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“Experience from other countries suggests that the company could provide the universal service with around half its current mail centres.”
Does the Minister accept that, and what is his estimate of the number of job losses as a result of this announcement?
Mr. McFadden: The company is already going through a process of reducing the number of mail centres. Automation will mean fewer mail centres in future, as, I believe, both the company and the work force are aware. It is not for me to say exactly how many jobs would be involved, but automation will mean fewer mail centres. Many other western European postal organisations have gone through precisely that process.
John McDonnell (Hayes and Harlington) (Lab): May I quote from the statement? It mentions, “Bringing in a partner through a minority stake in the Royal Mail’s postal business”. That will be interpreted by almost every postal worker as privatisation, no matter how the Minister dresses it up, and it conflicts with a commitment to a wholly publicly owned service that we gave that work force. What role will the Government play in offering the work force a sense of security in respect of the threat of job losses and the security of long-term employment, because those workers have served this country well over generations of commitment to this public service?
Mr. McFadden: I acknowledge the work force’s contribution. This package offers them a more secure future for their pensions than would otherwise be the case. The Government established the Hooper review to examine how the Royal Mail can succeed in a world in which electronic and other forms of communication provide increasingly attractive alternatives to the mail and in which there is more competition in postal markets. That is precisely what Hooper has done in his report, which has been published today. Its recommendations are a consequence of our fulfilling a manifesto commitment to carry out this review.
Mr. Michael Jack (Fylde) (Con): The importance of postal workers to the communities they serve cannot be underestimated, so under the new capital structure, which the Minister has outlined to the House today, will postal workers be able to acquire an equity stake in the new business? Do his proposals for the pension fund restructuring breach the state aid rules?
Mr. McFadden: The intention in the Hooper report is for Royal Mail to partner another postal firm that has experience of going through this kind of change. It is not a share floatation that might be talked about in another context; this is a partnership with another postal firm. Of course, we will be mindful of the state aid rules in any reform package that we take forward.
Mr. Gordon Prentice (Pendle) (Lab): We are not going to sub-contract our judgment to Richard Hooper, who is a former vice-chair of Ofcom. We want a wholly publicly owned Royal Mail, and I will not support any legislation that privatises it. Is it not the case that over a very long period Government policies have been designed to weaken the Royal Mail in order to encourage competition into the market? Is it not scandalous that new entrants have been allowed to undercut the Royal Mail? There has never been a level playing field in the provision of postal services, and it is completely disingenuous for the Minister to advance this argument—
Mr. Speaker: Order. Other hon. Members want to get in.
Mr. McFadden: I cannot accept that the Government have weakened the Royal Mail. We have lent the company money to make new acquisitions, and put up money to support the pension fund and to finance modernisation. But that process has not proceeded quickly enough in the face of the challenges that the company is facing. Today’s report concludes that new entrants are not the primary problem for the Royal Mail—new technology is.
Mr. Edward Leigh (Gainsborough) (Con): One of my many failures in this place occurred 15 years ago, when, as Post Office Minister, I tried to privatise the Post Office. In the light of the Government’s acceptance of the importance of private capital, may I welcome new Labour to the Thatcherite wing of the Conservative party?
Mr. McFadden: As I have made clear a number of times, we will maintain the Royal Mail as a publicly owned company, in line with our manifesto commitment to have a publicly owned Royal Mail.
Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): The fact that the Hooper report has now been published is welcome, as it allows decisions to be taken and discussed in the context of the whole picture instead of the piecemeal way in which they have been announced thus far. The mail processing centre in my constituency is one of those under threat. Would the Minister agree to meet a delegation from that mail processing centre so that he can understand the context of the decisions that are being made for my constituents, including both those served by and those working in the centre?
Mr. McFadden: I am always happy to meet hon. Members and any delegations they wish to bring, but Hooper is clear in his report that what the company needs is less political interference in its day-to-day decision making, not more. The future of mail centres must be for the company and the union to negotiate: it is not for Ministers to dictate operational matters such as where mail centres should be situated.
Mr. Alan Reid (Argyll and Bute) (LD): I welcome the commitment to the universal service obligation, but if Royal Mail is to be in a position to continue to deliver it, it must be adequately funded and have fair competition. Will the Minister consider a levy on companies that are not implementing the universal service obligation and are using the money to pay Royal Mail to do so? At present, too many private companies are cherry-picking the easy side of the business.
Mr. McFadden: Hooper considered and rejected the idea of a levy, because the real challenge is to make the changes necessary in Royal Mail to enable it to deliver the USO while not running at a loss, as it is at the moment. That requires changes in automation, the changes that have been mentioned to the pension fund, and other regulatory changes that we have outlined today.
Ms Katy Clark (North Ayrshire and Arran) (Lab): The Minister will be aware of the existing very low morale in Royal Mail, partly because the work force has to deliver for private sector competitors at a loss. He will also be aware of press reports today that up to 50,000 job losses could result from the proposals. Will he tell the House what implications the proposals have for jobs? Surely he must agree that the proposals go against the spirit of the manifesto commitment given by the Labour party?
Mr. McFadden: I do not accept that the proposals are not consistent with our manifesto, as I have said several times, because the company will remain publicly owned. My hon. Friend talks of low morale, and it is true that there has been a history of industrial relations problems in Royal Mail. Ascribing blame serves no good purpose, and a fresh start in industrial relations is needed if change is to proceed at the pace and in the spirit necessary to get the company into the shape necessary for the future. We need a fresh start in industrial relations, and there is a lot in these proposals for the work force, not least security for the pension fund as part of a wider programme of change.
Mr. Andrew Mackay (Bracknell) (Con): I congratulate the Minister on his courageous decision to part-privatise Royal Mail and assure him that when he introduces the legislation we will vote for it, so that—despite the clear number of Labour rebels that there will be—he will get it through.
Mr. McFadden: I believe that the legislation to implement these proposals is in line with our manifesto and offers a good future for Royal Mail, its work force and the public.
Mr. Frank Field (Birkenhead) (Lab):
May I offer the Minister an opportunity to deny specifically the allegation that the Opposition spokesman yelled from a sedentary position—that the Government are intent on stealing
the assets of the pension fund? Will he confirm that what we will be discussing is the pension fund and its assets remaining in existence, and the terms on which taxpayers may contribute further to overcoming the deficit?
Mr. McFadden: As I say, the hon. Member for Rutland and Melton (Alan Duncan) has a weird concept of stealing if he thinks that our proposals amount to stealing. The proposals take into account the fact that there are assets and liabilities in the pension fund. The problem for the company is that the liabilities are far greater than the assets. The Government will therefore try to address that problem to relieve the company of the burden of the additional payment that that deficit poses for it at the moment.
Bob Spink (Castle Point) (Ind): Let us be clear: decent, hard-working Royal Mail staff and their families are approaching this Christmas deeply worried. Can the Minister guarantee that there will be no forced redundancies as a result of his statement, and will he make it his policy to start to return public business to the Post Office?
Mr. McFadden: As I said in my statement, the Hooper review did not cover the network of post office branches. Our intent was illustrated several weeks ago when we announced that the Post Office card account would go to the post office network. I am glad to say that the Select Committee on Business and Enterprise has agreed to undertake a further inquiry into what further work might go to the post office network. I know that that is valued on both sides of the House.
On the question of the staff, I return to what I said to my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) when she said that morale was low. I accept that there has been a history of industrial relations problems in the Royal Mail. I believe that there is a need for a fresh start, and I do not believe that much can be gained by blaming anyone for the history of industrial relations problems. There is a lot in the statement for the staff at Royal Mail, who have worked hard and made a hugely important contribution. There is a lot in this for the staff, particularly when it comes to the pension fund proposals.
Mr. Russell Brown (Dumfries and Galloway) (Lab): I thank my right hon. Friend for the commitment that he has given to the universal service obligation, which means so much to a rural constituency such as mine. I and a number of Labour colleagues met the regulator before he took up post and officially started to liberalise the service. We warned the then Secretary of State and Ministers with the relevant responsibilities that we were about to see a butchering of the service. What happened in such a short space of time should never have happened to the extent to which it did. It is not beyond the wit of the work force or the Royal Mail management team to deliver for this country what we require without the interference—I shall put it no more strongly at this point—of a third party to partner the business.
Mr. McFadden:
Hooper is clear that his recommendations are a package and that they stand or fall together. That is the view that the Government take. My hon. Friend mentioned the regulator and, as I have said, under the
proposals the regulator will change from Postcomm to Ofcom. However, on the effect of the liberalised market on Royal Mail, I repeat that Hooper makes it very clear that the main impact on the company’s balance sheet comes not from other postal companies or the terms of that competition but from the shift from mail to other technologies. That is having by far the most major impact on the company’s balance sheet.
Mr. Alistair Carmichael (Orkney and Shetland) (LD): Many of us predicted the impact of what Hooper refers to as “asymmetric competition” at the time of liberalisation. I observe that paragraph 193 of the report states:
“Competition reduces Royal Mail’s revenue available to support the universal service. And some forms of competition may be inefficient if they simply exploit the constraint placed on Royal Mail to provide the universal service.”
Notwithstanding what he told my hon. Friend the Member for Argyll and Bute (Mr. Reid), will the Minister keep the door open on the possibility of a compensation fund at some future point? My constituents can tell him from their experience of the parcel post market that if liberalisation takes place without proper protection, a universal service might exist but it will exist in name only.
Mr. McFadden: We are determined to ensure that the universal service does not exist in name only. We understand its value socially and in terms of the one price goes anywhere service, which I suspect is valued in the hon. Gentleman’s constituency. Let us be clear about Hooper and competition. He says that competition has had benefits. He does not accept the analysis that the Royal Mail’s problems were caused by opening the market to liberalisation. Instead, he paints a picture of much more deep-seated problems of a failure to modernise, a growing pension fund deficit and a transfer in consumer habits from mail to other technologies. That is why he proposes a far-reaching package of extensive reform.
Family Justice
4.35 pm
The Secretary of State for Justice and Lord Chancellor (Mr. Jack Straw): With permission, Mr. Speaker, I shall make a statement about the opening up of the family courts. I have today laid before Parliament the document “Family Justice in View”, copies of which will be available in the Vote Office and on my Department’s website.
Family courts play a crucial role in our society. They make far-reaching decisions—for example about how to divide finance on divorce, or what protection to give victims of domestic violence—and they make life-changing decisions about the future of children: whether they should be given contact with their parents, whether they should be removed into the care of the state, and whether they should be placed for adoption. The decisions of family courts have profound and long-term effects on the lives of those involved and cumulatively on society as a whole.
Family cases can be conducted in the magistrates family proceedings courts, in county courts, and in the family division of the High Court. All those with responsibility for these proceedings are well trained and work to extremely high standards. It is vital that these courts, like any others, command the confidence of the public, if the public—including the parties involved—are to accept their decisions. That can best be achieved if justice in these courts is seen to be done.
For entirely legitimate reasons, the privacy of parties to family proceedings must be properly protected. That is of enormous importance to adults, and is an overwhelming imperative in cases involving children. At present, with some exceptions, neither the public nor the media are permitted to witness proceedings in these courts. However, many argue that the current provisions to safeguard privacy and confidentiality go too far, leaving family courts unfairly open to accusations of bias or even injustice.
In contrast, there is a greater degree of openness in the youth courts. For example, the media are allowed to witness and report proceedings in the youth courts, so long as they do not identify juvenile defendants, and youth courts have a wide discretion to allow others to attend. These rules have worked effectively, and both their spirit and their letter have been well respected by the media.
The debate about opening up the family courts has intensified in recent years, and two successive consultations have been carried out, in 2006 and again in 2007. The results of those exercises were inconclusive, with strong representations on the one hand in favour of improving transparency, and on the other in favour of maintaining the current position.
In the past few months, the Under-Secretary of State for Justice, my hon. Friend the hon. Member for Lewisham, East (Bridget Prentice), who has responsibility for access to justice, and I have been actively considering how we can shed more light on family courts while preserving the imperative of the welfare of the child. The Government have now reached their conclusion, and I am therefore announcing today that the rules of court will be changed to allow the media to attend family proceedings in all tiers of court.
Understandably, the media will be subject to reporting restrictions similar to those that apply in the youth courts. The courts will be able to relax or increase those restrictions in appropriate cases, and will have the power to exclude the media from specific proceedings altogether where the welfare of the child or the safety of the parties or witnesses requires it. The overall effect of these changes will be fundamentally to increase the openness of family courts, while protecting the privacy of children and vulnerable adults.
As well as allowing the media to attend family proceedings, there is a need to increase the amount and quality of information coming from the courts. At present, anonymised judgments of the Court of Appeal, and in some instances of the High Court, are made public, but that is not the situation for the county courts or the family proceedings courts, which deal with the bulk of family law cases.
We have therefore decided to pilot the provision of written judgments when a final order is made in certain family cases. The courts in the pilot areas—Leeds, Wolverhampton and Cardiff—will, for the first time, routinely produce a written record of the decision for the parties involved. In selected cases, where the court is making life-changing decisions for a child, it will publish an anonymised judgment online, so that it can be read by the wider public.
The consequences of family proceedings are so significant that the parties involved will sometimes need to seek advice or support from a range of people, including legal advisers, family members, medical practitioners and Members of Parliament or other elected representatives. To do so, they must be able to discuss and share information about their case. In 2005, we made changes to the rules of court to allow people to disclose certain information to specified individuals, but after two years it became clear that those rules remained unnecessarily restrictive and too complicated. Following a consultation last year, the Government have now decided to relax the rules on the disclosure of information in family proceedings.
Parties and legal representatives will be able to disclose more information for the purpose of advice and support, mediation, the investigation of a complaint, or—in an anonymised form—for training and research. In more cases, the person receiving the information will be able to disclose it to others, for the purposes for which it was originally disclosed to them, without seeking the permission of the court. To protect the anonymity of children after proceedings have concluded, the decision of the Court of Appeal in Clayton v. Clayton will be reversed. In principle, that decision removed the protection of the court once proceedings had been completed, although that protection could be reapplied in particular cases.
Most of the key changes that I have announced today can be made in the rules of court, without the need for primary legislation, but some will require legislation, including the reversal of the effect of the decision in Clayton v . Clayton and the potential opening-up of adoption proceedings. As regards the latter, we will consult on the most appropriate approach.
The Government are committed to improving the visibility of justice in this country—to lifting the veil that sometimes keeps justice from view. The measures that I have outlined today will help to build a transparent,
accountable family justice system that inspires the confidence of the people whom it serves, while continuing to protect the privacy of the parties and children involved. I commend the statement to the House.
Nick Herbert (Arundel and South Downs) (Con): I thank the Justice Secretary for early sight of his statement. The UN convention on the rights of the child states that
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