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Lord Skelmersdale: My Lords, that was the most refreshing answer that I have received from the Minister in several weeks. Indeed, the noble Lord is quite right: the concern is that, under the wording of the Bill, the council could have no committee in England at all. I have obviously been expressing myself extremely badly over a number of weeks; but, none the less, the Minister has finally got the point. That is no reflection on him. It is almost certainly a reflection on me.

I am delighted to hear that the Minister will look seriously at correcting what I see as a total anomaly in the Bill, and something that should not be allowed to happen. On that basis, I shall withdraw the amendment. However, should it prove necessary, I reserve the right the come back and chase the noble Lord a little on Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 13 not moved.]

29 Jun 2000 : Column 1109

Schedule 3 [Transfer to the Post Office company: supplementary provisions]:

Lord Sainsbury of Turville moved Amendment No. 14:

    Page 82, line 38, at end insert--

("(4A) The Secretary of State may by order provide for any provision of sub-paragraphs (1) to (4) not to apply, or to apply with modifications, in such cases or descriptions of case as he considers appropriate.").

The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment No. 15. This amendment provides for a new subparagraph to be inserted in Paragraph 1 of Schedule 3. It provides the Secretary of State with an order making power to disapply, or apply with modications, the provisions in subparagraphs (1) to (4) of that paragraph.

Schedule 3 sets out a series of supplementary provisions regarding the vesting of property, rights and liabilities of the Post Office in the Post Office company. The purpose of Schedule 3 is to ensure that the transition of the Post Office from statutory corporation to public limited company is seamless; that it does not disadvantage either the Post Office company or any third parties; that appropriate provision is made in relation to pension arrangements; and that any foreign property, rights and liabilities are transferred with effective legal force.

Paragraph 1 has the effect that anything done by or in relation to the Post Office is deemed to have been done by, or in relation to, the Post Office company. This includes legal proceedings and references in any agreement or document. The order making power could be used to deal with an instance where it is inappropriate for a reference to thePost Office in a current document to be construed as a reference to the Post Office company after vesting day. The power will be subject to the negative resolution procedure.

Amendment No. 15 is clarificatory. It spells out that only sub-paragraphs (1) to (4) of paragraph 1 to Schedule 3 are subject to any provision made by or under the Bill. I beg to move.

On Question, amendment agreed to.

6 p.m.

Lord Sainsbury of Turville moved Amendment No. 15:

    Page 82, line 39, leave out ("This paragraph is") and insert ("Sub-paragraphs (1) to (4) are").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Clause 63 [Government holding in the Post Office company and certain subsidiaries]:

Lord Sainsbury of Turville moved Amendments Nos. 16 and 17:

    Page 40, line 29, at beginning insert ("receives,").

    Page 40, line 29, leave out ("transports") and insert ("conveys").

The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move.

On Question, amendments agreed to.

29 Jun 2000 : Column 1110

Clause 65 [Restriction on issue of shares to third parties]:

Lord Clarke of Hampstead moved Amendment No. 17A:

    Leave out Clause 65.

The noble Lord said: My Lords, as usual I declare my interest as a former postman and a former official of the Union of Post Office Workers.

Clause 65 concerns shares, share dealings, issue rights and a number of other matters including the issue of shares to the Treasury, the Secretary of State or to any of their nominees.

My amendment seeks to delete the whole clause and the authority it contains. My views on the Government's plans to create a share based Post Office company are known to many noble Lords. I shall not repeat all of my concerns about the Bill that I have mentioned on a number of other occasions. The amendment enables me to place on record my sadness at what the Government are doing to a valuable and socially useful publicly owned asset.

I do not hold a starry-eyed sentimental view of the jolly postman on a snow covered path with a robin on his shoulder struggling through the elements to deliver the essential Christmas cards. I am concerned about the future of an organisation that has worked efficiently for 350 years and currently shifts in excess of 56 million items a day.

I was concerned at the comments of the noble Earl, Lord Caithness, who has experienced difficulties with his local post office in Hammersmith. I could give him some good advice. As a former postman in Hampstead, which had more Peers and Members of Parliament to the square mile than anywhere else in the country, I know just how effective parliamentary interference in the daily running of a post office can be. Perhaps the noble Earl and I can discuss that matter later.

A share based Post Office company is unnecessary. An alternative has been proposed, the independent publicly owned corporation (IPOC). It has been said that IPOC would not be acceptable to potential partners in joint ventures. However, I remind noble Lords that that has not prevented negotiations with Deutsche Post or the joint venture with the Singapore postal authority. There is no substance in the statement that an IPOC could not do the job just as efficiently.

At an earlier stage of the Bill I asked the Minister to say whether the Government would place a limit on the amount of the share base that could be transferred in a joint venture. The Government have said publicly that the organisation will remain 100 per cent publicly owned but have at the same time said that a transfer of shares can take place. That is a contradiction. I am grateful to my noble friend the Minister for having had the courtesy to concede that point in this House on an earlier occasion. However, I understand that the Secretary of State is still saying that it will remain 100 per cent publicly owned.

29 Jun 2000 : Column 1111

In my view Clause 65 will enable a future government to adopt a fast track procedure to extend share ownership to individuals and institutions. I am aware that the Secretary of State has said repeatedly that further legislation will be needed to extend share ownership. I believe that secondary legislation will be needed before such an extension of share ownership could take place. However, I am a relatively new Member of the House and I may not have the terminology correct. However, as I say, Clause 65 will enable a fast track procedure to be adopted. I consider that that is wrong. Much as I would love to think that we shall always have a Labour Government, I am not daft enough to think that a future government of a different persuasion would not wish to pursue a policy of wholesale privatisation. I do not agree with that view but I respect it.

When the Bill first arrived in your Lordships' House I said how sad I was to take issue with the Government which I support and for which I have worked hard for many years. Over the past few weeks that sadness has deepened because I realise that nothing I can say today will nullify the concept of share ownership in the Bill. I ask my noble friend the Minister, probably for the final time, to accept the amendment and allow the Post Office the freedoms contained in the Bill without the need for a share base for our great publicly owned institution. I beg to move.

Lord Sainsbury of Turville: My Lords, the noble Lord's views on retaining the Post Office in public ownership are well known. However, the amendment would do nothing to serve his purpose.

Clause 65 contributes to the policy on government ownership of the new Post Office company, and helps us deliver the promise made at the time of the publication of the Post Office Reform White Paper that the Government,

    "would not seek to dispose of Post Office shares without further primary legislation",--[Official Report, Commons, 8/7/99; col. 1177.]

except where a sale or exchange of equity would be in the interest of the Post Office to cement a joint venture or strategic alliance with another company--in which event the approval of the Houses of Parliament would be required.

Clause 65 imposes firm restrictions on the issue of shares and share rights of the Post Office company and "relevant subsidiaries"--relevant subsidiaries being those which are involved in the core business of the Post Office company.

Deleting this clause would remove the restriction on the issuing of shares and share rights leaving the Post Office company (and the relevant subsidiaries) free to issue shares as they will. I do not think that this is the effect that the noble Lord is seeking. On those grounds I ask him to withdraw his amendment.

Perhaps I can try to reassure the noble Lord that the Bill does not enable us simply to sell Post Office shares. Clause 65 is a clear restriction on the issue of shares and share rights. Clause 66 prevents those to whom those shares and share rights have initially been issued

29 Jun 2000 : Column 1112

from disposing of the shares and share rights. Only if the procedure in Clause 67 is used can shares and share rights be issued or disposed of to a third party.

Clause 67 is, of course, pretty restrictive over what can take place, and it includes what has become known as the "triple lock"; namely, that there can be no issue or disposal of shares unless the following conditions are met. First, it has been done to cement a commercial alliance, to use the words of the statute,

    "a joint venture, or another arrangement for working together with another person",

and the Post Office company considers that the arrangement is in its commercial interest, and has recommended the issue or disposal to the Secretary of State. Secondly, the Secretary of State must be satisfied that the share transaction is for the purpose of securing the commercial arrangement and it is in the interest of the Post Office company. Thirdly, resolutions must have been passed in both Houses approving the issue or disposal of the shares or share rights.

I also point out that the Bill ensures that not only are the words of the Government's promise of last July--that there should be no disposal of Post Office shares etc--fulfilled; but also that the spirit of that promise is fulfilled. The Bill ensures that the promise is not undermined by the transfer of all the key businesses to a subsidiary, leaving the subsidiary to be sold. We have plugged that loophole by subjecting the relevant subsidiaries to the same restrictions on share disposal.

There is therefore a very tight grip over the disposal of shares and share rights, while giving the Post Office company real commercial freedom for those joint ventures and partnerships which it needs to compete successfully in the global postal market. To deprive the Post Office of those commercial opportunities at a time when we are seeing rapid consolidation and alliances being formed would be to condemn it to being a very minor player in what is becoming a market of substantial companies.

Share disposal or swaps are not the only route to greater commercial freedom. Our policy is not to stand in the way of sensible commercial activities and deals. The Post Office company will be able to develop through in-house investment; it will be able to acquire third parties along the lines of the acquisition of German Parcel last year; and, as envisaged in the Post Office alliance with the Dutch Post Office and the Singapore Post, which is currently under consideration, it will be able to cement deals via the transfer of assets by each of the parties into a new, jointly-owned organisation.

As responsible shareholders, the Government would not want the Post Office company's assets to be dissipated improperly, but we would want to allow good commercial deals, and we shall look at the memorandum and articles of association of the Post Office company to give the Secretary of State powers to control major asset movements and disposals.

29 Jun 2000 : Column 1113

In summary, we are not looking for freedom for the Government to do what they will with the Post Office and the future Post Office company; we are seeking the freedom to enable the organisation to compete effectively in a fast-moving market place, with the same opportunities as its competitors to do deals which are in its commercial interests.

Of course there must be safeguards in place to protect the taxpayers' interest. The Post Office company will be owned by the people of this country. But I have no doubt that the greater commercial freedom will benefit consumers, employees and the UK as a whole. I hope that the noble Lord will agree that his amendment does not achieve his purpose and that the Government's intentions are the best way forward for the Post Office company, its users and its employees. I therefore ask my noble friend to withdraw his amendment.

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