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Postal Services Bill [HL]

In the amendment I have identified three key and well known stakeholders represented in successful board models operated in northern Europe. Responsibility to shareholders is regarded in the amendment, as in much of northern Europe, not as the sole criterion of a business’s success. That works in northern Europe and this is a good opportunity to think how something like it might work here. Perhaps it is only due to a lack of imagination that we do not seem able to think through how to set up what I would describe as a social democratic model in this country. The debate about the corporate partner has already been held in part, and the three key stakeholders are the Crown, the corporate partner and the workforce. The noble Lord, Lord Bradshaw, criticised the Network Rail model. I would simply say that that model of finance illustrates the fallacy of the doctrine of "there is no alternative to the raising of finance". I put this challenge to my noble friends on the Front Bench. Could they publish—on an independent basis, although it would be derived from DBERR and Treasury assessments—all the different models rather than simply say that there is no alternative or other model? If the whole of Hooper has to be accepted on the basis that it is a package deal and amendments are redundant or offensive, that makes us all redundant. There is no point in being here if that is the prior statement of the position. It has been put to us like that, so I am not being pedantic. I hope that we do not have to accept Hooper in its entirety as a magic solution. I hope we are not prevented from amending it in any way at all. I see that there would be a business partner, but I want to say something about workers’ representation. One of the issues in a normal Companies Act company is that one cannot simply spatchcock in workers’ representation, because the only interest is that of the shareholders. There are ambiguities even in the Government’s own model, and certainly there would be a new situation in the model I am proposing, particularly when it is linked with the other amendments we have been discussing. It would not be a typical Companies Act company. However, can my noble friend, who is highly skilled in these matters, tell us in what sense the Government’s model is a typical Companies Act company, when clearly it is not? We ought to analyse this in a little more detail, and if invited, we would all be ready to discuss it and see if any fresh light can be thrown on it. As far as board membership by the workforce is concerned, I used to think that I was a radical and a progressive in meeting the attitude seen in the trade union movement that you could not possibly have any form of partnership or worker representation because that would undermine confrontation through the single channel of collective bargaining. This is perhaps a field on which my noble friend cannot reflect without a caricature of the 1970s in her mind, but some of us used a great deal of our limited political capital to become heretics. We all have to be heretics at some stage in our lives, howled down for talking about something that is quite unrealistic. But we do not yet have a clear social democratic model of society to put before the British people. I say that because, given the world economic crisis, something new has to emerge from this chrysalis. There was a progressive experiment in the 1970s in which my right honourable friend Alan Johnson, the Secretary of State for Health, was one of the worker members of the supervisory board set up at that time. It worked quite well. The only reason it did not get down nearer to grass-roots level is that it was in its early days when the plug was pulled by Mrs Thatcher. I repeat: this model works quite well in northern Europe in different forms. It gives some metaphorical ownership to the workforce. That is far more relevant to the modernisation programme than the shares question, which I think is a big red herring. BT shares started off at £20 and are now £1, but this is nothing to do with that; this is to do with the fact that a number of workers’ representatives are signing off the modernisation programme. It is simple in principle but what is happening at the moment is a bit of a contradiction. We are hearing that the union is useless; the workers are useless; industrial relations are useless; everything is useless—and yet the only magic wand is to bring in private equity and that will solve the problem of industrial relations. If I was in a pub and said that, people would say, "You must be joking". We have to consider what kind of business model is most conducive to change and modernisation at the present time. The last thing we want is a climate of suspicion and insecurity and no information. But on the Government’s model there will be no stock-exchange-sensitive information. Yet how can you have the workforce’s full involvement in modernisation without providing information about, for example, the capital investment and the arithmetic on introducing automation? A new technology agreement, however it is arrived at, will crucially depend on information being shared. We have got to get beyond the stock exchange rules governing everything that happens. This is different from many other sectors of the economy. The biggest resource of the Royal Mail by a mile is of course its workforce, but one point that has not been made is that we are talking here about productivity on established sites. We are talking not about greenfield sites—which I fully acknowledge DHL and TNT are experts in creating—but about sites and philosophies of industrial relations, industrial sociology or whatever you like to call it, which have been around for a long time. It is not a fashionable subject to talk about these days but I would be much happier if the Secretary of State and other Ministers occasionally acknowledged that this is a difficult nut to crack. It follows that if rapid change is to be the name of the game and is to be supported by the workforce, there has to be a partnership. You can have rapid change by running down the Post Office and doing unmentionable things to the workers’ representatives, but no one is suggesting that. If we are to have some degree of ownership, in a metaphorical sense, and mutual understanding and resonance, we need this model of worker representation. I fully acknowledge that anyone, including my noble friends on the Front Bench, could ask me how this would work, that would work and the other thing would work; but we are now at Committee stage and it is high time to expose not only the pros and cons of the financial models but the magic solutions which are supposed to transform industrial relations. I am very pleased that surveys have shown that something like this model could, given a fair wind, have the support of the workforce. It worked well in the 1970s when they were getting to grips with modernisation. We have to remove the suspicion of the workforce that it will be 30 per cent now, 50 per cent later, and then it will be privatised and everything will be up for grabs. If we are to remove that suspicion, there will have to be a transformation of some of the structures that give workers an input. I trust that my noble friend will recognise that this is a constructive contribution. She perhaps will not say, "This is a good idea. We will accept it today", but new thinking has got to be given to improving workforce participation and solving the ownership problems, because they form two-thirds of the issues we are facing. My noble friend Lord Brooke was quite right to quote the Hooper report, and obviously the issue of finance is important. But if you analyse the increasing loss, you have to take into account that there is a world recession and the ongoing problem of letters in Land’s End and John O’Groats. I am not sure how the cross-subsidy relates to the government subsidy on guarantees of delivery, but we know that that is what the British people want. Indeed, put round the other way, have the Government now decided that they do not accept that that is what the British people want? I think the Government’s position is that that is what the British people want but the only way to give them what they want is to sell the family silver to get some money, and then to bring in a private sector partner whose interest would ultimately be to merge it into their own business. Obviously the board structure I am proposing is not like that. It is an idea whose time has come, and it is in favour of modernisation, not against it. I beg to move.