constraints shall be determined by the regulator, independent of Parliament and parliamentary scrutiny.
The Government have made available a pro forma, or skeleton, of the general form of licence that they expect the regulator to grant. I am grateful to the Minister for sending it to noble Lords who intervened in this debate on the previous occasion and who had not had the benefit of seeing the draft licence. Quite properly, the licence will be subject to detailed negotiations with the intended licensees, and licences may vary between individual licensees. I agree that that is absolutely as far as the Government can go at this stage.
However, I am troubled by matters which I raised in Committee and which the Minister agreed were relevant to the running of the new Post Office but which he is not prepared to provide for in primary legislation. I believe that that is quite an important constitutional matter. In our system of primary legislation a Bill goes through three stages in both Houses of Parliament. Then we have secondary legislation, where the Government legislate by what is, in effect, ministerial decree. There are statutory instruments, which are approved by Parliament in a more perfunctory positive or negative procedure. And, now, the Government are introducing what I consider to be a new legislative device over which Parliament will have no control once the Bill is passed.
Instead of legislating on matters which the Minister accepts are important and relevant, he is leaving that to a paid appointee—the regulator. I hasten to say that I do not impugn the integrity or good intentions of the first or, indeed, any subsequent incumbent of that post. However, it is not acceptable that the Government should agree that certain essential matters are required in the public interest to govern the conduct of the Post Office when other licensees and the regulator (for his own reasons) may fail or decline to do so. Where would we be then? There would be no statute and no condition in the licence.
Therefore, I have extracted from the debates and ministerial answers in Committee three of the matters which it is essential that the licensee should cover. I have proposed in the same general terms that the draft licence should state that the regulator shall be required to include them in the licences.
The first is that the operators shall provide no less of a service than at present. In response to my Amendment No. 4 in Committee, the noble Lord, Lord McIntosh of Haringey, said:
"It is certainly the Government's expectation that the standards set in the licence will be at least as demanding as the current quality service targets".—[Official Report, 816/00; col. 1258.]
I have incorporated those remarks word for word in paragraph (a). I assume that the wording must be entirely acceptable to the Government, because it is what the Minister said.
The second item requires the regulator to conform to the current and any future EC directive on postal services. The EC directive was referred to more than once in Committee. I regret that, due to pressure of work, I have been unable to find all the references, but I should like to mention one. When rejecting amendments to Clause 4, the noble Lord, Lord McIntosh of Haringey, said that,
"amendments which go beyond the European directive are inappropriate".—[Official Report, 8/6/00; col. 1265.]
That is a clear indication from the Government that the regulator is to conform to the directive, as paragraph (b) provides. Incidentally, I find it paradoxical that I, of all people, should be accused by the Government of gold-plating an EC directive, but never mind. It was a new experience and I quite enjoyed it at the time. I shall make a careful note of the Minister's words, as I have no doubt that I shall wish to remind the Government of them on many future occasions.
Paragraph (c) would ensure that the Post Office, or another licensee, could not attempt to force customers to have a mailbox at their front gate, in the American style, and should make deliveries to the front door, as we are all used to. The noble Lord, Lord McIntosh, told your Lordships:
"For most people in the UK the normal point of delivery is the front door and we expect that to continue to be the case. If a universal service provider were to propose such a radical departure, we would expect the commission to take a close interest in the matter and to act accordingly. In other words, that is one of the conditions that could well be in the licence. I am sure that the commission, acting responsibly, will seek to ensure either that it does not happen or that if it happens a suitable penalty is imposed".—[Official Report, 8/6/00; col. 1290.]
If we substitute the words "shall be included" for the words "could well be included", we can be sure that the licence will include what the noble Lord, Lord McIntosh of Haringey, agrees is our expectation of delivery to the front door. There would be no chance of the regulator being persuaded to allow that provision to be dropped in return for some other promise by the licensee.
The Government's job is to govern, not to shuffle off some of their responsibilities to outside agencies, especially ones not directly answerable to Parliament

1097
on a day-to-day basis. The amendment would require the regulator, subject to a fairly wide discretion on the wording, to grant licences on some minimal and non-controversial terms that the Government have conceded are essential.
I could have made the amendment longer and included more conditions, but I restricted myself to the items that the noble Lord, Lord McIntosh, said that he was certain would be in the Bill. On that basis, the amendment should be acceptable to the Government. I beg to move.
5.15 p.m.
The Earl of Caithness: My Lords, I support my noble friend on this important amendment, which would clarify the starting position for the commission. I entirely agree with the Minster that we are talking about the delivery of letters alone.
Paragraph (c) of the amendment is about the important issue of the delivery of mail to the front door of the building. It would avoid giving the licensee a perfect opportunity to adopt an American-style system, which would be highly detrimental to the service that we are used to in this country. I hope that the Minister accepts that.
Paragraph (b) relates to compliance with the standards set by EC directive 97/67. As my noble friend said, the noble Lord, Lord McIntosh of Haringey, said in Committee that it would be wrong to go beyond the directive. However, the directive is fairly wishy-washy and, under the principle of subsidiarity, it gives member states responsibility for specific items. I agree with that principle.
Paragraph 32 of the directive states:
"Whereas national quality standards consistent with Community standards must be determined by Member States".
That clearly gives us scope to go beyond the directive, as does Article 16 in Chapter 6, which states:
"Member States shall ensure that quality-of-service standards are set and published in relation to universal service in order to guarantee a postal service of good quality".
It does not go on to say what a postal service of good quality is. It leaves that to member states.
The noble Lord, Lord McIntosh of Haringey, was not as forthcoming as usual on the specifics of these issues. It is clearly for member states to decide.
Paragraph (a) of the amendment relates to the quality of service standards in effect on the day on which the Act is passed. While I support the principle of what my noble friend has said, I have to raise a question about the standards today. The noble Lady, Lady Saltoun of Abernethy, said in Committee:
"Where I live in Scotland, post is not delivered until after 1 p.m. and often after 2 p.m.".—[Official Report. 8/6/00; col. 1264.]
All that I can say to the noble Lady is, "Lucky her to get a delivery at all." When I am in London, I live in the borough of Hammersmith where the postal service is notoriously erratic. On a number of occasions, deliveries have not been made until about 3 p.m. and over the past three or four weekends there
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has been no delivery on Saturday. I thought that Ministers had gone into the post office to sabotage my mail so that I would not get any parliamentary papers—but I would not accuse them of that in real life.
Wondering how best to tackle the problem, I rang the manager of the post office in Hammersmith. It seems to have a peculiar telephone system with a two-way button. For half the day, they let the telephone ring and ring without answering it and for the other half of the day they switch the button to the other side to make the telephone constantly engaged.
After great perseverance and about a dozen attempts, I finally got hold of the manager on Monday. He did not recognise my address as being within his area, but he found somebody who knew that it was. He blithely told me that of course I did not have any deliveries on Saturday and I was not going to have any on that day—Monday—but there was a chance that I would get a delivery the following day.
That is a wholly unsatisfactory level of service. I told the man that my parliamentary papers had not arrived and that at meetings in the House I had been the only person not to have received them—and those present included people from Scotland. He was a little perplexed and I got a delivery before 8 a.m. the next morning, for which I was very grateful. The service has become a bit more erratic again since then. What remedies are there now for such a diabolical level of service and what remedies will there be in the future? What will the penalties be for not delivering on time? In Committee, the noble Lord, Lord McIntosh of Haringey, said:
"In my experience the most important factor was to receive the first post early in the morning by 8 a.m. or 8.30".—[Official Report. 8/6/00; col. 1265.]
Would the Minister make it a condition of a licence that deliveries in urban areas, including the very remote and distant borough of Hammersmith in London, are made by 9 a.m.?
Lord Sainsbury of Turville: My Lords, perhaps I may begin by saying that I have enough work to do without spending my weekends sabotaging the mail of other Peers. There appear to be better ways of spending one's weekend.
It is not a new legislative device for the regulator. This Bill sets up an independent system of regulation now seen in many areas, not least in the utilities legislation passed by the previous administration. The Secretary of State will continue to be answerable to Parliament as regards postal matters. The essence of what the noble Lord said is that we shall not have good performance until we have real competition. That is what the regulator has to do. Once we have that, then all the penalties can be included and standards raised. That is the clear job of the regulator in the circumstances.
I suspect that these amendments are designed to probe the Government's intentions on licensing and raise a number of points which have already been discussed in this House. There is not much between the

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noble Baroness and myself on the points that she raised. There are differences as to the best way in which the assurances she seeks may he achieved.
I take the three points in turn. As regards her first point about minimum standards, the Government fully expect that the Post Office, as and when it has a licence, will have to deliver the same, if not better, standards of delivery. It will be a matter for the regulator to determine exactly what those standards are. The regulator is best placed to do that. Equally, it is also important that the regulator may wish not to impose such onerous requirements on a new entrant who might be operating in a niche market. It may be entirely appropriate in those circumstances to have a different set of service standards. This flexibility would be precluded by the amendment proposed by the noble Baroness.
I now move to the noble Baroness's third point. We debated at some length in Committee the pros and cons of delivery being to a fixed point. I can offer the noble Baroness the same assurance that there is no government proposal, nor on the part of the Post Office, that delivery points should be established other than those that exist now; for example, to follow the manner of the United States or New Zealand. The amendment proposed here also appears restrictive. For example, it would prevent deliveries to the service bay of a building. Neither does it contain the sensible part of the noble Baroness's previous amendment that the postman would not have to deliver where delivery to the front door would place him or her in danger. I make it absolutely clear that it is not for the licensee to decide the standards, but for the regulator. He has clear responsibilities at the service level.
The second point made by the noble Baroness has some merit. However, it merely states the position in law as it stands. The European directive has direct effect here. The UK is a member state and in these circumstances it has to comply with the requirements. Therefore, on first inspection I do not believe that an amendment would be necessary. However, if she is prepared to withdraw the amendment I shall be happy to take the second point away and consider whether an amendment could be usefully added to the Bill at Third Reading. Therefore, I ask the noble Baroness to withdraw the amendment.
The Earl of Caithness: My Lords, before the noble Lord sits down perhaps I may clarify the position as regards the answers to my questions. Is the Minister saying that he cannot help me on the present position, let alone on the overall situation because that will be determined by the regulator?
Lord Sainsbury of Turville: My Lords, at present the Post Office has a system of dealing with customer complaints, but there are no formal remedies. Under the Bill the quality of service targets will be set as a condition of the licence. The regulator, the commission and the council will monitor these closely. The commission can issue enforcement orders requiring standards to be met and, if necessary, impose
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financial penalties on the licence holder. Under these new arrangements there is the possibility of taking sanctions if performance rather than standards fails.
Baroness Miller of Hendon: My Lords, I understand very well what the Minister said, particularly about flexibility; namely, that the regulator may wish to make the licence slightly different for new entrants to the market. We on this side of the House certainly would not wish to do anything that interfered with fair competition because that would be totally inappropriate. I presume it is right that if for some reason the regulator was acting in an inappropriate way—not that I suggest he would—there would be some way of handling that situation. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 8:
Page 9, line 17, at end insert—
("( ) The provisions of a licence may, in particular, require the acceptance of payment for services provided under the licence by cash, cheque, debit card or credit card.").
The noble Lord said: My Lords, even at this late stage of the Bill this is an unashamed probing amendment, so the Minister can relax to some extent. It was put to me in conversation recently that it is quite extraordinary in this day and age and with the future Post Office being an all-singing, all-dancing, interwired, Internet and inter-anything organisation, or whatever you like to call it, that modern methods of payment have been unacceptable until now. I am quite prepared for the Minister to tell me that this is the wrong place in the Bill to introduce this amendment because it should not be concerned with a licence. However, I would like him to tell me that in future people will be able to pay, for example, for their road fund licence, TV licence, utility bills, etcetera, with either a debit or credit card. That is the sole purpose of my amendment. I beg to move.
Lord Sainsbury of Turville: My Lords, I have listened carefully to what the noble Lord said. I understand his views about this matter, which are not totally in keeping with the modern way of doing things. However, the noble Lord's attempt to set this provision into the Bill is out of proportion to the specific issue that he has raised. It must be remembered that the licences issued by the post services commission are potentially for the entire range of postal services.
The kinds of conditions that the commission might set under its powers in subsection (3) of this clause could run across the whole gamut of the services provided under the licence. In particular, the commission may well set quality of service standards and performance targets for the delivery of mail, a subject which is obviously very dear to the hearts of enormous numbers of users of the postal service.
But we see no need to specify in the Bill the topics on which the commission may lay down conditions. We have required the commission to exercise its function in a manner it considers best to further the interests of users promoting competition wherever appropriate, as

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detailed in Clause 5 of the Bill. The commission will have to consider many important issues. There are many potential conditions that the commission will want to set in the licence. Therefore, I see no point in singling out the means of payment as the second potential condition mentioned on the face of the Bill.
The commission may well decide for itself to lay down requirements about the way in which the postal services might be paid for. It may be that the consumer council for postal services would wish to make representations on that point. If the commission decided that such requirements were appropriate, it could do so within the powers already contained in Clause 13(3) after consulting the prospective licensee as required by subsection (4) of this clause. Above all, this is a commercial matter for the Post Office and the future post office company. There are significant charges for each credit card transaction. For many of the comparatively low value transactions that take place in post offices it may not be worth while. Having said that, other commercial arguments could be applied.
I have a certain sympathy with the amendment, but I believe that to put this particular requirement into the Bill would be inappropriate. On that basis, I ask the noble Lord to withdraw his amendment.
5.30 p.m.
Lord Skelmersdale: My Lords, I am grateful to the Minister for that answer and for "a certain sympathy with the amendment". My amendment was deliberately drawn widely so that those items of lesser value can continue to be paid for in cash or perhaps by cheque. At the moment, as noble Lords know, everything has to be paid for by cash or cheque. When I paid for my road fund licence recently in a village not far from Taunton, the good lady behind the counter in the franchised post office, blinked when I produced the money in one pound coins. I believe that I should not have needed to do that.
I wonder how far the "certain sympathy" expressed by the Minister extends. Does he foresee a time when the larger transactions, like the ones that I mentione—TV licence, road fund licence, utility bills and so on—will be paid for by credit card, or will the damning hand of the Treasury zero in on that? As the Minister clearly said, a charge is levied by credit card companies. Against that, there is the fact that this new all-singing, all-dancing Post Office will, according to the PIU report, also incorporate a new bank with the working title of the universal bank. Presumably, that will not only issue credit and debit cards, but will also have to accept credit and debit cards. Does the Minister agree that that is a future that we can see within the environs of the Post Office? I hope he does. I see him nodding. Is that a significant nod, or a "taking in what I am saying" nod?
Lord Sainsbury of Turville: My Lords, in relation to the charges for credit cards, most organisations will always want to resist that unless they see good competitive reasons for doing otherwise. As
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competition rises and as opportunities present themselves, I believe that people will look at that differently. In either case, it is clearly a commercial decision of the Post Office. To the extent that the regulator feels that action has not been taken that is appropriate to the needs of the users, he should lay down the regulations. My point is that it is one of many standards and, therefore, is appropriately left to him.
Lord Skelmersdale: My Lords, in that case, I am delighted that we have had this debate. Clearly, the regulator will read what has been said and make up his own mind about the necessity for my suggestion. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 42 [Duties in relation to public post offices]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 9:
Page 28, leave out lines 12 and 13 and insert ("any postal services are provided directly to the public (whether or not together with other services)").
On Question, amendment agreed to.
Clause 44 [Review and information]:
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 10:
Page 29, line 5, at end insert (", including comparative information on the efficiency and economy of the provision of such services").
The noble Lord said: My Lords, some noble Lords will recall that a fortnight or so ago we discussed this amendment in Committee and the Minister, to my pleasure, said that he would take the amendment away and consider it. I presume that his consideration has led him to table Amendment No. 11, with which my amendment has been grouped. I dare say that I shall find out in due course. I have been asked to table this amendment by the Periodical Publishers Association of which I am a vice-president. I have that interest to declare.
In Committee the noble Lord, Lord Skelmersdale, quite rightly pointed out that it was possible to send magazines abroad in bulk for posting to individual addresses in this country. In my days as a magazine publisher, that was one of the devices that we used. We sent magazines abroad in bulk to Holland, where they were redirected back to our readers in this country. We also had an international magazine with a world-wide readership which, rather surprisingly, we had posted in Singapore. Quite often, readers received it from Singapore, but not always. That is one way of dealing with bulk deliveries of magazines. We would prefer to use the Post Office, as the most sensible and readily accessible means of delivery; that is, if reasonable arrangements can be made with the Post Office especially as regards charges.
Earlier the Minister said that he did not want to hear arguments repeated that he had heard before in Committee. I can assure him that I have no intention of repeating those arguments, because he will have read them carefully and committed them to memory. I have just one point to add. As the noble Lord, Lord Dearing, said earlier, warm words sometimes cool with the passage of time. I do not know whether that is a

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quotation, but that is what he meant. The noble Baroness, Lady Miller of Hendon, repeated that notion too. That is an important aspect of this part of the Bill as, in Committee, the Minister pointed out that the commission would be prepared to see benchmarking introduced as a means of dealing with what I want to see done. That is all very well as far as the present commission is concerned—doubtless it is quite prepared to do that—but there is no certainty that future commissions will be of a like mind. The warm words, as the noble Lord, Lord Dearing, intimated, will cool; so I would like to see this provision in the Bill.
Lastly, I want to say a fleeting word about amendment No. 11. I find it welcome, but I find it not wholly satisfactory. I hope that my noble friend is not offended by the coolness of my welcome; it is not meant to be cold, but cool. I do not like the words,
"considers it practicable to do so",
which leaves the commission to make up its own mind whether or not it will do what we all want it to do. This is a situation in which the commission should be under an obligation to do something, rather than to consider whether or not it is practicable. I beg to move.
Baroness Miller of Hendon: My Lords, I support the amendment tabled by the noble Lord, Lord Howie of Troon. Like him, I do not want to repeat matters mentioned earlier. In Committee I supported the noble Lord and I had tabled two similar amendments— Amendments Nos. 38 and 39—which were somewhat wider in their application. I remember the noble Lord saying that he was more modest than I was and I made the point that I was not quite so modest. As I recall, the noble Lord, Lord Sharman, said that we were getting into a discussion about who was the more modest. I agree with the noble Lord, Lord Howie of Troon. Amendment No. 11 could be described as even more modest than Amendment No. 10. So I feel that Amendment No. 11 is pie in the sky and does not do what we would like it to do.
Given that the Minister's noble friend is such a modest man, and his amendment is sufficiently modest, I hope the Minister will feel it possible to accept Amendment No. 10. He has so far found it difficult to accept amendments. But it always goes down a treat to accept an amendment from one's noble friend.
Viscount Goschen: My Lords, again, the noble Lord, Lord Howie of Troon, made a compelling case for his amendment, as he did in Committee. I believe there was a suggestion from the Liberal Democrat Front Bench that the word "effectiveness" should be included. The noble Lord, Lord Howie, obviously thought that was one "e" too many and that the amendment was fine as it was.
The Minister's response that, "it is a helpful suggestion" is so full of cop-outs that, if I worked for him and he instructed me to do something, I would be tempted to say, "In so far as it is practical for me to do so and all other things notwithstanding, I shall make
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my best endeavours so to do". I am sure that it is practical to accept this amendment. There is plenty of information available. The commission will be in a good position to collect that information. I see no reason why the Minister should not accept Amendment No. 10, but I suspect that he will not. At least he has shown a degree of willingness in bringing forward his own, perhaps overly-carefully drafted, amendment, and for that he should be commended.
Lord Skelmersdale: My Lords, I am rather confused by Amendment No. 11. This "overly-carefully drafted amendment", as my noble friend described it—so far as I can work out, because I cannot put my hand on the precise clause in the Bill—is an exact repetition of what is already in the Bill, whereas Amendment No. 10 is different and new. Therefore, if we are talking of these amendments as being in the alternative, I shall certainly go along with that of the noble Lord, Lord Howie of Troon.
Lord Sainsbury of Turville: My Lords, perhaps I can make a preliminary comment and point out that, in this race for moderation in which we are involved, Clause 44(1) starts by saying,
"So far as the Commission considers it practicable to do so".
Amendment No. 10 is therefore also constrained, I believe rightly, by the practicability of the specific case.
I shall respond to my noble friend's amendment and then speak to Amendment No. 11. The underlying purpose of both amendments is to require the commission to collect information so that it will be able to compare the efficiency and economy of the Post Office with other postal operators. As I said in Committee, I am sympathetic with that principle because I believe benchmarking is vital to those sorts of operation. I therefore brought forward the government Amendment No. 11.
As can be seen, the wording of our amendment is somewhat more detailed than that of my noble friend. That is because the government amendment strives to define exactly what comparative information is. However, the purpose behind both amendments is identical.
It should be noted that the requirement as set out in our amendment, and also in that of my noble friend, still leaves the commission with some discretion over whether or not to collect such comparative information. That is because the commission may not always feel that such a comparison is useful. Also, the commission does not have the power to require such information from unlicensed operators operating outside the licensed area who are not providing the universal service. It can only request the information. Therefore we cannot put an absolute duty upon the commission to gather the information.
I am sure that no one, least of all the Opposition, would want the commission to have the power to require information from people operating completely outside the licensed area. Our amendment is therefore important, but I hope also practical. In those

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circumstances I ask my noble friend to withdraw his amendment and the House to accept Amendment No. 11.
Lord Skelmersdale: My Lords, before the Minister sits down perhaps he can help me. He drew my attention to Clause 44(1) which, in terms of paragraphs (a) and (b), is almost identical to Amendment No. 11 which will be a new subsection (2A) inserted between subsections (2) and (3). The only difference is the part which says,
"which enables comparisons to be made between the efficiency and economy of different postal operators".
All the rest is already contained in subsection (1). That makes the Minister's amendment tautologous to a great extent and therefore unnecessary. That is why I prefer the words of the noble Lord, Lord Howie of Troon.
Lord Sainsbury of Turville: My Lords, I am glad it was the noble Lord, Lord Skelmersdale, who used the word "unnecessary" in this context. I believe it takes the issue one stage further. There is an original point which covers this, perhaps not as fully as the noble Lord would like. We were hoping to take it one stage further in terms of collecting information from abroad. However, if it is now felt that that is unnecessary, I do not want to push the point. It will be for the Opposition to say that it is unnecessary.
5.45 p.m.
Lord Howie of Troon: My Lords, I was described as "modest", which I found very pleasant. I am also extremely cautious. Insisting upon my amendment, as the noble Lord, Lord Skelmersdale, would clearly like me to do, would be to push caution to a dangerous limit.
I make only one point. It is in my mind to table an amendment at Third Reading which removes the words,
"So far as the Commission considers it practicable",
from this part of the Bill. The Minister drew my attention to another place where I can remove it as well; namely, at the beginning of Clause 44. That is not a threat. But I shall consider that possibility carefully over the coming weeks. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 11:
Page 29, line 9, at end insert—
("( ) So far as the Commission considers it practicable to do so with a view to facilitating the exercise of its functions, it shall, in particular, collect information which enables comparisons to be made between the efficiency and economy of different postal operators (whether in the United Kingdom, other member States or elsewhere).").
On Question, amendment agreed to.
Clause 54 [Exercise of functions: general]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 12:
Page 35, line 1, at end insert ("and
(iv) a committee for England.").
The noble Lord said: My Lords, in moving Amendment No. 12, I shall speak also to Amendment No. 13; they are part and parcel of the same thing.
In Committee my noble friend Lady Miller withdrew a similar amendment on the basis that the Minister would look at the matter again because there was what he called "strong feeling" in the Chamber on the subject. With her agreement I am returning to the charge. When I read Hansard I detected a misunderstanding of what I in particular and many others were actually intending by my noble friend's amendment at that time.
Clause 54 concerns the function of the new Post Office consumer body, and subsection (4) talks about what arrangements there will be for that; namely, that committees for Scotland, Wales and Northern Ireland shall be established and that area sub-committees may be established as well.
All well and good; I would be the first to agree with that. It is clearly up to the council to sub-regionalise, if it wants to. As the Minister said, recent history should not be lightly set aside. Again I agree with the noble Lord. It is when the clause considers England that the snag occurs. Here the formulation is much weaker and the Bill says that the council "may"—I stress that word—
"establish one or more committees for, or for any areas within, England".
For many years now I have listened to, argued about and, on occasion, defended the use of the word "may" rather than "shall" in legislation, especially where the draftsman has used "may" in such a way that it really means "shall". This is not such an occasion. Here the meaning is totally transparent. There is to be a different treatment in England as compared with the rest of the United Kingdom. Why?
In Committee, the Minister said,
"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".—[Official Report, 8/6/00; col. 13431.]
Yes, of course; but that is no reason why, as in Scotland, Wales or Northern Ireland, there should not be a committee with sub-committees for the various regions. After all, Scotland is a large landmass. I could get into trouble with the noble Earl, Lord Mar and Kellie, who—perhaps fortunately for me—is not at present in the Chamber, if I called it a "region". However, it is certainly a large landmass. It is quite likely that sub-committees will be set up in Scotland. Therefore, why not here?
The Minister went on to say that Clause 54 also requires the council to maintain at least one office in England, Scotland, Wales and Northern Ireland. That is true, but it also allows the English office to be in limbo with no committee at all to support it. The latter is very unlikely to happen, but, under the phraseology of the Bill, it could just occur. No doubt the Minister

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will call this one of my "extreme examples"; indeed, for the avoidance of doubt, it was meant to be an extreme example. I do not believe that that could happen but, in theory, it could.
I am sure that the Minister has thought again about this, as he said he would. I hope that his thoughts are rather more positive than those he expressed in Committee. I trust that he now agrees that there must he a committee for England. I know that between the Committee stage and today the Minister sent my noble friend Lady Miller a letter. I do not know whether the noble Lord copied it to me, but I certainly did not receive a copy until this morning. Doubtless he will base his speech on the arguments set out in his letter. If so, I must warn him that I have now read, marked, learnt and inwardly digested the contents of that letter. Therefore, it will be very much easier for me to respond to him when I conclude the debate. I beg to move.
Viscount Goschen: My Lords, I rise briefly to support the sentiments expressed by my noble friend Lord Skelmersdale. We had a rather unsatisfactory debate in Committee. I cannot remember whether it was the Minister or his colleague who insisted on answering rather a different question to the one we had raised. It was not about the number of sub-committees and whether or not we should decide how many regional committees there should be for England but about an extraordinarily simple point—namely, why the word "shall" has been used in relation to the other parts of the United Kingdom, while only the word "may" applies to England. It is as simple as that.
I see no reason why there should be conditionality attached to England but none attached to Scotland, Wales or Northern Ireland. I am not arguing for hundreds of committees to be set up; indeed, I am no great fan of committees. I just do not understand why there should be an element of conditionality attached to England and not to the other parts of the United Kingdom.
Baroness Miller of Hendon: My Lords, the Minister will not be surprised to learn that I also support my noble friend's amendment. I tabled a similar amendment in Committee, but withdrew it although there was great support all around the House. The Minister acknowledged that fact and said that as there was such strong feeling, he would take the matter away for reconsideration. We had hoped that he would return to us and agree that as the word "shall" has been used in connection with the setting up of committees for Scotland, Wales and Northern Ireland rather than the word "may", the same should also apply to a committee for England.
I can confirm that I received a letter from the Minister on this point, but, regrettably, I was away for the whole of last week and only read the letter this morning when I found it on my desk. That is when I showed the letter to my noble friend who has moved this amendment. I am most grateful to my noble friend for telling the House that he has gone into the detail so that, in winding-up the debate, he can rebut those arguments if that is the line that the Minister takes.
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It seemed to me that the Minister's argument was that, as this provision has appeared in other Bills, we must have consistency. The situation is becoming quite bad. If this continues, we shall really be in trouble. Therefore, I very much look forward to hearing what my noble friend has to say in response to the Minister.
Lord Sainsbury of Turville: My Lords, the Bill has been worded in this way because we felt that the decision as to whether to have a single committee for England, or a series of regional committees, should be left to the discretion of the council. It was always understood that it would be one or the other. As I said on 8th June, it is interesting to note that not one of the respondents to the consultation on the future committee structure for postal services suggested a single committee covering the whole of England. The reason for that is probably rather clear: the population of England is simply too large to be covered by one committee in this sense.
If the noble Lord's concern is that there would be no committee, I should be glad to take the matter away to ascertain whether we could introduce an amendment to make it clear that there would be either a committee, or regional committees, to meet the needs of the people. However, it is rather curious to propose an amendment that would require the committee to have a particular structure that was not what consumers wanted.
If the noble Lord is truly concerned that nothing would be set up, we can meet that need, while leaving it to the discretion of the council. We shall consider whether we can draft an amendment to achieve that end. However, if the aim is that there should be a single committee, we must resist that proposition on the grounds that we would like that decision to be left to the discretion of the council, after consultation with its users. Indeed, in that case, the council may decide upon something completely different.
Lord Skelmersdale: My Lords, that was the most refreshing answer that I have received from the Minister in several weeks. Indeed, the noble Lord is quite right: the concern is that, under the wording of the Bill, the council could have no committee in England at all. I have obviously been expressing myself extremely badly over a number of weeks; but, none the less, the Minister has finally got the point. That is no reflection on him. It is almost certainly a reflection on me.
I am delighted to hear that the Minister will look seriously at correcting what I see as a total anomaly in the Bill, and something that should not be allowed to happen. On that basis, I shall withdraw the amendment. However, should it prove necessary, I reserve the right the come back and chase the noble Lord a little on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
Schedule 3 [Transfer to the Post Office company: supplementary provisions]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 14:
Page 82, line 38, at end insert —
("(4A) The Secretary of State may by order provide for any provision of sub-paragraphs (1) to (4) not to apply, or to apply with modifications, in such cases or descriptions of case as he considers appropriate.").
The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment No. 15. This amendment provides for a new subparagraph to be inserted in Paragraph 1 of Schedule 3. It provides the Secretary of State with an order making power to disapply, or apply with modications, the provisions in subparagraphs (1) to (4) of that paragraph.
Schedule 3 sets out a series of supplementary provisions regarding the vesting of property, rights and liabilities of the Post Office in the Post Office company. The purpose of Schedule 3 is to ensure that the transition of the Post Office from statutory corporation to public limited company is seamless; that it does not disadvantage either the Post Office company or any third parties; that appropriate provision is made in relation to pension arrangements; and that any foreign property, rights and liabilities are transferred with effective legal force.
Paragraph 1 has the effect that anything done by or in relation to the Post Office is deemed to have been done by, or in relation to, the Post Office company. This includes legal proceedings and references in any agreement or document. The order making power could be used to deal with an instance where it is inappropriate for a reference to the Post Office in a current document to be construed as a reference to the Post Office company after vesting day. The power will be subject to the negative resolution procedure.
Amendment No. 15 is clarificatory. It spells out that only sub-paragraphs (1) to (4) of paragraph 1 to Schedule 3 are subject to any provision made by or under the Bill. I beg to move.
On Question, amendment agreed to.
6 p.m.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 15:
Page 82, line 39, leave out ("This paragraph is") and insert ("Sub-paragraphs (1) to (4) are").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 63 [Government holding in the Post Office company and certain subsidiaries]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 16 and 17:
Page 40, line 29, at beginning insert ("receives,").
Page 40, line 29, leave out ("transports") and insert ("conveys").
The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Clause 65 [Restriction on issue of shares to third parties]:
Lord Clarke of Hampstead Lord Clarke of Hampstead moved Amendment No. 17A:
Leave out Clause 65.
The noble Lord said: My Lords, as usual I declare my interest as a former postman and a former official of the Union of Post Office Workers.
Clause 65 concerns shares, share dealings, issue rights and a number of other matters including the issue of shares to the Treasury, the Secretary of State or to any of their nominees.
My amendment seeks to delete the whole clause and the authority it contains. My views on the Government's plans to create a share based Post Office company are known to many noble Lords. I shall not repeat all of my concerns about the Bill that I have mentioned on a number of other occasions. The amendment enables me to place on record my sadness at what the Government are doing to a valuable and socially useful publicly owned asset.
I do not hold a starry-eyed sentimental view of the jolly postman on a snow covered path with a robin on his shoulder struggling through the elements to deliver the essential Christmas cards. I am concerned about the future of an organisation that has worked efficiently for 350 years and currently shifts in excess of 56 million items a day.
I was concerned at the comments of the noble Earl, Lord Caithness, who has experienced difficulties with his local post office in Hammersmith. I could give him some good advice. As a former postman in Hampstead, which had more Peers and Members of Parliament to the square mile than anywhere else in the country, I know just how effective parliamentary interference in the daily running of a post office can be. Perhaps the noble Earl and I can discuss that matter later.
A share based Post Office company is unnecessary. An alternative has been proposed, the independent publicly owned corporation (IPOC). It has been said that IPOC would not be acceptable to potential partners in joint ventures. However, I remind noble Lords that that has not prevented negotiations with Deutsche Post or the joint venture with the Singapore postal authority. There is no substance in the statement that an IPOC could not do the job just as efficiently.
At an earlier stage of the Bill I asked the Minister to say whether the Government would place a limit on the amount of the share base that could be transferred in a joint venture. The Government have said publicly that the organisation will remain 100 per cent publicly owned but have at the same time said that a transfer of shares can take place. That is a contradiction. I am grateful to my noble friend the Minister for having had the courtesy to concede that point in this House on an earlier occasion. However, I understand that the Secretary of State is still saying that it will remain 100 per cent publicly owned.
In my view Clause 65 will enable a future government to adopt a fast track procedure to extend share ownership to individuals and institutions. I am aware that the Secretary of State has said repeatedly that further legislation will be needed to extend share ownership. I believe that secondary legislation will be needed before such an extension of share ownership could take place. However, I am a relatively new Member of the House and I may not have the terminology correct. However, as I say, Clause 65 will enable a fast track procedure to be adopted. I consider that that is wrong. Much as I would love to think that we shall always have a Labour Government, I am not daft enough to think that a future government of a different persuasion would not wish to pursue a policy of wholesale privatisation. I do not agree with that view but I respect it.
When the Bill first arrived in your Lordships' House I said how sad I was to take issue with the Government which I support and for which I have worked hard for many years. Over the past few weeks that sadness has deepened because I realise that nothing I can say today will nullify the concept of share ownership in the Bill. I ask my noble friend the Minister, probably for the final time, to accept the amendment and allow the Post Office the freedoms contained in the Bill without the need for a share base for our great publicly owned institution. I beg to move.
Lord Sainsbury of Turville: My Lords, the noble Lord's views on retaining the Post Office in public ownership are well known. However, the amendment would do nothing to serve his purpose.
Clause 65 contributes to the policy on government ownership of the new Post Office company, and helps us deliver the promise made at the time of the publication of the Post Office Reform White Paper that the Government,
"would not seek to dispose of Post Office shares without further primary legislation",—[Official Report. Commons, 8/7/99; col. 1177.]
except where a sale or exchange of equity would be in the interest of the Post Office to cement a joint venture or strategic alliance with another company—in which event the approval of the Houses of Parliament would be required.
Clause 65 imposes firm restrictions on the issue of shares and share rights of the Post Office company and "relevant subsidiaries"—relevant subsidiaries being those which are involved in the core business of the Post Office company.
Deleting this clause would remove the restriction on the issuing of shares and share rights leaving the Post Office company (and the relevant subsidiaries) free to issue shares as they will. I do not think that this is the effect that the noble Lord is seeking. On those grounds I ask him to withdraw his amendment.
Perhaps I can try to reassure the noble Lord that the Bill does not enable us simply to sell Post Office shares. Clause 65 is a clear restriction on the issue of shares and share rights. Clause 66 prevents those to whom those shares and share rights have initially been issued
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from disposing of the shares and share rights. Only if the procedure in Clause 67 is used can shares and share rights be issued or disposed of to a third party.
Clause 67 is, of course, pretty restrictive over what can take place, and it includes what has become known as the "triple lock"; namely, that there can be no issue or disposal of shares unless the following conditions are met. First, it has been done to cement a commercial alliance, to use the words of the statute,
"a joint venture, or another arrangement for working together with another person",
and the Post Office company considers that the arrangement is in its commercial interest, and has recommended the issue or disposal to the Secretary of State. Secondly, the Secretary of State must be satisfied that the share transaction is for the purpose of securing the commercial arrangement and it is in the interest of the Post Office company. Thirdly, resolutions must have been passed in both Houses approving the issue or disposal of the shares or share rights.
I also point out that the Bill ensures that not only are the words of the Government's promise of last July—that there should be no disposal of Post Office shares etc—fulfilled; but also that the spirit of that promise is fulfilled. The Bill ensures that the promise is not undermined by the transfer of all the key businesses to a subsidiary, leaving the subsidiary to be sold. We have plugged that loophole by subjecting the relevant subsidiaries to the same restrictions on share disposal.
There is therefore a very tight grip over the disposal of shares and share rights, while giving the Post Office company real commercial freedom for those joint ventures and partnerships which it needs to compete successfully in the global postal market. To deprive the Post Office of those commercial opportunities at a time when we are seeing rapid consolidation and alliances being formed would be to condemn it to being a very minor player in what is becoming a market of substantial companies.
Share disposal or swaps are not the only route to greater commercial freedom. Our policy is not to stand in the way of sensible commercial activities and deals. The Post Office company will be able to develop through in-house investment; it will be able to acquire third parties along the lines of the acquisition of German Parcel last year; and, as envisaged in the Post Office alliance with the Dutch Post Office and the Singapore Post, which is currently under consideration, it will be able to cement deals via the transfer of assets by each of the parties into a new, jointly-owned organisation.
As responsible shareholders, the Government would not want the Post Office company's assets to be dissipated improperly, but we would want to allow good commercial deals, and we shall look at the memorandum and articles of association of the Post Office company to give the Secretary of State powers to control major asset movements and disposals.

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In summary, we are not looking for freedom for the Government to do what they will with the Post Office and the future Post Office company; we are seeking the freedom to enable the organisation to compete effectively in a fast-moving market place, with the same opportunities as its competitors to do deals which are in its commercial interests.
Of course there must be safeguards in place to protect the taxpayers' interest. The Post Office company will be owned by the people of this country. But I have no doubt that the greater commercial freedom will benefit consumers, employees and the UK as a whole. I hope that the noble Lord will agree that his amendment does not achieve his purpose and that the Government's intentions are the best way forward for the Post Office company, its users and its employees. I therefore ask my noble friend to withdraw his amendment.
Lord Clarke of Hampstead: My Lords, nothing that I have said during the passage of this Bill—be it at Second Reading, in Committee or as recently as today—has suggested that I would in any way want to restrict the Post Office from having commercial freedom. I have spent a large part of my working life arguing for that commercial freedom because of the need for the Post Office to compete with the various organisations which are in business to try to take away what I would call the "cream" work of the Post Office—not the rural areas, to which the Post Office has a universal obligation to deliver.
My noble friend has exposed my limited knowledge of the procedures of the House. He is right; my amendment would not achieve what I set out to do. With reluctance, I shall have to learn this lesson. I do not expect that I shall burden your Lordships' House at Third Reading with another stilted and incoherent request for the Government to think again on this issue. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 18:
After Clause 67, insert the following new clause—
NOTIFIABLE TRANSACTIONS
(".—(1) Where the Post Office company or any relevant subsidiary enters into a notifiable transaction it must, as soon as practicable after the terms of that transaction have been agreed, issue a disclosure notice in accordance with this section.
(2) For the purposes of this section "notifiable transaction" means any acquisition or disposal of any undertaking or interest in any undertaking by the Post Office company or any relevant subsidiary which, if the acquisition or disposal was made by a listed company, would be a transaction in respect of which that company would need to give notification or make an announcement in accordance with the listing rules.
(3) A disclosure notice must include the same information regarding the transaction to which it relates as any notification or announcement under the listing rules would be required to include if the transaction was an acquisition or disposal which had been made by a listed company.
(4) A disclosure notice shall—

(a) be published in the London Gazette, the Edinburgh Gazette and the Belfast Gazette; and

(b) be published or disseminated in any other manner as the Secretary of State may prescribe.

(5) In this section—

"listed company" means a company any class of whose securities have been admitted to the official list; and

"listing rules" and "official list" have the same meaning as in Part VI of the Financial Services and Markets Act 2000.").

The noble Baroness said: My Lords, the amendment replaces a similar one that I moved in Committee. On the first occasion in Committee, I mentioned that I was prompted to move the amendment because the noble Lord, Lord Razzall, had said at Second Reading that he thought that this may be something that needed doing.
I have spoken on this issue not once, but twice. On the first day of the Committee stage, being unsatisfied with the Minister's response, I attempted to divide the Committee, but because there was not a quorum the Committee was counted out under Standing Order 57. This meant that the amendment was brought forward as the first item of business on the second and final day of the Committee stage. That means that I have now made two speeches on precisely the same point. Certainly I do not want to take up any more of your Lordships' time than is necessary by repeating the same arguments.
Put very simply, the Post Office is to become a public limited company. The objective of this change is to enable it to become a more commercial trading company in a highly competitive market. The Post Office is a huge organisation and, it is to be hoped, freed of the dead hand of Whitehall, it will become even larger. Inevitably it will become involved in mergers, take-overs, partnerships and joint ventures of all kinds.
Any publicly-quoted company is required to keep its shareholders and potential investors informed of such transactions—even while they are in progress. At the first, aborted, debate, the noble Lord, Lord Sainsbury of Turville, rejected the amendment on the grounds that,
"No other commercial company would be required to publish its intentions to acquire or dispose of an undertaking in the same way".
With respect to the noble Lord, that is not entirely correct. But, on reflection, it is possible that my amendment in its previous form could have been interpreted as being too prescriptive. I believe I said that.
So, ever helpful, I have altered the form of the amendment in a way that makes it clear that the Post Office plc is to be treated no differently and—no less importantly—to act no differently from any other publicly-quoted company.
In the same speech, the Minister also suggested that,
"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".— [Official Report, 8/6/00; cols. 1358 and 1359.].
I find that difficult to understand. The amendment seeks to ask the Post Office to make public announcements of certain transactions. But the Government, the only shareholder, said they would be satisfied if the regulator alone was told or was the one to decide when the deal would be made public. That would prevent the shareholder from exercising their influence.
We also recall the deal with the German Post Office, details of which came out too late for any public discussion.
During the second debate, the Minister repeated his argument that the form of my previous amendment went further than the requirements imposed on ordinary listed companies. Contrary to what the Minister said on that occasion, listed companies do not make announcements only after the deal is done; announcements are made when it is appropriate to do so—especially when people might buy or sell shares to their disadvantage in ignorance of a pending deal.
One of the purposes of the Stock Exchange regime is to prevent distortion of the market by speculative rumours. Announcements of pending bids, deals and negotiations—and, sad to say, failed bids and deals—appear in the press every day.
I wish to turn now to another serious and major point. I am informed from a very reliable source—and that was the National Audit Office; someone gave me some information—that it had reported to the Government advising that the disclosure regime for the Post Office should be the same as the one I am now proposing. In other words, it recommends what this amendment seeks to achieve.
Your Lordships may recall that I hinted at that when the amendment was before the Committee on the previous occasion. When I spoke then, I said that I had mentioned it to the Minister outside the Chamber. Inside the Chamber, I suggested that the Minister should bring forward an amendment himself. To my surprise, he has not done so. I therefore ask the Minister to tell your Lordships' House: first, is there such a report; secondly, am I correct in saying what the report recommends; thirdly, do the Government agree with the report; fourthly, if they do not, why not; and, fifthly, if they do agree, will they accept my amendment or undertake to bring forward an amendment to the same effect?
I do not necessarily expect the Minister to give me an answer now—he may be able to—but, if he is unable to give me one, I should like an assurance from him that he will tell me the Government's intentions before Third Reading. This is something that I thought would have been dealt with. However, it has not.
What is at issue here is transparency—the same transparency as the Minister told your Lordships on 15th June, at column 1764 of Hansard, he had no quarrel with.
Lord Razzall: My Lords, the noble Baroness is correct; this was a point that I first raised when the Bill was debated at Second Reading. On these Benches—but probably not on the Conservative Benches—we
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have considerable sympathy with the arguments used by the noble Lord, Lord Clarke of Hampstead, for his amendment. The problem highlighted by the Conservative opposition amendment arises because the Government did not adopt the recommendation of the Trade and Industry Select Committee that the Post Office should be transferred into an independently owned corporation, albeit with 100 per cent public ownership. At Second Reading I expressed my concern that there would be an unsatisfactory compromise between the structure of the Post Office that the Government were proposing—one with a limited degree of commercial freedom but nevertheless with some of the constraints that government ownership would still impose on it—and a structure giving the Post Office complete commercial freedom.
Where I part company with the noble Baroness is that I do not see a way in which what is proposed wi11 work unless the Government go back on their fundamental principle regarding the structure of the corporation. The various valiant attempts of the noble Baroness to produce an amendment that seeks to mirror the requirements of a listed company will not work with the form of structure that the Government have put in place.
I have every sympathy with the noble Baroness. However, I cannot support her amendment because I do not think it will work. We are left, reluctantly, to rely on whatever undertakings the Minister can give as to the powers that the Government will take to ensure that transparency occurs—in Committee the noble Lords went some way to meeting the points made by the noble Baroness—and to rely on any undertaking he can give us as to what he will expect the regulator to do, also with regard to transparency. I fear that we cannot have an amendment of this nature, largely because the Government have sold the pass on it by the structure of the corporation that they are putting in place.
Lord Sainsbury of Turville: My Lords, the listing arrangements of the London Stock Exchange have to do with market transactions. This is about making certain that there are no distortions in the market. We are dealing here with a public company, a plc, but it is not listed on the Stock Exchange. That has to be a major consideration. The National Audit Office intends to produce a report, but the publication date is for the NAO to decide.
When we discussed the noble Baroness's previous amendment at the Committee stage I gave a commitment that if what we were proposing in respect of disclosure for the Post Office company fell in any way short of the London Stock Exchange disclosure requirements then we would look at the issue again. My intentions are exactly the same as the noble Baroness's in wishing to ensure transparency when the Post Office company makes a major acquisition or disposal, but while seeking to be fair to its competitors, I do not wish to see the Post Office company unfairly treated. The noble Baroness and I obviously do not have a meeting of minds on the means of achieving that end.

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Perhaps I may try again to persuade the noble Baroness that her proposed course is not the best means of securing our joint objective by explaining in more detail the implications of her proposed amendment. It takes the argument a stage forward that the noble Baroness now seeks to require an announcement to follow the agreement of the terms of the transaction. But her amendment would still place an unfair burden on the Post Office company. In particular, it should be noted that the scope of her amendment is such that it would catch very minor transactions which, for example, fall under the related party rules, set out in Chapter 11 of the Listing Rules, where the materiality threshold is extremely low or Class 3 transactions where the relevant percentage ratios are below 5 per cent.
The Listing Rules provide for listed companies also to consult the UK listing authority at an early stage about the application of the rules of Chapter 10—or Chapter 11—to a particular transaction. This is especially so where there is any doubt about the application of the rules, because in practice it is not always easy to tell whether a transaction falls within the rules or within a particular class. Furthermore, where the calculations which determine which, if any, class applies produce an anomalous result or the calculations are inappropriate to the sphere of activity of the listed company, the UK Listing Authority may disregard the calculation and may substitute other relevant indicators of size, including industry specific tests. For example, the consideration to market capitalisation test would not be applicable for the unlisted Post Office company.
Listed companies and their advisers often spend a fair amount of time in consultation with the UK Listing Authority as to the exact classification of a particular transaction, the precise interpretation of a rule or obtaining a company or transaction specific ruling on an ad hoc basis. There is therefore an element of flexibility in the operation of the Listing Rules which would not be available to the Post Office company. Instead it would be faced with deciding whether disclosure is required against a set of tests, incorporated by reference into the statute. The tests are therefore inflexible, especially as there is no possibility of the UK Listing Authority exercising its discretion to apply the rules in a manner appropriate to the Post Office company's business.
In any case, the analogy between the Post Office company and a public listed company does not really work when it comes to public announcements of information. In the case of the Post Office company, it is the public at large, as well as Parliament, who would be interested to know about the transaction, although, I think, not with any great urgency. In the case of a listed company, the information is announced to the market through the Company Announcements Office, with the intention that the listed company's shareholders, and potential shareholders, are made aware of the transaction as soon as possible so they can make an informed investment decision regarding the holding, buying or selling of the shares in the
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company. That is clearly not relevant in the case of the Post Office company. It will have no public shareholders who could be prejudiced by the lack of a full and immediate announcement. The purpose of any announcement would therefore be very different and the Listing Rules requirements are not therefore felt appropriate to be adopted.
Perhaps I may return to the noble Baroness's main theme. It would appear that the purpose of this transparency would mainly be to the benefit of the Post Office's competitors and, to some extent, the public at large. I have no difficulty with that idea. But at the same time I do not wish to subject the Post Office company to an unnecessarily onerous and inflexible regime which is designed to serve a very different purpose. The Post Office company's competitors and, more generally, the public would be kept informed about what the company was doing if it made a press announcement once a major acquisition or disposal had been agreed. That would be a far more practical arrangement than an announcement in the London Gazette and is the one which the Post Office has already adopted for its recent major acquisitions.
We want to achieve a sensible and practical regime for the Post Office company without detracting from the principle of transparency. If we enshrine disclosure requirements in the Bill which are linked to the Listing Rules, which contain a degree of discretion for the UK Listing Authority in their application and are regularly updated and amended and, in the light of recent developments, particularly concerning the London Stock Exchange's proposed merger, may well be subject to significant revision over the next few years, we would be setting in concrete in the Bill before the House a regime which may be totally inappropriate in a few years' time and which would be accompanied by none of the flexibility which is presently available to listed companies under the Listing Rules as applied and interpreted by the UK Listing Authority.
The way to achieve this flexibility is to make provision for the disclosure of information in the Post Office company's articles of association. We are currently discussing with the Post Office the draft memorandum and articles of association and we shall be discussing the inclusion of an article which requires the disclosure to the Secretary of State of information about major acquisitions and disposals relating to transactions involving 10 per cent or more of consolidated profits, turnover or gross assets. The provision will require disclosure within a specified period of business days after the transaction in question has been agreed, by way of a press announcement giving the prescribed information.
It is the Government's intention that the Post Office company should provide transparent information on completed acquisitions and disposals along the lines of the London Stock Exchange disclosure requirements, at least in terms of content, if not in method or timing. The Post Office is already following this policy for all but the most minor acquisitions and it will also provide summary information in its annual report and accounts. The inclusion of a disclosure requirement in

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the articles of association will ensure that the current policy of openness is enforceable by the shareholder—the Government.
It is intended that our proposals will achieve the transparency that the noble Baroness desires, but without inflexibly shackling the Post Office company to a regime which is intended for another purpose entirely and to which no competitor would be bound in the same way. I hope that the noble Baroness is both persuaded by my arguments and takes comfort from my assurances. I would ask her to withdraw her amendment.
6.30 p.m.
Baroness Miller of Hendon: My Lords, I take some comfort from the assurances given by the Minister. However, I must say that I have been having some difficulty in certain cases in drafting amendments that are technically acceptable or that can be met. However, I take the point made by the noble Lord, Lord Razzall; namely, that it may not be possible to draft an amendment that would be suitable. That may well be why the Government did not come back with their own amendment, as I suggested they should. I should have thought that that would have provided an answer.
Having said that, I asked the Minister certain questions and told him that I did not necessarily require the answers now. I should like to see the responses before we move on to Third Reading. However, the Minister was able to confirm that the National Audit Office had produced a report, although he did not know when it was going to be published. I should tell the Minister that I did not specifically ask when it was going to be published. I have the question in the notes for my speech, but I decided not to ask the question; I thought that would be more tactful. I have crossed it out to ensure that the Hansard writers do not put in something that I did not say in the Chamber.
However, the second question I put to the Minister is more important; namely, am I correct in saying that the report did agree with my amendment? That is what I have been told—that the National Audit Office had in fact recommended something similar, if not quite the same. I believe the NAO thought that my amendment was rather wider than it should have been. I agree. For that reason, I have returned with a somewhat narrower amendment. However, I understand that the NAO did agree that this is something that should be done.
The Minister has confirmed that there is to be a report. I should now like him to confirm whether the report did in fact recommend that this kind of disclosure should take place. The Minister does not need to reply to me now, but I should like to have a response to that question before we return to the Bill at Third Reading.
Lord Sainsbury of Turville: My Lords, perhaps I may make quite clear what I said. The National Audit
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Office intends to produce a report. As far as I am aware, no report is yet available. The NAO intends to produce one.
Baroness Miller of Hendon: My Lords, that is an extraordinary response. It is extraordinary because I have received information that I would have sight of the report. My researcher then took a telephone call to say that the Department of Trade and Industry did not wish me to see it. I do not know where the lines have crossed here, but that was exactly what I had heard; namely, that there was a report and that it made a recommendation. I spoke to two different people. However, I do not wish to say any more, other than to recommend that the Minister should make inquiries within his own department. If there is such a report, he will be in a position to respond to the remainder of my questions.
In view of this discussion, I see no purpose in taking the matter any further at this point. I shall withdraw the amendment, but I hope that we shall be able to have further communications before we return to the matter at Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 71 [Limit on loans and other arrangements with government]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 19:
Page 44, line 41, at end insert—
("( ) amounts outstanding in respect of the principal of debt securities issued in pursuance of section 63 of this Act, and").
The noble Lord said: My Lords, in speaking to Amendment No. 19, perhaps I may speak also to Amendments Nos. 20, 21 and 44.
Amendments Nos. 19 and 20 amend Clause 71 by removing the Government's shareholding in the Post Office company and its wholly owned subsidiaries from the calculation of the Post Office company's indebtedness to government while retaining within the calculation any debt securities issued to government under Clause 63.
I am very grateful to the noble Lord, Lord Dearing, for prompting further consideration of the interaction of the old subsection (2)(f) in Clause 71 with the overall calculation of indebtedness determined by the clause. Following the debate in Committee on the noble Lord's amendment, we have reconsidered with our financial advisers the interaction of the Government's shareholding with the overall limit on indebtedness to government of the Post Office company. We have concluded that the inclusion of the Government's equity does not mirror normal commercial practice in determining the borrowing limit for a company. These amendments therefore remove the equity from the calculation while retaining within it debt securities issued to government under Clause 63.
Amendment No. 21 makes provision for any debt assumed by the Post Office company under Clause 74(1) to be treated for the purposes of the Corporation Tax Acts as if it had been assumed wholly in

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consideration of a loan made to the Post Office company of an amount equal to the principal sum payable under the debt. Clause 74 gives the Secretary of State powers for the restructuring of the balance sheet of the Post Office company by April 2002 by injecting debt to create a commercial level of gearing. If the debt were treated as having been assumed for no consideration, interest payments by the company could be considered a distribution and attract a tax charge. This amendment mirrors the existing provisions in Schedule 4 in respect of the treatment of shares and other securities for the purposes of the Corporation Tax Acts. It is intended to maintain a position of tax neutrality for the Post Office company during the restructuring of the company's balance sheet.
Amendment No. 44 provides that for the purposes of calculating total indebtedness of the Post Office Corporation under Clause 115, the Secretary of State will determine the sterling equivalent of any foreign currency debt. The amendment ensures that Clause 115 mirrors the provision in Clause 71(4) regarding the determination of the sterling equivalent of any foreign currency debt for the Post Office company. I beg to move.
Lord Dearing: My Lords, I am grateful to the Minister for his response. It has persuaded me that there is such a thing as beginner's luck. Furthermore, wisdom is to be found in the proverb that, "Everything comes to he who waits". I waited eight hours—not to be called! However, it was well worth it.
Perhaps I may trespass a little on the time of the House. I was moved by the way in which the noble Lord, Lord Clarke, spoke in support of his amendment. I felt that he was speaking on behalf of those postmen and postwomen who go out with the mail, heads down in the February darkness and rain, to the backstreets of this land. They will not understand what is going on in this House. However, they have a deep feeling for the Post Office, a feeling that has been developed over five centuries, since the first Master of the King's Mail, Brian Tuke, to the opening in 1635 of a postal service for the likes of us. It is a great and historic institution, a part of the fabric of this realm. I believe that the noble Lord, Lord Clarke, reminded us of that, as did the noble Baroness, Lady Miller.
On behalf of all those people, as well as on behalf of the national interest, I intervened with my amendment to talk about the balance sheet of the new Post Office company. It should be given strength so that it will be able to support those 180,000 Post Office workers and enable them to carry forward the great tradition that they have inherited.
On the last occasion I mentioned my concern that, in negotiating major partnerships in a world in which the big players—the well-heeled, strongly commercial players—are likely to become great postal operators throughout Europe and perhaps the world, the Post Office should have a balance sheet which gives it a basis of strength for such negotiations. I expressed also
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my concern that it was important to ensure that the Post Office should be able to demonstrate strong operating results.
The reduction of the monopoly from 350 grammes to 150 grammes—the Post Office has agreed to that and that is the intention of the Government—will take £100 million out of the bottom line. If the commission has its way, the chief executive stated, I believe, the mail's profits will be eliminated. I also mentioned the taking out of past profits in the form of assets, producing £100 million a year. Furthermore, at that point I had not recollected that the Post Office has enjoyed a pensions contributions holiday for the Post Office staff superannuation scheme for very many years. That is worth at least £100 million a year. I am concerned, therefore, that the Minister should be valiant in pursuit of the principle that he announced in response to my amendment; namely, that in thinking of the balance sheet, the Government should be forward-thinking about the purposes that they have in mind and the national interest, and they should enable the Post Office to go forward in strength.
I recognise that this matter is in the hands of those who have much more expert knowledge than I. I have great confidence in them. I thank the Minister and I am sure that he will be valiant in their support.
Lord Skelmersdale: My Lords, this subject came up rather belatedly in Committee. It was not the fault of the noble Lord, Lord Dearing, as he explained, but perhaps the fault of some of the rest of us that his amendment was not reached on that occasion. Since then, we have had the report and financial accounts of the Post Office. On 19th June, it announced a post-tax loss of £264 million for the year 1999–00. It was the first time in 24 years that the corporation had not made a profit. Not surprisingly, the result was heavily influenced by the £571 million write-down of the assets, due to the changes made to the Horizon project to automate the Post Office network.
Although that result was not unexpected (it was planned for) in a real world it would surely affect the balance sheet, would it not? We shall all want to be convinced that the balance sheet will be strong notwithstanding the write-down, which has been necessary through what the Minister could fairly believe were government activities beyond the control of the Post Office.
Lord Sainsbury of Turville: My Lords, the losses were due to an accounting write-down. The reason for the write-down had to do with the fact that we had to take action to deal with the misconceived project that had been put in place to automate Post Office Counters. To the extend that accounting entries are ever real, this is a real accounting entry. The money that had been put into the project was effectively of no value going forward to the Post Office. So the situation was corrected in a perfectly correct accounting way. What it does not affect is the underlying ability of the Post Office to create profits in future years.
The thinking behind the amendment is exactly that which the noble Lord, Lord Dearing, so well represented. We want to see the Post Office going

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forward with a strong balance sheet, and able to develop its business commercially. In the world that we are entering there is no strategy for standing still. The market is opening up, and we want to see the Post Office play a major role. Clearly, in order to do so, it must have the financial resources. That is why we have made arrangements for it to be able to acquire more debt. This amendment will place the Post Office in a strong position as it goes forward.
I appreciate the fact that the noble Lord, Lord Dearing, has raised this point. I hope that in responding in this way we can indicate our strong feeling that the Post Office should go forward with a strong balance sheet.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 20:
Page 44, line 43, leave out from ("liabilities") to end of line 47.
On Question, amendment agreed to.
6.45 p.m.
Baroness Byford Baroness Byford moved Amendment No. 20A:
After Clause 77, insert the following new clause—
OPERATION OF SUB-POST OFFICES AND RURAL POST OFFICES REVIEW ETC

(" .—(1) Within not less than six months and not more than one year of the commencement of this Act the Secretary of State shall lay before both Houses of Parliament a report into the operation of sub-post offices and rural post offices in the United Kingdom.

(2) The report will, among other issues, cover the following subjects—

(a) the number and location of sub-post offices;

(b) the number of such offices as have closed or been opened in the preceding year, or in the period since the previous report under this section, whichever shall be less;

(c) the numbers employed, or working self-employed in such offices;

(d) an assessment of the reasons for the closure of such offices should they have taken place;

(e) what action the Secretary of State has taken, and proposes to take, to limit such closures;

(f) the effect of government policies, including the means of delivering social security benefits, on sub-post offices in the preceding year.

(3) The report will examine particularly the condition of rural post offices and will cover, among other subjects—

(a) the number and location of rural post offices;

(b) the number of such offices as have closed or been opened in the preceding year, or in the period since the previous report under this section, whichever shall be less;

(c) the numbers employed, or working self-employed in such offices;

(d) the nature of other services provided in rural post offices, including the supply of food and goods;

(e) the number of rural post offices which serve as the only shop or point of sale for food and goods in a village, other than farm shops;

(f) an assessment of the reasons for the closure of such offices should they have taken place;

(g) what action the Secretary of State has taken, and proposes to take, to limit such closures;

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(h) the effect of government policies, including the means of delivering social security benefits, on rural post offices in the preceding year.

(4) In compiling the report required by this section the Secretary of State shall consult such persons as he shall see fit, including—

(a) the appropriate district and parish councils;

(b) the Women's Institute;

(c) the Council for the Protection of Rural England;

(d) the National Association of Sub Postmasters and Sub Postmistresses

(5) After laying a report before Parliament in pursuance of subsection (1) the Secretary of State shall subsequently lay a report annually before each House of Parliament; and the other provisions of this section apply to a report under this subsection as they apply to a report under subsection (1).

(6) Where a report by the Secretary of State sets out proposals to take any action to limit the closures of sub-post offices and rural post offices no such action may be taken unless each House of Parliament has approved the proposals by resolution.

(7) For the purposes of subsection (3) above "rural" means post offices serving villages or towns outside Greater London or the Metropolitan Counties with a population of no more than 20,000 people.").

The noble Baroness said: My Lords, although in the past few days we have had much greater clarity in regard to the Government's thinking, especially with the Statement yesterday, we were obviously anxious to place on the face of the Bill a requirement that the Post Office should produce a report and that it should be required to state the number and location of sub-post offices.
Some of us are rather mystified as to the Government's perception of what is an acceptable base number of sub-post offices, whether in rural or urban areas. As I said earlier, we found it worrying when, at the Report stage of the social security Bill, the noble Baroness, Lady Hollis, referred to the United Kingdom having more sub-post offices than other countries; France and Germany were mentioned in particular. The Government have said that they will guarantee the retention of rural sub-post offices, but they have offered no definition of number, where those post offices will be located, or how many people they should serve. The amendment seeks some clarity on those points. I shall reserve my other comments until I speak to a later amendment that I have tabled, which may have a more direct bearing on this matter. Those are the thoughts behind the amendment, to which my noble friend Lady Miller and the noble Lord, Lord Northbrook, have also put their names. I beg to move.
Baroness Miller of Hendon: My Lords, we still have a large number of amendments to consider and I do not want to detain the House any longer. I support everything that my noble friend Lady Byford has just said.
Lord Sainsbury of Turville: My Lords, perhaps I may repeat, because it seems that there is some misunderstanding, that yesterday the Government gave a clear commitment to keep open those post offices that currently exist and which fall within the criteria that we have laid down regarding the size of the population, subject only to the two specific situations

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of unavoidable closures. That is an absolutely clear commitment and it answers entirely all the queries raised on this point. So there is a clear commitment, subject to two very small practical points—and I cannot believe that there is disagreement about them because they are clearly specified.
I find it difficult to disagree with the sentiment behind the amendment. However, I do have difficulty with the level of prescription suggested by the noble Baroness. The Bill, as I have said many times, is intended to last for a generation, and the reporting requirements that might be needed in the immediate future might be quite different some years hence.
We gave a commitment yesterday with the publication of the PIU report that we accept its recommendation that the commission should publish an annual report on the network. That report would, of course, be available to Parliament. However, it is much better to leave the exact substance of the report to the discretion of the independent regulator, who is in a better position to judge what the report should contain.
As the PIU report has shown, we have consulted with a wide number of people in all kinds of organisations.
The amendment also requires the Secretary of State to seek the approval of Parliament before taking action that might limit the closures of sub-post offices. While I believe in proper oversight, it is possible that this could actually in some cases delay action that might benefit local post offices, as one would have to wait for the approval of Parliament before any action could be taken to limit closures. Finally, we have made it clear in the context of the PIU report that we are adopting the Countryside Agency's definitions in terms of the rural network, and therefore for a post to qualify as "rural" the number of people it would have to serve would be 10,000 rather than 20,000.
I hope that with the assurance that there will be reports the noble Baroness will withdraw her amendment.
Baroness Byford: My Lords, I thank the noble Lord for his response. He did indeed speak earlier—and I accept his confirmation—about the two specific categories that the Government obviously cannot guarantee.
However, one thing is still missing, and I shall refer to it in a later amendment. Yesterday's Statement included the following passage:
"This Government are committed to ensuring that the rural post office network is maintained".—[Official Report, 28 June 2000; col. 915.]
That requires money. The PIU report talks of money, but gives no idea of what money. We are told that we have to wait for the spending round. Here I am sure that the noble Lord will respond again. One of our concerns is that it is all very well—it seems to be on the horizon—but we have no indication whether it will be the responsibility of the Post Office to provide that money or whether the Government will give the Post Office the money to provide and how it will kick in.
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Everybody will be delighted if the money allocated in the spending review is sufficient, but some of us feel, although we may well be proved wrong, that it might be a one-off, pump-priming. The noble Lord and I agree that we are looking to the longer term. How does he envisage matters in that longer term? On the finance side we are receiving no answers.
I apologise to the noble Lord; I feel like someone trying to extract a tooth that does not wish to come out. I understand the constraints on him, but he will appreciate that those of us on the Opposition Benches are having a very difficult time and are only sorry that the PIU report came out so late, as recently as yesterday. We could have saved ourselves hours, not only in this debate, but in the debates on the social security Bill. If the noble Lord cannot give us guidance today, perhaps he can give some indication that he can be more constructive—within his brief; I appreciate the difficulty he finds himself in—before Third Reading. It would be greatly appreciated. I hope that he will be able to come back to me.
With that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 [Transfer to the Post Office company: tax]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 21:
Page 86, line 24, at end insert—
("Debt
. Any debt assumed by the Post Office company under section 74(1) shall be treated for the purposes of the Corporation Tax Acts as if it had been assumed wholly in consideration of a loan made to the company of an amount equal to the principal sum payable under the debt.").
On Question, amendment agreed to.
Clause 86 [Prohibition on affixing advertisements on certain letter boxes etc.]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 22 and 23:
Page 51, line 39, leave out (", receptacle or other facility") and insert ("or receptacle").
Page 51, line 45, leave out ("purposes of a universal service provider") and insert ("provision of any postal services in connection with the provision of a universal postal service or a part of such a service").
On Question, amendments agreed to.
Clause 87 [Prohibition on misleading descriptions]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 24, 25 and 26:
Page 52, line 9, after ("house") insert (", building, room, vehicle").
Page 52, line 22, after ("collect") insert (", receive, sort, deliver").
Page 52, line 25, after ("collecting") insert (", receiving, sorting, delivering").
On Question, amendments agreed to.
Schedule 5 [Acquisition of land]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 27:
Page 87, line 16, at end insert ("as a universal service provider").
The noble Lord said: My Lords, the group of minor drafting amendments of which this amendment is a part relates to the compulsory acquisition provisions in the schedule and other land issues in Schedule 6.
Amendments No. 27, 28, 29 and 37 clarify that a universal service provider's undertaking is limited to its undertaking as a universal service provider. The effect of the amendments is to ensure that references to a statutory undertaking or undertaker in other parts of the Bill, and in other relevant legislation, are construed correctly.
Amendments Nos. 32, 33, 34 and 35 are intended to clarify the meaning of "statutory undertakers" in paragraph 2(3) of Schedule 6 by expanding the references to the Town and Country Planning Act 1990 and the Town and Country Planning (Scotland) Act 1997.
Amendment No. 31 is intended to ensure that "appropriate Minister" in paragraph 2(4) of Schedule 6 reflects the transfer of responsibility to the National Assembly of Wales of water and sewerage undertakers. It is not correct to refer only to "Minister" in that subparagraph.
I wish to notify the House that the Government are considering tabling further amendments relating to land on Third Reading. They would cover two areas. The first relates to the status of land already owned by universal service providers in connection with the provision of the universal service. The second relates to a request from the Northern Ireland Assembly about the procedures to be followed when universal service providers wish to compulsorily purchase land in Northern Ireland. If the Government table such amendments I shall write to the Opposition Front Benches before Third Reading explaining their details. I shall also place a copy of my letter in the House Library. I beg to move.
Lord Skelmersdale: My Lords, it seems to be a feature of this Government that legislation is put before us ill prepared, and that over the course of its passage through both Houses more and more and more Government amendments are made. That is not a satisfactory way of legislating. If amendments on whatever subject—in this case land—have to be made late, Parliament as a whole is given an impossible task in carrying out its role of supervising the legislation.
If the noble Lord is to put down the amendments, I hope he will see to it that at least we have two days to see them in the flesh and consider them, because on Third Reading we are not allowed manuscript amendments, nor are we allowed the sort of situation, which I was surprised we were allowed this afternoon, that we had on Amendment No. 4A. That would be quite improper. If there were a mistake in any of those amendments, the Opposition would not be able to point it out to the Government. That would be absolutely wrong.
I hope that on this occasion at least, when we are dealing with a very small Bill, and not a particularly technical one although a certain amount of interest has naturally been shown in it during our debates, we shall have time to consider the amendments adequately.
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On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 28 and 29:
Page 87, line 25, at end insert ("as a universal service provider").
Page 87, line 39, at end insert ("as a universal service provider").
On Question, amendments agreed to.
Schedule 6 [Further provisions relating to land]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 30:
Page 93, line 28, at end insert—
("Power to place post-boxes etc in streets

.—(1) A universal service provider may, for any purpose in connection with the provision of a universal postal service, execute in a street works of any of the kinds mentioned in sub-paragraph (2).

(2) The kinds of works are—

(a) placing a universal postal service letter box or a universal postal service pouch-box in a street,

(b) inspecting, maintaining, adjusting, repairing, altering or renewing such apparatus which has been so placed, changing its position or removing it,

(c) works needed for, or incidental to, the purposes of any works falling within paragraph (a) or (b) (including, in particular, breaking up or opening a street).

(3) Accordingly, Part III of the New Roads and Street Works Act 1991 (street works in England and Wales), and the Street Works (Northern Ireland) Order 1995, apply in relation to undertakers' works in exercise of a power conferred by this paragraph.

(4) For the avoidance of doubt, references in Part III of the Act of 1991 or the Order of 1995 to apparatus shall he construed as including universal postal service letter boxes and universal postal service pouch-boxes.

(5) Subject to sub-paragraphs (6) and (7), sub-paragraph (1) authorises the universal service provider concerned to execute works of any of the kinds mentioned in sub-paragraph (2) without obtaining any consent which would otherwise be required to be given by the street authority in its capacity as such and, in the case of a maintainable highway, in its capacity as owner.

(6) Sub-paragraph (5) is without prejudice to—

(a) the provisions of Part III of the Act of 1991, or the provisions of the Order of 1995, as to the making of requirements by the street authority or as to the settlement of a plan and section and the execution of the works in accordance with them,

(b) section 61 of the Act of 1991 or Article 21 of the Order of 1995 (consent required for protected streets).

(7) Sub-paragraph (1) does not free the universal service provider concerned from obtaining any other consent, licence or permission which may be required.

(8) This paragraph binds the Crown.

(9) In this paragraph references to doing anything in a street shall be construed as including references to doing anything under, over, across, along or upon the street.

(10) In this paragraph—

"maintainable highway"—

(a) in England and Wales, has the same meaning as in Part III of the Act of 1991 and includes a street in respect of which a declaration has been made under section 87 of that Act (prospectively maintainable highways), and

1129

(b) in Northern Ireland, means a road (within the meaning of the Order of 1995) and includes a street in respect of which a declaration has been made under Article 46 of that Order (prospective roads),

"street" and "street authority"—

(a) in England and Wales, have the same meaning as in Part III of the Act of 1991, and

(b) in Northern Ireland, have the same meaning as in the Order of 1995, and

"universal postal service pouch-box" means any box or receptacle provided by a universal service provider for the temporary storage of postal packets in the course of transmission by post pending their collection for immediate delivery by a person who is in the course of delivering postal packets in connection with the provision of a universal postal service.

(11) In the application of this paragraph to Scotland—

(a) references to streets shall be construed as references to roads and references to street authority shall be construed as references to road works authority,

(b) "maintainable highway" means a public road within the meaning of Part IV of the Act of 1991 and includes a road in respect of which a declaration has been made under section 146 of that Act (prospective public roads),

(c) "road" and "road works authority" have the same meaning as in Part IV of the Act of 1991,

(d) in sub-paragraph (3) for the words from "Part III" to "apply" there shall be substituted "Part IV of the New Roads and Street Works Act 1991 (road works in Scotland) applies",

(e) in sub-paragraph (4) for the words from "Part III" to "1995" there shall be substituted "Part IV of the Act of 1991",

(f) in sub-paragraph (6)(a) for the words from "Part III" to "1995," there shall be substituted "Part IV of the Act of 1991", and

(g) in sub-paragraph (6)(b) for the words from "61" to "of 1995" there shall be substituted "120 of the Act of 1991".").

The noble Lord said: The legal authority for the installation of post boxes and postal-pouch boxes in the street is unclear in current legislation. The purpose of this technical amendment is to put universal service providers on the same basis as other statutory undertakers in relation to the New Roads and Street Works Act 1991 and to reduce the unnecessary administrative burden in installing postal apparatus. This is causing delays to the installation of postal pouch-boxes, which are important to ensure that letters are delivered on time. Pouch-boxes are secure receptacles from which post men and women collect additional mail sacks without returning to the delivery office, thereby enabling health and safety legislation to be observed while responding to increasing volumes of mail. The alternative would be to deliver sacks to post men and women by van, which would be environmentally undesirable. I beg to move.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 31 to 37:
Page 94, line 7, leave out second ("Minister") and insert ("person").
Page 94, line 9, leave out ("has the same meaning as in") and insert ("means any persons who, by virtue of").
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Page 94, line 10, at end insert ("are or are treated as statutory undertakers for the purposes of that Act or any provision of that Act.").
Page 94, line 18, leave out ("has the same meaning as in") and insert ("means any persons who, by virtue of").
Page 94, line 19, at end insert ("are or are treated as statutory undertakers for the purposes of that Act or any provision of that Act.").
Page 94, line 33, leave out from ("in") to ("the") and insert ("any other case").
Page 95, line 38, at end insert ("as a universal service provider").
On Question, amendments agreed to.
7 p.m.
Clause 103 [Subsidy for public post offices]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 38:
Page 61, line 46, at end insert—
("( ) Payments under a scheme under this section shall be made only following an independent assessment of whether such payments would create a competitive disadvantage between public post offices.").
The noble Baroness said: My Lords, this amendment is intended to probe government thinking on the subsidy clause. As it stands, the provision is extremely vague and short on detail. The amendment would ensure that before any subsidy was paid an independent assessment was made of the effect of the subsidy on competition between different sub-post offices, which we believe would be valuable. Obviously, there is a danger that subsidies will create a distortion in the market. For example, if the subsidy is paid to one sub-post office, what will be the effect on the next nearest sub-post office or village shop, which might not be a sub-post office but might sell products in competition with it?
Obviously, there is a real risk of creating artificial competitive distortions in the market. We were not particularly keen on subsidies and wanted more business. However, if there are to be subsidies we must ensure that they do not distort the market, which is the purpose of this simple amendment. I beg to move.
Lord Sainsbury of Turville: My Lords, this amendment has the effect of delaying payments under a scheme while an additional and unnecessary assessment is made of the effects of the payment on competition between postal operators. As with any government subsidy, competition and state aid rules would apply to the provision of any assistance through a scheme made under this clause. Any such scheme would, therefore, be subject to oversight by the relevant competition authorities in the UK and the European Commission.
The proposed amendment does not specify who might carry out an independent assessment of whether payments under a scheme would create a competitive disadvantage between public post offices; nor, for that matter, does it say from whom it should be independent. I find it difficult to envisage any persons or bodies more independent and well fitted to carry out

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such an assessment than the competition authorities. As I have said, it is implicit that any scheme is subject to competition and state aid rules.
The amendment is also technically deficient. First, it is concerned only with the assessment of the effect of payments on competition between public post offices. That would he a very narrow consideration—too narrow in our view. If a scheme is judged to be compliant with competition and state aid rules we expect it to be so in relation to all relevant markets, not simply for the purposes of competition between public post offices. The amendment is also deficient because, while it requires an independent assessment before payments can be made, it does not provide that payment cannot be made if the assessment is such that payments will create a competitive disadvantage between public post offices.
The Government are committed to fair and open markets and want to encourage competition. That is something on which I hope we can agree. We are also aware of the need to make provision to allow for the possibility of a scheme to support post offices, particularly those in rural and deprived urban areas. When we consider a scheme under these provisions we shall ensure that it complies with competition and state aid rules. Any scheme will also have to come before Parliament, itself an independent body, for approval by affirmative resolution. Therefore, there will be plenty of opportunity to comment on the merits or demerits of a specific scheme, including its effect on competition. Therefore, I ask the noble Baroness to withdraw her amendment.
Baroness Miller of Hendon: My Lords, I am amazed that I have moved so many deficient amendments in one afternoon and evening. I surprise myself. I believe that the noble Lord gave an undertaking—I shall read his response with care—that any subsidy would be subject to a test as to whether or not it hindered competition. If, having read the Minister's response carefully, I am not satisfied and must return to this matter I shall ensure that any amendment is not defective. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Byford Baroness Byford moved Amendment No. 39:
Page 61, line 46, at end insert—
("( ) A scheme under this section must provide for payments under the scheme to be made subject to conditions specified in or determined under the scheme enabling payments of any benefits to which section 5 of the Social Security Administration Act 1992 applies to be made at a public post office to which the scheme applies—

(a) in cash;

(b) in a manner which ensures the identification of the recipient; and

(c) to a designated proxy of the recipient.").

The noble Baroness said: My Lords, earlier today the noble Lord, Lord Dearing, used the expression "he who waits". I wonder whether this is my opportunity and that "she who waits" is appropriate. I fear not.
I return to subsidies for sub-post offices, the challenges that they face in the move to ACT and the pressure placed on sub-post offices to remain viable in future. I totally accept the confirmation by the noble Lord, Lord Sainsbury, and other Ministers that welfare benefit payments will be available in cash. However, what is not clear is who is to bear the cost of these transactions. We have been through the arguments already and I do not anticipate going through each of them again, which I am sure is a great relief to the Minister.
The noble Lord accepts that when books and giros disappear and are replaced by cards, or whatever it be, there will be a cost. When another place debated the Statement on the Post Office network the Secretary of State said that transaction costs were likely to be negotiated. For example, I understand that at the moment the cost of a pension transaction is 13p. We do not know what the cost or saving will be when the new system kicks in. If there is a saving who will get it, and how will it be paid? I hope that in tabling this amendment again I shall receive answers to some of those questions. In the same debate my right honourable friend Peter Lilley pressed the Minister to say,
"whether sub-post offices will receive the same amount or less per transaction than they currently receive from the Post Office? Will the same number of transactions or fewer transactions be made? If sub-post offices receive the same revenues, from where will the savings come that the Secretary of State anticipates? If they receive less revenue, will not post office closures accelerate in future?".—[Official Report. Commons, 28/6/00; col. 914.]
The response of the Minister in another place still leaves big question marks. I hope that this afternoon these questions can be answered.
In an earlier debate the Minister responded to a question from me about universal service provision. I forget the exact phraseology that I used. The Minister said that universal service provision did not cover welfare benefit payments. That sent shivers down my spine and caused me extreme worry. I hope that I have given a lifeline to the Minister to enable him to think about his earlier response. The noble Lord said that universal service provision concerned letters and had nothing to do with welfare benefit payments. The whole purpose of the Bill is to ensure that in future the Post Office remains viable and can do the kinds of things that we wish it to do. Until now one of its activities has been the payment of welfare benefits. At Committee stage I was also disturbed to hear the Minister suggest that perhaps other organisations might look at the question of payments. These two negatives give me great concern about the future of welfare benefit payments, and for that reason I have tabled these amendments again. The House would be greatly helped if the Minister could clarify the position.
At Committee stage the Minister gave the following response:
"There are two issues involved. One is the subsidy issue. I hope I have made clear that, if we have a subsidy scheme, it has not been decided who it would be. Therefore, there have been no discussions with various bodies. As there are alternative bodies, it might not be sensible at this point to say that it would be done through the commission".—[Official Report, 15/6/00, col. 1816.]
I became even more confused. In my innocence, I had assumed throughout the debates at both stages of the Child Support, Pensions and Social Security Bill and this Bill that it was the Government's intention that welfare benefits would continue to be paid through the post office. However, one receives misleading messages. For that reason, I have tabled this amendment again to try to clarify the intentions of the Government, particularly as to the future but also in relation to the cost implications. As I said earlier, I have not received answers to the questions that I put. I hope that my argument may tease from the Minister a more fulfilling response. I beg to move.
Lord Sainsbury of Turville: My Lords, the universal service provision is, and has been for generations, about the delivery of letters. It has nothing to do with the payment of welfare benefits through sub-post offices. That is not to say that we do not think the payment of welfare benefits through sub-post offices is extremely important. That is the way we see the process going. That is what the Statement yesterday was about. It is simply a matter of fact that the universal service provision is, and always has been, a requirement about the delivery of letters. We envisage welfare benefits continuing to be paid through sub-post offices. That is a quite separate matter. We think that right and we hope that it will continue in future.
The amount is 70p for a banking transaction from Post Office Counters Limited, and 13p for a benefit book transaction. The exact sums which sub-post offices will receive will be subject, as in the past, to negotiations between Post Office Counters Limited and the National Federation of Sub-Postmasters. We can give no guarantee as to the number of those transactions. That will depend, as always, on the number of users and customers who go to the post offices to receive those benefits. People may choose to go elsewhere. We cannot guarantee the number of those payments.
I would hope that Amendment No. 39, standing in the name of the noble Baroness, Lady Byford, will be withdrawn. The amendment is not appropriate in the light of the Government's announcement yesterday of the results of the PIU study. We have given clear undertakings that there will be financial assistance for post offices; and that benefits will be paid in cash at post offices now and in the future if benefit recipients choose that method.
I assure the noble Baroness, as I did the Committee, that designated proxies will still be recognised under any new arrangements introduced in future.
The amendment is based on the supposition that there will be a single scheme for the provision of financial assistance for public post offices. There may be more than one. This is over a long period. For example, we might want a separate scheme for the provision of IT facilities at post offices. I do not see why access to the Internet should become embroiled in the issue of benefit payments. We want the post office
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to be a point not only at which benefits can be collected, important as that is, but also a point of access for a range of government and other services.
I remind the House that the Bill is intended to last for a generation. Over that period of time there may be a number of schemes targeting different types of post offices or certain services which do not have any direct bearing on the question of benefits. This scheme would fetter unnecessarily this discretion within the Bill. Any scheme will have to come before Parliament for approval by affirmative resolution. There will be plenty of opportunity, therefore, to comment on the merits or demerits of a specific scheme.
7.15 p.m.
Baroness Byford: My Lords, I thank the Minister for his response. I am somewhat disappointed that he is unable to give fuller details on the financial implications as regards welfare benefits. I thank the noble Lord for his clarification of the 70p for a banking transaction and of the 13p to which I referred. The subject is of great concern to many people who receive benefits and to the sub-postmasters and sub-postmistresses whose livelihoods depend on such payments. As the noble Lord knows well, some 40 per cent of their income comes from those payments.
The noble Earl, Lord Russell—he is no longer in his place—pointed out that instead of saying, "You can have payment at the post office but you can choose another way", by informing people about the welfare benefit payments the Government tend to promote the fact that individuals can have ACT. We would prefer automatic payment through the post office with the ability to opt out if individuals wish to have ACT. That is where the Government take a different line from us.
At the end of the day, the issue involves individual choice. I am grateful for the Minister's comments about cash payments. I shall read Hansard carefully. I thank the noble Lord for his response. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 105 [Application of customs and excise enactments to certain postal packets]:
Baroness Miller of Hendon Baroness Miller of Hendon moved Amendment No. 40:
Page 63, line 43, at end insert—
("(6) The power to make regulations under this section shall be exercisable by statutory instrument.
(7) No regulations shall be made under this section unless—

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

(b) the draft regulations are approved by resolution of that House.").

The noble Baroness said: My Lords, in moving the amendment I speak also to Amendment No. 51 which is consequential.
When we last debated this clause in great detail I indicated to the Minister that I would return to the issue. Those who briefed me did not agree with the

1135
answer. I now put forward a further probing amendment which requires regulations under Clause 105 to be approved by the House of Commons, as they are a fiscal measure, before coming into effect and would require the Treasury in seeking that approval to confirm that the regulations would not distort competition in postal services.
I could speak again at length on the amendment but I think that it would be unwise. I know that the Minister is well aware of the concerns. We have been in correspondence. In its simplest form the amendment seeks to ensure that there is no undue advantage between Parcelforce and express couriers in their dealings with Customs and Excise when sending parcels abroad. The Minister has replied in a detailed letter addressing some of the questions I posed in Committee. His answer was faxed to my house and as I did not return home until 10.30 p.m. I did not have the opportunity to give the response the attention it undoubtedly deserves.
His argument centres around the fact that there are two totally different types of traffic: one by Parcelforce, and another by express couriers where time is the critical issue. On 16th June in a Question for Written Answer I asked the Minister to identify Parcelforce's traffic so that we can see how much it differs from those of the express couriers. I maintain that the two types of traffic are identical and, therefore, that all operations exporting parcels abroad should be treated in the same way by Customs and Excise. I have received an advertisement from Parcelforce which reinforces my view that it is the same kind of traffic. Tomorrow I shall post it to the Minister. I do not think that there is a distinction.
What has the Minister to say on that and other issues raised? I beg to move.
Lord Freeman: My Lords, I speak as the Honorary President of the British International Freight Association whose attention has been drawn to the issues raised by my noble friend Lady Miller of Hendon. I associate myself with her remarks which were of a probing nature. The issues are whether there is actually, and whether there is perceived to be, a distortion in competition. They can be resolved simply because if there is no distortion in competition, as the Government have argued, there can be no problems in ensuring that Parcelforce and the public sector abide by and are governed by exactly the same Customs and Excise regulations and new procedures as is the private sector.
One understands the reasons for the actions of Customs and Excise in introducing new electronic systems governing the import and export of express parcels of certain categories of freight. It saves staff needs and one does not necessarily argue with that. My argument and that of the association of which I am president—many of the companies in the association are small by comparison with the large international couriers—is that in this tough world the Post Office and Parcelforce are intent on entering, in the sense of developing greater commercial freedom and behaving
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like the private sector, they should be governed by exactly the same pressures and rules which apply to the private sector.
I have not had the opportunity of benefiting from the late-night fax which my noble friend Lady Miller received last night; nor have I had an opportunity to understand the Government's arguments or to discuss the matter with my noble friend. However, I look forward to the Minister's response in trying to allay the fears of members of my association.
Lord Sainsbury of Turville: My Lords, Clause 105 applies Customs legislation to postal packets. It re-enacts and updates the provisions contained in Section 16 of the Post Office Act 1953. It gives the Treasury, on the recommendation of the Secretary of State and the commissioners of Customs and Excise, the power to make regulations specifying how the legislation should apply. This power has been amended only in so far as it is necessary to reflect the changing market conditions by changing references to the Post Office to postal operator. It is intended only to maintain the powers that Customs and Excise currently enjoy and operate.
Two issues arise from the way in which the system is operated. The first is the requirement of further information. Customs are clear that the information called for will in no way exceed that provided at present and is the minimum required under EC agreements.
The provision prior to export of an eight-digit tariff code for consignments valued at more than £600 was a bone of contention, but it has now been agreed that a good plain language description of the goods will also be acceptable. Exports declared using the plain language description will not be disadvantaged.
The second issue relates to the question of whether there is unfair treatment. I do not believe that there is. Customs' treatment of the two types of traffic must be viewed in the round. For imports, the express carriers have been approved to use simplified procedures which allow them to clear their goods within one hour of arrival. Postal packages chargeable with duty would normally have to wait several hours to be cleared and at times as much as two or three days. Express carriers offer a time critical service at premium rates, whereas postal rates are lower and time of delivery less certain. Customs' treatment of these two types of traffic in part reflects the needs of the trade. Express carriers should appreciate that point.
I have examined the issue and believe that it is fair in the circumstances. However, I shall of course look at any material which the noble Baroness provides. On that basis, I ask her to withdraw her amendment.
Baroness Miller of Hendon: My Lords, the Minister deserves a better answer than the one I was able to give to his reply to my letter. I shall not pursue the matter now because I need to go back to those who brief me. They were clearly unhappy and, from a cursory glance, I do not believe that they will agree with the point the Minister made in his letter that competition between all is fair as regards Customs and Excise.

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I shall not waste any more of your Lordships' time on the amendment. I shall write to the Minister and send him the mailshot from the Post Office which indicates that it has a speedy service. I do not believe that it is a two-track service. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 107 [Conditions of transit of postal packets]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 41:
Page 64, line 39, at end insert—
("( ) The detention or disposal by a postal operator of any postal packet on the grounds of a contravention of section 85 or of any terms and conditions applicable to its transmission by post shall not exempt the sender from any proceedings which might have been taken if the packet had been delivered in due course of post.").
The noble Lord said: My Lords, Amendment No. 41 brings forward into the Bill a provision similar to that which currently exists in Section 11(4) of the Post Office Act 1953. It is intended to ensure that the detention or disposal of a postal packet, on the grounds of a contravention of Clause 85 of the Bill (which prohibits the sending of certain articles by post) or of any of the terms and conditions applicable to its transmission by post, does not exempt the sender from any proceedings which might have been taken if the postal packet had been delivered in the due course of post.
The amendment makes it clear that the fact that the postal packet does not reach its destination because it is detained or destroyed by a postal operator, as is permitted by Clause 107 where the postal operator knows or reasonably suspects the packet is being sent by post in contravention of Clause 85, should not prevent proceedings being brought. This applies to proceedings under this or other legislation. I beg to move.
On Question, amendment agreed to.
Clause 111 [Exclusion of liability in relation to postal and money orders]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 42 and 43:
Page 65, line 44, after first ("a") insert ("reasonable").
Page 66, line 1, after ("a") insert ("reasonable").
The noble Lord said: My Lords, Amendments Nos. 42 and 43 relate to the provisions in Clause 111, which covers postal and money orders.
Subsection (1) of the clause exempts the Post Office company from any proceedings if it refuses to pay or delays payment of a postal or money order. Following further consideration of this exemption, the Government have concluded that as currently drafted the exemption is too wide. We consider that it should apply only where the Post Office company has a reasonable excuse for refusing to pay or delaying the payment of a postal or money order. Such an excuse would be where there was a suspicion that the postal or money order was stolen. I beg to move.
On Question, amendments agreed to.
Clause 115 [Extension of existing powers relating to the Post Office]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 44:
Page 69, line 2, at end insert—
("(7) After section 74(4) of that Act there shall be inserted—
"(4A) For the purposes of this section equivalents in sterling shall be calculated as the Secretary of State considers appropriate." ").
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 45:
After Clause 117, insert the following new clause—
SUPPLEMENTARY PROVISIONS RELATING TO THE COUNCIL

(" .—(1) On such day as the Secretary of State may by order appoint ("the relevant day"), all the property, rights and liabilities to which the Post Office Users' National Council was entitled or subject immediately before that day shall become by virtue of this section property, rights and liabilities of the Council.

(2) An order made under subsection (1) may be varied or revoked by a subsequent order at any time before any property, rights or liabilities of the Post Office Users' National Council vest in the Council by virtue of this section.

(3) Paragraphs 1 and 7 of Schedule 3 apply for the purposes of this section as they apply for the purposes of section 62 with such modifications as are necessary (including the substitution for references to the Post Office and the Post Office company of references to the Post Office Users' National Council and the Council respectively).

(4) Where a person employed in the civil service of the state and seconded to the Post Office Users' National Council or a Country Council immediately before the relevant day becomes an employee of the Council on that day, his period of employment in the civil service of the state (including any part of that period spent otherwise than on secondment) counts as a period of employment with the Council for the purposes of the Employment Rights Act 1996 (and the change of employer does not affect the continuity of the period of employment for those purposes).

(5) Where a person who—

(a) is employed in the civil service of the state and is seconded to the Council, and

(b) immediately before his secondment to the Council was seconded to the Post Office Users' National Council or a Country Council,

becomes an employee of the Council, his period of employment in the civil service of the state (including any part of that period spent otherwise than on secondment) counts as a period of employment with the Council for the purposes of the Employment Rights Act 1996 (and the change of employer does not affect the continuity of the period of employment for those purposes).

(6) In this section "Country Council" means the Post Office Users' Council for Scotland, the Post Office Users' Council for Wales or the Post Office Users' Council for Northern Ireland.").

On Question, amendment agreed to.
Schedule 7 [Disclosure of information]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 46:
Page 95, line 43, after ("Act") insert ("(other than section 62 or (Supplementary provisions relating to the Council))").
On Question, amendment agreed to.
Clause 121 [Orders and regulations]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 47:
Page 71, line 6, after ("for") insert ("different cases or descriptions of case or for").
The noble Lord said: My Lords, the amendments in the group modify some of the provisions under which the Secretary of State may make orders in accordance with the Bill. The amendments are mainly technical adjustments to ensure that the powers can be exercised to best effect. In particular, many of the amendments in the group are aimed at ensuring that the use of the powers to make consequential amendments of existing legislation and to make arrangements for the commencement of the Bill can be effectively exercised. I beg to move.
Lord Skelmersdale: My Lords, this group of amendments comes almost at the end of the Marshalled List. I am concerned about Amendment No. 64 to Clause 126. It turns into a negative procedure order any positive amendment procedure order. There are other similar amendments. Orders under this Bill are almost entirely negative procedures and under other earlier Acts they are affirmative procedures. As I understand it, some of the amendments turn them to negative procedures.
I have not had time to study the matter in great detail. Therefore, I am a little unclear as to whether that is the effect of the amendments. If it is, I give notice that I shall return to the subject at Third Reading.
Lord Sainsbury of Turville: My Lords, I believe that the point which the noble Lord raises is that it is possible to put together negative and affirmative resolutions and take them together for convenience. If that is done, the specific and rather technical point is that it does not prejudice the ability to use the negative order in the future. I believe that that is the specific point to which the noble Lord refers. However, if I may take the matter away and consider it in detail, I shall write to the noble Lord.
Lord Skelmersdale: My Lords, as I was admittedly unclear on the matter, I believe that we had both better look at Hansard in the morning to decide what each of us said and whether we said the right thing.
On Question, amendment agreed to.
7.30 p.m.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 48 to 50:
Page 71, line 15, at end insert—
("( ) The power of the Secretary of State under paragraph A6(1) of Schedule 8 (including that power as extended by this section) may be exercised by modifying any enactment.").
Page 71, line 20, at end insert—
("( ) The power of the Secretary of State under section 102, 103, 126(1) or 127 (including that power as extended by this section) may be exercised so as to make provision for the delegation of functions.").
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Page 71, line 20, at end insert—
("( ) The fact that a power is conferred by this Act does not prejudice the extent of any other power so conferred.").
On Question, amendments agreed to.
[Amendment No. 51 not moved.]
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 52 to 56:
Page 71, line 23, after ("shall") insert (", if made without a draft of it having been laid before and approved by a resolution of each House of Parliament,").
Page 71, line 25, after second ("and") insert ("paragraph 1 (4A) of Schedule 3 (including that paragraph as applied by section (Supplementary provisions relating to the Council)(3)),").
Page 71, line 26, at end insert ("and paragraph A6(1) of Schedule 8").
Page 71, line 26, at end insert—
("( ) An instrument containing an order under any of the provisions mentioned in subsection (7) which revokes, amends or re-enacts an order under any of the provisions mentioned in that subsection may (in spite of section 14 of the Interpretation Act 1978) be subject to a different procedure under that subsection from the procedure to which the instrument containing the original order was subject.").
Page 71, line 29, at end insert—
("( ) In this section references to enactment include references to any instrument or other document.").
On Question, amendments agreed to.
Clause 124 [Interpretation]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 57 to 63:
Page 72, line 19, leave out from ("enactment") to ("whenever") in line 20.
Page 72, line 42, leave out ("purposes of a postal operator") and insert ("provision of any postal services").
Page 72, line 47, leave out ("postal services") and insert ("the service of conveying postal packets from one place to another by post or any of the incidental services of receiving, collecting, sorting and delivering such packets").
Page 73, line 6, leave out ("such services") and insert ("any of those services and is provided in conjunction with any of them").
Page 73, line 8, leave out ("Communities") and insert ("Union").
Page 73, line 15, after ("a") insert ("postal").
Page 73, line 16, after ("packets") insert ("in connection with their transmission by post").
On Question, amendments agreed to.
Clause 126 [General amendments and repeals]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 64:
Page 75, line 11, leave out from ("such") to end of line 13 and insert ("supplementary, incidental or consequential provision he considers necessary or expedient for the general purposes, or any particular purpose, of this Act or in consequence of any provision made by or under this Act or for giving full effect to this Act or any such provision.
(1A) The power conferred by subsection (1) (including that power as extended by section 121) may, in particular, be exercised by modifying any enactment, instrument or other document.
(1B) No other provision of this Act restricts the power conferred by subsection (1).").
On Question, amendment agreed to.
Schedule 8 [Amendments of enactments]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 65:
Page 98, line 25, at end insert—
("PART I
GENERAL AMENDMENTS
A1.—(1) Any enactment which requires or authorises a document or other thing to be sent by post (whether or not it makes any other provision in that respect) shall not be construed as limited to requiring or (as the case may be) authorising that thing to be sent by the postal system of the Post Office company.
(2) Any enactment which makes any other provision in relation to the sending of a document or other thing by post or to a thing so sent shall not be construed as limited to the sending of that thing by the postal system of the Post Office company or (as the case may be) to a thing sent by that system.
A2.—(l) Any enactment which requires or authorises a document or other thing to be sent by registered post (whether or not it makes any other provision in that respect) shall be construed as if it required or (as the case may be) authorised that thing to be sent by a registered post service.
(2) Any enactment which makes any other provision in relation to the sending of a document or other thing by registered post or to a thing so sent shall be construed as if it made corresponding provision in relation to the sending of that thing by a registered post service or (as the case may be) to a thing sent by such a service.
A3.—(1) Any enactment which requires or authorises a document or other thing to be sent by recorded delivery (whether or not it makes any other provision in that respect) shall be construed as if it required or (as the case may be) authorised that thing to be sent by a postal service which provides for the delivery of the document or other thing by post to he recorded.
(2) Any enactment which makes any other provision in relation to the sending of a document or other thing by recorded delivery or to a thing so sent shall be construed as if it made corresponding provision in relation to the sending of that thing by a postal service which provides for the delivery of the document or other thing by post to be recorded or (as the case may be) to a thing sent by such a service.
A4.—(1) Any enactment which requires or authorises a document or other thing to be sent by first class post (whether or not it makes any other provision in that respect) shall be construed as if it required or (as the case may be) authorised that thing to be sent by a postal service which seeks to deliver such documents or other things by post no later than the next working day in all or the majority of cases.
(2) Any enactment which makes any other provision in relation to the sending of a document or other thing by first class post or to a thing so sent shall be construed as if it made corresponding provision in relation to the sending of that thing by a postal service which seeks to deliver such documents or other things by post no later than the next working day in all or the majority of cases or (as the case may be) to a thing sent by such a service.
A5.—(1) Any reference (however worded and including references which are to be construed as such references) in a related enactment to the post or to a thing sent by post shall not be construed as limited to the postal system of the Post Office company or (as the case may be) to a thing sent by that system.
(2) In sub-paragraph (1) "related enactment" means—

(a) any enactment the provisions of which apply to, or operate in consequence of the operation of, any enactment to which paragraph Al applies, or

(b) any enactment relating to the sending of documents or other things otherwise than by post or to documents or other things so sent.

(3) Any reference (however worded and including references which are to be construed as such references) in a related enactment to the registered post, the recorded delivery service or the first class post, or to a letter or other postal packet sent by that service or post, shall be construed as references (as the case may be) to a registered post service, a postal service which provides for the delivery of the document or other thing by post to be recorded or a postal service which seeks to deliver such documents or other things by post no later than the next working day in all or the majority of cases, or to a letter or other postal packet sent by such a service or post.
(4) In sub-paragraph (3) "related enactment" means—

(a) any enactment the provisions of which apply to, or operate in consequence of the operation of, any enactment to which paragraph A2, A3 or (as the case may be) A4 applies,

(b) any enactment relating to the sending of documents or other things otherwise than by registered post, recorded delivery or (as the case may be) first class post or to documents or other things so sent.

(5) Any reference (however worded and including references which are to be construed as such references) in a related enactment to—

(a) a Post Office receipt for a registered or recorded letter or other postal packet.

(b) an acknowledgement by the Post Office of delivery of such a letter or packet, or a certificate by the Post Office of such delivery,

shall be construed as a reference to a receipt of, or an acknowledgement or certificate by, the postal operator concerned.
(6) In sub-paragraph (5) "related enactment" means—

(a) any enactment (other than a future enactment) the provisions of which apply to, or operate in consequence of the operation of, any enactment to which paragraph A2 or (as the case may be) A3 applies,

(b) any enactment (other than a future enactment) relating to the sending of documents or other things otherwise than by registered post or recorded delivery or to documents or other things so sent.

(7) This paragraph is without prejudice to the generality of paragraphs A1 to A4.
A6.—(1) The Secretary of State may by order provide for any provision of paragraphs A1 to AS not to apply, or to apply with modifications, in such cases or descriptions of case as he considers appropriate.
(2) Paragraphs A1 to A5 do not apply in relation to future enactments if the context otherwise requires.
(3) Paragraphs A1 to A5 are subject to any provision made by or under this Act.
A7.—(1) In this Part of this Schedule, "future enactment" means any enactment passed or made after the passing of this Act other than—

(a) any enactment made before the commencement of this sub-paragraph and comprised in subordinate legislation made under an enactment passed or made before the passing of this Act, and

(b) any Act passed in the same session as this Act or any enactment comprised in subordinate legislation made under such an Act before the commencement of this sub-paragraph.

(2) In this Part of this Schedule—

(a) references to sending a document or other thing include references to serving, executing, giving or delivering it or doing any similar thing,

(b) references to sending any thing by registered post include references to sending it by or in a registered letter or other postal packet (whether the references are expressed in those terms or terms having a similar effect and whether there is any mention of the post or prepayment),

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(c) references to sending any thing by recorded delivery include references to sending it by or in a recorded letter or other postal packet (whether the references are expressed in those terms or terms having a similar effect and whether there is any mention of the post or prepayment),

(d) references to any thing sent by registered post or the recorded delivery service shall be construed accordingly.

PART II OTHER AMENDMENTS").
The noble Lord said: My Lords, in moving Amendment No. 65, I shall speak also to Amendments Nos. 66, 68 to 72, 74 and 75. This group of amendments relates to modifications and repeals of existing enactments.
The effect of Amendment No. 65 is to gloss the interpretation of standard postal terms contained in legislation. The amendment deals specifically with the considerable number of references in legislation to the expressions "by post", "registered post", "recorded delivery" and "first-class post". The Bill creates a new postal regime and the meaning of those terms will be superseded. For example, as the provisions of the Bill will allow for there to be more than one provider of a universal postal service, it is not appropriate for "by post" to be limited to requiring or authorising a document to be sent by the Post Office postal system. Therefore, by virtue of the amendment, such references are not to be construed as being so limited.
In addition, the Bill contains a new definition of "registered postal service"; "recorded delivery" is no longer the name of the Post Office signature service; and, in future, universal service providers may not provide a service called "first class". The general glosses in this amendment are meant to deal with those generic terms and provide standard definitions.
I apologise for inserting such a substantial amendment into the Bill on Report. I do not believe that it is controversial and its insertion will significantly reduce the number of consequential amendments that will need to be made under the power in Clause 126.
Amendments Nos. 66, 68 and 69 make modifications to the Post Office Act 1969, the Mental Health Act 1983 and the Insolvency Act 1986, again to reflect the new postal regime established by the Bill.
Amendment No. 70 is a technical consequential amendment to bring the term of reservation for "post" in the Northern Ireland Act 1998 up to date with the provisions in the Bill. The terms of reservation in Schedule 3 to the Northern Ireland Act define the areas in which the Northern Ireland Assembly cannot legislate without express permission from the Secretary of State for Northern Ireland. A term of reservation for postal matters already exists, but it will not make sense in the post-Bill world as it refers expressly to "the Post Office". Therefore, we have amended it.
The amended term of reservation is aimed primarily at capturing the regulation of postal services, the transformation of the Post Office, the activities of the commission and the council, and the activities of
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postal operators that come within the scope of the Bill. It is not designed to encompass all the activities of postal operators, nor all the activities of the Post Office company. The exception ensures that the devolved administration can legislate to provide financial assistance for the provision of services through public post offices other than postal services or postal or money orders.
Amendments Nos. 71, 72, 74 and 75 repeal provisions in the existing Post Office legislation and the Mental Health Act 1983 that are either spent or superseded by the provisions in the Bill. I beg to move.
Lord Skelmersdale: My Lords, clearly, as the Bill introduces competition into postal services, it is absolutely right to ensure that any competitor is covered. However, I rise to make the point that, when I spoke to the previous group of amendments, I referred to Amendment No. 64 but I was actually talking about Amendment No. 55. Therefore, when the noble Lord looks at Hansard, as shall I, perhaps he can translate "64" into "55" and make life very much easier for both of us.
On Question, amendment agreed to.
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 66 to 70:
Page 98, line 39, at end insert—
("Post Office Act 1969 (c.48)
In section 135(1) of the Post Office Act 1969 (remuneration of Post Office for issuing game licences in England and Wales) for "the Post Office", where it appears for the first, second and third time, there shall be substituted "the Post Office company".").
Page 99, line 8, at end insert—
("Superannuation Act 1972 (c.11)
. In Schedule 1 to the Superannuation Act 1972 (kinds of employment in relation to which pension schemes may be made), in the list of "Other Bodies", there shall he inserted at the appropriate place—
The Consumer Council for Postal Services." ").
Page 100, line 17, at end insert—
("Mental Health Act 1983 (c.20)
.—(1) Section 134 of the Mental Health Act 1983 (correspondence of patients) shall be amended as follows.
(2) In subsection (1) for "the Post Office" there shall be substituted "the postal operator concerned".
(3) In subsection (9)—

(a) after "this Act" there shall be inserted "and "postal operator" and",

(b) for "has", where it appears for the second time, there shall be substituted "have", and

(c) for "the Post Office Act 1953" there shall be substituted "the Postal Services Act 2000".").

Page100, line 17, at end insert—
("Insolvency Act 1986 (c.45)
In section 371(1) of the Insolvency Act 1986 (re-direction of bankrupt's letters etc.)—

(a) for "the Post Office" there shall he substituted "a postal operator (within the meaning of the Postal Services Act 2000)",

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(b) for "the Post Office Act 1953" there shall be substituted "that Act"), and

(c) for "them" there shall be substituted "the operator concerned".").

Page 101, line 22, at end insert—

Northern Ireland Act 1998 (c.47)
For paragraph 7 of Schedule 3 to the Northern Ireland Act 1998 (reservation for the Post Office etc.) there shall be substituted—
"7. The subject-matter of the Postal Services Act 2000.
This paragraph does not include financial assistance for the provision of services (other than postal services and services relating to postal or money orders) to be provided from public post offices.
In this paragraph "postal services" and "public post offices" have the same meanings as in the Postal Services Act 2000." ").
On Question, amendments agreed to.
Schedule 9 [Repeals and revocations]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 71 to 75:
Page 102, line 19, column 3, at end insert—
("In section 135, subsection (1)(b) and the word immediately preceding it and subsections (2) and (3).").
Page 102, line 20, column 3, at end insert—

("In Schedule 4, paragraph 21.").

Page 102, line 21, at end insert—

("1970 c. 44.

Chronically Sick and Disabled Persons Act 1970.

In section 14, in subsection (1), the words ", the Post Office Users' Councils" and subsection (2).")

Page 102, line 38, column 3, leave out ("Section") and insert ("to").

Page 102, line 44, at end insert—

("1983 c. 20.

Mental Health Act 1983

In section 134(9), the words from "and the provisions" to the end.")

On Question, amendments agreed to.
Clause 127 [Modifications of local enactments etc.]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 76:
Page 75, line 22, leave out from ("such") to end of line 24 and insert ("supplementary, incidental or consequential provision in relation to local enactments as he considers necessary or expedient for the general purposes, or any particular purpose, of this Act or in consequence of any provision made by or under this Act or for giving full effect to this Act or any such provision.
( ) The power conferred by subsection (1) (including that power as extended by section 121) may, in particular, be exercised by modifying any local enactment or any instrument or other document which is not an Act.
( ) No other provision of this Act restricts the power conferred by subsection (1).").
On Question, amendment agreed to.
Clause 129 [Commencement]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendments Nos. 77 and 78:
Page 75, line 37, leave out ("and") and insert ("to")
Page 75, line 40, at end insert ("or different areas").
On Question, amendments agreed to.
Clause 130 [Short title and extent]:
Lord Sainsbury of Turville Lord Sainsbury of Turville moved Amendment No. 79:
Page 76, line 5, after (" 126(1)") insert ("to (1B)").
On Question, amendment agreed to.

Fur Farming (Prohibition) Bill
Brought from the Commons; read a first time, and to be printed.

Scotland Act 1998 (Modifications of Schedule 4) Order 2000
7.37 p.m.
Baroness Ramsay of Cartvale Baroness Ramsay of Cartvale rose to move, That the draft order laid before the House on 25th May be approved [21st Report from the Joint Committee].
The noble Baroness said: My Lords, this debate concerns the draft Scotland Act 1998 (Modifications of Schedule 4) Order 2000. Like most Scotland Act orders which have come before this House since last summer, this one is primarily a tidying exercise.
The context of the order is that Schedule 4 to the Scotland Act forms part of the definition of the legislative competence of the Scottish Parliament. It places restrictions on the extent to which certain legislation, including the Scotland Act itself, can be modified by the Scottish Parliament.
Section 30 of the Scotland Act provides a mechanism whereby Schedule 4 can be modified by an Order in Council, subject to the approval of both the UK and Scottish Parliaments. That allows the boundary of legislative competence to be adjusted or clarified.
The purpose of the order is to clarify the boundary in respect of two matters: pensions and the Scottish Consolidated Fund. When the Scotland Act was drafted, the concept of pension sharing had not developed sufficiently to enable the Act to deal with it fully. The position is now settled following the passing of the Welfare Reform and Pensions Act 1999. As a consequence, it has now become necessary to amend Schedule 4 to the Scotland Act to bring it into line.
General pensions law and, in particular, the law which deals with the sharing of rights under pension arrangements on divorce are reserved matters. Nothing in the order changes the extent of the reservation which is set out in Schedule 5 to the Scotland Act. This order is concerned with the complex rules in Schedule 4 which determine the extent to which the Scottish Parliament can amend rules of Scots private law even though they relate to reserved matters. Paragraph 2(1) states that an Act of the Scottish Parliament cannot amend the "law on reserved matters". That includes the aspects of pensions law reserved by Schedule 5. Sub-paragraph (3) relaxes this restriction for rules of Scots private law. Together with Section 29(4), this allows the Parliament to modify Scots private law as it applies to

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reserved matters, as long as the purpose of the provision is to make the law in question apply consistently to reserved and non-reserved areas.
However, certain rules of Scots private law are protected from amendment if they are
"special to a reserved matter"
or are listed in sub-paragraph (3). The order extends the list of protected provisions of Scots private law to include pensions obligations introduced by the 1999 Act.
Following the chain of exceptions to exceptions, the inclusion of the new entries to Schedule 4 ensures that no modification to these rules of Scots private law can be made by the Scottish Parliament. In practical terms, we do not expect the amendments made by this order to have any great effect. They do not change pensions law or Scots private law. Nor is it likely that the Scottish Parliament would wish to legislate in this area, which is already pretty well the preserve of the UK Parliament.
Schedule 4 was intended to cover pension sharing on divorce. The order simply ensures that its terms fit with the Welfare Reform and Pensions Act 1999, now that the concept has been firmed up.
The second aspect of the order relates to the Scottish consolidated fund. Under Schedule 4(4) of the Scotland Act 1998, the Scottish Parliament cannot in general amend the Scotland Act. That is hardly a great surprise. However, it was recognised that there are some aspects of the Scotland Act that it makes sense to allow the Scottish Parliament to amend, so provision is made for this restriction to be relaxed in specified instances.
One instance is to allow the Scottish Parliament to modify some of the references to the Scottish consolidated fund. The purpose is to add one further type of provision to the areas that the Scottish Parliament may legislate to amend in the 1998 Act.
At present, and subject to certain exceptions, the Parliament can legislate to amend provisions in the Act that
"charge sums on the fund"
or
"require sums to be paid from or to the fund".
However, the Scottish Parliament cannot at present legislate to make amendments to the provisions of the Scotland Act that provide for expenditure to be "payable out of" the Scottish consolidated fund.
There are two provisions in the 1998 Act that provide for sums to be "payable out of" the Scottish consolidated fund, which the Scottish Parliament cannot amend. The first is Section 21(6), which provides that any expenses of the Scottish parliamentary corporate body shall be payable out of the fund. The second is Section 51(5), which, in effect, provides that the salaries and allowances of the Scottish Administration civil servants are payable out of the fund.
Some noble Lords may ask what the distinction is between sums "payable out of" and sums "charged on" the Scottish consolidated fund. The answer is that "charged on" means that money has to be paid out of the fund without any further approval, whereas "payable out of" means that money can be paid out of the fund only if the Scottish Parliament specifically agrees the expenditure, normally by its inclusion in a budget Act.
The upshot of all this is that under the current legislation, the Scottish Parliament cannot legislate to put in place alternative arrangements, such as having some part of the Administration staff or of the affairs of the Scottish Parliament corporate body funded directly from the proceeds of trading.
It was never intended that those parts of the Scotland Act should be put beyond the reach of the Scottish Parliament. The order will allow the Scottish Parliament to amend them if it wishes. This is purely a tidying exercise. There are no plans for the use of the new power, but the order will allow the Scottish Parliament greater flexibility for the future. As I said at the outset, this order is concerned more with good housekeeping than with constitutional policy. On that basis, I hope that noble Lords will feel able to support it.
Moved, That the draft order laid before the House on 25th May be approved [21st Report from the Joint Committee].—(Baroness Ramsay of Cart vale.)
7.44 p.m.
The Earl of Mar and Kellie: My Lords, I believe that this is the ninth time that we have been asked to approve a Scotland Act order. That is not a complaint.
The order makes two clarifying amendments, which it is not difficult to approve. It is right that any modification of the significant Schedule 4 should require the so-called type A procedure of approval by both Houses of the United Kingdom Parliament and by the Scottish Parliament, but that highest level of scrutiny is here being applied to clarifications of two substantive elements of the schedule, rather than to substantive modifications.
I certainly approve of last year's extension of pension sharing on divorce into the law of Scotland and I understand the logic of expanding paragraph 2(3)(b) by two extra sentences to make it clear that the new elements of Scots law are reserved to the United Kingdom Parliament.
Similarly, Article 3 makes a slight increase in the powers of the Scottish Parliament. No one will be surprised to hear that I instantly approve of any such proposal. In this case, we are being asked to approve the opportunity for the Parliament to legislate changes to the way in which money may be paid out of the Scottish consolidated fund. It is curious that that modification is being proposed at this time, when the Scottish Executive has no plans to implement those soon to be acquired powers. However, that lack of pressing need suggests that the modification is pure in intent and is not being brought forward out of expediency.

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I have three quick observations to make about the Scottish devolutionary process and its relationship to this House. First, this House is not serving itself well in its legislative work for Scotland by the lack of awareness and availability of the Bills and Acts of the Scottish Parliament. I acknowledge that this is a new phenomenon, but we should be more familiar with what the Scottish Parliament is doing and how that may merge with legislation in Westminster. Perhaps the existence of the Parliament in Northern Ireland between 1922 and 1972 is a precedent.
Secondly, this House should be made aware at least of Royal Assent being granted to an Act of the Scottish Parliament. I believe that there have been eight so far. Thirdly, I want to complain about the minimalist explanatory note attached to the draft order. Comprising four sentences, it compares unfavourably with the four pages issued to Members of the Scottish Parliament by the Scottish Executive. My honourable friend Sir Robert Smith also raised that issue when the draft order was before the First Standing Committee on Delegated Legislation.
This Parliament must work hard to become the new Union Parliament and, in so doing, re-find its place in the evolving nature of the British Union.
7.48 p.m.
Lord Mackay of Ardbrecknish: My Lords, the noble Baroness, Lady Ramsay of Cartvale, will be pleased to hear that I do not have much to say about the order. It is important that we are given an opportunity to study the orders arising from the Scotland Act through the affirmative resolution procedure. I am not sure whether the noble Earl, Lord Mar and Kellie, was complaining about that. I have taken advice from people who understand these matters and they seem to be satisfied that it was sensible.
I have a small interest in pension splitting on divorce, because I was responsible for the Green Paper and the subsequent White Paper that set the process in train. I am perfectly happy with the order. It would not have been sensible for Scotland to be left out on a limb. I hope that I do not embarrass the noble Baroness by saying that she has my support on the order.
Baroness Ramsay of Cartvale: My Lords, it is with great delight that I receive the support of both the noble Lord, Lord Mackay of Ardbrecknish and the noble Earl, Lord Mar and Kellie. I very much appreciate their welcome of this measure which, as I have said, is very much a tidying up exercise.
On Question, Motion agreed to.

Northern Ireland Act 2000 (Restoration of Devolved Government) Order 2000
7. 49 p.m.
Lord Falconer of Thoroton rose Lord Falconer of Thoroton rose to move that the draft order laid before the House on 5th June be approved [21st Report from the Joint Committed].
The noble and learned Lord said: My Lords, in moving this order I shall also speak to the second order standing in my name on the Order Paper. These orders were laid before the House on 5th June. Both orders cease to have effect if they are not approved by resolution of each House of Parliament within 40 days of their being laid. I am seeking the approval of this House today. Approval was sought and granted in another place last week.
Under powers conferred by Section 2(2) of the Northern Ireland Act 2000, the Northern Ireland Act 2000 (Restoration of Devolved Government) Order 2000 repeals Section 1 of the 2000 Act, thereby lifting the suspension of the operation of the devolved institutions.
Almost exactly one month ago, on 29th May, my right honourable friend the Secretary of State for Northern Ireland signed the restoration order which returned devolution to Northern Ireland, bringing about the end of the period of suspension. From midnight the members of the Northern Ireland Executive Committee automatically resumed their posts. Salaries and allowances were returned to their pre-suspension levels and all of the committees of the Assembly were once again able to meet.
The first plenary meeting of the Assembly was held the following week. These early meetings have shown that members are keen to get down to business, dealing with the real bread and butter issues which affect everyone in Northern Ireland including economic, social and regional development, health and education. The brief period of suspension has done nothing to diminish their energy or enthusiasm or their commitment to work diligently for the good of the people of Northern Ireland. I am sure that this House will join me in wishing them every success, both now and in the future, in building the future prosperity of Northern Ireland for the good of all of its people.
The second order before this House, the Northern Ireland Act 2000 (Modification) Order 2000, has been made by the Secretary of State to ensure that actions taken by him under powers granted to him during suspension by the Northern Ireland Act 2000, cannot be annulled or revoked by the Assembly. These actions would include, for example, the Secretary of State's determination to reduce salaries and allowances for the duration of the suspension period.
I by no means wish to suggest that Assembly members would have contemplated retrospectively awarding themselves full salaries and allowances for that period. However, it would be seriously remiss of any government not cover all eventualities in this way, under the law.
The modification order also ensures that orders in council made by the Secretary of State under the schedule to the 2000 Act during suspension are not affected by restoration. This ensures that the Flags (Northern Ireland) Order 2000 cannot be revised or annulled by the Assembly.
As noble Lords will no doubt keenly remember, this House approved the Northern Ireland Act 1998 (Appointed Day) Order 1999 in November of last year, bringing devolved government to Northern Ireland for the first time in almost 30 years.
It was a momentous occasion; namely, the return of power to the people of Northern Ireland. We all hoped and prayed that Northern Ireland was finally entering a new era of democratic and locally accountable devolved government, where disputes were aired in the debating chamber and not on the streets. But it was not to be, at least not yet. However, I do not believe that the optimism we felt at that time was misplaced.
We had come a very long way and the sight of historically opposed parties facing each other for the first time both across the Assembly chamber and across the Executive Committee table only served to underscore this. Indeed, the Assembly and Executive Committee quickly settled down to the serious business of government and showed early on that they were prepared to work together for the good of the community as a whole.
Devolution proved not only to be popular but also to be effective. It was consequently hugely disappointing for everyone to see the devolved institutions suspended so soon. My right honourable friend the Secretary of State in another place stressed from the outset that the suspension of the institutions was a temporary measure only, designed to save them from a collapse which would have been far more damaging. He made clear that the Government's unswerving commitment would be to work to bring about the restoration of the institutions at the earliest possible opportunity and on a lasting basis and to tackle head on those issues which had led to the decline in confidence and consequent suspension in the first place. I am delighted to be before noble Lords today with these two orders to help this commitment to become a reality.
I believe that we have succeeded in returning confidence that devolution is here to stay and that we can move forward in implementing all the other aspects of the Good Friday Agreement. Many people have worked tirelessly to bring this about. The Northern Ireland political parties and the two governments put in enormous time and effort to reach agreement on the way forward.
The personal involvement of the Taoiseach and my right honourable friend the Prime Minister demonstrated the importance that we and the Irish Government attach to securing the best outcome for the people of Northern Ireland. The Irish Government worked closely with us at every level throughout this process. Their commitment to the Good Friday Agreement and to implementing that political settlement is beyond doubt. Their contribution has been invaluable.
The determination of the pro-agreement parties to fulfil their commitments under the Good Friday Agreement has also been crucial in bringing about the right circumstances for the restoration of devolution. Throughout the process the pro-agreement parties maintained their commitment to forging a better future for Northern Ireland, to removing the guns from politics and establishing a lasting and peaceful political settlement for the people of Northern Ireland.
The commitment made by the IRA in its statement of 6th May to put its arms completely and verifiably beyond use was undoubtedly significant, as was the signalling of their good intent in offering an early confidence building measure. The House will be aware that this commitment to initiating confidence building has now been honoured.
On Sunday, President Ahtisaari and Cyril Ramaphosa, appointed by the two governments as independent inspectors, reported to the Decommissioning Commission that they had successfully completed the initial inspection of several weapons dumps. They confirmed that they were shown a substantial quantity of IRA arms and explosives and they were able to verify that these weapons were safely stored and could not be used without their detection. I will repeat just one short significant quote from their report. It is that the confidence-building measure is,
"a genuine effort by the IRA to advance the peace process".
Cyril Ramaphosa and President Ahtisaari are wholly independent and highly respected. Their reputation is such that we cannot fail to recognise the significance of this statement and take great encouragement from it. That said, I do not pretend that this is the end of the process. The confidence-building measure is no substitute for decommissioning. The IRA has promised to initiate a process of putting IRA weapons completely and verifiably beyond use and as a start to the decommissioning process it has now re-engaged with the Decommissioning Commission.
The signs are good. These first steps are encouraging and significant. However, we cannot afford to become complacent. The removal of all arms and explosives from Northern Ireland for good is of paramount importance to this Government and will remain so. Nevertheless, it is clear that we now have words and deeds to illustrate the IRA's commitment to peaceful means and to putting their arms beyond use. In turn, the two governments have made a commitment that the agreement will be implemented in full and we are moving as fast as we can to achieve that.
The draft orders before the House today represent a triumph of democratic politics over the politics of fear, violence and intimidation. But there will be more hard work ahead. Of course there will be arguments and disputes between the parties in the Assembly but that is the stuff of politics. A debating chamber or committee room, as this House knows, is precisely the place where such disputes should take place.
More seriously, just last week we had further evidence of the continuing threat from dissident Republican terrorists. The UFF statement showed that at least one of the loyalist ceasefires cannot be taken for

1153
granted, and we are already experiencing a rise in tension as the marching season begins. Members of the House will agree with me that violence, from either side, will achieve nothing: only politics works.
The Good Friday Agreement and devolution have shown that it is possible for all shades of political opinion to work together to forge a better future for all of the people of Northern Ireland. Political leaders in Northern Ireland are committed to this, and so is the Government. That is why these orders are important.
Restoration of the devolved institutions promises a lasting political settlement for Northern Ireland based on the principles set out in the Good Friday Agreement; consent, equality and parity of esteem. I commend these orders to the House.
Moved, That the draft order laid before the House on 5th June be approved [21st Report from the Joint Committee].—(Lord Falconer of Thoroton.)
Lord Smith of Clifton: My Lords, as regards the first order, it is most welcome: the second is most prudent. I associate myself with all the remarks that the Minister expressed.
8 p.m.
Baroness Park of Monmouth: My Lords, I shall save my fire for the Second Reading of the Police (Northern Ireland) Bill, but I have three points to raise now. When we come to Second Reading I would like an explanation of the statement made by the two special representatives whom the Minister has mentioned. They said that they had ensured that weapons and explosives could not be used without their detection. Who are "they", the inspectors or the IRA? If they are the former, how could they ensure that? Did they place devices? No doubt, we shall be told that those are deeply secret matters, to be revealed only, if at all, to the de Chastelain commission.
As I know of no evidence that either of the inspectors has any military experience, it is not unreasonable to inquire how they—if "they" means the inspectors— were able to assess the quality and state of the arms, and yet more impressive, to ensure that they cannot be used without detection. If "they" means the Provisional IRA, I am less reassured. Presumably, Mr Galvin, who has recently addressed a dissident splinter group of the IRA in Northern Ireland, and his audience will not be able mysteriously to acquire some of the IRA's remaining dumps, the ones that the inspectors did not see.
I have two other points. The first is to establish whether it is explicitly accepted that after this "confidence building measure", which I nevertheless welcome, we cannot expect the IRA to proceed with any actual decommissioning until Her Majesty's Government have delivered the Police (Northern Ireland) Bill and withdrawn a substantial further number of troops. It would be nice to know whether there is an implicit, underlying understanding of that sort.
1154
Even the Patten report, in theory, accepted that the implementation of its salient recommendations, in the Belfast agreement, was intended to take place only when the security situation had changed significantly and that it was intended to regulate policing in a peaceful society. I hope that that will be remembered when we come to be asked to implement the Bill, although I recognise that naturally the legislation has to be agreed. However, timing is a separate issue.
Well before then, I hope that we shall have been told what is the Government's notion of generous severance pay. The exchange earlier today on the issue of pensions and compensation did not encourage me. If there is to be a fresh start, surely it should be on the basis of a generous and fair settlement of the debts of the past. Not a few of the RUC officers who were murdered were very young men—perhaps 24 or 26 years-old. They had had no time to build up a serious pension. Their wives and children live on to a life of poverty and trauma, as do many of the disabled who survived. I hope that the Treasury is making provision for a proper settlement and that it will not conclude that nothing can be done because it has not been included in the spending round.
Meanwhile, I am glad that the Assembly is back at work. The Secretary of State was absolutely right to suspend it when he did. I also believe that we should not have seen the IRA make the gestures that it has made without his firm readiness to call their bluff.
Lord Glentoran: My Lords, I thank the Minister for bringing these orders before the House. It is worth reflecting that when David Trimble took the courageous decision last November to enter the Northern Ireland Executive, and to sit in government with Sinn Fein, he did so on the clear understanding that decommissioning would soon follow. He made it clear at the time that without decommissioning it would be impossible to sustain the Executive beyond February.
Regrettably, decommissioning did not follow. As General de Chastelain's report said, not only had no decommissioning taken place by the end of January, but there was no prospect of any taking place in the near future, despite the clear commitment in the Belfast agreement for decommissioning to have been completed by 22nd May 2000. On that basis the Secretary of State had no choice but to face the collapse of the Executive, with little prospect of it coming back, or to suspend the institutions in the hope that sufficient confidence could be established to enable them to be restored in the future.
That is why we had no hesitation in supporting the Government on the Northern Ireland Bill when it was brought before Parliament in February, giving the Secretary of State the power to suspend and why we were convinced, at that time, that the Secretary of State was absolutely correct to suspend the institutions and re-impose direct rule on 11th February. We always hoped that the renewal of direct rule would be short-lived. It is a profoundly regrettable and undemocratic way of governing Northern Ireland. The first time I said that was in my maiden speech about five years ago.

1155
Before devolved government could be restored there had to be assurances, or at the very least confidence within the unionist community, that Sinn Fein/IRA were at long last to deliver on their obligations under the Belfast agreement to decommission their illegally-held arms and explosives. In that context, the IRA's statement of 6th May marked a significant development. I believe for the first time in the history of the IRA it committed itself to a process that would lead to its arms being put "completely and verifiably beyond use". They also committed themselves to restoring their links with the Independent International Commission on Decommissioning headed by General de Chastelain and they promised, as a confidence building measure, to open up some arms dumps for inspection by independent third parties.
While, as I have said, that was significant, the Conservative Party and the Ulster Unionists sought certain assurances before Mr Trimble and his colleagues could return to the Executive. Specifically for us, those included, first, a guarantee from the Secretary of State that no deals had been done with any of the parties or with Dublin that in the event of another default by the IRA he would not use the power to suspend the institutions. In our view, that power is essential for it remains fundamentally wrong to expect democrats to sit in government with representatives of a fully-armed terrorist organisation for anything other than a transitional period. Secondly, they included an assurance that the Union flag would be the only flag flown from government buildings on appointed days and that the Secretary of State would, for all practical purposes, be treated like any other part of the United Kingdom. Thirdly, and crucially, an assurance was sought that the opening up of arms dumps was only a first step and that the decommissioning of illegal arms and explosives must follow. We were pleased that the Prime Minister gave such a commitment in the other place on 17th May.
With those assurances, we supported Mr Trimble in his decision to ask the Ulster Unionist Council to endorse a return to the Executive at the meeting in Belfast on 27th May. The council backed him, and therefore the Secretary of State was able to make the restoration order that we are now debating.
Welcome as the restoration of devolved government is, it is vital that we do not forget that the Ulster Unionist Council backed Mr Trimble by only the narrowest of margins—53 per cent to 47 per cent. The closeness of the vote reflects anxieties that are prevalent throughout the unionist community in Northern Ireland today, in particular at the opening of the marching season. I was there yesterday and there is a great deal of sensitivity, cautious worry and concern. Many people see a process in which for unionists it has been all take and no give by republicans. They see wicked and evil terrorists released from prison early; they see the RUC stripped of its name and symbols; and they see members of Sinn Fein in government without even a start to any IRA decommissioning. As Mr Trimble has said, the Ulster Unionists, in backing a return to devolved government, have stretched themselves to the limit.
1156
They can literally go no further. It is now more vital than ever, if the process is to succeed and as we all hope, the Belfast agreement is to be implemented in full, that republicans deliver.
In that context the announcement on Monday that the IRA had opened up one of its dumps for inspection by Mr Ramaphosa and Mr Ahtisaari was encouraging. But, as the Prime Minister has rightly pointed out, on its own that is not enough. Decommissioning must follow. Arms must be put completely and verifiably beyond use. We all hope that that will happen. We all hope that devolution works. But unless actual decommissioning begins to happen, then welcome as this order is, I fear that it may not be too long before we are again debating a suspension of devolved government and the renewal of direct rule. That would be a tragedy for Northern Ireland. It would be a tragedy for all the people in Northern Ireland and it would put to waste the huge amount of time, patience and loss of life that has been expended on what is known as the Northern Ireland problem. But if it does not happen, there will be no doubt as to who is to blame. I have no problems in supporting the Minister in this order.
Lord Falconer of Thoroton: My Lords, I am grateful for the support for these orders from all sides of the House. Perhaps I can deal with the three specific questions raised by the noble Baroness, Lady Park.
First, the noble Baroness sought an explanation of some of the comments made by President Ahtisaari and Mr Ramaphosa. They confirmed, first, that weapons and explosives are safely and adequately stored; secondly, that the bunkers will be sealed and the weapons cannot be used without the knowledge of the two independent assessors; thirdly, arrangements will be made for inspection every few months. I cannot go into more precise details, nor would I want to; it would be a standing invitation to dissident groups. The last thing anybody wants is for weapons to fall into the wrong hands. I did not understand the noble Baroness to be pressing me, at least at this stage; she said she was saving her fire for the Patten Bill. Therefore I shall neither go any further nor give any undertaking to write.
Secondly, the noble Baroness asked whether there was any underlying understanding or arrangement that no further decommissioning would take place until the Patten Bill was passed and there had been a further reduction in troop levels in Northern Ireland. There is no such understanding. There is no understanding connecting the Patten Bill or troop reductions and further steps in relation to decommissioning. The decommissioning process is back on track. The IRA has resumed contact with the independent International Commission on Decommissioning. It is possible to say that it will set out the modalities, including the timetable. But I can assure the noble Baroness that there is no undertaking on the lines she indicated.
Finally, the noble Baroness referred to the position of a number of members of the RUC who died at a particularly young age as a result of the terrorist

1157
activity as they were fighting during the time of the troubles. She hoped that there would be proper compensation and severance pay. In fact, coincidentally, there was a Question about that earlier in the day and I dealt in some detail with those issues.
I indicated that there was no present proposal to review either the levels of pension or levels of compensation. But I referred to the fact that the Patten report recommended that a fund be set up. The Government accept that recommendation and that fund will be available by the spring of next year. I cannot say how it will be dealt with, but we shall be addressing the position of the widows and disabled who have been affected by terrorism.
I hope that answers all the questions. I commend the order to the House.
On Question, Motion agreed to.

Northern Ireland Act 2000 (Modification) Order 2000
8.13 p.m.
Lord Falconer of Thoroton Lord Falconer of Thoroton rose to move that the draft order laid before the House on 5th June be approved [21st Report from the Joint Committee].
The noble and learned Lord said: My Lords, I have already spoken to this order. I beg to move.
Moved, That the draft order laid before the House on 5th June be approved [21st Report from the Joint Committee].—(Lord Falconer of Thoroton.)
On Question, Motion agreed to.

Northern Ireland Act 1998 (Designation of Public Authorities) Order 2000
8.14 p.m.
Lord Falconer of Thoroton Lord Falconer of Thoroton rose to move that the draft order laid before the House on 8th June be approved [21st Report from the Joint Committee].
The noble and learned Lord said: My Lords, this order is made under Paragraph 1(1) of the schedule to the Northern Ireland Act 2000.
The purpose of the draft order is to make the bodies listed in the schedule "public authorities" for the purposes of Section 75 of the Northern Ireland Act 1998. These public authorities will be subject to the statutory duties set out in Section 75(1) and (2) of the Act requiring them to have due regard to the need to promote equality of opportunity and good relations between specific groups.
Equality of opportunity and treatment are crucial for civilised society and they are values that the United Kingdom holds dear. The House is aware that these are issues that are of particular importance in the context of Northern Ireland and that the promotion of
1158
equality was at the very heart of the Good Friday agreement. In the agreement, the parties affirmed their commitment to,
"the mutual respect, the civil rights and the religious liberties of everyone in the community … in particular … the right to equal opportunity in all social and economic activity, regardless of class, creed, disability, gender or ethnicity".
The Good Friday agreement laid the foundations for a new dispensation based on respect for rights and the principle of equality. This Government are committed to ensuring the full implementation of the agreement. This order is another step in that important process.
Section 75(1) of the Northern Ireland Act requires all public authorities to,
"have due regard to the need to promote equality of opportunity—

"(a) between persons of different religious belief, political opinion, racial group, age, marital status or sexual orientation;

"(b) between men and women generally;

"(c) between persons with a disability and persons without; and

"(d) between persons with dependants and persons without".

In addition, and without prejudice to those obligations, public authorities are required under Section 75(2) to,
"have regard to the desirability of promoting good relations between persons of different religious belief, political opinion or racial group".
Public authorities are required to produce a plan— or equality scheme—that sets out how they will fulfil those duties. The schemes will cover the full range of the organisation's function in Northern Ireland, including arrangements for policy appraisal; public consultation; public access to information and services; monitoring; and timetables. Those schemes will be submitted to the Equality Commission for approval.
The Equality Commission will advise on, validate and monitor the Section 75 statutory obligation and will investigate complaints of default. Under Section 75(3)(b) and (c), a range of bodies are automatically brought within the definition of public authority—all bodies that are subject to investigation by either the Northern Ireland Ombudsman or the Northern Ireland Commissioner for Complaints. However, the Act also provides the power for the Secretary of State to designate other organisations as public authorities for the purposes of Section 75.
This order is the first designation order made under this power. It covers mainly Whitehall departments (including the Northern Ireland Office) and other UK-wide bodies—like certain of the lottery distributors— that carry out functions in Northern Ireland. The list is not exhaustive but represents the first tranche of additional public authorities. We intend that the statutory duty should, in time, embrace as many bodies as possible.
In the weeks and months ahead we will continue our consultation with the commission to consider what other bodies might need to be designated. Further orders will be made as required. We want to build a society free from unfair discrimination, where the

1159
active promotion of equality and good relations is seen as an integral part of public life. Section 75 laid the foundations for that goal and I am pleased to be able to extend its reach to these further organisations.
I commend this order to the House.
Moved, That the draft order laid before the House on 8th June be approved [21st Report from the Joint Committee].—(Lord Falconer of Thoroton.)
Lord Smith of Clifton: My Lords, in welcoming this order I have to say to the Minister that the initial list is rather parsimonious. I welcome the fact that there will be additions made in the course of time. I should like to ask when the second tranche will appear. As he said in his contextual remarks, in Northern Ireland it is particularly important for equality and rights to be maintained.
Lord Glentoran: My Lords, on this occasion I support the noble Lord, Lord Smith, and declare a small interest in that the chairman of the Northern Ireland Equality Commission is well known to me. I have been lobbied, as I believe have the Government, to broaden the list. I am not saying that I have any great desire for that myself and I am not pressing the
1160
Government in any way. I am stating what it is my duty to state from these Benches; that is, that the community and the commission concerned are not totally happy with the situation at the moment. But I support the order.
Lord Falconer of Thoroton: My Lords, I am grateful for the support provided from all sides of the House. I was asked when the second tranche will be designated. The answer is as soon as possible, probably some time in the autumn. I commend the order to the House.
On Question, Motion agreed to.

Limited Liability Partnerships Bill [H.L.]
Returned from the Commons agreed to with amendments and with a privilege amendment; the Commons amendments ordered to be printed.

Learning and Skills Bill [H.L.]
Returned from the Commons agreed to with amendments and with a privilege amendment; the Commons amendments ordered to be printed.
House adjourned at nineteen minutes past eight o'clock.