Postal Services in Scotland - Scottish Affairs Committee Contents


Examination of Witnesses (Question Numbers 181-262)

Ian McKay and Paula Vennells

15 December 2010

  Q181 Chair: I welcome you both to this meeting of the Select Committee on Scottish Affairs. As you are aware, we are looking at the Postal Services Bill and its impact on Scotland. We are particularly concerned, as a Scottish Committee, with the impact on the postal service in Scotland—the Universal Service Obligation—and on the network of post offices, rather than with things that are UK-wide, which are more properly the responsibility of other Committees. It is a question of ownership and so on.

  I think it would be helpful if we started off asking you to introduce yourselves, but also giving us a brief statement about how you think this might impact on Scotland in particular and on the interests of this Committee in particular. Ian?

  Ian McKay: My name's Ian McKay and I'm the Director of Scottish Affairs for the Royal Mail Group.

  Paula Vennells: I'm Paula Vennells, Managing Director for Post Office.

  Q182 Chair: Right, Ian, how in particular is the Postal Services Bill going to impact in Scotland and what should we be concerned about?

  Ian McKay: It will certainly impact on Scotland, in the same way as it will impact right across the UK. I think our general view is that we don't see it as a matter of concern, but it's certainly a matter for a challenge, in the way in which we respond to the things in the Bill and the changes that it will introduce. What we are looking forward to is the opportunity to address some of the historic difficulties—in fact, some are not quite so historic—that we are having to deal with just now, in terms of funding, in particular our access to capital, the position that people are well aware of with the pensions deficit, and our need to sustain the viability and long-term future of both Royal Mail and Post Office Ltd. Do you have something to add?

  Paula Vennells: Yes, I would add two points to that. One is on regulation. We are hoping that the Bill will enable us to move into an environment where the regulation will be more favourable to Royal Mail. You may think that from a Post Office point of view, that is of little concern to me, but it is the opposite. Actually, I need a very strong Royal Mail Group, as it is one of my lead suppliers for Post Office Ltd. I think, from the Post Office's view, that is probably the main issue—as long as Royal Mail is strong, very effective and able to compete commercially then, as Post Office, that sustains the future of the post office network as well. Royal Mail is our biggest supplier by some considerable amount, accounting for most visits to post offices, and we have had a very long, very healthy and very commercial relationship for some period of time in the past, and we anticipate that will continue in the future. From the Post Office point of view, the Bill simply helps that by addressing the points that Ian raised.

  Q183 Chair: May I start by asking Ian about the Universal Service Obligation? As I understand it at the moment, in the Bill there is the specification that it should be six days a week for delivery and collection, and the single price goes everywhere, but this is only guaranteed for 18 months, I think, and then Ofcom can change that presumably. What is your view on that?

  Ian McKay: I'm not privy to what the Bill or the final Act will be. As far as the USO and its importance to the group and to Scotland are concerned, the USO operates right across the UK. The great advantage of the USO is that it evens out in that way the demographics, geography and other natural things which are there giving an organisation such as ours difficulties.

  On the idea that the USO should be changed within a short period of time, I think we would probably come at it from a very different direction. From our point of view, the USO is absolutely central to what we do presently and what we see ourselves doing, if the Bill goes through, in a private way within Royal Mail. The USO is the absolute base rock for everything else that we do. It is through the USO that our network is able to function and to provide a service, not just in Scotland, but generally.

  At the moment, the bill stipulates that every three years or so the organisation that is granted the USO comes up for review. You will be aware that in other very important industries, that period of time is much longer than three years—in water, it is 25 years, or something. It would seem to us highly sensible that anyone operating a USO has a longer period of time when they know it will continue. That makes sense to us now; it would make sense to us in that new environment, too.

  In fact, even if one were looking for other sources of capital, it would make business sense as well, because if you're going to put money into something you would like to know that the basic rules of the game are not going to change the next day, in a year and a half, or even in three years. You would want it to be a perfectly reasonable length of time. We would be more than comfortable with that period of time being longer.

  Chair: Can I ask Alan Reid to follow on?

  Q184 Mr Reid: Thanks for coming along this afternoon. At the moment both Royal Mail and Post Office Ltd are part of the same group, but if the Bill goes through you will be separate companies. I believe that there will be an inter-business agreement between the two companies. Can you tell me what will be in that and for how long you intend it to operate?

  Paula Vennells: There is currently an inter-business agreement between Post Office and Royal Mail Group, as I'm sure you are aware. It is a particularly commercial agreement and there is always some robust debate about when it is put into place. We anticipate something similar going forwards. Both of us—Royal Mail and Post Office Ltd—are concerned that that can be as long as possible.

  I think Moya Greene, the group chief executive of Royal Mail, said that it was unthinkable that something could be in place that was too short a period of time. We would like it to be as long as possible and as robust and commercial as it is currently, frankly.

  Q185 Mr Reid: You say it's as long as possible—will it be 10 years, 20 years or 25 years? Has thought been given to that yet?

  Paula Vennells: That decision hasn't yet been made. We are both trying to make it as long as we possibly can. The current one runs until 2014, and I would like it to go much further out than that. But I would say that, wouldn't I, because I am the managing director of Post Office.

  Ian McKay: I think, generally speaking, this isn't anything new. It has existed within the group ever since there has been a group. There has to be that kind of contractual relationship between the two parts. From our point of view, internally, there is nothing new. It has always been there, and it is there currently until, as you say, 2014. We recognise, however, that as the Bill goes through, and any legal status changes accordingly, we are on record, I think, as saying that we want it to be as long as it possibly can be. We are also on record as saying that that would be negotiated prior to the separation actually happening. I hope both of those give comfort in the sense that we see the importance of it, as well as the importance of all of us knowing the rules of the game thereafter, because that is important to us in the bigger picture.

  Q186 Mr Reid: Are you saying that you are not aware of any legal restraint on the length of time you can sign that for?

  Ian McKay:   I don't think we have got to the stage yet.

  Paula Vennells: There are lawyers looking at it, because all sorts of factors come into play. The important thing for the Committee to note is that both the businesses are coming from exactly the same starting point—as long as possible and as commercially robust as the current one is.

  Q187 Mr Reid: The evidence we have heard is that the amount that Royal Mail gets from other companies to up or downstream access is not sufficient. Can you explain how you have managed to get into that situation?

  Ian McKay: As you know, we are starting from a position where Britain was quite early into the commercialisation of the postal services market, so a lot of things happened quite quickly, and some other countries have not caught up with us yet. Part of that history was that the way in which the market in Britain has tended to open up is that people have come in at the start of the delivery process. It is quite a mature market now—there are 50-odd companies operating—but there isn't really anyone who competes with us in terms of end to end, who is going out collecting—

  Q188 Mr Reid: I understand that, but why have you got into this situation?

  Ian McKay: The reason I'm giving you that background is that if someone is coming into the market and only taking bulk orders from a big mailer and then passing them to us for the final delivery, which is by and large what happens—in fact, it happens in something like 60% of all bulk mail; that is where we now are—the regulator establishes the price of that transaction, because obviously there is a price that they are giving us.

  Q189 Mr Reid: The regulator fixes the price. When the regulator fixed the price, did Royal Mail consult? Did you argue for a higher price?

  Ian McKay: Indeed. It was done in the normal way. The difficulty we have is that the price that was established actually ended up with our losing something like 2½p on every item. When I say to you that that is 60% of all the bulk mail and 40% of all addressed mail in the whole system, it means that it costs us something like £160 million a year.

  Q190 Mr Reid: We keep on hearing that Government Departments, for example, are awarding contracts to private companies for that part of the business. Why were you not able to compete with those private companies and win that business?

  Ian McKay: We are debarred from competing by regulation. We are not allowed to do that. You have to remember that, at the start, we were the monopoly.

  Q191 Mr Reid: Is that by legislation or by decision of the regulator?

  Ian McKay: It's a bit of both really. The regulator is established by the legislation and than makes the decisions. Our argument is that they set the wrong number. Their assessment of the market was wrong, and we ended up in this position. It is also one of the reasons why, even though the present Bill has the provision for a change in regulator—an important change—that takes us more generally into communications under Ofcom, which most people would see as a very sensible move, any changes coming therefrom are really quite far down the road. It might be two or three years before we actually see changes to the situation that I am talking about.

  Our difficulty is that we would like to see change in that regulatory regime right now, because we are continuing to be damaged right now. It will mean that there will more of a run-off—us subsidising our competitors—until we get to the point further down the road when Ofcom, or whoever, is in a position to address it. It is a very real and immediate problem for us.

  Q192 Mr Reid: One further area I want to pursue is that of parcels. We heard evidence when we were up in Oban that Parcelforce was actually cheaper at delivering to the Highlands and Islands than many private companies, yet the companies that are actually producing the product are often giving the contract to private companies, not to yourselves. Have you made any efforts to win that business?

  Ian McKay: We have, and we continue to argue, in particular, with internet retail companies, which as everyone knows is a vastly expanding area. We are constantly seeking from them that they give customers choice. Our belief is that when you go on a website and order your Christmas stuff from whomsoever, were everyone to be given an option as to their carrier, we would be in a very good position, particularly from a collection point of view. I can tell you anecdotally, in my own case, that if something is brought to me by Royal Mail or Parcelforce and I am not in, I have a 200-yard walk to the local post office to collect it. If it is brought to me by other carriers, I have a 70-mile trip, a 140-mile round trip, to go and collect that same item. From my point of view, given that choice as a customer, I would like to see that happen.

  Q193 Mr Reid: You are talking a good sales pitch, but why, as a company, have you not been able to win that business in practice?

  Ian McKay: I can assure you that we have tried very hard so to do. In a sense it is not even winning the business, it is getting retailers to act in that way. I know that Consumer Focus gave evidence earlier, and we were very pleased that in its detailed look at the parcels market in Scotland only last year, one of its recommendations was along the lines of what I am saying—that at the point of purchase customers should be given the option of carrier. They can then elect who is bringing the thing to them. We were very happy that a third party had looked at the whole situation and agreed with us that it would be a good thing.

  Mr Reid: Thank you.

  Q194 Fiona O'Donnell: May I ask a follow-on question? I wonder whether part of the reason why it cannot compete, Ian, is because some mail order companies pay drivers 50p a parcel, which is well under the minimum wage, and Royal Mail does not treat its employees in that way.

  Ian McKay: I don't think we would comment on the business practices of others. Clearly, we will have certain set costs, and even the CWU would agree that we have very good terms and conditions for our drivers and for everyone throughout the group. That is important to us and what we certainly would never do is cut corners on things like health and safety and the rights of our employees, for the sake of making a couple of bob.

  Q195 Cathy Jamieson: On the same issue, do you think that people are aware, by and large, that when they are ordering from the internet they may not get Royal Mail or that they will not get it delivered to their door? Is there something in those terms, so that the organisations or the companies ought to specify exactly what delivery they will get? Otherwise, they assume it is you guys, and when it is not, you also get the blame.

  Ian McKay: Notwithstanding anything to do with the Bill currently before the House, and notwithstanding your efforts at looking at the postal services in Scotland, I think that this issue—the right of a customer to have that information available to them at the point of sale—is something that we would support anyway. I suspect that not only Consumer Focus, but an awful lot of other consumer groups, would support that as well. Anyone who is adding their voice to that general point about consumer rights will find us in full support.

  Q196 Jim McGovern: On that same point, does the buyer have any right to say, "I want this item to be delivered by Royal Mail"?

  Ian McKay: That's my point. What we would like to see is retailers making that opportunity available to customers. Basically, when you get to the end of buying it and put in your credit card details, there is a page that asks who you want to bring it.

  Paula Vennells: And some do. We are working through our central marketing department in Royal Mail, where we have major clients that we deliver for, and often now you will see the Royal Mail logo. We are pushing that as a company. Your point, Ms Jamieson, is very helpful. There is a point of principle on this, around consumer choice. Sometimes that choice is there, and it isn't necessarily branded very obviously.

  Q197 David Mowat: Do you have a view as to why you do not win this work? Is it that the opposition is a lot cheaper than you? You said that the online retailers do not choose you and you must have done some analysis as to why you failed to win the work.

  Ian McKay: With all due respect, I didn't say that the online retailers don't choose us. I'm saying that, in our view, it would be good were consumers given a choice by retailers.

  Q198 David Mowat: But you say that the retailers themselves—the Amazons or whoever—are presumably choosing somebody else to do their deliveries.

  Paula Vennells: No, if I may, it's the clarity on the website. For instance, Parcelforce won Screwfix, which is a huge parcel distributor both in terms of business-to-business and consumer, quite recently. That was a great one, and it's very obvious that it's Parcelforce doing the delivery. The point I was trying to make is that we do a number of them, but it isn't obvious on the websites of the online retailers that it is Royal Mail doing it. Where we can, we influence them and say "Please put our logo on there", but at the end of the day, if there was a consumer recommendation from an independent body that almost insisted that that was best practice, that would be even more effective than the work our colleagues in marketing are doing.

  Q199 Lindsay Roy: If I've made a choice through a retailer and that's made known, are there differential rates? In other words, are you able to compete with the Royal Mail logo against other organisations?

  Ian McKay: I think we're very competitive. One has to remember that the parcels market is probably one of the most competitive markets that there is out there in the UK. Certainly, there is an awful lot of competition. Clearly, retailers—online or otherwise—will also have their own criteria. It might be price. It won't always be price. I think you would see, were you looking at any of Parcelforce's literature, for example, that we don't compete on the basis of being the cheapest. We actually set an awful lot of store by our quality of service and by that side of the business. If one were simply applying cheapness as the only criterion, it may well be that Parcelforce wouldn't be the one you would look for. But if you were looking in the round for proper quality of service and a good service, that's where I think we compete within the market. But, as I say, you're dealing with a market that is very competitive and where there will be different criteria applied by the retailer as well as by the consumer. All that we're saying is, in that balance, give the consumer more voice. Our view is that if that happens, an awful lot of consumers will choose Royal Mail and Parcelforce.

  Chair: Eilidh has been waiting patiently.

  Q200 Dr Whiteford: Good afternoon. I'd like, if I may, to take us back to the USO, because I'm sure you'll appreciate that from my point of view in the rural hinterlands, the USO is critically important, as is access to the network of post office outlets. They are an essential piece of public infrastructure. The key question I want to ask is the question that Alan asked about the three years and whether it is long enough. It's interesting to hear you say that it's not nearly long enough, because, certainly from where I'm standing, I have very grave concerns that after three years we'll be left high and dry if safeguards are not put in place.

  A question that I've been asking lots of people who have been before us is whether, given the reality of the geography of Scotland, it is ever going to be commercially viable to have a Universal Service Obligation across the whole UK. A lot of the discussion here has been predicated on Royal Mail and the post office network being sustainable commercial propositions as businesses. I haven't heard an answer yet that's convinced me that we're going to be close to that and preserve the Universal Service Obligation at its current standard.

  Ian McKay: Perhaps Paula will say something on the post office network as well, because I think the two are intrinsically linked. In our view, the USO is the starting point. In a sense, it doesn't start from the issue of commercial viability. It starts from being a principle that says wherever you are, there should be a common charge for your letters and parcels of a certain size to go to anywhere else within the nation state that is making that decision. That's the principle. It is necessary, thereafter, to make sure that the USO is as small a burden on the state as it can be. What we are arguing is that we are very proud operators of the USO, we wish to continue to operate the USO, we have no plans to change the USO, and we don't have any wish to see the terms of the USO change.

  What does need to happen, however, is that we need to be as efficient as possible in being the deliverer of that USO, and we need to make sure, therefore, that any burden that there is on the public purse in order to keep it going is minimised. That's against a backdrop where we're all aware that the mails market globally is falling though the floor. We are having, therefore, not only to think about now and the modernisation that we're doing now in order to be as efficient as we can, but to look into the future and see that the need for modernisation is not going to go away. We're going to have to keep running to keep up with that. But what will be central is the delivery of the USO. We see that as the kernel. I think that someone said "the jewel in the crown," and we certainly regard it in that way. It is central to our operation, and it's central to our future operation too.

  Chair: We've got only about an hour with you, of which about half has passed. I think we understand quite a lot of the generalities, so perhaps we could have briefer answers, and briefer questions, it that's possible.

  Q201 Dr Whiteford: The other area where I think there has been a lot of vagueness in the discussion today is models of mutualisation. I just wonder what kinds of models of mutualisation you think might work.

  Paula Vennells: There are two answers to that. The first is that to mutualise you have to have something to mutualise, so in terms of the Post Office we've actually got to see through the transformation programme first, otherwise it's going to be difficult to find any model of mutualisation that works. That's important, because it's about recognising what was published in the Government policy document and the £1.34 billion funding that was awarded, which we are very grateful for.

  Secondly, assuming that we can deliver that transformation programme—I'm very confident that we can—what models might work? The Government have put in place a review that is currently under way, and with which we're working very closely. It is run by an association called Co-operatives UK and is headed by Ed Mayo, who used to be the chief executive of Consumer Focus—or its forerunner—and is therefore someone well versed in this area. The review will produce four or five different options for mutualisation that might work in a post office environment. It could be anything from the co-operative model that works in the Co-op, which is an almost entirely consumer-based one, to the employee-based model in John Lewis, or a trust, or some of the things that work in mutual charity organisations. What's important for us is that we've been involved in the discussions and feel that, whatever they come up with, we can make it work.

  A final point, bearing in mind that you want short answers, is that from a Post Office point of view it's a promising concept, because if we can tie in local communities and local authorities—more local involvement in terms of what post offices need to deliver in communities—that can only be a good thing.

  Q202 Chair: Can I return to the question of the USO? Unless I'm mistaken, the USO requires a substantial degree of internal cross-subsidy, and Scotland, as a region that probably has a disproportionate amount of the cost, is effectively being subsidised by the rest of the network for the provision of the USO. Is that fair?

  Ian McKay: I think that Scotland's demographics and so on are more of a challenge, yes.

  Q203 Chair: Is that a yes? It would be helpful if you answered the question I asked you, rather than another question you wish I'd asked you.

  Ian McKay: That would be a yes, Chair.

  Q204 Chair: And in that context as well, at the moment urban areas are effectively subsidising rural areas.

  Ian McKay: Again, it depends on what the character of the mail is. Yes, that might be the case in some places, but it depends. For example, the mail market tends to be dominated by very large mailing agencies. An awful lot of the volume comes from banks or financial services, or something like that. Their customers will be spread; they won't all be in urban areas. Their mail is going all over.

  Q205 Chair: I understand that, but can I be clear though? For a bulk mailer, will it cost less to deliver in an urban area than in a rural one, on average?

  Ian McKay: If you had a separate operation to ourselves, yes, but our network is designed—

  Q206 Chair: No, I understand that. So, there is an element of cross-subsidy there.

  The point that I wanted to clarify is that we have the USO, as specified in the legislation, and we are worried about the tension between the desire to have costs cut and the universality and frequency of the service. We are told that Ofcom can designate one or more postal operators in accordance with the standards set out in the universal service order. Presumably, if that were split on a geographical basis, in some areas TNT would be the universal service provider, in other areas it would be Royal Mail and in other areas it would be other people. This comes back to the question of some areas being more expensive to deliver in than others. Therefore, in a situation of competitive tendering, I can see that Scotland would be a less attractive market if the country were split geographically, than some other areas. What I am not clear about is what scope there would be for cross-subsidy in circumstances where there were different operators working in different parts of the country.

  Ian McKay: I hear what you're saying, and there are many ifs and ands about the way in which the legislation could be interpreted or, indeed, how the legislation that is currently going through might end up. I'm afraid that they remain ifs and ands. The situation as it actually is, and that we have to deal with, is that there is one USO operator and we are geared up to collect and to deliver the final mile—in Scotland, most of the time that is the final 20 miles—right across the whole of the UK. So, our operation is geared up that way, and it will continue into the future to be geared up that way. There are lots of hypothetical "others" that could happen, but that will be for others.

  The one point I would make to you is that, through European legislation, there are currently other ways, were the USO not washing its face, in which the regulator can assist that process, particularly, as in the British situation, where others are in the market, but are not doing it at the end—the final delivery and so on—because the main cost is clearly at our end of the equation, where we are having to physically collect and deliver the mail. European legislation is already in place to equalise that, but, as I say, I would not speculate on what might come out of this, were it organised in another way. We can only live in the world that we live in.

  Q207 Jim McGovern: I'd like to thank Paula and Ian for coming along. I have already indicated to the Chair that I have another meeting at 3 pm, but I will try to get back later.

  Members of the Committee visited the sorting office in Glasgow on Monday, and met Julie, who was one of our tour guides, as it were—and very good at it, too. The person in charge of the Glasgow sorting office said, "We welcome the Postal Services Bill." The Chair put to him, "What do you mean by 'we'?" He said, "Well, Royal Mail." I am in regular contact with a lot of posties in my constituency of Dundee West, and the only person I have ever heard saying, "We welcome the Postal Services Bill," was the person in charge of the Glasgow sorting office. Do you believe that the employees welcome part-privatisation or total privatisation, or do you think that they would prefer public ownership?

  Ian McKay: As you and some other members of the Committee know, I have a long personal association with the public service, and with different forms of delivery within the public service. What people who deliver those public services value is that the service is protected, their jobs are protected, and the public, who are the beneficiaries of those services, have at the end of the day a good service, which they pay for through their taxes and so on. My view is that what we are putting forward—in terms of our case on the need to address the pension deficit, the need to address our lack of capital and the need to address the regulatory situation—is the way in which we can ensure that these services to the public, and Royal Mail and the Post Office as entities, go forward into the future in a stable and secure way. That, in my view, is very much in the interest of all of us who are employed within that service, and very much in the interest of everyone who uses those services. You know the same as I do that when you get those basic economics wrong, services suffer and the people who are employed within those services suffer.

  Q208 Jim McGovern: Have you got a view on what the employees think?

  Ian McKay: I actually think that the vast majority of our employees would agree with the view that I have just given.

  Chair: A number of other people want to come in. I think that is clear.

  Jim McGovern: I don't think it was a good answer. I don't think he answered the question.

  Q209 Fiona Bruce: My question is directed to Paula, but thank you very much to both of you for coming. It relates to Outreach post offices and how effective you think they would be in meeting the needs of rural customers.

  Paula Vennells: My answer is fairly straightforward—very. As some of you will know, post the last closure programme, Network Change, we were able to respond to the national access criteria—particularly in Scotland, because there are some challenges due to the terrain and the remoteness—through the Outreach services. We do know the view of the customers and of the sub-postmasters—both the cause and the local people operating them. The feedback has been very positive. Particularly in the Outreach, we have been able to address the widest range of services to the communities they are going to, so people can take the tax disc with them and do the sort of work that they can do in a main post office in an urban area.

  Q210 Fiona Bruce: That is very interesting. Can you give us some examples of how this has worked in rural communities and perhaps how they could be built on to continue the network and the service?

  Paula Vennells: Yes. In almost all cases of the Outreaches, what has worked particularly well is having different types of models. So we don't just have the single Outreach model, but a mobile one that goes to some of the most remote areas. We also have a home service that operates, literally, in some cases, in somebody's front room a couple of mornings a week. We have a host of services that might be in a local pub, a community hall or a church hall, which is set up at specific times two or three times a week. We finally have a partner model, which is usually in smaller shops and villages. What has worked well is simply the range of post office services and the fact that they are tied into a core post office, so that there is always the security behind it—that you have an experienced sub-postmaster managing the cash, the range of services available and the regulation and form-filling that has to go with it. What we deliver in what looks like a very eclectic range of services is something terribly professional, out to some of the most remote communities in the UK.

  One of the interesting things from that is that both the hosted and the home services carry a lot of the post office in an attaché-type case. One of the lessons that we have taken from that—we are grateful because Scotland actually helped us do this—is that it is also something we are now thinking of applying in some other urban locations. Where we have pressure on needing to deliver additional services, we have been able to build that off the back of the Outreach.

  Q211 Fiona Bruce: Thank you. That was also very interesting. So what you are saying is that those customers who use the Outreach service have confidence in it?

  Paula Vennells: Yes they do.

  Q212 Fiona Bruce: How can we promote the Outreach service to a broader range of customers?

  Paula Vennells: That is done in two ways. In most cases where Outreaches work, they're in communities. The small communities tend to be quite tight anyway, so there is word of mouth, posters and information about hours of opening. If it is in a pub, all the pubs have that available, and if it is in a church hall, there is a poster on the door. Within the communities, it is well promoted. Also, within the core sub-post office, that is exactly the same.

  The other area that we would look at going forward is where we get post offices changing hands or closing, we would work with local councils, parish councils and local authorities to promote the services. I would simply say to the Committee that if you have any other suggestions, we would be more than happy to take those on. This is something that works for us, and we want to continue it being successful.

  Q213 Fiona Bruce: And you therefore see that as a real way forward?

  Paula Vennells: Completely.

  Q214 Dr Whiteford: We have had evidence in the Committee from people in my own constituency, who are really very unhappy with the Outreach service. It is more popular in the summer than in the winter, when people are standing about in the cold and wet, waiting for a van that may be late. There isn't any shelter provided.

  There have also been consistent technical problems with computers. Sometimes telecommunication signals have been problematic, and so has back-up when staff go on leave. I think it would be remiss of me not to raise that with you when you're here, because you are obviously getting very positive feedback about the service. Actually, I'm getting very mixed feedback from the people using it.

  Paula Vennells: I am not getting biased feedback either, so I am aware that there have been technical problems and that the ones that have been explained to me have been sorted out. If you want to drop me an e-mail later, I will be happy to look into specific issues, because it is very important, as Fiona has pointed out, that those things work in future. In the past 10 days, it has been quite difficult to make everything work, but we have not run out of cash across the Post Office Network, and making cash available is one of the most important things we do. When you get extreme weather conditions, everyone is challenged, but on an ongoing basis—

  Q215 Dr Whiteford: The weather wasn't that extreme last week for people in the far north.

  Paula Vennells: If there are ongoing problems in your constituency, please let me know.

  Q216 Chair: To be clear about those other Post Office Essentials and so on, am I right in thinking that they can cap benefit payments so that people can only draw a certain amount of money on one day? Yes or no?

  Paula Vennells: No.

  Q217 Chair: Well, the evidence that we've heard indicates that some of them limit the amount of money and, similarly, can't always pay traditional paper bills, or pay by cheque, and customers can't always apply for passports or driving licences or send larger parcels or heavy international items. Some of those services would be restricted quite considerably in those smaller offices.

  Paula Vennells: The answer to that is that a Tesco superstore sells many more things than a Tesco Express. The point about Post Office Essentials is that it deals with 95% of customer visit requirements and 85% of all the products and services that we offer. You are quite right that there will be some things that cannot be done in Post Office Essentials, but in the vast majority of instances those products and services are available. Of the customers using those, 98% are extremely satisfied, and seven out of 10 operators would recommend them to someone else.

  Q218 Chair: The evidence from Consumer Focus indicates that part of the problems with Post Office Local included benefit capping, where branches limit the amount of money that people who are collecting benefits, such as a pensioners, can withdraw in a single day. That does not seem to us to be a particularly good service.

  Paula Vennells: I would be concerned about that and would need to look into it, but that is the first time I have heard that criticism.

  Q219 Chair: Does Consumer Focus not normally correspond with you?

  Paula Vennells: Yes, it does, but I have not heard that criticism.

  Chair: I find it surprising that you have not heard that from Consumer Focus if I have.

  Q220 Fiona O'Donnell: To follow on from the question asked by the other Fiona, how many outreach services do we have in Scotland?

  Paula Vennells: You have about 150 or so, I think.

  Q221 Fiona O'Donnell: How many post offices?

  Paula Vennells: 1,436.

  Fiona O'Donnell: So it's close to 10%.

  Paula Vennells: There are more in Scotland, but it is not that far off the national ratio.

  Q222 Fiona O'Donnell: I don't know whether you'll be able to answer this question, but part of the reason why the Federation of SubPostmasters supports the Bill is the £1.34 billion investment. My understanding is that about half of that will go into subsidising the network over the three years from 2012 to 2015. What will the other half of that figure be spent on?

  Paula Vennells: The £1.34 billion is intended to achieve a number of different things, so I am not sure that I would have carved it in half. There are two or three main planks. The first is that we will restructure the network. I will go back to my Tesco analogy, where you have a Tesco Superstore and a Tesco Express. We segmented the Post Office Network and have identified approximately 4,000 locations across the country that will be termed "main post offices", and they will have the full suite of post office services, including all the mail services, the full suite of Government and financial services and everything the Post Office does.

  Q223 Fiona O'Donnell: I am interested in how that money will be spent. How much will that cost?

  Paula Vennells: We haven't got down to splitting it up exactly across the different things that we are doing. Now that the Government have issued the policy statement, which was literally only about three or four weeks ago, and confirmed the funding, one of the pieces of work we have to do is to say how we will split it up, not only across the different things we have to do, because some will be compensation and some will be converting post offices.

  Q224 Fiona O'Donnell: Compensation to whom?

  Paula Vennells: For post offices that become Post Office Essentials or Post Office Locals, there will be some moves in terms of converting either existing post offices or new ones, where pay rates change etc. From precedents set previously, there would have to be some sort of compensation if you were changing somebody's contract from a current one to something else.

  Q225 Fiona O'Donnell: Where the service is reduced you would compensate.

  Paula Vennells: For a period of time, if that was the appropriate thing to do. What is important in that money is that it isn't just a compensation to change a model of Post Office; it is an investment in creating new Post Office operating models that will work in the future.

  One of the biggest challenges I have had while I have been in Post Office was having to manage the last Network Change Programme. I had to close 2,500 post offices, which was probably the most unpleasant thing I have done in my whole career. I really don't want to have to do that again. This funding enables me to put in place different models across the network that will be sustainable, so that we don't have any more post office closures. A really important part of that money is investing to create the right shop, if you like, for a post office.

  Q226 Fiona O'Donnell: How do you stop the 900 post offices that are on the market from closing, so that none will close?

  Paula Vennells: No, the 900 post offices that are on the market at the moment are there simply in terms of commercial churn—roughly every quarter, 200 to 300 change hands.

  Q227 Fiona O'Donnell: But this is an unusual number just now, we have been told by George Thomson.

  Paula Vennells: I would disagree—it is not much more than it normally is. It is very healthy to have commercial churn, and if sub-postmasters are in a position where they believe they can sell their business, that's a good thing. My concern is that I want them all to be able to do that in future.

  Q228 Fiona O'Donnell: I don't think it is fair to represent that you can prevent post offices from closing. Although the Government do not—

  Paula Vennells: There are two different aspects on that. There are sub-postmasters who retire, or who, unfortunately, fall ill. There are force majeure reasons for a post office closing. We cannot possibly change that, and some of that goes into the commercial churn. In some areas, it is very difficult to find somebody to step in and take that post office on.

  Part of the funding and the Government policy change is about having different models available so that it is possible to continue post office services. In Scotland, Outreach services and the Post Office Essentials model have enabled us to do that.

  You are quite right—we cannot stop post offices closing in some cases. But I want to stop sub-postmasters closing because they think that they cannot make any money out of it, because that is not a healthy Post Office going forwards.

  Q229 Fiona O'Donnell: When it is clear how the money will be spent in Scotland, would it be possible, Chair, to ask Paula to write to us to make us aware?

  Chair: If possible, that would be helpful.

  Paula Vennells: I should think that would be possible, yes.

  Q230 David Mowat: I want to go back briefly to the IBA—the agreement between the two of you—which accounts for a third of turnover of Post Office Ltd. Is that right?

  Paula Vennells: That's right—37%.

  Q231 David Mowat: It seems to me that if there were a possibility of you losing that contract in the future, which I know you do not plan for, you could do all you like about re-modelling—business models, and all the rest of it—but if you lose a third of your turnover it will be difficult to keep 11,000 post offices open without a massive influx of cash from somewhere else, won't it?

  Paula Vennells: It would be much more challenging, certainly. That is why we are very supportive of the Bill. There are a number of answers. The first is that the Bill is important, because whether we can sort out a strong Royal Mail going forwards remains a hypothetical question. It is the biggest provider of mails and will continue to be our biggest supplier in that area. There are a number of other areas, however, where Post Office provides customers with products and services. We have been very successful in financial services, in bureaux de change.

  As I am sure you are aware, the policy document referred to positioning post offices as front office for Government. Before this meeting I was at a meeting with the Minister, in which we were talking to local authorities about how we could extend that concept into local authorities as well as national Government. So there are other areas—Government being a prime example—of where else the Post Office could get revenue.

  Q232 David Mowat: Yes, so are you saying that you could try to grow the other two thirds to, potentially, replace that?

  Paula Vennells: Not at all in terms of motivation to replace Royal Mail, because we are the Post Office.

  Q233 David Mowat: No, it's not motivation. All I am saying is that if you are a business, and it has become privatised, and one third of your turnover depends on a contract which it may or may not renew with you—

  Paula Vennells: You would not have all your eggs in one basket.

  Q234 David Mowat: It would be quite a difficult position. I was trying to imagine, if you weren't to win that contract, how you could keep 11,000 post offices open. That is my question.

  Ian McKay: Could I add something from the Royal Mail point of view? You have identified the proportion of the Post Office's income as 37%. If, particularly given that we are in the eBay generation, the Post Office Network were not available to Royal Mail, privatised or otherwise, in terms of putting things into the system and being a collection point out of the system and so on—if we didn't have that enormous network available to us and all the links that have been built up over that period of time—we would be in quite a lot of bother, too. That is why our chief executive used the word "unthinkable" to break that umbilical.

  Q235 David Mowat: That is useful. So you are saying that the possibility of the IBA not being renewed in some form is very small on both sides?

  Ian McKay: It's extremely difficult to see how either company could go forward without what is a very basic relationship.

  Q236 David Mowat: So what you're saying, just to be clear, is that when we started the evidence sessions by saying that a contract renegotiation was due to take place, that we didn't know the period and all the rest of it, your business judgment is that it's so beneficial for both sides that it is likely to be a non-issue? Is that right?

  Ian McKay: Indeed. To make it very clear, think of the range that we need to deliver the USO. It's 28 million addresses everywhere, up hill and down dale. To do that and to service that, we need a network of a size to be able to do so. The Post Office Network is bigger than all the supermarket branches put together; it is bigger than all the banks and all the building societies put together. Here in our most natural of partners, we have the most natural of partners for that, too. That is why, from our point of view, it is literally an unthinkable separation.

  Q237 David Mowat: Just to be clear, the negotiation that you are going to have when you come to renew the IBA, in whatever form you do it, sounds as if it's going to be fairly amicable. One side is saying that it is unthinkable not to have the IBA, and it represents one third of the other side's turnover. In that sense it is not a massively commercial negotiation, is it?

  Ian McKay: Paula's been involved with it.

  Paula Vennells: It's always both. It's always very amicable and very commercial, because service level agreements between both businesses are tied into it. Royal Mail needs to be sure that the Post Office Network and sub-postmasters are able to deliver the required service levels, and we need Royal Mail to be able to deliver the metrics and mail centres.

  David Mowat: Thank you.

  Q238 Cathy Jamieson: Could I follow up with one question on that particular point? I then have another question that I want to ask. One of the things that I have learned during my years in politics is that, with the best will in the world, you can have nice people who want to do good things and who say that it is unthinkable to do something else, and then someone comes along later and does the unthinkable. Does the Bill stop anyone doing the unthinkable at a later stage? If the Bill goes through, would it stop the business arrangements from going ahead in future?

  Ian McKay: With your experience of ministerial duties in other places and with your experience here, I am sure you would agree that there are things that one writes into primary legislation, and there are things that one doesn't. I think it would be very unusual to find detailed commercial relationships written into primary legislation, because, like the anecdote that you've just told—

  Q239 Chair: That's a no then?

  Ian McKay: That would be a no.

  Q240 Cathy Jamieson: Could I move on? The Chair's beady eye is upon me. On smaller post offices, Fiona mentioned that 900 post offices across the UK are on the market, do you have a figure for the number in Scotland?

  Paula Vennells: I don't, but I could get back to you with that.

  Cathy Jamieson: We seem to be having some difficulty.

  Chair: I think it's 57, and 22 have closed and are classified as long-term temporary closures. It sounds as if you have to identify what those closures mean, but I am sure you can get the list of figures.

  Paula Vennells: I'd be happy to write back to you on that.[1]

  Q241 Cathy Jamieson: That would be helpful. The other issue is that I have been speaking to some of my local sub-postmasters, who, being Ayrshire folk, are not entirely in agreement with the overall view of the National Federation of SubPostmasters. Their concerns are that there has been an increasing squeeze on them, as they see it. I heard your words on not wanting any sub-postmaster to be looking at closing down because they thought that they could not make a living, but the sub-postmasters that I have met would say that that is the reality. They say that it will be increasingly difficult to attract new people into the business, at a point where the percentage of their income that they need to survive is coming from additional retail markets. In other words, they have to be able to open a shop and sustain that, rather than being stand-alone. Can you give any comfort to the people who have been struggling on in difficult circumstances? What encouragement are you able to offer new people who may want to enter the market as sub-postmasters in future?

  Paula Vennells: Yes, I believe I can. You have to set it in the context that many retailers are currently suffering because of the economic conditions. If I talk specifically on sub-post offices, what is particularly good about a sub-post office converting to a Post Office Local or an Essentials is that it enables them to offer post office services for longer. I will paint a picture. My local Budgens currently has two post office counters—in Scotland perhaps not Budgens, but a similar example—behind the fortress glass, so it is a typical sub-post office. The local shop is open from half 6 in the morning until 10 at night and the post office is open from 9 until 5.30. In the two shoulder periods, there are no post office services available to the customers and no possibility for the sub-postmaster to earn off the back of that. If they convert to a Post Office Essentials, we dismantle those one or two post office counters, depending on the number of customers going through, and that space is then available to make a greater return from a retail business, whether they put in freezer cabinets or self-bake bread or whatever. They put the Post Office Essentials offer on their main counter. That is then open from half 6 till 10 in the evening. The big saving for the sub-postmaster in that is on staff. Previously, they were employing two additional members of staff to work on the dedicated post office counters, who could not work in any other part of the shop because they are frozen off by the fortress glass. Once that is gone, they have saved on staffing costs. That is one of the biggest pieces of positive feedback we have had. The model is in pilot, so it is not theory, it is practice.

  Q242 Cathy Jamieson: With respect, the people who have spoken to me say that's all very well in a one-shop village or a one-shop local area. It is not as easy if there are a number of other competing shops for that additional retail outlet. Can you envisage any stand-alone sub-post offices that do not have to operate a shop, and sell bread and things out of freezer cabinets, in the longer term, in Scotland?

  Paula Vennells: There would absolutely be, where there is the number of customer sessions to justify them. Where they are in communities where perhaps that is not the case, we would continue to operate the different models that we have currently. The Outreach is our example of that entirely. A number of the Outreach models are not in other shops, they are stand-alone post office services. We have to—all of us—change the mindset of what a post office is. The most important thing is that the customer gets the range of post office services delivered to them in the most appropriate and cost-effective way. That is not necessarily two or three dedicated counters in a shop that does nothing else, if there is not sufficient business.

  Q243 Cathy Jamieson: My final question, going back to Fiona's issue on the money, is how much of that money might be available to assist local sub-postmasters in upgrading their premises, converting and doing all the things that are necessary to sustain them?

  Paula Vennells: We haven't got down to specifics on how much, but within the strategy that is foreseen as something that we will do. We will invest with them in their shops to convert them into something that is much more viable.

  Ian McKay: In Scotland we have seen other agencies becoming involved in the equation that you are setting out. The Scottish Government made a £1 million fund available last year, not just for post office development, but to develop those who had post offices within their shops. For some of the people who benefited, the money was for things not related to the post office as such. It was a model that said, far from a stand-alone sub-post office, we will actually try to put lots of different services into that place for the community. Indeed, the Chair and other members of the Committee saw at Dalmally a good post office, which runs Outreach services to other places which shares premises with our pharmacists and one or two other things within the shop. It is the range of streams of income that make it a viable proposition.

  Q244 Lindsay Roy: I am interested in further discussion about mutualisation. Yesterday, we heard that it was potentially diverse and potentially complex. Looking at different models and different stakeholders, can you give us an idea of what kind of mutualisation models in rural areas would embrace Outreach? Would they be highly localised mutuals, regional mutuals or are some models being developed?

  Paula Vennells: To be straight with you, as you would expect, at the moment I don't know. The work is currently under way, and we haven't got close enough to the detail of that at the moment to say what it would be. I would be very happy to come back and talk through it once we have more detail. The work has just kicked off. The plan is, I believe, that roughly by Easter next year, there will be various options available for us to look at, which will then go to public consultation in early summer.

  Q245 Lindsay Roy: Would you consider, for example, the one that we have discussed at some length—the W H Smith Post Office Network? That is a kind of mutual, too, isn't it? Or is it?

  Paula Vennells: Could it be? As I said, we have to get models that the Post Office can work with, whoever operates the mutuals. One of the questions we have to ask in this process is how that would work. Our big franchise partners are clearly a question mark in that. Interestingly with the Co-op, which runs more than 500 for us, there is an easy conversation to engage in. What I don't think we can countenance from a Post Office point of view is lots and lots of different models of mutual because it would be almost impossible to manage that. Again, I know it is not a very satisfactory answer, but as we get closer to some of the models, we can look at that.

  Q246 Lindsay Roy: Perhaps in due course you can give us an idea of the range of stakeholders you might envisage across the network.

  Paula Vennells: Yes.[2]

  Q247 Mr Reid: You both said that it would be unthinkable to break the contractual relationship between Royal Mail and the Post Office. However, the evidence that we heard from the CWU yesterday was that all that Royal Mail would need in villages would be a box and a machine that people would put their parcels in. It would automatically be weighed, people would put their coins in and the only human intervention would be postmen to come and empty it. Clearly, you think that there is more to a post office than that, so can you respond to the point made by the CWU?

  Paula Vennells: I can't envisage that that would be the case as long as the relationship between Royal Mail and the Post Office carries on. Both businesses are here to deliver a service to customers. What we do very, very well and better than any potential competitor is the face-to-face service in the post office. The mails business in this country is so complicated that I cannot envisage people just doing that—perhaps in urban areas as a supplementary, but certainly not as a replacement for post offices.

  Ian McKay: Can I add to that? I didn't see that evidence, but possibly those who gave it have not been sitting in the same post office branches as I have. Again, in any big challenge like the one we are facing, your glass is either half full or half empty. From our point of view, this is not about a future that is about cutting corners and taking money away from suppliers and so on; from our point of view, what is offered is the opportunity for us to correct the difficulties that we historically and currently are dealing with and to put us a position to start developing and bringing in new products.

  I hope that that relationship with the Post Office in the future will see us freed up from some of the regulatory constraint, and able to bring in new products that reflect where communications are because that is part of the issue. Society out there communicates differently from how it used to. You cannot go back. You have to go forward. When you are looking for the app for your Android—whatever that means—the post office is your app. It is a human thing, which will allow us to develop new products between both of the companies. We are looking at a positive future.

  Chair: I understand that. You are both sitting there all lovey-dovey between the Post Office and Royal Mail. Can I just clarify this? The National Federation of SubPostmasters said to us that you were both willing to sign a 10-year business agreement at the moment, but the Government weren't letting you. Is that true?

  Paula Vennells: I have no idea where they got that from. Absolutely no idea.

  Q248 Chair: So it's not true.

  Paula Vennells: We are currently looking for something as long and as strong as possible.

  Q249 Chair: Can I be clear? You would both today sign up to a 10-year agreement if you were allowed to do so.

  Ian McKay: In that hypothetical question you assume that the Bill goes through as it currently is without Parliament doing anything more to it and that we have reached the other end. We would be more than happy when we reach the other end to come back and talk to you again. But at the moment—

  Q250 Chair: Is that a no or a yes?

  Ian McKay: It is neither because we are not in a position to answer that until the changes that are before Parliament have progressed. I am conscious that people are seeking reassurance. The reassurance is that both parties to a contract, which has been in existence for an awful long time and is currently in existence—

  Q251 Chair: No, I understand that.

  Ian McKay: We both want that contract to be for as long as it possibly can be and to be negotiated prior to any separation.

  Q252 Chair: I understand that you would have a haggle.

  Ian McKay: It's not a haggle.

  Q253 Chair: Quite naturally there would be a haggle. Even if you both wanted to sign a pledge, as it were, there would still be a haggle about the exact terms. I understand that. But I want to be clear about this. I don't quite understand, Ian, why you are not responding to this in the way that I had expected. If you were allowed to do so now, irrespective of some haggling later on, would you or would you not be willing to sign up to a 10-year deal? If that was signed, it would clearly give a guarantee of the further work that David mentioned earlier. It would give a guarantee of continuity to the Post Office, which is not there at the moment and is where a lot of the anxieties seem to be coming from. If you are trying to distance yourself from that you can understand why we then have anxieties.

  Ian McKay: I am not distancing us and I think Paula has also said this. The position you were describing is one that we don't recognise. We are not in the position of all of this having been agreed legally and so on, as to what the position is between the two companies. What we are trying to do, in the absence of that legislation having gone forward, and in the absence of the world having changed, is to give you the assurance that we wish to see the longest possible contract.

  Q254 Chair: Okay. But can I also pick up the question of growing business from other streams and so on? You indicated that you wanted to get more Government business, quite understandably. Yet the Government have put out to tender the contract to issue green giros. I don't understand how you can suggest to us that you are working with Government to expand the range of things that you are doing with Government while at the same time the Government put out to tender something that would put £50 million or so a year through yourselves, and presumably will take the lowest bidder who might very well be somebody else. Can you address that incompatibility?

  Paula Vennells: The Government Department concerned follows procurement rules the Committee will be very familiar with, and which apply to central Government and to local government. We have submitted a very competitive tender and what I am very aware of, having read all the documentation, is that when they evaluate those submissions, they are evaluated on two bases. Part of it will be on the cost competitiveness of what is put in and part of it will be on the qualitative criteria. We have put in a cost-competitive bid. We also feel very confident on the qualitative. It's measured on a 50-50 basis. We believe we are a long, long way ahead of anybody who would compete with us for that business. I hope that whoever evaluates the tender will do it on that basis.

  Q255 Chair: But can you understand then why we have this anxiety, which some Members have also expressed to us, about there being alternative networks to the Post Office Network when the Government, even though they have said that they will be working closely to support the Post Office, are entertaining other bids for what would be seen as a core part of your work?

  Paula Vennells: I can understand that. The current processes are bound by current procurement legislation and the rules that apply.

  Q256 Chair: So it's the European Union's fault rather than the Government's. Is that correct?

  Paula Vennells: We are working within the guidelines that were set out in the documentation.

  Q257 Chair: That's a yes, then. It's always good to have my prejudices confirmed. I am quite happy with that.

  One of the things that we had with another group was the question of credit unions saying to us that they would be very keen to put a lot of work through Post Office Counters. But to do that, it is necessary for you or them, or both of you together, to put some £50 million into back-office gee-whizzery. Is that being considered? Is it a possibility? Where are we with that, and is it not one of the ways forward?

  Paula Vennells: Yes, it is. It's a very positive possibility, so we are working very closely with ABCUL, the Association of British Credit Unions. The issue that has presumably been referred to, although I don't recognise the £50 million, is that the several hundred—I don't know the exact number—credit unions around the country have slightly different back ends. We have the ability to do that now. So within the Post Office, there is the technology, because we service 80% of banking customers in the UK. A piece of work is under way scoping out what needs to be done.

  Q258 Chair: That's all I needed to know. My final point is that it has been suggested to us on several occasions by a number of people that, basically, you are being bled white by the people who are getting downstream access to your services, and that the rate at which you are charging them is the wrong one. I am not clear about the process that led to that rate. It has been suggested to us that the regulator would have allowed you to charge more had you not settled with the bulk suppliers at a rate that was to your disadvantage. Can you clarify that position for us?

  Ian McKay: There is a very simple response. There is a rate, and the rate is established by the regulator. Ever since that rate has been established, we have been in the position that we are in. I think what has happened is that, at one and the same time, you have had a massive fall in the overall volumes of mail—that has happened globally and in this country—and a really massive shift over to the use of other carriers.

  Q259 Chair: I understand that. The point that was made to us quite specifically yesterday—it is something that we will pursue with the regulator as well—was not that the regulator set the rate, but that the regulator was lurking in the wings ready to set the rate, and that you settled at a worse rate for yourselves than the regulator would have imposed. I want to clarify whether or not that is correct.

  Ian McKay: As to the historical "who did what and when", I would have to get back to you with the chronology of events. That rate is established by regulation, which is why we want to see that changed.

  Q260 Chair: Sorry, but you say "established by regulation" and that has a double meaning—in fact, it has three meanings. It is either established by the regulator, or there is an immutable formula, or the regulations establish some sort of negotiation structure within which you settle a price. I am not clear, from what you are saying, which of those three it is. Can you clarify that for me?

  Ian McKay: I would have to take advice on that. I would be quite happy to give the Committee a document that sets that out for you.[3]

  Q261 Chair: This is obviously of major significance, given the issues of bleeding yourselves white.

  Ian McKay: I can understand. As I say, what we are dealing with is the reality that the price that is established means that, from our point of view, we lose £160 million a year.

  Chair: As I said, the evidence we received was that you settled on that yourselves.

  Q262 David Mowat: Just to be clear on that, presumably it could be due to a volume decrease since the price was established.

  Ian McKay: There will be several factors involved as to just how bad the situation is, so that is not the only one. There are other restrictions in terms of us bringing forward new products, the general mail volume, the pension deficit and so on, all of which have now combined to put us in a place in which the status quo is not an option for us. That is why we need change.

  Chair: Thank you very much for coming to see us this afternoon. I am sure it has been enjoyable all around. We learned a great deal from that. We are seeing a couple of other people this afternoon, so we will now have a short break.




1   Ev 108 Back

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