HL Deb 12 October 2000 vol 617 cc497-9

Baroness Miller of Hendon asked Her Majesty's Government:

Whether they accept the recommendations of the Audit Commission's report dated 24th August on the acquisition by the Post Office of German Parcel.

The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)

My Lords, a number of lessons of good practice are set out in the National Audit Office report. I understand that the Public Accounts Committee is to hold a hearing on the NAO report and produce its own recommendations on the basis of that hearing and the report. The Government will respond in the normal way to the report of the Public Accounts Committee via a Treasury Minute. Many of the lessons of good practice highlighted by the NAO, such as the need for access to advice and for appropriate financial disclosure, are already being implemented.

Baroness Miller of Hendon

My Lords, on Third Reading of the Postal Services Bill on 11th July I told the Minister that his department had agreed with the report of the National Audit Commission on the manner in which the Post Office should deal with acquisitions and disposals. Can the noble Lord explain why his answer then was that he had not seen the report and, therefore, the department could not have agreed with it, even though I had seen the draft NAO report? Can he further explain how on 24th August, at the time of final publication of the report, the same recommendations were made and it was said that the department had agreed with the NAO's arguments? At what stage did the Minister know with what the department was agreeing? Is it usual for the department to reach such agreements in draft reports that the Minister has not seen? Why had the Minister not seen it, and when did he find out?

Lord Sainsbury of Turville

My Lords, as it is being suggested that I misled the House, perhaps I may go through the rather grim details of the various stages.

At Report stage on 29th June I said that the NAO was to produce a report but it had still not been finalised. At that stage draft copies had been shown to a number of people, including Sir Michael Scholar two days before. At that stage I said that the Government would put the requirements for disclosure into the articles of association. The report had not been finalised at that stage. At Third Reading on 11th July the noble Baroness said that she had a copy of the report and claimed that the DTI had accepted the arguments about disclosure. At that stage Sir Michael Scholar had not commented on the report, and there can be no question of it having been finalised or agreed. He wrote to the NAO on 14th July with his comments and the final report was released on 3rd August. The House will agree that it would be grossly improper for me to quote from an NAO report that had not been finalised at that stage and which was subsequently changed before its publication.

Lord Razzall

My Lords, can the Minister tell the House whether, had he read the report in detail it and had been finalised by Third Reading of the Postal Services Bill, his response to the noble Baroness and myself would have differed in any way?

Lord Sainsbury of Turville

My Lords, the action had already been taken and so I do not believe that it would have been any different. The report had not been finalised and, therefore, it would have been grossly improper to quote from it. Noble Lords will appreciate that the report is agreed by the Permanent Secretary, not by departmental Ministers. It is a matter for the NAO and the Public Accounts Committee, and it is the Permanent Secretary who takes the role of accounting officer.

Baroness Byford

My Lords, I should like to press the Minister further. At Report stage the Minister indicated to noble Lords that the report was not available, and that is what the noble Lord is being asked about. I should like to press the Minister on another matter that has not yet been clarified. I refer to approval by the European Commission for the setting up of a universal bank. That question was raised at the time and has not received a satisfactory response. Can the Minister answer that?

Lord Sainsbury of Turville

My Lords, I did not say that the report did not exist but that it had not been finalised. The universal bank had nothing to do with that particular debate and was a totally different issue. It was announced in the course of the proceedings but it is not reflected in the Bill.

Baroness Trumpington

My Lords, can the Minister inform the House what a German parcel is?

Lord Sainsbury of Turville

My Lords, I do riot know what a German parcel is, but we have bought something called that for £289 million.

Lord Mackay of Ardbrecknish

And, my Lords, cheap at the price perhaps!

Lord Clarke of Hampstead

My Lords, does my noble friend agree that the subject of this Question, which is the acquisition of German Parcel, is of vital importance to the new Post Office, as agreed by this House? Does my noble friend also agree that, because of the uncertainty about comments relating to the acquisition, it is helpful if a written statement is placed in the Library of the House?

Lord Sainsbury of Turville

My Lords, if it is helpful to noble Lords, I shall set out the sequence of events in a note and place it in the Library of the House.

Lord Mackay of Ardbrecknish

My Lords, I return to the subject of my noble friend's Question. The Minister will recall that I also intervened at Third Reading and suggested that the Minister was dancing on the head of a pin. He is now dancing on the point of a pin. At that time my noble friend had a copy of the report which clearly said that the department had told the NAO that it accepted its argument. The Minister said that, when one refers to the department giving authority to the report, that must mean Ministers".—[Official Report, 11/7/00; col. 181.] Does one conclude that officials did not tell Ministers that they were doing it? Did they tell other Ministers but not the noble Lord, or did the noble Lord forget that the department had made this observation to the NAO? This is a simple question which I do not believe the Minister has addressed.

Lord Sainsbury of Turville

My Lords, I said that in general when departments agreed matters it meant that the Minister had to agree it. I should have said more specifically that in this particular case it was the Permanent Secretary as chief accounting officer who would have to agree it with the National Audit Office.

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