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Postal Services Bill [HL]

My Lords, I begin by joining other noble Lords in paying tribute to the memory of Lord Dearing, of whom it was said by a colleague in an obituary that he was the man least changed by high office of anyone he had met. That was certainly my experience of him. As someone who has spent his life working in universities, I remember Lord Dearing for his massive contribution to the restructuring of higher education—in which, I might say, many of the issues are quite similar to those under discussion today. The Hooper review on the future of the Royal Mail has been commented on, criticised and in some quarters even vilified, but by and large it is an exemplary document. It is thorough, written in an impartial way and includes detailed comparisons with other countries. In drawing up the Bill, the Government have accepted the Hooper review more or less in its entirety, and at least from my point of view they are right to do so. Most noble Lords have skipped across the backdrop to all this as though it is obvious. In a way it is obvious, but it is important to emphasise it. There has been an absolute sea change in our modes of communication. They extend to everyone in our society and have been brought about by the marriage between computerisation and satellite technology, which has given rise not only to the internet but also to a proliferation of new ways to communicate. While I hate to disagree with my noble friend Lord Haskel, his assertion that the paperless office never materialised is not true. That is to neglect the fantastic revolution we have seen in how offices work, so although we still use paper—I am reading from a somewhat scruffy piece of paper now—its relationship to the technologies of communication we now use is vastly more complicated and quite different from what it was even 10 years ago. As someone who spends some of his time studying broadband, I have to say that this revolution is still only in its early stages, with implications that we cannot yet fully spell out. The consequence I draw from this is that in our postal service we need an organisation that is well capitalised, innovative, highly adaptable and quick on its feet, because this is the milieu in which it will have to function in the future. Over the past few weeks I have spent quite a bit of time poring over the detail of these comparisons. It is true to say that the Royal Mail lags behind postal networks in other countries, and that this can be fairly readily demonstrated. It is true of some comparisons that can be drawn between the Royal Mail and the networks in Germany, France and the Netherlands, for example, and that is in spite of the very considerable progress made in recent years, a point made by several other noble Lords. The organisation Compass has produced a pamphlet entitled Case Not Made, which no doubt many noble Lords have received either through the post or via computer, because I believe that it was sent to us in both forms. However, my conclusion is that the comparisons made in the Hooper review are indeed robust. You can never make exact comparisons between the services in different countries, but the comparisons that have been made are quite revealing. I think that one can say "case not made" of that pamphlet. Hooper describes the Royal Mail as a commercial service with strong public obligations, and that is surely an accurate description. The report and the Bill rightly stress the key importance of the Royal Mail to national solidarity and the crucial importance of a universal service with a standard tariff. But the main question we must ask when considering the Bill is whether a wholly state-based organisation is the best way to reconcile these features with the prime need to cope with the radical changes that I mentioned earlier. In commenting on this question and relying on a certain movie title, I want to offer two criticisms and a conclusion. My criticisms concern some fairly general assumptions that are being made in the debate on the Hooper review. The first mistake I identify is similar to the one alluded to by my noble friend Lord Soley: that it is simply fallacious to equate the public sphere with that of the state. It is clearly false to suppose that a wholly state-owned and state-run organisation functions by definition in the public interest. Most public institutions are a mixture, but that does not make them any less public institutions. For example, the National Health Service is run and organised largely by the state but depends wholly on its interaction with the large, privately-run pharmaceuticals industry. Most public institutions are of this kind. I do not propose to invoke the wisdom of Humpty Dumpty, but the somewhat hysterical discussion of privatisation that you see in some parts of the press misses the point; it is entirely possible for the Royal Mail to stay a public institution while having a private sector partner if the organisation of this relationship is well executed and well thought through. The second mistake is to suppose that bringing in private capital is somehow a reversion to a now discredited past, a kind of new Labour thing that has suddenly become obsolete. After all, it is said that everyone is now turning to the state. But this is an absurd argument. What is at issue in all spheres is more effective regulation and partnership between the Government and the private sector. This will be true of the future of financial systems and the financial markets in general, and it is true of the legislation before us. The important thing is to produce an effective system of partnership and regulation. My overall conclusion is that the case for why the Royal Mail cannot modernise quickly and radically enough within its existing structure is very compelling. The Hooper report stresses very strongly, as do the Government in the Bill, that these proposals are part of a package and have to be judged as such. I hope therefore that the Government will not back down on the major clauses incorporated in the Bill.