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Lord Lyell: I have listened to the comments of my noble friend with considerable care. The Minister
probably has considerably more expertise in this matter than myself. I declare my interest as a mere accountant. I believe that I last made detailed studies of the Companies Act in 1963-64. However, I believe that the arguments put forward by my noble friend have some merit. I hope that the Minister, and perhaps other Members of the Committee, can assist me in this matter.
- "the Treasury or the Secretary of State",
- "or, with the consent of the Treasury".
My noble friend Lady Miller questioned the relationship between the Treasury and the Secretary of State of the relevant department. I hope that the Minister can clarify a point for me. Is there a precedent for the measure we are discussing? If he can tell me that there is a precedent for this measure in what is often called a "golden share", I can research the matter and not delay the House at a later stage of the Bill. But certainly I should like clarification. Although my noble friend attempted to clarify the situation she was beginning to faze me. I am looking for help. I think that the Minister may be able to give me some assistance and I shall wait to hear what he has to say.
Lord Skelmersdale: My noble friend perhaps will be delayed a few minutes before he hears what the Minister has to say.
My question on Clause 62 is very simple: why both? I can understand why the Treasury should want to hold the shares; I think it is absolutely right that it should. To that extent, I disagree with my noble friend on the Front Bench. None the less, I think it is extremely dangerous from all kinds of points of view for the shares to be held essentially by both or by a nominee of both. I hope that that is not what is intended by the Bill.
Lord Sainsbury of Turville: Perhaps I may speak to Amendments Nos. 63, 65, 66, 67, 68, 68A and 68B and continue my career of being as helpful as I have been in the past.
The noble Baroness may feel that the issue here is the "dead hand of the Treasury" in matters concerning the Post Office. This view has been aired before in this House and in the other place. I am of course aware that the Treasury is often cast as the villain of the piece in respect of many areas of government policy--indeed, I think my own party has occasionally implied that that may be the case.
But there is a serious point to be made in explaining why we do not believe that it should be left only to the Secretary of State to hold the Government's shares in the Post Office company and its wholly owned or relevant subsidiaries, nor for the Secretary of State to be the only party who can give directions regarding the issue of further shares to the Government after the appointed day.
It may be simply because I have been a finance director for many years of my life that I think the Treasury has the responsibility of being the guardian of public sector finances. It is simply a matter of practicality with large sums of money such as this that the Treasury is inevitably involved. In the same way that if substantial investments were made in a private company, it would not be done by a divisional shareholder without consulting the finance director, who no doubt would have a very strong say in what took place.
The Government's shareholding in the Post Office company and its subsidiaries represents a substantial public sector investment. The Treasury therefore has a legitimate interest in the Government's shareholding in this public sector asset and it should not be excluded from the holding of that asset and should be involved in the giving of directions to increase the size of the asset.
There is a simple practical issue that makes it sensible for the Secretary of State and the Treasury to be able to be shareholders in the Post Office company--that is, that a public limited company must have at least two shareholders. It is quite right that the Treasury is not a sole corporation, but in this case it would be represented by the Treasury Solicitor. So there is a sensible, practical reason for giving the Government flexibility in the management of its shareholding in this way.
Our approach is certainly not unique; a number of previous statutes followed the same route--for example, the Gas Act 1986, the Water Act 1989 and the Electricity Act 1989.
I am sure that the noble Baroness fears the undue interference and influence of the Treasury in the future of the Post Office company and wishes to safeguard against this fear. But whether the Treasury holds any shares or whether its consent is required before directing the issue of further shares to Government is, to some extent, an irrelevance. The Treasury's greatest influence in the future development of the company will be as a provider of finance for growth investment. On this point I hope that our policy is quite clear.
The borrowing regime for the Post Office, both now and when it becomes the Post Office company, was clearly set out in the White Paper. The Post Office company will be expected to finance investments in the core business from retained earnings. But these funds are unlikely to be sufficient to enable the Post Office company to develop its business and to meet the challenges and opportunities of the changing postal market. Therefore, the Post Office company will be allowed to borrow for growth investments.
We have already given effect to our policy to give commercial freedom to the Post Office by giving it greater borrowing powers. As a result the Post Office has already commenced its strategy to expand its international business for the benefit of its customers.
I hope that I have been able to give the noble Baroness comfort that the supposed dead hand of the Treasury is now a myth as far as concerns the Post
Office and that the organisational arrangements make sense. On that basis I ask the noble Baroness to withdraw her amendment.10.15 p.m.
Baroness Miller of Hendon: I certainly do intend to withdraw the amendment. I am not too sure that the Minister was able to give me comfort because at this time of night I could not match what he was saying to what I think the problem is. However, I shall read carefully in Hansard what the noble Lord said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 3 [Transfer to the Post Office company: supplementary provisions]:
Lord Sainsbury of Turville moved Amendment No. 64:
- Page 79, line 31, at end insert--
.--(1) This paragraph applies to--
(a) a fund (whether described as a welfare fund, benevolent fund, mutual aid fund or otherwise) whose objects consist in, or include, the provision of benefits in case of need, sickness or distress for Post Office beneficiaries, and
(b) a society or organisation (however described) whose objects are similar.
(2) In sub-paragraph (1) "Post Office beneficiaries" means any or all of the following persons--
(a) persons who are, or have been, engaged in the business of the Post Office,
(b) the relatives or dependants of such persons.
(3) The provisions of the trust deed, rules, regulations or other instrument constituting or regulating a fund, society or organisation to which this paragraph applies may, by resolution of the managers of the fund, society or organisation, be altered as mentioned in sub-paragraph (4).
(4) The provisions may be altered so as--
(a) to permit persons who are, or have been, engaged in the business of the Post Office company, or such persons of a particular description, to become members of, or subscribers to, the fund, society or organisation,
(b) to entitle such persons, or such persons of a particular description, and persons claiming in right of them, to receive benefits from the fund, society or organisation (subject to any terms and conditions specified in the resolution) if, and to the extent that, they would be entitled to receive benefits from it if being engaged in the business of the Post Office company were being engaged in the business of the Post Office.
(5) No alteration may be made that alters the character of the fund, society or organisation.
(6) If a resolution of the managers of a fund, society or organisation to which this paragraph applies so provides--
(a) any references in the trust deed, rules, regulations or other instrument constituting or regulating the fund, society or organisation to the Post Office shall be construed as references (or, if the context so requires, as including references) to the Post Office company, and
(b) any references in that instrument to persons engaged in the business of the Post Office or persons of a particular description so engaged shall be construed as references (or, if the context so requires, as including references) to persons engaged in the business of the Post Office company or (as the case may be) persons of a corresponding description so engaged.
(7) In this paragraph "managers" in relation to a fund, society or organisation, means the trustees, committee or other persons entrusted with its management.").
The noble Lord said: Amendment No. 64 inserts a new clause into the Bill which is intended to ensure that the managers of welfare and other funds for persons and their relatives and dependants who are or have been engaged in the business of the Post Office have the power to alter these funds to take account of the transfer of the Post Office to the Post Office company. The amendment will maintain the rights of persons eligible for assistance under the existing funds and allow persons and their relatives or dependants who become engaged in the business of the Post Office company to become eligible.
The Government believe that it is appropriate for the trustees to have this power to enable them to continue the good work of these funds in providing assistance for beneficiaries in case of need, sickness or distress. I beg to move.
On Question, amendment agreed to.
Schedule 3, as amended, agreed to.
Clause 63 [Government holding in the Post Office company and certain subsidiaries]:
[Amendments Nos. 65 and 66 not moved.]
Clause 65 [Restriction on issue of shares to third parties]:
[Amendments Nos. 67 and 68 not moved.]
Clause 66 [Restriction on disposals of shares to third parties]:
[Amendments Nos. 68A and 68B not moved.]
Clause 67 [Approved disposals]:
On Question, Whether Clause 67 shall stand part of the Bill?
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