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Postal Services Bill [HL]

My Lords, this amendment looks to introduce requirements for Government to report to the House on the issue and disposal of shares or rights in the Royal Mail company and the ability of the private sector partner to meet certain selection criteria. As I said during debate in Committee, I recognise your Lordships’ legitimate interest in any partnership deal and that you would wish to be assured, and rightly so, that Government are meeting the objectives they have set out for the transaction. I said that we would need to report to both Houses on the deal. The transaction process is continuing and we remain committed to finding the right partner for this business and ensuring that any deal represents value for money for the taxpayer. I have already provided the House with details on our current intentions in relation to a partnership deal and committed to provide further updates throughout the passage of the Bill. I understand that noble Lords opposite remain keen, however, to have what further detail we can provide. The agreement with any partner will, as I have said, be subject to negotiation and will be covered by a legally binding agreement. I have already explained that this agreement will make clear what the buyer can do, for example on board appointments, and what it cannot do, for example by placing restrictions on sales of its shares. Perhaps it might be helpful if I outline some of the other areas the agreements will cover. The shareholder agreement will set out those matters requiring shareholder consent. I previously mentioned the company’s future business strategy but other areas are likely to include any acquisitions or disposals, future incentive schemes, future funding of the business, key executive appointments and dividend policy. The detail on the treatment of these issues will be subject to negotiation with any partner but, as I have already made clear, we expect the agreement to reflect that this is a partnership, giving the partner a real, genuine say in the running of the business—after all, otherwise what on earth would be the point. The agreement will ensure that there can be no perception of political interference in the operations of the company. We have seen time and again, when management of the Royal Mail has sought to introduce modernising changes within the business, that the union has approached or politically invited the Government to intervene and operate in a way that, frankly, does not leave the management the proper freedom it needs in order to take the business forward. A partner would not accept that sort of practice, and neither would we. The agreement would also cover transfer restrictions on the shares sold to a partner. For example, it will ensure that they are tied into the business for an appropriate period to meet our objectives for modernisation. On the specifics of the amendment tabled by the noble Lord, Lord Hunt, given my commitments to be transparent about the deal, I wholeheartedly support the intention behind the amendment. However, I see two issues with this particular amendment. First, it would require the Secretary of State to report to Parliament before issuing or disposing of any shares or rights to a private partner. There are significant disadvantages to this approach, which could effectively act as a potential barrier to a deal being struck. The noble Lord, Lord Blackwell, made an important point in Committee, which I believe is relevant here. He highlighted the differing role of Parliament versus the Executive. He said: ""There is a point at which the role of Parliament is to define objectives and give the Government permission to take a course of action … in some of the things that we are asking to be brought back to Parliament, such as negotiation details and choice of partner … we might be crossing the line by getting Parliament too involved in executive matters of judgment and discussions".—[Official Report, 31/3/09; col. 967.]" Therefore, while I have said that I agree that the Government should report to both Houses on any partnership deal, I believe that it is more appropriate that this should be after the Executive have done their job and a legally binding deal has been agreed with the partner. To erect a parliamentary barrier to any such agreement would operate as a powerful disincentive to any negotiating partner with which we are reaching an agreement, and I would not wish any reporting provision in the Bill to delay a deal being agreed and signed. Secondly, the amendment sets out the criteria which we have outlined will be used to assess the current partnership proposal. But under this amendment, the obligation to report on these criteria would apply to any potential share sale. It would not necessarily follow that these same criteria would apply to any future sale of shares under the Bill. Therefore, while I support the intention behind this amendment, and indeed do not believe that the noble Lord and I are too far apart on the issue, I cannot support it as drafted. I am, though, happy to agree to consider a variation of the amendment and come back to the House at Third Reading. In the light of this I ask the noble Lord to withdraw his amendment.