---

Postal Services Bill [HL]

I shall speak also to Amendments 7 and 8. If it is permissible, I would like to degroup Amendment 13, which is contingent on the previous three. I hope that that is all right. These amendments are intended to be helpful, not hostile. They start from the premise that the Government are correct in seeking to promote constructive change within the postal service. There has been a great deal of argument about the managerial and financial record of Royal Mail, but clearly it needs to raise far greater funds to run the service efficiently—by how much is debatable. The Compass booklet correctly said that the Hooper report did not give a precise indication of the amount of investment required, but it is beyond dispute that much more is required. It is needed in part because Royal Mail has suffered under the existing regulatory framework from private companies picking off profitable bits of the business on unfair concessionary terms, but there is also a clear need to promote technical innovation, as other postal services have done. The reason for these amendments is that the current government solution involves part-privatisation, which the Bill calls a "strategic partnership". The words "strategic" and "partnership" are taken from the politicians’ lexicon, and when the two terms appear together they are a particularly toxic combination. In fact, what we have is part-privatisation—an equity sale to a third party. A 30 per cent private stake in the service will be owned by foreign firms as outside partners. If there is a 30 per cent stake now, why should there not in time be perhaps a 100 per cent stake? The opinion surveys show overwhelming public support for Royal Mail being kept wholly in public hands. This is seen as a guarantee of a nationwide universal service run for the public good, not for the sectional private interest. This was very much the view of that great man, Mr Herbert Morrison, the grandfather of my noble friend and architect of the post-war policy on public ownership. The principle enshrined in it was a cornerstone of the Warwick agreement with the trade unions. It was also enshrined in that historic document, the Labour Party manifesto. I think that these pledges should be honoured. It is a reason for much fundamental opposition within the Labour Party towards the Bill. The Bill consequently suffers although it deals properly and constructively with many other issues, including the pensions of postal workers. I suspect that once the Bill is removed from the rather tranquil atmosphere in this House—not to mention the empty Benches opposite that yawn at me—it will face much more difficulty in the Labour Party, particularly in another place. It might be helpful to address the issue here. I have tried in these amendments to combine two important principles: first, that no part of Royal Mail should be place in private hands; and, secondly, that Royal Mail should nevertheless be free to attract the investment that it needs. We are therefore talking about investment, not the surrender of equity. Amendments 5, 7 and 8 are designed to remove the bits of the Bill that deal with the part-private ownership of Royal Mail. The phrase "publicly owned" leads to a good deal of confusion because the Bill says that "publicly owned" equals the public owning 51 per cent. That is an extension of language, as I understand it. I therefore suggest instead the phrase which the Government favour: ""owned in its entirety by the Crown"." That seems to me to remove any ambiguity. Amendment 13 will enable Royal Mail nevertheless to accept private investment, with safeguards for the public interest. I have suggested a new Clause 4 on the financing of Royal Mail companies which will allow a Royal Mail company to accept private loans as long as it does not involve the transfer of any of the company’s shares. I have set down a condition that, ""for a loan of £1 billion or less, the Secretary of State must have the consent of the Treasury";" and that for a loan of more than £1 billion, there should be an affirmative resolution in each House of Parliament. It may be said that that would happen anyway, but it is highly desirable to spell it out in full. In time, we will need another clause to amend the articles of association to change to £1 billion the limit that Royal Mail can raise. This would delete the requirement from the articles of association for the Secretary of State to give specific approval for it to borrow from other sources. These amendments are intended to be constructive. They are probing amendments and I shall certainly be happy to withdraw them in time if the Government come forward with proposals that distinguish between investment on the one hand and equity and control on the other. Without some redefinition of this issue, constructive change and modernisation of Royal Mail, which we all seek, will not be achieved. I beg to move.