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Postal Services Bill [HL]

I welcome the amendment, not because I believe that it is necessary but because it provides a welcome opportunity to explain some of the proposals in detail. I say in response to the question of the noble Lord, Lord Hoyle, that the strategic partner is invited to look at Royal Mail Group Limited and not at any part separately. Therefore, it is not possible for it to take over separately another element of part of the group. I hope that that sufficiently reassures my noble friend Lord Hoyle on that subject. I understand the concerns around the protection of the Post Office. The introduction of the strategic partner would have no impact on the relationship between the Post Office and Royal Mail, because this is a currently and contractual relationship, with Royal Mail using the post office network across the country and able to provide access to its products to the public through that network—for example, special delivery, airmail and stamps. On the other hand, the Post Office derives about 30 per cent of its revenue from that relationship. If anything, we believe that, as the noble Lord acknowledges, it improves the Post Office’s ability to attract revenue from elsewhere. I therefore assure the noble Lord that the reorganisation will not lead to weakening the relationship between the Post Office and Royal Mail. Royal Mail will remain publicly owned; that is on the face of the Bill. The partnership is a commercial partnership, and the Post Office will continue to offer Royal Mail services through its network. Income from Royal Mail is very important to the Post Office and to sub-postmasters; vital business derives from it, from consumers and small businesses. The noble Lord asked about the post office network. The proposed regulatory regime allows Ofcom to oblige access to POL for other mail providers in certain circumstances. These changes being proposed provide new opportunities for the Post Office to focus on its own challenges and create a better and more vibrant future for its network. As noble Lords will be aware, we provide a subsidy of approximately £150 million a year to the Post Office. In this context, it is absolutely vital that we protect the taxpayers’ interests as well, in particular to ensure that there are no leakages of that subsidy to Royal Mail—and even more so when there is a strategic partner. The noble Lord asked about further details of the contractual relationship between the two businesses, which are commercially confidential. It covers the pricing of about 30 products, the details of which would be of great interest to the competitors of both the Post Office and Royal Mail alike and which it would be inappropriate to provide. We hope that, in addition to the opportunities for further revenue that this Bill will provide the Post Office, we will strengthen the Post Office through creating a new board and its own non-executive chair, which will provide greater support to the Post Office’s management team. There has been some concern in the past that the Post Office should have the commercial freedom to provide services to other postal companies; as I have said, Clauses 34 and 44, which will be debated after the Easter Recess, will provide the regulator with the powers to compel access to the post office network for other postal companies in certain circumstances. I hope that noble Lords have found helpful the chart that was circulated to them. I am very happy to discuss it and to put it on the record, if there are any questions about the organisation of the chart.