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Postal Services Bill

I am extremely grateful to my hon. Friend. If he is called to speak in the debate, I hope he will elaborate on that important and valuable point, of which I was not aware. I am sure he is correct—he would not have said it otherwise—so if it is acceptable for private sector companies to split but still have a legally binding agreement, why cannot we have that in this case? I thank him for making that point. Royal Mail needs to be free from Government interference. It must become more dynamic—I think that that reinforces my point—and more competitive, as the market for postal services has liberalised. Mr Richard Hooper, who has reported to this Government and the previous Government, has said that Royal Mail's profit is considerably lower than that of other national postal authorities and a lot lower than that of the private carriers. Of course, one reason for that is the subsidised delivery of private mail. Whether or not that is an accurate assessment, the argument in favour of privatising Royal Mail has at its core the desire for the business to grow and become more profitable. As with all private businesses that operate in strongly competitive markets, Royal Mail will undoubtedly want to use the new commercial freedoms it has been given. Indeed, a dynamic Canadian business woman was appointed as chief executive precisely to ensure that Royal Mail can get the best of starts as a wholly commercial entity. Chief executives of large private companies have a primary goal: to maximise shareholder value by running their businesses as profitably as they can. Of course, that involves driving down cost, ensuring that distribution channels are as efficient as possible and selling products wherever and however possible. What would a dynamic chief executive make of an inter-business agreement that restricts the ability of the principal business to sell its goods or services? What would Sir Terry Leahy say to a supplier who told him, ““You cannot negotiate with me on the price of the goods or services I provide for you.””? Tesco—I shop at the Co-op—did not become what it is by being anything other than determined to drive down costs. We may not always feel comfortable with the relationship that supermarkets have with their suppliers, but they will always say that the No. 1 customer motivation is price and that costs must be controlled. If a chief executive of a large company somehow neglected their obligations to cut costs or gave unfair favour to a supplier, they would have a board, including non-executive directors, and shareholders breathing down their necks. In a few years' time, we face the prospect of a privatised Royal Mail, free from the clutches of my right hon. Friend the Secretary of State for Business, Innovation and Skills, free to innovate and free to do all the things that only privatisation will allow it to do.