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Postal Services Bill

The Government recognise the important role that employees will play in the modernisation of Royal Mail. The implementation of the business transformation agreement reached in March 2010 is vital to the success of the company. This requires changes in the way in which people work and will impact on everybody employed by the company. This agreement sets out a new relationship between the management and the union in Royal Mail which seeks to improve industrial relations, which have been so poor in recent years. Progress on the implementation of the agreement has been encouraging, and we encourage both sides of the agreement to build on this promising start. Nobody inside or outside the House wants to see a return to the national strikes that so damaged Royal Mail and the postal market in 2007 and 2009. The current position is that there is no employee representation on the board of the Royal Mail. My understanding is that there has been no pressure or suggestion that there should be an employee representative on the board. In public ownership the Royal Mail is being run on a commercial basis, so I fail to see that a change in ownership should automatically require that there should be an employer representative on the board, a requirement that the amendment proposes should be written into primary legislation. I have listened to the noble Lord, Lord Lea, and the noble Baroness, Lady Turner of Camden, with her terrific record within the union movement. The noble Lord, Lord Cotter, talked about bringing staff with you; I have done that myself. In a small company, especially, you are all working together very closely and you can really involve the workforce in a way that large companies sometimes cannot. The noble Lord, Lord Brooke of Alverthorpe, talked about shares and NATS. I know how well he did there. On the point made by the noble Lord, Lord Myners, with his corporate governance, and the noble Lord, Lord Hoyle, on employee participation, a seat on the board is not the only way to actively encourage employee participation. For example, the concept of world-class mail at Gatwick and elsewhere has shown what increased engagement can achieve. We hope that there will be increased engagement. That is one of the reasons for making sure that shares are passed in such a large number to employees of the company. I am not at all clear how such an arrangement as proposed in the amendment would work in practice. For example, how does it link up with the CWU and Unite’s representation of the workforce and their roles in collective bargaining? I should say that the Government are not saying that there should never be an employee representative on the board. Royal Mail may decide in future that there are advantages to doing exactly that. I refer us back to my noble friend Lord Eccles, who suggested that Moya Greene might be a wonderful example of someone who could be brought on to the board to the benefit of the company, as she is at the moment the chief executive. However, I do not believe that it is appropriate to impose such a requirement though legislation. Issues relating to board composition are properly issues for the company and its shareholders who, thanks to the Bill, will include its employees. I therefore ask the noble Lord to withdraw his amendment.