Postal Services Bill (HL Bill 70)

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its relevant subsidiaries) are repealed.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,

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

(c) the objective intended to be achieved by the undertaking of it.

(4) The report must—

(a) contain information about the expected commercial relationship, after
the proposed disposal, between the Royal Mail company in question
10and any Post Office company, and

(b) if the proposed disposal would result in shares or share rights being
owned by or on behalf of an employee share scheme for the first time,
give details of the scheme.

In paragraph (b) “employee share scheme” has the meaning given by section 3.

(5) 15In 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) the issue or transfer of share rights to a person the effect of which would
20be, 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.

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

(a) provides a universal postal service, and

(b) 25is 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 Employee share scheme

(1) 30The 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
company owned by the Crown is reduced to nil, the proportion of the company
35owned 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
regarded for the purposes of subsection (2) as if they are still owned by or on
40behalf 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
employees 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
5other 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 by order—

(a) direct a Post Office company (if it is wholly owned by the Crown) to
10issue 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) A disposal of the Crown’s interest in a Post Office company is authorised
under this subsection if—

(a) 15the 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 by order approved the issue or transfer.

(4) An order under subsection (2) or (3)(b) is subject to affirmative resolution
procedure.

(5) 20No 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) 25a company wholly owned by the Crown.

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

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

(8) In this section any reference to a disposal of a person’s interest in a Post Office
30company 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
35be, 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 proposes to make an order
40under section 4(2) or (3)(b) (order directing or approving issue or transfer of
shares or share rights in a Post Office company to a relevant mutual).

(2) The Secretary of State must lay before Parliament a report on the proposed
issue or transfer before making the order.

(3) The report must—

(a) give details of the proposed issue or transfer (including the expected
time-scale for the issue or transfer),

(b) name the body to whom shares or share rights are proposed to be
5issued 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) 10is 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)
was at that time designated under this section, and

(c) is designated for the purposes of this subsection by order made by the
15Secretary of State.

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

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

(4) An order under section 93 that appoints a day for the commencement of section
201 (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 Meaning of “relevant mutual”

(1) In section 4 “relevant mutual” means a body in respect of which the Secretary
25of 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
provided by a Post Office company or at its post offices.

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

(a) 30persons 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) persons who act on behalf of, or represent, persons within paragraph
(a).

(4) 35Condition 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.

Transfer of property etc

8 Transfer schemes

(1) 40The 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
(or the creation of interests, rights or liabilities)—

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

(b) between—

(i) 5a company within subsection (3), and

(ii) the Secretary of State or the Treasury (or a nominee of either of
them) 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) 10it 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) The Secretary of State must consult the original holding company—

(a) 15before 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
owned by the Crown) to make a transfer scheme in accordance with the
20direction.

(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) A company within subsection (3) must provide the Secretary of State with any
25information 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
in confidence.

(11) 30That 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) for any other appropriate remedy or relief.

9 35Transfer 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) This section also applies if—

(a) 40employees 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) company 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
5may—

(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
10who is provided as mentioned in subsection (2)(a).

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

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

(a) 15the 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
of those regulations as giving rise to a relevant transfer.

(7) Where by virtue of the agreement a designated employee of a company within
20subsection (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
of employment with the transferee, and

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

10 25Taxation provisions relating to re-structuring

Schedule 2 contains taxation provisions.

Supplementary provisions

11 Annual report on post office network

(1) A Post Office company must send to the Secretary of State each year a report
30on 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,
Wales, Scotland and Northern Ireland,

(b) the postal services, the services provided under arrangements with a
35government 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) In subsection (2)(b) the reference to postal services includes postal services
provided pursuant to arrangements made with a person who provides a
40universal postal service.

(4) The 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) disadvantaged individuals,

(e) 5individuals with low incomes,

(f) individuals with disabilities, and

(g) elderly individuals.

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

(6) 10The Secretary of State must lay a copy of the report before Parliament.

(7) 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
15Ireland.

(8) A Post Office company’s duties under this section are enforceable in civil
proceedings by the Secretary of State—

(a) for an injunction,

(b) for specific performance under section 45 of the Court of Session Act
201988, or

(c) for any other appropriate remedy or relief.

12 Annual report on postal museum collection and archive

(1) A Royal Mail company must send to the Secretary of State each year a report
on its activities in relation to—

(a) 25the British Postal Museum Collection, and

(b) the Royal Mail Archive.

(2) Before preparing the report, the company must consult any Post Office
company.

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

(4) 30A Royal Mail company’s duties under this section are enforceable in civil
proceedings by the Secretary of State—

(a) for an injunction,

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

(c) 35for any other appropriate remedy or relief.

(5) This section applies irrespective of whether the British Postal Museum
Collection or the Royal Mail Archive alters the name by which it is known or
forms part of a wider collection or archive.

13 Directions

(1) 40This 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) A 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) 5for an injunction,

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

(c) for any other appropriate remedy or relief.

Interpretation

14 10Ownership of companies

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

(2) References 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) 15References to the reduction of the proportion of a company owned by the
Crown include a reduction to nil.

(5) For 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
20Crown.

15 Part 1: general interpretation

(1) In this Part—

• “agreement” means agreement in writing,

• “company” means any body corporate,

• 25“debt securities” means any instrument creating or acknowledging
  indebtedness which is issued by a company (including, in particular,
  debentures, 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
  30to nominated company),

• “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,

• 35“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
  40company), and

  (b)

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

• “shares” include stock,

Postal Services BillPage 9

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

  (a)

  rights 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
  52006, and

• “wholly owned by the Crown”, in relation to a company, means the
  Crown 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 65(2) and (3)).

(3) 10In 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)
that 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
15of section 1161(5) of the Companies Act 2006, the company is a group
undertaking in relation to that other company.

Part 2 Royal Mail Pension Plan

Introduction

16 20Introduction

(1) In this Part—

• “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,

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

• “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
  30under the RMPP,

  (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
  35the 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
40not 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—