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Postal Services Bill

My Lords, I was sorry to hear the Minister say a few moments ago that she was looking forward to debating with my noble friend Lord Young and to listening to what he had to say, because I am going to interpose in that relationship. I hope that that is not to her discomfort or concern. However, we want to give my noble friend a rest and to allow him to come back even more vigorously. This amendment places a duty on the Secretary of State such that, before making a relevant disposal, the Secretary of State must lay before Parliament a report setting out how the value of shares in the Royal Mail Group has been assessed and, with this, she or he must provide an independent report of the value being placed on the business. This is a straightforward amendment and it has, perhaps uniquely, the support of such diverse groups as the TaxPayers’ Alliance and the Communication Workers Union. If I may say so, its beauty is in its simplicity, but its logic is derived from the experience of privatisations long past. Several noble Lords have mentioned the sell-offs of British Gas and British Telecom. The British Gas share issue totalled £9 billion in 1986—at that time, the highest-ever equity sale on the UK stock market. However, within a year the value of those shares, initially at £1.35, had risen significantly. A few years before that, in 1982 in the first of the big privatisations, the share price of British Telecom rose 40p on the day after the shares were sold, making an immediate and tidy profit for investors. Of course, those were different times, and a privatised Royal Mail is neither British Gas nor British Telecom, but what links these original privatisations to the present day is a worry that, in the rush to get this show on the road, the Government appear to be glossing over the fundamental question which would surely occur to anyone selling anything, whether it is a watch on eBay, a second-hand car or a company the size of Royal Mail. What is it worth? Valuation is an art. Some of the value can of course be derived from the assets, the stocks and the history of trading. Removing the pension liabilities is a huge start in this case, but it is also worth pointing out that a long-run inter-business agreement with the Post Office and a firm commitment to use the Royal Mail by government departments will be material facts in any calculation of value. Valuation is a two-way process. It is often conceived as a willing-buyer/willing-seller situation, and we hope that that will be the case in this sale. How different would it be if there were a forced sale or no ready buyer and we had to think of other ways to try to get rid of the assets? That would change the way in which the valuation was approached. There is a real prospect that Royal Mail can be under- or even over-valued by the Government. We have searched through the documentation with which we have been provided and through the written debates in the other place, and we have yet to sense what Ministers think the Royal Mail will be worth. If they have a sense of the valuation, they are very coy about it. I have seen estimates that have suggested that the value could be as low as £700 million, which seems ridiculously low, or as much as £7 billion, which may be ridiculously high. Of course, many internal factors will impact on the value of the business—the regulatory regime, the industrial relations climate, the nature of the obligations being placed on the Royal Mail and the arrangements for the Post Office. All those factors and others will determine the value of the business and its share price on flotation. Taxpayers and the employees of Royal Mail, who stand to gain 10 per cent or more of the business, deserve not to be kept in the dark about its value. After all, 10 per cent of £700 million is far less than 10 per cent of £7 billion. This amendment calls on the Minister to lay before Parliament an accurate value for the Royal Mail and the rationale for the setting-out of its price prior to its sale. The work will have to be done in any case; the City will expect a rigorous and detailed valuation so that it can make a judgment on the share price issue. The underwriters who facilitate the sale will have to do likewise. We feel very strongly that Parliament should be kept fully informed as well, and we would like to see all aspects of the sale disclosed to Parliament before it goes forward. I beg to move.