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Postal Services Bill [HL]

My Lords, in preparation for this debate—this goes back to the point raised by the noble Lord, Lord Neill of Bladen—I referred to Herbert Morrison’s book of 1933, Socialisation and Transport, in which he addressed the subject of how to run big corporations. He said that the boards of such bodies should be composed of people of competence, ability and public spirit. Public spirit is in some short supply today and, like society, is rather denigrated as a concept—and has been by successive Governments—having been replaced by self-interest. However, these qualities were represented by people whom I knew and worked with, such as my noble friend Lord Ezra, the late Sir Peter Parker and the late Lord Dearing, to whom several noble Lords have referred. Why did the system not work properly, with good people operating in the public interest? I think that it was because there was a lack of clear, consistent and financable objectives, which should direct a board and guide the actions of a regulator. I am not convinced that the description in Part 3 of the actions of the regulator is adequate; it should be much clearer about what his job should be. Most Governments bring a lot of political pressures on boards, from the so-called lunchtime directive, with the constant interference in matters such as industrial relations, fares and charging. That swiftly turns into a bureaucracy and procrastination, along with a growth of econometrics, modelling as a substitute for common sense and decision making. Then there is the cynical attitude of the press and the ever-present problem of how you provide loss-making services. Once appointed—and I believe that the Government should address the issues raised by the noble Lord, Lord Neill of Bladen—a board should not be subject to constant political pressure. It should be overseen by an independent regulator. To paraphrase Herbert Morrison again, if Ministers are immersed in a large amount of detail, they will depart from their wider ranges of responsibility. We all recognise the fact that there is nothing better than getting your hands on the detail so that you do not have to take the hard decisions that you are paid to take. Nor should such a board be subjected to the unreasonable pressures of the trade union movement—the noble Lord, Lord Sawyer, spoke about that. A reorganised Royal Mail along public interest lines should include in its terms of reference that trade unions should go to arbitration before they subject consumers to disputes. This is not the 19th century, and I really do not believe that very many workers are subject to the levels of exploitation they were subject to 150 years ago. Salaries of board members should not be fixed by the Treasury, shareholders or non-executive directors, but should be chiefly determined by such things as, ""exceptional efficiency, great initiative and plenty of ideas"." However, I do not believe that they should include within their number representatives of any special interest group—and they should be free from the modern curse of the bonus culture. I still see it reflected in organisations, such as Network Rail, which have been set up by the present Government but are largely driven at the top by that dreadful culture. I refuse to believe that such public-spirited people do not exist. When thinking of the post office, my experience teaches me that it should be the epitome of public service—particularly, as many noble Lords have mentioned, the universal service obligation. Experience tells us that people want a local post office. A regulator must recognise the costs of maintaining the universal service obligation and the final delivery of bulk-posted mail. Efficiency must continue to improve, as has been said by very many people, particularly in the previous speech. The historic pension deficits remain a problem but, interestingly, in today’s Times, I read that the Royal Bank of Scotland is to use £800 million of taxpayers’ money to shore up its gold-plated staff pension scheme, including the £703,000 payout pledged to Sir Fred Goodwin. That I find thoroughly objectionable—that taxpayers’ money can be poured into the top pension scheme of an organisation that has failed, whereas postmen, who have given years and years of service, should have their pensions put into jeopardy. I turn to items raised in the debate. I was very interested in the fact that the noble Lord, Lord Fowler, raised the question of the National Freight Corporation. I should have liked to ask him what happened to all those shares, and the people who held them. Are they all raking in the dividends from the German company that has taken them over? Any employee shareholding should be invested in some sort of public interest trust so that, if people leave the industry, they must sell the shares back to the trust and there is no scope for those shares to get out into the market, where they will be used to lever up the percentage owned privately, and possibly by somebody who becomes the majority stakeholder. The evidence from Welsh Water, for example, tells us that public interest boards can work. It appears to be working well and is as much in the interests of consumers of water and water services in Wales as it is in those of the various companies that are running our water services here, many of which are foreign companies. I noted that the noble Lord, Lord Hunt of Wirral, talked about the rushed choice that Government were making, having taken seven years to reach a decision about the Post Office. If he were in his place, I would remind him of what was done when he was part of a Government who nationalised the railways, and what a terrible, expensive mess they made of it. I received a letter this morning—and this is quite genuine—from someone who was a bridge engineer who used to work for me in Bristol. He says: ""With privatisation practically all experienced engineers were sold to contractors or consultants and many others retired. Railtrack was left seeking advice from a procession of consultants who were generally inexperienced in railway work, were not part of a network of railway professionals and did not have the ‘good of the railway’ as part of their ethos. Railtrack lacked people who could assess what was best for the railway and had to depend on hiring consultants (or contractors) who needed to ensure their ‘professional indemnity’ was not at risk when giving advice and had little interest in achieving the most economic design solution, even if they had the information (eg possession and disruption costs) to do so. Unnecessary work was carried out, inappropriate designs adopted, additional unplanned disruption caused and huge extra costs incurred"." Whatever the Government are planning to do with the Post Office, it should not allow the person who holds whatever is the minority stake to move away from the ethos of an efficient public service, because that is what we want.