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Baroness Miller of Hendon moved Amendment No. 5:

The noble Baroness said: My Lords, I am returning to this amendment which I moved in Committee because I said then that I was totally unsatisfied with

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the reply given to me by the noble Lord, Lord Sainsbury, on behalf of the Government. I am sure that he will forgive me for saying that I was unsatisfied because I said it previously and of course there is nothing personal in it.

I want to remind your Lordships of the chronological sequence of events. The timing is crucial. In July 1999, the Government stated in their White Paper in unequivocal and entirely plain words:

    "the Government will take a major first step towards liberalisation by halving the monopoly currently enjoyed by the Post Office to 50p ... on items weighing over 150 grammes".

That could not be plainer.

On 16th September 1999, the Government placed an expensive display advertisement, seven inches by seven inches, in the Sunday Times. They were seeking candidates for the office of chairman of the Postal Services Commission. The advertisement stated:

    "the Government is granting the Post Office greater commercial freedom but is convinced that successful reform requires more than this. It requires greater competition in the postal market; already a major first step towards liberalisation has been taken with the halving of the monopoly currently enjoyed by the Post Office to 50p from April 1st 2000".

Let me repeat those words:

    "already, a major first step ... with the halving of the monopoly currently enjoyed by the Post Office".

So at that stage, the Government's intentions are absolutely clear and unambiguous.

Matching words with actions, the Government laid an appropriate statutory instrument before Parliament to carry those intentions into effect. On 8th December, the Government tabled a Motion to revoke their own statutory instrument. Their feeble excuse--I believe that I described it thus last time--for that volte face was that the Trade and Industry Select Committee had recommended that the reduction should be further considered by the new commission.

The Select Committee's report was published on 14th September 1999, two days before the advertisement which appeared for a chairman of the commission. That is why on the previous occasion I said to the Minister that the excuse was feeble. The fact is, I cannot believe that the Government had no idea what was in that report and saw it only on 14th September. I am certain that they must have had the information before then.

It may be that the Minister's department was not so efficient. I know that sometimes it is difficult because when I asked about the PIU report on Tuesday, I was told that those concerned had no idea whether it was coming out on Wednesday. Therefore, I suppose it is possible. Nevertheless, the report was published and in the public domain two days before the advertisement.

I pointed that out in Committee and the Minister did not deny it. Indeed, today he nodded his head as I repeated it. Therefore, going ahead with the advertisement clearly shows that at that stage the Secretary of State was not going to follow the recommendation; the Government were going to go along with liberalising the market. And why should

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he? The whole thrust of the Government's policy as regards the Post Office is to reduce the monopoly. The European directive will force the Government to do so anyway.

The sequence of events, which I have just described as crucial, makes the whole sad story very clear. I apologise to the House for having to bring it back again in order to clarify the position, but when on the previous occasion I begged the Minister to tell me the real reason--not this reason--no answer was forthcoming.

I remind your Lordships that we had a White Paper announcing a reduction in the monopoly; followed by a statutory instrument carrying that policy into effect even before and totally independent of the passage of the Bill; followed in turn by an advertisement for a chairman telling candidates that their brief would be to preside over a reduced monopoly. And then, suddenly, the Government revoke their own draft order and say that that is to do with something else.

Quite clearly, there is a different reason. They might well have been got at by the trade unions. They could have been. From where else could the idea have originated? But perhaps I am wrong and perhaps the Minister will nominate a candidate other than the unions, which I suspect. But what he cannot continue to say is that it was the report of the Trade and Industry Select Committee which caused their change of mind, because its report was in the hands of the Secretary of State well before the advertisement was published.

The excuse becomes even more incredible when it is noted that the report was made public on 14th September and the Motion to revoke the order was laid before Parliament on 8th December; that is, three months after the report was published and who knows how much longer after the Secretary of State received it.

It is clear that, as so often happens, the Government decided to shuffle the responsibility for what might be regarded by some as an unpopular decision on to someone else and say, "It's not my fault, guv. This will be a matter for the commission and I can't deal with it". But I must tell the Minister here and now that I hope to receive from him a proper and frank explanation of the Government's deviation from their own policy which they had announced and for which they had begun the legislative and administrative processes in the briefing of a potential regulator.

When I moved this amendment in Committee, I said that, because a reduction in the monopoly would occur, we believed that our proposal would be more helpful to the Post Office as it would enable it to compete, having got used to the change gradually. The chief executive, Mr Roberts, said that the Post Office could handle the change if it occurred in that manner. We believe that it would be very difficult for the Post Office if the change occurred suddenly and in one fell swoop. I should be most grateful if the Minister would tell me what the position really is. I beg to move.

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5 p.m.

Lord Sainsbury of Turville: My Lords, these two amendments show an enthusiasm for the repetition of arguments which I am not altogether certain that I share. The noble Baroness raised exactly the same point in Committee and, I believe, received an extremely lengthy answer. However, I am happy to repeat that answer for noble Lords who may not have been present. If there is a certain sense of boredom in the House, I cannot be held totally responsible.

I am sure that the noble Baroness will be aware of the 12th Report of the Trade and Industry Select Committee, published on 14th September 1999. In the report, the committee recommended that the Government consider withdrawing the Postal Privilege (Suspension) Order 1999 which would have reduced the monopoly to 50p in price and 150 grams in weight from 1st April this year so that the Postal Services Commission could consider evidence put to it of the effect of a reduction in the monopoly threshold and recommend to government an appropriate threshold. After careful consideration, the Government accepted that recommendation.

Baroness Miller of Hendon: My Lords, I thank the noble Lord for giving way. Will the Minister accept that the advertisement was published after the report was received? That is the point that I am making. If the Government were giving the matter such careful consideration, why did they place the advertisement?

Lord Sainsbury of Turville: My Lords, perhaps I may go through the sequence of events and all will become clear.

The chronology was as follows. The Postal Privilege (Suspension) Order 1999, intended to reduce the monopoly to 50p, was laid on 8th July 1999 and was to come into force on 1st April 2000. The Sunday Times advertisement for the post of chairman, which mentions the 50p order, was first issued on Sunday, 19th September 1999. The Trade and Industry Select Committee's 12th report on the 1999 Post Office White Paper, which recommended that the Government consider withdrawal of the order so that the Postal Services Commission could consider the matter, was ordered to be printed on 14th September 1999 but published on Tuesday, 21st September 1999.

The Government wrote to the Trade and Industry Select Committee on 29th September 1999 accepting its recommendation to refer the matter to the PSC. The Postal Privilege (Suspension) Order 1999 (Revocation) Order 1999, which stopped the reduction to 50p from 1st April 2000, was laid on 20th October, coming into force on 1st December 1999. On 22nd November 1999 the Government sent their full response to all the recommendations of the Trade and Industry Select Committee on the Post Office White Paper.

We shall remit the issue to the commission as soon as possible and urge it to treat it as a high priority. Having accepted the Trade and Industry Select Committee's recommendation, I believe that it would be wrong to accept an amendment to the Bill which

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would reduce the scope of the reserved area before the commission has begun even to consider evidence and consult interested parties.

The overriding duty of the commission is to ensure the provision of a universal postal service; that is, the delivery of letters and parcels to any part of the United Kingdom at a uniform tariff. It is vitally important that all users, wherever they work or live in the UK, should be assured of those essential services. The Government place an enormous weight on the value of that obligation and we believe that greater competition must not undermine the services. We recognise that users of postal services expect that.

However, we do not believe that greater competition is incompatible with the provision of the universal postal service at a uniform tariff. We remain totally committed to greater competition in postal markets. Greater competition in postal markets will be a spur for efficiency, and that should bring benefits for consumers in terms of choice, price and quality while universal service obligations are maintained.

We are giving the commission a free hand to decide what changes to the reserved area are compatible with the provision of a universal postal service. The commission may come forward with a recommendation for 50p or 150 grams, as proposed in these amendments. They may find in favour of a completely different figure. Under the existing postal services directive, the reserved area can be set only at a level which is necessary to ensure the maintenance of the universal service. I am sure that the commission will do a thorough job and will consult all interested parties. We should leave it to get on with its work and not seek to prejudge it. Therefore, I would ask the noble Baroness, having made her point, to withdraw the amendment.

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