Postal Services Bill (HL Bill 66)

Part 1 Restructuring of Royal Mail group

Removal of existing statutory restrictions on ownership

1 Removal of restrictions on ownership of Royal Mail Holdings plc etc

(1) 5Sections 65 to 67 of the Postal Services Act 2000 (which contain restrictions on
the issue and transfer of shares and share rights in Royal Mail Holdings plc and
its relevant subsidiaries) are repealed.

(2) But see section 4 of this Act (which imposes restrictions on the issue and
transfer of shares and share rights in a Post Office company etc).

10Ownership of the Royal Mail

2 Report on decision to dispose of shares in a Royal Mail company etc

(1) This section applies where the Secretary of State—

(a) has decided to undertake a particular kind of relevant disposal, or

(b) has decided that another person may undertake a particular kind of
15relevant disposal.

(2) As soon as reasonably practicable after making the decision, the Secretary of
State must lay before Parliament a report on the proposed disposal.

(3) The report must state—

(a) the kind of relevant disposal intended to be undertaken, and

(b) 5the expected time-scale for undertaking it.

(4) In this Part “relevant disposal” means—

(a) the issue or transfer of shares in a company the effect of which is to
reduce the proportion of a Royal Mail company owned by the Crown,
or

(b) 10the issue or transfer of share rights to a person the effect of which would
be, if the shares to which the share rights relate were issued or
transferred to the person, to reduce the proportion of a Royal Mail
company owned by the Crown.

(5) In this Part “Royal Mail company” means a company that—

(a) 15provides a universal postal service, and

(b) is or has at any time been in the same group as—

(i) the original holding company, or

(ii) another company that is or has at any time been a Royal Mail
company.

3 20Employee share scheme

(1) The Secretary of State must ensure that arrangements are made, before the time
at which the first relevant disposal is made in relation to a Royal Mail
company, for the establishment of an employee share scheme.

(2) Those arrangements must secure that if at any time the proportion of the
25company owned by the Crown is reduced to nil, the proportion of the company
owned by or on behalf of the employee share scheme is at that time (or has
before that time been) at least 10%.

(3) If any shares or shares rights have been transferred under the employee share
scheme to beneficiaries of the scheme, the shares or share rights are to be
30regarded for the purposes of subsection (2) as if they are still owned by or on
behalf of the scheme.

(4) “Employee share scheme” means a scheme for encouraging or facilitating the
holding of shares or share rights in the company (or companies in the same
group as the company) by or for the benefit of persons who are or include
35employees of the company.

Ownership of the Post Office

4 Restrictions on issue and transfer of shares and share rights in a Post Office
company etc

(1) No disposal of the Crown’s interest in a Post Office company may be made
40other than a disposal that—

(a) is made pursuant to a direction under subsection (2), or

(b) is authorised under subsection (3).

(2) The Secretary of State may—

(a) direct a Post Office company (if it is wholly owned by the Crown) to
issue shares or share rights to a relevant mutual, or

(b) direct a company wholly owned by the Crown to transfer shares or
share rights in a Post Office company to a relevant mutual.

(3) 5A disposal of the Crown’s interest in a Post Office company is authorised
under this subsection if—

(a) the disposal is by way of an issue or transfer of shares or share rights in
a Post Office company to a relevant mutual, and

(b) the Secretary of State has approved the issue or transfer.

(4) 10No disposal of a relevant mutual’s interest in a Post Office company may be
made other than a disposal to—

(a) another relevant mutual,

(b) the Secretary of State or the Treasury (or a nominee of either of them),
or

(c) 15a company wholly owned by the Crown.

(5) Any disposal in contravention of subsection (1) or (4) has no effect.

(6) For the meaning of “Post Office company” and “relevant mutual”, see sections
6 and 7.

(7) In this section any reference to a disposal of a person’s interest in a Post Office
20company is to—

(a) the issue or transfer of shares in a company the effect of which is to
reduce the proportion of the Post Office company owned by the person,
or

(b) the issue or transfer of share rights to a person the effect of which would
25be, if the shares to which the share rights relate were issued or
transferred to the person, to reduce the proportion of the Post Office
company owned by the person.

5 Report on transfer of interest in a Post Office company to a relevant mutual

(1) This section applies where the Secretary of State—

(a) 30has made a direction under section 4(2) (direction to issue or transfer
shares or share rights in a Post Office company to a relevant mutual), or

(b) has granted an approval under section 4(3) (approval of such issue or
transfer).

(2) As soon as reasonably practicable after making the direction or granting the
35approval, the Secretary of State must lay before Parliament a report on the issue
or transfer in question.

(3) The report must—

(a) give details of the issue or transfer (including when it is expected to
occur),

(b) 40name the body to whom shares or share rights are to be issued or
transferred, and

(c) explain how that body meets the conditions set out in section 7.

6 Meaning of “Post Office company”

(1) In this Part “Post Office company” means a company that—

(a) is engaged in the provision of post offices,

(b) is or has at any time been—

(i) a subsidiary of the original holding company, or

(ii) in the same group as a company that is or (as the case may be)
5was at that time designated under this section, and

(c) is designated for the purposes of this subsection by order made by the
Secretary of State.

(2) A company may be designated only if, immediately before it is designated, it
is wholly owned by the Crown.

(3) 10An order under subsection (1) may not be amended or revoked.

(4) An order under section 91 that appoints a day for the commencement of section
1 (removal of restrictions on ownership of Royal Mail Holdings plc etc) may
not be made unless Post Office Limited (registered number 02154540) has been
designated under subsection (1).

7 15Meaning of “relevant mutual”

(1) In section 4 “relevant mutual” means a body in respect of which the Secretary
of State considers that conditions A to C are (and will continue to be) met.

(2) Condition A is that the purpose (or main purpose) for which the body exists is
to act for the public benefit by promoting the use by the public of services
20provided by a Post Office company or at its post offices.

(3) Condition B is that the members of the body are—

(a) persons who have an interest in the use by the public of such services
(including employees of the Post Office company and other persons
engaged in the provision of its post offices), or

(b) 25persons who act on behalf of, or represent, persons within paragraph
(a).

(4) Condition C is that the body has in place arrangements for the prevention of
disposals of property or rights by the Post Office company that would be
inconsistent with the purpose (or main purpose) for which the body exists.

30Transfer of property etc

8 Transfer schemes

(1) The Secretary of State, or the original holding company (if it is wholly owned
by the Crown), may make one or more transfer schemes.

(2) A “transfer scheme” is a scheme for the transfer of property, rights or liabilities
35(or the creation of interests, rights or liabilities)—

(a) between companies within subsection (3), or

(b) between—

(i) a company within subsection (3), and

(ii) the Secretary of State or the Treasury (or a nominee of either of
40them) or a company wholly owned by the Crown.

(3) A company is within this subsection if—

(a) it is the original holding company or a subsidiary of that company, and

(b) it is wholly owned by the Crown.

(4) A transfer scheme made by the original holding company has effect—

(a) only if approved by the Secretary of State, and

(b) subject to any modifications made by the Secretary of State.

(5) 5The Secretary of State must consult the original holding company—

(a) before making a transfer scheme, and

(b) before making any modifications of a transfer scheme made by the
company.

(6) The Secretary of State may direct the original holding company (if it is wholly
10owned by the Crown) to make a transfer scheme in accordance with the
direction.

(7) Schedule 1 contains further provision about transfer schemes.

(8) Nothing in that Schedule is to be read as restricting the provision that may be
contained in transfer schemes.

(9) 15A company within subsection (3) must provide the Secretary of State with any
information or other assistance that the Secretary of State may reasonably
require for the purposes of, or in connection with, the exercise of any power
under this section or that Schedule.

(10) That duty overrides any contractual or other requirement to keep information
20in confidence.

(11) That duty is enforceable in civil proceedings by the Secretary of State—

(a) for an injunction,

(b) for specific performance of a statutory duty under section 45 of the
Court of Session Act 1988, or

(c) 25for any other appropriate remedy or relief.

9 Transfer of employees otherwise than under transfer scheme

(1) This section applies if an agreement between companies within subsection (3)
provides for the transfer from one to the other of rights and liabilities under
contracts of employment.

(2) 30This section also applies if—

(a) employees of a company within subsection (3) (“company A”) are
provided to another company within that subsection (“company B”),

(b) an agreement between the companies provides for the employees to
cease to be provided to company B, and

(c) 35company B intends to employ the employees.

(3) A company is within this subsection if—

(a) it is the original holding company or a subsidiary of that company, and

(b) it is wholly owned by the Crown.

(4) At any time before the agreement comes into force, the Secretary of State
40may—

(a) in a case within subsection (1), designate any contract of employment
the rights and liabilities under which are to be transferred under the
agreement, and

(b) in a case within subsection (2), designate any employee of company A
who is provided as mentioned in subsection (2)(a).

(5) The designation may specify or describe the contracts of employment or
employees.

(6) 5On the coming into force of the agreement, the Transfer of Undertakings
(Protection of Employment) Regulations 2006 apply in relation to—

(a) the transfer of designated contracts of employment, and

(b) the cessation of the provision of designated employees to company B,

whether or not the agreement would otherwise be regarded for the purposes
10of those regulations as giving rise to a relevant transfer.

(7) Where by virtue of the agreement a designated employee of a company within
subsection (3) (“the transferor”) becomes an employee of another company
within that subsection (“the transferee”)—

(a) a period of employment with the transferor is to be treated as a period
15of employment with the transferee, and

(b) the transfer to the transferee is not to be treated as a break in service.

10 Taxation provisions relating to re-structuring

Schedule 2 contains taxation provisions.

Supplementary provisions

11 20Annual report on post office network

(1) A Post Office company must send to the Secretary of State each year a report
on its network of post offices.

(2) The report must give details of—

(a) the number and location of the company’s post offices in England,
25Wales, Scotland and Northern Ireland,

(b) the postal services, the services provided under arrangements with a
government department and the other services that are provided at
those post offices, and

(c) the accessibility of those post offices to users of those services.

(3) 30The report must, in particular, provide information about the accessibility of
the company’s post offices to—

(a) individuals living in rural areas,

(b) individuals living in urban areas,

(c) small businesses,

(d) 35disadvantaged individuals,

(e) individuals with low incomes,

(f) individuals with disabilities, and

(g) elderly individuals.

(4) The report must contain such other information as the Secretary of State may
40from time to time require.

(5) The Secretary of State must lay a copy of the report before Parliament.

(6) The Secretary of State must give a copy of the report to—

(a) the Scottish Ministers,

(b) the Welsh Ministers, and

(c) the Office of the First Minister and deputy First Minister in Northern
5Ireland.

12 Directions

(1) This section applies to directions under this Part.

(2) A direction must be in writing.

(3) A direction may be varied or revoked by a further direction.

(4) 10A person to whom a direction has been given has a duty to comply with it.

(5) That duty is enforceable in civil proceedings by the person by whom the
direction was given—

(a) for an injunction,

(b) for specific performance of a statutory duty under section 45 of the
15Court of Session Act 1988, or

(c) for any other appropriate remedy or relief.

Interpretation

13 Ownership of companies

(1) This section applies for the purposes of this Part.

(2) 20References to ownership of a company are to ownership of its issued share
capital.

(3) References to ownership of a company include indirect ownership of it.

(4) References to the reduction of the proportion of a company owned by the
Crown include a reduction to nil.

(5) 25For the purposes of determining the proportion of any company owned by the
Crown, property and rights of the Secretary of State or the Treasury (or a
nominee of either of them) are to be regarded as property and rights of the
Crown.

14 Part 1: general interpretation

(1) 30In this Part—

• “agreement” means agreement in writing,

• “company” means any body corporate,

• “debt securities” means any instrument creating or acknowledging
  indebtedness which is issued by a company (including, in particular,
  35debentures, loan stock, bonds and certificates of deposit),

• “the original holding company” means the company that was nominated
  under section 62 of the Postal Services Act 2000 (transfer of property etc
  to nominated company),

Postal Services BillPage 8

• “post office” means any premises or vehicle in the United Kingdom from
  which postal services, or services provided under arrangements with a
  government department, are provided directly to the public,

• “Post Office company” has the meaning given by section 6,

• 5“relevant disposal” has the meaning given by section 2,

• “Royal Mail company” has the meaning given by section 2,

• “securities”, in relation to a company, includes—

  (a)

  shares, debt securities and other securities of the company
  (whether or not constituting a charge on the assets of the
  10company), and

  (b)

  the right to subscribe for, or acquire, such securities and any
  other rights in connection with such securities,

• “shares” include stock,

• “share rights”, in relation to any shares, means—

  (a)

  15rights to subscribe for or acquire the shares, and

  (b)

  any other rights in connection with the shares,

• “subsidiary” has the meaning given by section 1159 of the Companies Act
  2006, and

• “wholly owned by the Crown”, in relation to a company, means the
  20Crown owns all of it.

(2) In this Part references to a person providing a universal postal service have the
same meaning as in Part 3 (see section 63(2) and (3)).

(3) In this Part references to a company’s post offices (or network of post offices)
are to those post offices (whether or not owned or operated by the company)
25that the company is engaged in providing.

(4) For the purposes of this Part (other than Schedule 2) a company is to be
regarded as being in the same “group” as another company if, for the purposes
of section 1161(5) of the Companies Act 2006, the company is a group
undertaking in relation to that other company.

30Part 2 Royal Mail Pension Plan

Introduction

15 Introduction

(1) In this Part—

• 35“the RMPP” means the Royal Mail Pension Plan,

• “qualifying member of the RMPP” means a person who is or has been a
  member of the RMPP of a prescribed description,

• “the qualifying time” means the time immediately before such date as
  may be prescribed (which may be before the passing of this Act),

• 40“qualifying accrued rights” means—

  (a)

  any right which, at the qualifying time, has accrued to or in
  respect of a qualifying member of the RMPP to future benefits
  under the RMPP,

  Postal Services BillPage 9

  (b)

  any entitlement under the RMPP to the present payment of a
  pension or other benefit which a qualifying member of the
  RMPP has at the qualifying time, or

  (c)

  any entitlement to benefits, or rights to future benefits, under
  5the RMPP which a person who has survived a qualifying
  member of the RMPP has at the qualifying time in respect of the
  member.

(2) For the purposes of the definition of “qualifying accrued rights”—

(a) references to pensions or other benefits (including future benefits) do
10not include money purchase benefits but, subject to that, do include
benefits attributable to additional voluntary contributions, and

(b) references to a right include a pension credit right.

(3) In the event that qualifying members of the RMPP include any person (“P”)
who is in pensionable service under the RMPP after the qualifying time—

(a) 15the qualifying accrued rights in respect of P, and

(b) the amounts payable in respect of those rights,

are to be determined for the purposes of this Part on the assumption that P had
opted, immediately before the qualifying time, to terminate that service.

Powers exercisable

16 20Transfer of qualifying accrued rights to new public scheme

(1) The Secretary of State may by order establish a scheme (a “new public scheme”)
which, in respect of pensionable service under the RMPP before the qualifying
time, provides for pensions or other benefits to be payable to or in respect of
persons who are or have been qualifying members of the RMPP.

(2) 25The Secretary of State may by order make provision for the transfer of
qualifying accrued rights to a new public scheme (without the need for any
approval or consent to the transfer).

(3) An order under subsection (2) may include provision for the discharge of
liabilities in respect of the qualifying accrued rights that are transferred.

(4) 30A new public scheme may—

(a) include provision for increasing in particular circumstances the
amounts payable in respect of qualifying accrued rights,

(b) include provision in relation to any persons who are active members of
the RMPP which (despite the effect of section 15(3)) differs from the
35provision made in relation to persons who are deferred members of the
RMPP,

(c) include provision for the payment of transfer values, and

(d) include provision for the transfer of money purchase benefits under the
RMPP into the scheme (whether or not the contributions to which those
40benefits are attributable are made before or after the qualifying time)
and the conversion of those benefits into benefits under the scheme.

(5) An order under this section may include provision for treating a new public
scheme as an occupational pension scheme for the purposes of any provision
made by or under any enactment specified, or of a description specified, in the
45order.