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Postal Services Bill

My Lords, this group of amendments seeks to add to the Bill a requirement for the Secretary of State to make an Oral Statement and obtain additional parliamentary approval before there can be a relevant disposal of shares in a Royal Mail company. Amendment 5 of the noble Lord, Lord Young, proposes that an order on the disposal should be subject to the affirmative procedure. The noble Baroness’s Amendments 6 and 17 seek to insert into the Bill a requirement for a super-affirmative procedure before there can be a disposal of shares. Like my noble friend Lord Eccles, I congratulate her on the thoroughness of these amendments which set out clearly the process that is required under the super-affirmative procedure. The noble Baroness may be new to your Lordships’ House but from these amendments it is clear that her knowledge and attention to detail will ensure that its business receives proper and close scrutiny in the years to come. I congratulate her on that. From my noble friend Lord Eccles we received a master class in how to buy and sell businesses. I suspect that I shall lean on him heavily as this Bill goes through to make speeches like that again. I do not believe that further parliamentary procedures should be required before there can be a disposal of shares in Royal Mail. A committee in the other place has fully debated the disposal of shares as set out in this Bill and this Committee of the Whole House is now debating the issue. The disposal of shares to enable an injection of private capital into Royal Mail is part of a package of measures set out in this Bill which should be scrutinised as a package. The disposal of shares should not be looked at in isolation but alongside the other two essential parts of the package—tackling the pension deficit and reforming the regulatory regime. Richard Hooper emphasised the importance of this package when he gave evidence to the committee in the other place. The noble Lord, Lord Young, asked about the timetable for state aid clearance. We have not at this stage notified the European Commission of the proposed aid but we will do so as soon as we are ready. As I said earlier, this Government have learnt the lessons of 2009. We will take a staged approach to all the steps we need to take before a sale can be completed. The Opposition’s Postal Services Bill in 2009 did not include a requirement for additional parliamentary procedures before there could be a disposal of shares. As noble Lords opposite themselves said in 2009, additional parliamentary procedures would be unwelcome because they would create uncertainty for potential investors. During the passage of that Bill, noble Lords representing the then Government suggested that noble Lords would agree that the appropriate place for commercial negotiations to take place was not on the Floor of the House. Noble Lords opposite have expressed interest in the value of Royal Mail. The uncertainty that would exist if a disposal is subject to voting in Parliament would only further reduce the value of the business. This would damage the chances of achieving the best deal for the taxpayer and the company from any future disposal. I fail to see how this amendment fits with other amendments tabled by noble Lords where there has been an emphasis to take forward a sale of shares quickly. These amendments would insert time-consuming mechanisms that would add delay to a disposal. With regard to legislative provision for the Secretary of State to make an Oral Statement, we do not think that is necessary whenever there is a sale of shares. The Bill is setting the minimum requirements for government action. What is important is the principle that information on this sale should be provided to Parliament. The requirement for a report in Clause 2 applies not only to the first sale of shares but any subsequent sale of shares. I fully accept that an Oral Statement might, of course, be appropriate for the first sale of shares, but would it also be a good use of time if, for instance, five years later Ministers decided to put an extra 100 shares into the employee share scheme? We are committing in Clause 2 that there should be a report to Parliament every time the Government reduce their stake in Royal Mail. We will, of course, discuss with the House authorities the appropriate format for such reports at the relevant times, including whether or not an Oral Statement is appropriate. Finally, the noble Baroness, Lady Drake, asks in her amendments for evidence of consultation and an impact assessment. I point the noble Baroness to the extensive consultation carried out by Richard Hooper in his two independent reviews on the future of the Royal Mail and the impact assessment published alongside the Bill. On this basis, I ask the noble Lord to withdraw the amendment.