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Postal Services Bill [HL]

The Government have made it clear that they accept Richard Hooper’s review’s recommendations as a package in the way that they were originally proposed. I say in response to earlier comments that the reason that we have accepted Mr Hooper’s review and recommendations so promptly is that rarely has such a well researched, analysed and argued report been presented to government. Its competence and compelling case left little room for argument. That is why we are not going to select one recommendation to the exclusion of another. All three principal recommendations, on partnership, pensions and regulation, are required to be implemented if the challenges facing Royal Mail are to be successfully addressed and the universal postal service secured. It is important for the Royal Mail’s workforce to understand this because it is in danger of being misled by voices in this debate which say that the Government will have to bail out the pension deficit in all circumstances and that it need not be linked to the other recommendations in the Hooper report. That is not the case. I have already highlighted the extremely unattractive scenario in which a pension bail-out was not accompanied by properly managed modernisation and reform. Quite simply in this case, the state clearance powers of the European Commission could be used brutally to require accompaniment of the bail-out by a far reaching, enforced restructuring of the company rather than one readily volunteered by us. This state aid dimension apart, tackling pensions on their own would not be a panacea for Royal Mail’s difficulties; indeed, it would be irresponsible for the Government to ask the taxpayer to tackle the pensions issue without giving the taxpayer confidence that a plan was in place to ensure that Royal Mail could quickly transform to compete in a fast changing market. In other words, we need both to secure the future of the pension fund and ensure that the company’s finances are not simply eaten away in the future because it has failed to modernise and automate, a challenge which other European postal services have taken on and in which they have succeeded. I turn to the detail of the amendment. The proposed linkage with the repeal of the provisions in the Postal Services Act 2000 fails adequately to reflect the linkage in that package that the Government believe is essential. The repeal of those measures is an important enabling measure, but it does not in itself achieve the link to the partnership agreement that the Government believe is fundamental to the modernisation of Royal Mail and a precondition for the pension proposals and their implementation. Similar issues arise in relation to the proposed linkage to Part 3 coming into effect. Although Ofcom will assume its new responsibilities as soon as possible after Royal Assent, there are other measures in Part 3 related to the abolition of Postcomm where accounting and other legal requirements mean that implementation may take a little longer. It would be both artificial and counterproductive to establish a link in legislation between the implementation in full of Part 3 and the implementation of the measures in respect of pensions. It would increase the uncertainty for all parties, not least the scheme members, and introduce delay at a time when the Government must press ahead with the whole package of measures as soon as possible. Following Hooper’s recommendations, the Government are clear that if the challenges facing Royal Mail and the postal services sector are to be addressed successfully, all the measures in the Bill need to be implemented as a package. I understand the motivation behind the amendment and am sympathetic towards its intention of ensuring that the proposals are treated as a coherent package, but it does not achieve it in a practical manner. In the light of what I have said in explaining the effect of the amendment, and the Government’s overall intentions in terms of the implementation of their proposals on pensions, I trust that the noble Lord, Lord Skelmersdale, will feel able to withdraw the amendment in this form.