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Postal Services Bill

My Lords, the Government propose to sell off 100 per cent of Royal Mail, which may be regarded as one of our oldest public services, dating back to the 17th century. It will be the sale of one of our greatest and most cherished national institutions. It has a noble history in the development of the culture, social cohesion and economic strength of this nation, and today it still provides a vital public service. Richard Hooper has described the sale as a momentous step by any standard, as I am sure the whole House appreciates, whether or not they support the move. We and fellow Peers of several and no party affiliations have submitted amendments which seek to ensure that, if the sale of Royal Mail goes ahead, it meets four main objectives: first, that it is done in a timely fashion that does not present the prospect of an endless cloud of doubt hanging over the future of the company; secondly, that proper measures are taken to ensure that value for money is gained for the taxpayer and that the company is not sold at too low a price; thirdly, that there is greater clarity and greater accountability than the Bill currently provides; and, fourthly, that a privatised Royal Mail is put on a secure footing and is not subject to the ravages of asset-stripping and disintegration or doomed to failure because of the circumstances that the Bill creates. The amendment to make provision for a sunset clause aims to meet the first of those objectives, ensuring that any sale takes place in a timely fashion without a long-lasting aura of uncertainty besetting the company. Sunset clauses are well recognised. Indeed, Members, regardless of party affiliation, have argued for them in the past in various pieces of legislation, as I well remember. In fact, the Minister for Culture, Communications and Creative Industries, Ed Vaizey, stated in another place in June 2009: "““I also welcome the fact that there is a sunset clause. As other hon. Members have pointed out, sunset clauses are, in principle, a very good thing to include in any legislation””.—[Official Report, Commons, Holocaust (Stolen Art) Restitution Public Bill Committee, 10/06/09; col. 13.]" If the Government had provided for a sunset clause in the Bill, there would be no need to debate this amendment. As they have not, perhaps a few examples of sunset clauses and their use would help the Committee. In 2009, interestingly, the Conservatives in Scotland argued that sunset clauses should be added to all Scottish legislation. I am sure that Conservative Members of this House will support that position, given that it was stated in their party’s manifesto in 2007. The debt relief Act 2010 has a sunset clause which expires on 7 June 2011, which neither of the coalition parties voted against. In the Budget of June last year, regulatory sunset clauses were announced—a well tried and recognised tool for Parliament and, indeed, the Government to use. How would the amendment assist in the progress of this Bill? The answer is fairly straightforward: it would add clarity. The Labour Party’s position on 100 per cent privatisation of Royal Mail has been made clear. However, if the Government’s proposals to privatise Royal Mail completely were approved by this House and the other place, the amendment would put a time limit on the Government’s ability to sell off Royal Mail. Setting a relevant date would add certainty for the business and, indeed, for the workforce—certainty that is currently lacking in the Bill. As it stands, the Bill empowers not only this Government but future Governments to sell off Royal Mail. That process could go on and on. The Minister in the other place has made it clear that he would not intend to sell Royal Mail however low the price. That is a sound position and one with which we would agree. The Bill permits a period of uncertainty to continue not just into next year but possibly into the year after and even longer. That would be an intolerable position for Royal Mail, its management and its workforce. It would place the chief executive of the company in a perilous and uncertain position, which perhaps could be compared with that of a modern-day Premier League football manager at certain clubs, where team continuity has little value. It would damage the morale among the workforce too. If the amendment were passed, it would not, of course, rule out a future disposal of some or all of the company; but it would require the Government to return to the House if they failed to dispose of Royal Mail by 31 December 2012. We deliberately selected a date which we felt is achievable and viable, rather than a date that could lead to this being characterised as a wrecking amendment. As we proceed we shall put to the Minister other proposals that outline other areas where we would want them to come back to the House in order to do certain things. This amendment would not prevent the Government selling Royal Mail at another point in the future provided that the sunset clause is repealed. However, the Government have given no indication of a timetable for the sell-off. These amendments—one of which I hope the Government will accept—would enable this Government or a future Government to sell off Royal Mail and also ensure that the matter is not drawn out over many years. Without a sunset clause, the business, the employees, the partners in the Post Office, not to mention its business customers and the public, would be left in a strange limbo-land with no conclusion in sight. That would create massive uncertainty for the business. That could not be seen as an attraction to potential employees and customers, who could be driven away from the business by such massive uncertainty. An unrestricted time limit could also act as a mechanism to drive down the price of the business. We are told that letter volumes will continue to fall and that the business can modernise only with private investment—so how would a long delay be helpful? The Minister needs to address that issue. Market conditions would likely get worse, and a period of uncertainty would surely make it very difficult to succeed in modernisation or to make proper investment decisions. Can the Minister tell us what impact an extended period of uncertainty would have on the value of the business, and therefore on the value for taxpayers? What will be the impact on employees of the falling value of the share participation scheme, if the legislation is approved? As for the counterargument that a sunset clause would lead the Government to go for a fire sale of Royal Mail to get ahead of the time limit, the Government have already said that they will not sell Royal Mail at ““any price””. As I said, that is a sound position. It would show very little faith in the current Government to think that they would put making an expedient sale before gaining best value for money. This amendment is reasonable and necessary. It is called holding the Government to account. The legislation timetable is in the Government’s control. If the Government have the will, we will encourage and support the Minister—as we expect her to support our amendments. We will support her in bringing matters to the House and dealing with them as quickly as possible. The Bill currently provides for the creation of a situation which is similar to the perpetual ““sales”” at retail outlets. As we all know, there is no rush to get to Currys, Dixons or wherever to buy new electrical goods because the ““sale”” does not really exist—it is perpetual. A perpetual sale drives down the price. Nothing in the Bill seems to prevent Royal Mail being sold off piecemeal over an extended period, as I said. Even the Minister must agree that that cannot be an acceptable solution. If the Government cannot complete a sale by one of the dates stipulated in the amendments, my honourable friends and I think it right and proper for the sunset clause to be enacted. The amendments would impose on the Government a requirement to focus on their ambitions—which, as I said, are contrary to mine and those of my honourable friends. The alternative of death by a thousand cuts would wreck the Royal Mail and the improvements made recently, which even Richard Hooper could not envisage happening in 2008, at the time of his first report. The second Hooper report showed that good progress can be made with public ownership of the Royal Mail. It is vital that that is not unpicked and allowed to fall into disarray. The Bill, however, creates the opportunity for that kind of uncertainty. If the Minister and the Government are so sure that selling it off is a good thing, they should tell the Committee about the dangers of an extended period of sale. Indeed, it could be said that an extended sale period for Royal Mail might lead to a Dutch auction of sorts, which may suit some potential buyers more than others. Through these and other amendments, the Committee will see that the Opposition have the best interests of Royal Mail and the post office network in this country at heart. We would not want anything done to them that puts in jeopardy the very things that they stand for—through the universal service obligation, the inter-business agreement, access points and the social benefit provided to us by post offices. I bring the House's attention to another analogy. I am sure that many Members of this House have been involved in selling a house, and we can apply the logic of that scenario to the sale of Royal Mail. Anything that is up for sale for a long time and does not sell attracts a buyer only when the price is reduced. Is that what the Minister wants? If not, she should support the amendment; otherwise, that will damage the business. If the Government cannot bring Royal Mail to market and secure a deal by the stipulated date in the amendment, a stable future for it must be delivered by removing their ability to sell off the business. The Government will be able to provide proof to those who may doubt the Minister's ability to secure a good, strong and long-lasting future for Royal Mail in the private sector by striking while the iron is hot and driving up the interest by putting a closing date on the sale. It is interesting that, during her evidence to the Committee in another place, Ms Moya Greene, the chief executive of Royal Mail, in response to a question asked by the honourable Member for Telford, was bullish about the possibility of a sale. She said: "““Should we wait? I think we should sell the company and get it the capital that it needs as soon as we can. I hope that that will be some time in 2012.—[Official Report, Commons, Postal Services Public Bill Committee, 9/11/10; c. 12.]" We are therefore asking the Government to show their support for the aims and aspirations of Ms Greene, the chief executive of Royal Mail. She believes that a sale can take place during 2012. Inserting an end date into the legislation would focus the minds of all involved to either bring forward the conclusion or admit failure. The Government can show their support for Ms Greene by inserting a date of no later than 31 December 2012. Mr Brydon, the chairman of Royal Mail Group, told the Committee in another place that he believed it would be easier to attract investment after the sale to carry on future modernisation. Indeed, it could be taken from his evidence that a 2012 sale was imperative to the future of the business, because he felt that the negotiation period to get us to the current modernisation programme was too extensive. He said: "““You have to be flexible and quick. A system that takes a year and a half to agree to get capital to do things just does not work””.—[Official Report, Commons, Postal Services Public Bill Committee, 9/11/10; c. 15.]" As I understand it, Mr Brydon is also advocating a sale, in line with Ms Greene's aspirations, because a failure to attract capital will be significantly detrimental to the business. It is not only the Minister's best intentions that the amendment has at heart, but those of Ms Greene and Mr Brydon. I am asking the Government, through the amendment, whether they actually support the aspirations of Royal Mail's management and, in particular, whether they agree with Mr Brydon that we need to be quick and flexible. The Minister may claim that there is flexibility in the Bill, but the clause's omission of a date jeopardises the quickness advocated by Mr Brydon. What will the Minister's position be on continued investment if no sale occurs before the end of the current modernisation period? Will the Government commit to further investment of capital or not? In their evidence to which I referred, Mr Brydon and Ms Greene recognised the need for continued investment to modernise the business. Ms Greene commented that a further £2 billion will be needed. If a further investment of £2 billion is required for the business and the sale has not been concluded on time, will the Minister commit to providing that funding stream? I somehow doubt it. Will the Minister comment on what difficulties could be encountered in a future sale process if Royal Mail has been starved of cash for a period after the end of the current modernisation programme? Do the Government believe that the insertion of a date in the legislation would also have an impact on our post office network? If, as the Minister pointed out, the Government see the post office network as the natural partner for a privatised Royal Mail, does she see any difficulty from the network's point of view as a result of a completion date for the sale of Royal Mail? Can she confirm that the current inter-business agreement will expire over the next couple of years? Where will delay leave the sub-postmasters and sub-postmistresses of this country, many of whom are already in a perilous state? If there are such difficulties for the Post Office, how will they be eradicated by legislation without a clear and firm date? I ask the Government to accept the insertion of an appropriate date by which the sale should be completed, because to do anything else would be damaging to Royal Mail. Royal Mail management seems to believe that a 2012 date is acceptable. Why does the Minister not believe that? I am sure that she will reflect on the strength of the presentation I have put before her. I await her response with significant interest. I urge the House to support the amendment. I beg to move.