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Postal Services Bill [HL]

I can certainly commit to rereading the Hooper report many times between now and Royal Assent, and indeed well into the negotiations of the strategic partnership. Richard Hooper considered the not-for-profit and not-for-dividend models and concluded that they were not appropriate for Royal Mail; they might have been more appropriate for more stable industries, such as water. Richard Hooper was clear about the risks that the Royal Mail was facing, which we have already discussed, with regard to e-mail substitution, the pension deficit and facing competition, and that there was significant structural change in the market. He concluded that what we had was correct. The Royal Mail is currently a company governed by company law. It has a board that discharges its duty in the interests of the shareholders, and it will continue to remain a company under the Companies Act. It is in that situation that the fiduciary responsibility of a board member is to the company and its shareholders, not to any special interest group or stakeholders. Indeed, the issue that is discussed in the report, and that we have discussed, is having the appropriate set of directors with commercial expertise able to deal with the modernisation of a company facing the competition and liberalisation that this company does. We recognise the central importance of the workforce in the future of the Royal Mail; indeed, that is what the transformation of the Royal Mail is going to be about. A change is certainly required in industrial relations and the climate of, to quote my noble friend, "suspicion and secrecy" that has sometimes invaded the company. The workers are the backbone of the company. We are not opposed to the employees’ views being represented on the board if that would enhance the board’s effectiveness in fulfilling its role, so long as it was able to fulfil its fiduciary responsibility where the company’s interests in the round came first. The Committee will be aware that the Royal Mail already has a much respected trade unionist on the board: my noble friend Lady Prosser. Prior to her appointment in 2004, trade union experience was provided by Derek Gladwin and John Lloyd. We also know that the partner will have a view on this and that board composition will be a matter for negotiation and will be reflected in the shareholder agreement. Before we considered an amendment, we would have to be persuaded that another form of direct worker representation on the board would make a real difference to the transformation and modernisation of the Royal Mail and deliver the change that is necessary for the company. We do not believe that that case has been made. We would be obliged, therefore, if my noble friend could see his way to withdrawing the amendment. The noble Lord, Lord De Mauley, asked about the shareholder agreement. I believe that this issue will be dealt with in Amendments 20, 21 and 22. Perhaps I may provide my answers then.