|Postal Services Bill - continued||House of Commons|
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Clause 46: Power of the Council to investigate other matters
67. Clause 46(1) allows the Council to investigate any matter, not being a matter it has a duty to investigate under the terms of clause 45 which appears to it to relate to the interests of users of relevant postal services (defined in clause 40) or which relates to the provision of advice to the Commission about the number and location of public post offices (within the terms of clause 31).
68. Subsection (3) allows the Council to send reports on any matter investigated under subsection (1) to specified public bodies.
69. Subsection (4) allows the Council, subject to the requirements of subsection (5), to send reports on matters investigated to persons who the Council thinks might have an interest in these matters, or to publish a report in any manner the Council considers appropriate.
70. Subsections (5) and (6) require the Council, so far as practicable, to exclude from any report sent to any person or published under subsection (4), any matter which might seriously or prejudicially affect the interests of the person to whom it relates (unless that person consents).
Clause 47: Power of the Council to require information71. Clause 47 gives the Council the power to require information which it may reasonably require in the exercise of its functions from the Commission, universal service providers, or other licence holders. The Commission or other persons specified in this section, may refuse to supply information to the Council under certain circumstances.
Clause 48: Provision of information by the Council to the Commission
72. Clause 48 gives the Council the duty to provide to the Commission information which the Commission may need in order to carry out its functions. But this duty is limited by the Secretary of State having the power to make an order specifying the conditions in which the Council may refuse to provide information to the Commission. If the Council refuses to supply information to the Commission, it must give notice to the Commission explaining why it has reached this decision. The Commission has the power to publish this notice.
Clause 49: Memorandum of Understanding
73. Clause 49 gives the Council and the Commission the duty to make arrangements on co-operation and exchange of information between them and on consistent treatment of matters which affect both of them, and also the duty to prepare a document setting out these arrangements (a Memorandum of Understanding; MoU). The Council and the Commission have the duty to send this MoU to the Secretary of State who has the duty to lay it before each House. The content of this MoU is entirely at the discretion of the Council and the Commission.
Clause 50: Forward work programmes
74. Clause 50 provides that the Commission and the Council shall publish forward work programmes before the beginning of each financial year with a description of the projects each intends to undertake during that year. Such descriptions need not include routine activities in exercise of their functions. The description of the projects shall cover the objectives and the estimated costs to be incurred during the year in question.
Part IV Reorganisation of the Post Office
Clause 51: Transfer of property etc. to nominated company75. Clause 51 permits the Secretary of State, after consulting the Post Office, to transfer by order all the property, rights and liabilities of the Post Office to a company wholly owned by the Crown which has been formed under the Companies Act 1985. He may vary or revoke the order with a subsequent order before any transfer has taken place. Further provisions about the transfer are made in Schedule 3.
Clause 52: Government holding in the Post Office company and its subsidiaries
76. Clause 52 requires the Post Office company or any of its subsidiaries to issue securities (securities are defined in clause 67) upon the direction of the Secretary of State. Those securities shall, as directed by the Secretary of State, be issued to the Treasury or the Secretary of State, or to a person approved for the purpose of a disposal under clause 56, or to the Post Office company or a relevant subsidiary (as defined in subsection 8). Clause 66 has the effect that nominees may be appointed by the Treasury or the Secretary of State for the purpose of this clause. The Secretary of State's power to direct for the purpose of Clause 56 ceases in the event that the Crown no longer wholly owns the Post Office company. Securities issued under this clause can be issued at such times and on such terms as the Secretary of State directs, but any shares issued will bear a nominal value, as directed by the Secretary of State and be treated as if fully paid for the purposes of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986. A relevant subsidiary is defined in subsection (8) as one which delivers or collects or sorts or transports relevant postal packets (of the type defined in clause 4) in the United Kingdom or which provides a registered postal service in the United Kingdom.
Clause 53: Government investment in securities of the Post Office company77. Clause 53 empowers the Treasury or the Secretary of State (with Treasury consent) to acquire any securities issued by the Post Office company (or its subsidiaries). The Secretary of State can only dispose of such securities with the consent of the Treasury. The Secretary of State does not require the consent of the Treasury for disposals permitted under clause 56. Clause 66 has the effect that nominees may be appointed by the Treasury or the Secretary of State for the purpose of this clause.
Clause 54: Restriction on issue of shares to third parties
78. Clause 54 prevents shares in the Post Office company or any relevant subsidiary being issued to anyone other than the Treasury and the Secretary of State (or any nominee of either of them), unless approval has been given by Parliament under the procedure set out in clause 56 to dispose of shares to a named third party. Subsection (2)(b) does not prevent shares being issued when the Secretary of State has so directed in accordance with clause 52(4).
Clause 55: General restriction on disposals of shares
79. Clause 55 prohibits the Treasury and the Secretary of State (or any nominee) disposing of shares or share rights in the Post Office company (or any relevant subsidiary) other than to each other, as permitted by subsection (3). However, the prohibition does not apply if the prior approval of Parliament has been obtained in accordance with clause 56. This follows the policy, set out in the Government's White Paper (Post Office Reform, cmnd 4340), that after transformation to a Companies Act company, the Post Office would remain Government-owned and shares would only be exchanged or sold in order to cement commercial strategic alliances.
80. Subsection (2) prohibits the Post Office company or any of its subsidiaries (or their nominees) disposing of shares or share rights in any relevant subsidiary (as defined in clause 54). However, again in accordance with subsection (4), the prohibition does not apply if Parliamentary approval has been obtained under the procedure in clause 56.
Clause 56: Approved disposals
81. Clause 56 sets out the procedure to be followed in order to obtain the approval of Parliament to make share issues or disposals which would otherwise be prohibited by clause 55.
82. Subsection (2) specifies the minimum information to be contained in a motion to be presented for the approval of both Houses.
83. Subsection (3) sets out the conditions that must be met before a motion relating to the disposal of shares in the Post Office company may be moved, notably that the company has agreed to take part in a joint venture or other partnership which it considers to be in its commercial interests, which involves the issue or disposal of shares in the Post Office company. In addition the motion may not be moved unless the Post Office company has recommended to the Secretary of State that the disposal takes place, the Secretary of State is satisfied that the issue or disposal secures the proposed arrangement and that it is in the commercial interests of the company; and the Treasury has given consent to the proposed issue or disposal.
84. Subsection (4) sets out the pre-conditions to be met before moving a motion relating to issue or disposal of shares in a relevant subsidiary (as defined in clause 52) in order to enable the Post Office company or a relevant subsidiary to take part in a joint venture or other partnership. The pre-conditions are generally similar to those set out in subsection (3).
Clause 57: Loans by the Secretary of State to the Post Office company and its subsidiaries
85. Clause 57 empowers the Secretary of State, with the approval of the Treasury, to lend to the Post Office in any currency once it becomes a company and authorises the necessary funds to be provided from the National Loans Fund. The clause provides for lending either to the Post Office company or direct to any of its subsidiaries on terms to be agreed (with the Treasury's consent) between the Secretary of State and the Post Office company/subsidiary, except that interest rates are to be as directed by the Secretary of State with the approval of the Treasury. The lending and issues from the National Loans Fund may be in any foreign currency as well as sterling. Any monies repaid to the Secretary of State in respect of interest or capital on the loan will be repaid into the National Loans Fund. The provisions of this clause make section 5 of the National Loans Act 1968 applicable to the rate of interest payable on loans and the rate will be subject to the requirements of that section.
Clause 58: Guarantees by the Secretary of State to the Post Office company and its subsidiaries
86. Clause 58 empowers the Secretary of State to give guarantees in respect of any financial obligation of the Post Office company or its subsidiaries. This power is taken because under Treasury guidance, it is usual practice for nationalised industries which are borrowing from non-Government sources (e.g. to provide an overdraft facility) to obtain a Government guarantee to secure the cheapest available funds for the public sector. However, this may not be appropriate in all circumstances, and it is not envisaged that this power would be used often in the Post Office's case. The Secretary of State must make a statement to Parliament about the giving of any such guarantees as soon as practicable after they have been given. If any payments are made by the Secretary of State under a guarantee, the Secretary of State will direct the terms (as to interest and capital) on which the monies are repayable by the Post Office company or, as relevant, by the subsidiary. At the end of any financial year in which any monies were paid by the Secretary of State in respect of a guarantee, a statement will be laid before each House of Parliament stating the sums paid. A statement will also be laid before each House after the end of each financial year regarding the amount of any outstanding debt or obligation which is the subject of the guarantee given by the Secretary of State. This will allow Parliament to be informed about the remaining risk under any outstanding guarantees.
Clauses 59 and 61: Provisions about financial restructuring
87. Clauses 59 and 61 are intended to facilitate the restructuring of the balance sheet on 1 April 2002, as announced in the White Paper. The balance sheet will be restructured in order to place the Post Office company on a more commercial footing and allow benchmarking against its competitors. At present the Post Office holds on its balance sheet the government securities and deposits with the National Loans Fund (NLF) which represent accumulated reserves, in effect accumulated dividends, which were not payable to the Consolidated Fund.
88. Clause 59 empowers the Secretary of State, with the consent of the Treasury and subject to negative resolution order, to cancel any liability to Government of the Post Office company (or its subsidiaries), including any in respect of the fulfilment of guarantees, but not the principal or interest on loans owed to the Secretary of State and payable into the National Loans Fund or any form of taxation, duty or fine.
89. Clause 61 empowers the Secretary of State, after consultation with the Post Office company and with the consent of the Treasury, to give directions to the Post Office company requiring it to allocate amounts to general reserves or to reserves for a particular purpose; and to reallocate those reserves to other specified purposes. The Secretary of State may also direct the Post Office company to cause any of its subsidiaries to create such reserves or to reallocate them for other purposes.
90. The Secretary of State may also direct how amounts allocated to a reserve are to be applied and may require such amounts to be paid out as if they were profits available for distribution within the meaning of section 263(1) of the Companies Act 1985 or Article 271(1) of the Companies (Northern Ireland) Order 1986 (distributions to be made out of profits). This provision therefore enables the Secretary of State to require the payment of dividends out of these reserves.
91. Subsection (4) provides that no reserve created under this clause shall count as an undistributable reserve for the purposes of section 264(3)(d) of the Companies Act 1985 or Article 272(3)(d) of the Companies (Northern Ireland) Order 1986 (restriction on distribution of assets). However, under subsection (5), amounts allocated to reserves, apart from any amounts which the Secretary of State has authorised to be applied as if they were profits available for distribution, shall be treated as if they were unrealised profits of the company (for the purpose of section 264(3)(c) of the Companies Act 1985 or Articles 272(3)(c) of the Companies (Northern Ireland) Order 1986). This means that the reserves created under this clause would only be distributable once the Secretary of State has given a direction requiring their application as distributable profit.
92. This clause enables the Government to extract as a dividend, payable to it and then into the Consolidated Fund, the Post Office company's holdings of government securities and deposits with the National Loans Fund which represent accumulated reserves.
Clause 60: Limit on lending and other arrangements
93. Clause 60 sets a limit of £5,000 million on the total of the Crown's financial arrangements with the Post Office company and any of its subsidiaries and defines what is to be included in the calculation of the figure. The Secretary of State may increase the limit set out in the Bill by an order approved by a resolution of the House of Commons. The limit is in part required in order to provide assurance to Parliament that the Post Office company and its subsidiaries are not being afforded unlimited access to the National Loans Fund. The limit also provides assurance that unlimited calls may not be made on monies to be provided by Parliament.
Clause 62: Dissolution of the Post Office
94. Clause 62 provides for the Post Office to continue in existence after the day of transfer of the business of the Post Office to the Post Office company, for a transitional period. It gives the Secretary of State the power to dissolve the Post Office by order, following consultation with the Post Office and Post Office company, once he is satisfied that nothing further remains to be done under paragraph 5 of Schedule 3.
Clause 63: Accounts of the Secretary of State in relation to loans
95. Clause 63 requires the Secretary of State, at the Treasury's direction, to prepare an account in the form required by the Treasury showing:
96. The account must be sent to the Comptroller and Auditor General by 30 November following the end of the financial year in question and he will examine, certify and report on the account and lay copies of it and his report before each House.
Clause 64: Accounts and directors' reports of the Post Office company
97. Clause 64 requires the Post Office company to send to the Secretary of State:
(a) a copy of all annual accounts on which the company's auditors have made a report under section 235 of the Companies Act 1985, and
(b) a copy of the auditor's report
as soon as is practicable after the report is made. The Post Office company must also send to the Secretary of State a copy of its directors' report made in respect of each financial year under section 234 of the Companies Act 1985 as soon as is practicable after the report has been approved and signed. When he receives them the Secretary of State is required to lay a copy of the accounts and reports before both Houses of Parliament.
Clause 65: Information requirements on the Post Office company
98. Clause 65 empowers the Treasury to require the Post Office company to provide information (for example, forecasts of its capital expenditure and profits) for the performance of its functions in relation to public sector finance. The Treasury may apply to the court for any default under clause 65 to be made good.
Clause 66: Exercise of functions through nominees
99. Clause 66 empowers the Treasury, or the Secretary of State with the Treasury's consent, to appoint a person to act as their nominee for the purposes of clause 52 (Government holding in the Post Office company and its subsidiaries) and clause 53 (Government investment in securities of the Post Office company). Any nominees shall hold and deal with the securities on such terms and manner as directed by the Treasury, or with the consent of the Treasury, the Secretary of State.
Clause 67: Interpretation: Part IV
Part V Offences in Relation to Postal Services
Clause 68: Interfering with the mail: postal operators
100. Clause 68(1) provides for it to be an offence for a person engaged in the business of a postal operator to delay or open postal packets without reasonable excuse. It amalgamates the content of offences previously included in the Post Office Act 1953.
Clause 69: Interfering with the mail: general
101. Clause 69(1) provides for it to be an offence if other persons (not covered by clause 68 above) intentionally delay or open postal packets without reasonable excuse. It amalgamates the content of offences previously included in the Post Office Act 1953.
102. Subsection (2) makes it an offence for a person, intending to act to a person's detriment and without reasonable excuse, to open a postal packet which he knows or suspects has been incorrectly delivered to him.
Clause 70: Prohibition on sending certain articles by post103. Clause 70 contains two offences of sending postal packets by post which either contain articles likely to injure other postal packets in the course of transmission by post or those handling the packet, or indecent or obscene material. The offence applies to postal packets handled by any postal operator. The clause replaces section 11 of the Post Office Act 1953.
Clause 71: Prohibition on affixing advertisements on certain letter boxes, etc.
104. Clause 71 contains offences in relation to the fixing of advertisements, documents, boards or things onto post offices, post boxes or other property belonging to, or used by universal service providers in connection with the provision of a universal postal service, and other damage or disfigurement to such property. This clause replaces section 61 of the Post Office Act 1953.
Clause 72: Prohibition on misleading descriptions
105. Clause 72 contains offences intended to prohibit a person maintaining a post box or post office with the purpose of deceiving members of the public into believing that the post box or post office is operated by a universal service provider. This clause replaces section 64 of the Post Office Act 1953.
Clause 73: Obstruction of business of universal service providers
106. Clause 73 contains offences in relation to the obstruction of persons engaged in the business of a universal service provider in execution of their duty in connection with the provision of a universal postal service or the obstruction of the business of a universal service providers' post office. It also enables the police to remove from the premises a person obstructing a post office's business. This clause replaces section 65 of the Post Office Act 1953.
Part VI Universal Postal Service: Supplementary
Clauses 74, 75, 76 and 77: Schemes and limitation of liability
107. Clauses 74,75,76 and 77 concern the legal relationship between a universal service provider and its customers. They replace sections 28 to 30 of the Post Office Act 1969 which dealt only with the relationship between the Post Office and its customers. The new provisions provide for the same privileges to apply to a universal service provider if a condition of his licence is that he should provide a universal postal service.
108. These clauses enable a universal service provider to make and operate schemes setting out terms and conditions for the provision of postal services (in place of contracts), which limit liability, in particular the liability for consequential losses. The purpose of having such schemes is to ensure that the universal service will continue to be provided. Where a universal service is provided through the use of post boxes (as is the case at present) there is no proof of posting or of the value of contents. The removal of immunity could result in universal service providers being forced to require proof of posting to determine eligibility for any compensation for service failure. These provisions provide for all universal service providers to have immunity to avoid this.
Clause 78: Power to modify sections 74 to 77
109. Clause 78 creates a power for the Secretary of State to modify clauses 74 to 77 by order having first consulted the Commission, the Council, licence holders and any such persons as the Secretary of State considers appropriate. It is intended that the need for and scope of the provisions in clauses 74 to 77 should be reviewed to ensure that they continue to be in the best interests of users of postal services. The purpose of this power is to ensure that the conclusions of any such review could be implemented without unnecessary delay.
Clause 79: Provision relating to land110. Clause 79 gives effect to the provisions of Schedules 4 and 5, which relate, respectively to the compulsory acquisition of land by universal service providers and other provisions relating to land.
Clause 80: Inviolability of mail111. Clause 80(1) and (2) provide for mail-bags, packets in the post and their contents to be immune from examination, seizure or detention, as if they were the property of the Crown.
112. Subsection (3) provides for exceptions to the above immunities where the Commission is investigating an offence of delivery of letters without a licence or where Customs and Excise is to exercise its powers.
113. Subsections (4) and (5) provide protection for persons engaged in the business of universal service providers against prosecution for possession of articles in the post where such articles are prohibited under any enactment or fail to comply with restrictions under any enactment on carriage or delivery.
Clause 81: Harbour charges on mail-bags
114. Clause 81(1) and (2) protect the goods in the mail-bags of universal service providers and foreign postal administrations from harbour charges in respect of those goods.
115. Subsection (3) protects the mail-bags of universal service providers and foreign postal administrations from being detained by a harbour authority for non-payment of charges for a period of eight weeks so that they cannot be held up by a demand for immediate payment. This replaces section 66 of the Post Office Act 1969.
Clause 82: Mail-bags not to be subject to control by harbour authorities
116. Clause 82 sets out four cases in which harbour authorities may not detain mail-bags. It overrides any other statutory provisions. This replaces section 67 of the Post Office Act 1969 extending the protection to mail-bags of all universal service providers.
117. The cases are:-
Clause 83: Common carriers
118. Clause 83 states that universal service providers (so far as they are providing a universal postal service) are not "common carriers". Without this exemption universal service providers might be regarded as common carriers, which could make them liable in certain circumstances if the goods they carry are lost or damaged, even without fault on their part. Common carrier status could also mean that a universal service provider could be sued for damages arising out of a refusal to accept something for carriage by post.
Clause 84: Certain exemptions from postage etc.
119. Clause 84 provides for the exemption from postal charges for certain petitions and addresses forwarded or sent to Her Majesty, or to the Secretary of State for Northern Ireland, or sent to a member of either House of Parliament, the Scottish Parliament or the Northern Ireland Assembly. It also limits the amount of postage that the universal service provider may recover for the delivery of parliamentary proceedings. This clause replaces section 55 of the Post Office Act 1969.
Part VII Miscellaneous and Supplementary
Clause 85: Directions in interests of national security etc.
120. Clause 85 provides a power to the Secretary of State to direct the Commission or a licence holder as he considers appropriate if he considers it expedient to do so either in the interest of national security or in order to discharge an international obligation; to meet the object of an international organisation of which the Government is a member or agreement to which they are party; or to enable the Government to become a member of such an organisation or party to such an agreement. The Directions should generally be laid before Parliament but there are exceptions to this on specified grounds. It is an offence to contravene a direction or, in certain circumstances, to disclose it.
Clause 86: Power to ensure compliance with the Postal Services Directive
121. Clause 86 provides a power for the Secretary of State to ensure compliance with the EU Postal Services Directive. The purpose of this power is to ensure that the Government's obligations are always met, in particular in the event that the reserved area is removed and with it the ability to impose the universal service obligation and related requirements through licence conditions.
122. The power only applies where the Secretary of State is satisfied that a Community obligation under the Postal Services Directive in not being met or will not be met and where he has been unable to obtain any undertakings from any person which are sufficient to satisfy him that the situation will be remedied. In that case the Secretary of State may make by order such provision as he considers appropriate to ensure that a universal service is provided.
123. An order under this clause may in particular: confer or modify the functions of the Commission or the Council; require a postal operator to provide all or part of a universal postal service; specify terms and conditions for such services; provide for payment from public funds for any purpose of the order; and for the enforcement of provisions in the order.
124. In deciding whether to make any such order the Secretary of State will have regard to the likely impact of the order on the person on whom the requirement is to be imposed. And that before making such an order he will consult with any such person.
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