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Lord Sainsbury of Turville: I believe that under Clause 86 the Secretary of State has general power to make such provision as he thinks is appropriate. I shall check it in case I have given the wrong reference.

It is anticipated that the Post Office will be granted a licence that will take effect from, in this case, the first day of the new licensing regime. Such a licence would be agreed between the Post Office company and the postal services commission. I stress that it would have to include provisions that satisfied the detailed requirements of the EU postal services directive. It may be that this is where a difference of opinion arises. There is a statutory duty to follow the EU directive which requires that that information is produced.

I am informed that the correct reference is Clause 101(2).

A draft outline licence for the Post Office was placed in the Library of the House on Friday 11th February 2000. This document illustrates the kind of terms and conditions that the Government expect to see in the Post Office company's licence. One such condition (at paragraph 9 on page 4 of the outline licence), as required by the EU directive, is that the Post Office company keeps separate accounts within its internal accounting system for each of the activities carried out within the reserved area on the one hand and its activities outside the reserved area on the other. Furthermore, accounts for the non-reserved area must

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distinguish between activities that are part of the universal service and those which are not. That will enable the commission to ensure that there is no undue cross-subsidy from monopoly to competitive markets.

It is also intended that it shall be a condition of the Post Office company's licence that it competes within the law and does not abuse its dominant position, enter into anti-competitive agreements or use anti-competitive means either to enter new markets or to consolidate its position within existing markets. The Post Office company will also, like any other postal operator, licensed or not, be subject to general competition rules. The proposed licence covers this area. If there is any concern about this matter among other postal operators, there is in any event a requirement for this to be done under the EU directive.

Finally, if one is to make a further provision of this kind—which I believe the Committee agrees is unnecessary in the circumstances—this is not the way to do it, because the provision will come into effect only by way of an emergency power. Therefore, the amendment is not appropriate and I ask the noble Baroness to withdraw it.

Baroness Miller of Hendon: I have great difficulty in accepting the response of the Minister. I made the point very strongly that this fell within the EU directive and that the Bill should comply with it. I also said that it was in the White Paper and that the 12th report of the Select Committee on Trade and Industry had come to the same conclusion. All I say is that it should also be in the Bill. I very much hoped that the Minister would not say that it was for the regulator to put it into the licence. Perhaps at Report stage we may make suggestions as to what should go into the licence. However, at this stage what goes into the licence is within the discretion of the regulator.

I would have been satisfied had the Minister been able to show me a reference in the Bill to the transparency of accounts. The Minister corrected an earlier mistake, which I understand; it is always difficult to find the right references. The Minister quoted Clause 101(2) which provides that,

    "The Secretary of State may by order make such provision as he considers appropriate",

and so on. In Amendments Nos. 91 and 92 I sought to change "may" to "shall". I did not succeed because the Minister regarded it as unnecessary.

Therefore, the Secretary of State may not in the event need to do anything, and the regulator may not put it in the licence. The White Paper and European directive say that it should be, and the Minister relies on that. The fact remains that it is still not in the Bill.

Lord Sainsbury of Turville: I hope I have made it clear that all of this is covered by the EU directive, which also requires the national regulator to make certain that the universal service provider meets the requirements of the directive. This is not a matter that is within the discretion of the Secretary of State. The Secretary of State has power to require it, and the EU

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directive means that he has no choice. In any event, we have already shown it in the licence. This is not a matter of choice; it is a requirement.

Baroness Miller of Hendon: I would be very grateful if the Minister could give me the relevant reference in the EU directive. If the Minister is correct I am amazed that I am being lobbied so much by competitors who come into the market and tell me that there has never been any transparency in this matter and there is no provision that there should be. They do not believe that the directive covers it. If the directive dealt with it there would be no need for the amendment, in which case I would be in agreement with the Minister. The Minister began by saying that there was very little difference between us. If that is correct—I doubt whether this matter is covered because I am being pressurised by people who want to ensure that there is transparency—what is the difficulty in accepting this amendment?

Lord Sainsbury of Turville: I do not have to hand the exact reference in the European directive, and perhaps I may write to the noble Baroness and provide it. Clearly, this is a fundamental point. I do not want any misunderstanding among other postal operators: this is how we shall proceed, because there is no choice in the matter.

Baroness Miller of Hendon: I believe that a note has just come from the Box.

Lord Sainsbury of Turville: I am now able to give the reference with even greater speed. Articles 14 and 22 make provision exactly for this point. Therefore, I hope that that answers the noble Baroness.

Baroness Miller of Hendon: I must say to the Minister that he was saved by the bell. I had intended to divide on this point and had mentioned the fact to my Chief Whip. I had hoped that the noble Lord, Lord Razzall, would ask the Liberal Democrats to support me on this matter because, as he claimed earlier, it was he who pointed out during discussion on Amendment No. 69 that there should be clear transparency vis à vis acquisitions by the Post Office. He claimed the credit for that today, and I was intending to claim the credit on this point. As I took on board what he said and moved the amendment, I hoped that he would also support me and ask the Liberal Democrats to do so.

A few hours ago we lost a Division because the Liberal Democrats did not vote with us. That made the difference between winning and losing. It would have been nice if they had supported me on the matter of transparency, which I believed was very dear to their hearts. Therefore, I believe that not only the Minister but the noble Lord, Lord Razzall, was saved by the bell as now he does not have to advise his colleagues one way or the other whether to support or go against transparency.

I make it absolutely clear to the Minister that I shall ensure that those who urged me down this course take note of the particular conditions in the European

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directive to which he referred. If they are not satisfied, I shall certainly bring the matter back. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 101 agreed to.

Clause 102 [Subsidy for public post offices]:

5.45 pm

Baroness Miller of Hendon moved Amendment No. 94:

    Page 61, line 8, leave out ("may") and insert ("shall").

The noble Baroness said: In moving Amendment No. 94, I shall speak also to Amendments Nos. 95, 96, 98, 99, 100 and 102. My noble friend Lady Byford will speak to Amendment No. 97, to which my name and that of my noble friend Lord Northbrook have been added.

My amendments are probing amendments because the Government were not able to give an explanation to the other place of some of the provisions of this clause. Perhaps that is understandable to the extent that this clause, which covers the important—indeed, fundamental—subject of subsidies to the Post Office to enable it to continue to provide vital social services to many small communities, was introduced in the other place only at the last minute at Third Reading.

That was despite the fact that throughout the entire passage of the Bill and, indeed, during the debate on the White Paper which preceded it, honourable Members on all sides in the other place expressed serious concern about the effects that the Bill would have both on the universal postal service and on communities which experienced transport problems, lack of banking facilities or where the only shop (the village store), also serving as the post office, depended on that custom for its viability. It is not only village stores that will be affected but also small local shops in suburban parades which must compete with nearby giant supermarkets and often can do so only because customers come in to collect their pensions, and so on.

The so-called new Clause 1, which is now Clause 102, shows every sign of having been cobbled together hastily, partially to placate the other place where objections were raised to the absence of subsidy provisions. Certainly the aim also is to try to head off objections from your Lordships, who undoubtedly will not be willing to be fobbed off with provisions which may truly be described as an "Emmental cheese" because it is so full of holes.

At Second Reading, I expressed concerns about a number of mysterious provisions in the clause. No answer came from the Minister then and no answer has come since. Since Second Reading, no amendments have been tabled by the Government to clarify matters. Therefore, we must assume that the Government are content with the meaningless provisions that the clause contains, as drafted at present. I believe that that simply will not do for this very important provision. Absolute clarity is required. The public and sub-postmasters, whose businesses otherwise may be wantonly destroyed by the

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Government's action in taking away their earnings from paying pensions and social security allowances, must clearly know at least the basis of the help that the Government will give, or suggest that they may give, by way of compensating subsidies.

The clause as drawn at present is simply full of holes. Even at this advanced stage, we do not know whether the subsidy will be permanent or temporary, what will trigger the payments, how much they will be, or whether they will be more or less than the Treasury is trying to save by taking away, on their own figures, £400 million a year from the income of all the post offices by phasing out payments of benefits from across their counters. We do not even know whether all post offices will qualify and, if not, which will do so. We do not know who will be the arbiter of who will receive what, how much they will receive and how they will receive it.

We would prefer the whole clause and the need for subsidies to be unnecessary. However, they are necessary because the Government have decided to press ahead with the scheme for automatic credit transfer, whether or not the public want it and whether or not they have access to cash facilities. If the Government are to put at risk people's investments and businesses, valued in total at £2 billion, or at the least deprive local communities of a vital facility, then compensation is required and, in this case, it is in the form of a subsidy. We do not want to see people's businesses in effect confiscated by the state, which wants to grab £400 million a year. That is not the way that things are done; certainly that is not the way that things should be done.

With that explanatory preamble, perhaps I may now go through the amendments in sequence in order to indicate to the Minister where we require both clarification and, indeed, some sort of commitment from the Government. We want to know what it means and what is to happen.

Amendment No. 94 alters the word "may" to "shall". If the subsidy provisions are purely permissive, the entire clause is a meaningless piece of window-dressing. After the Bill is passed, that may be the last that anyone hears or sees of those subsidies. I say that particularly in the light of proposed subsection (6), which gives the Treasury an absolute veto over the whole scheme. The reason for my later amendment, Amendment No. 101, to this clause is to delete that veto.

Amendment No. 95 provides that one of the purposes of the subsidy is to have regard to the social needs of the local post offices and to ensure that those needs are given priority over commercial considerations. We do not want to hear that a village post office is not to be provided with a subsidy because it is not profitable. I remind the Committee that there is ample precedent in the form of subsidies paid to train and, more especially, bus services on otherwise unprofitable routes. If a sub-post office should turn out to be unprofitable and is to be ruined completely, then the subsidy is called for.

Amendments Nos. 96 and 98 are simply paving amendments for Amendment No. 99. That amendment adds a new paragraph, (5)(a), and

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prohibits the payment of the subsidy to a bank or building society. If we are to have subsidies to save sub-post offices, they should be the only organisations that receive those subsidies. Part of the problem is caused by the withdrawal of banking and cash facilities from small localities by banks and building societies.

A potential problem is also caused by the same commercial concerns demanding the payment of fees or charges from pensioners or receivers of benefits who collect their own money. It would be iniquitous if money which was needed to facilitate the continued existence of a sub-post office were diverted to the giant banks. It cannot be right for the Government to take £400 million a year from small businesses in the form of sub-post offices and hand that over to the banks. The subsidies are intended for the benefit of sub-post offices and this amendment is to ensure that that is where the subsidy goes.

Amendment No. 100 adds another new subsection. Subsection (2) refers to:

    "the person deciding whether to make the payments"—

that is the subsidy. Subsection (3) refers to payments:

    "made by the Secretary of State or by another person".

It is not clear whether that other person is the same one as referred to in subsection (2) or yet another person.

In subsection (5)(b) there is reference to,

    "the person concerned".

Who is that? What is this vague clause taking about? Who are these people? More important, despite the fact that several noble Lords asked the Minister who was this person—whether it is one person or two people—during Second Reading, there was no answer from him. I wonder why the Government are being so coy about specifying who is this mysterious person. Is it one person, two people, three people or even four people? I asked that at Second Reading and we still do not know.

Until the Government clarify the position to your Lordships' satisfaction, we believe that there should be certain essential constraints. We believe that the payment of subsidies must remain in the hands of the Government. However, if they want power to delegate such decisions so that they can divert any criticism of the application of subsidies from their good selves, that should go to the commission. At least the commission can be regarded as non-political and impartial.

Paragraphs (a), (b) and (c) of this new subsection expressly exclude from the power to distribute the subsidy to local authorities members of local authorities or candidates for local government and trade associations and trade unions. So long as the Government have failed to describe the circumstances under which a subsidy will be paid and by whom, it is essential that there should be payment only when it is impossible for it to be of local political advantage or for the benefit of a pressure group.

At Second Reading I mentioned that, and I said that no one should think that I am unduly suspicious or see politics lurking behind every single amendment that is

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tabled. The fact remains that if the subsidy is to be handed to a local council to pay to any sub-post office in their area where they believe that a subsidy is required, I would bet that it would be given to a Labour council just before a local election. I am sure that noble Lords opposite will understand why I feel that that should never be allowed to happen. In any case, that should not happen. It is not a matter for local councils. If there is a need for this subsidy, the Government must have responsibility for it and take the flak in relation to handing it out and when deciding the rules.

The Government have had ample time to clarify all the mysteries surrounding this clause and to ensure that when they promise a subsidy it is one that they or the Treasury cannot weasel out of as soon as the ink is dry on the Bill, the Bill is passed and there are no longer hundreds of thousands of sub-post offices collecting names and handing them in at Downing Street or somewhere else. The subsidy clause came in rather quickly. Now it is all over and matters have gone quiet. We do not want to hear that the Bill is simply passed. I await the Government's response to our anxieties over this clause, which we believe is essential to preserve the entire system of local sub-post offices. I beg to move.

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