| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
Lord Skelmersdale: My Lords, I, too, am extremely grateful to the Minister. I thought at one moment that he was going to break out into his old method of speaking and describe my amendments--or even his own Amendment No. 8--as unnecessary. However, he resisted that temptation and I am sure that the House is grateful. I repeat my gratitude to the Minister and his department. I shall not move Amendment No. 7, and I beg leave to withdraw Amendment No. 6.
Amendment, by leave, withdrawn.
Lord Sainsbury of Turville moved Amendment No. 8:
- Page 35, line 7, leave out paragraph (c) and insert--
On Question, amendment agreed to.
Baroness Miller of Hendon moved Amendment No. 9:
("(c) shall establish at least one committee, and may establish other committees, in relation to England (whether a committee for England or a committee for an area within England).").
After Clause 67, insert the following new clause--
(" .--(1) Where the Post Office company or any relevant subsidiary enters into a notifiable transaction it must, as soon as practicable after the terms of that transaction have been agreed, issue a disclosure notice in accordance with this section.
(2) For the purposes of this section "notifiable transaction" means any acquisition or disposal of any undertaking or interest in any undertaking by the Post Office company or any relevant subsidiary which, if the acquisition or disposal was made by a listed company, would be a transaction in respect of which that company would need to give notification or make an announcement in accordance with the listing rules.
(3) A disclosure notice must include the same information regarding the transaction to which it relates as any notification or announcement under the listing rules would be required to include if the transaction was an acquisition or disposal which had been made by a listed company.
(4) A disclosure notice shall--
(a) be published in the London Gazette, the Edinburgh Gazette and the Belfast Gazette; and
(b) be published or disseminated in any other manner as the Secretary of State may prescribe.
(5) In this section--
"listed company" means a company any class of whose securities have been admitted to the official list; and
"listing rules" and "official list" have the same meaning as in Part VI of the Financial Services and Markets Act 2000.").
The noble Baroness said: My Lords, in Committee I moved an amendment similar in principle to this one but different in wording. The Minister rejected it on the ground that, as he claimed, it would put the Post Office company,
I am afraid that I believe that the Minister is mistaken in that assertion. Every day we can read in the press of bids, deals and negotiations in progress. Shareholders are entitled to know a fact that could affect the value of the shares that they are considering buying or selling. Relevant details should be published as soon as it is reasonable to do so. If the Post Office were in negotiations with a publicly quoted company, that company would be required at some suitable stage to make an announcement, whereas the Post Office would be entitled to remain silent, thereby confusing the market. That would be preposterous.
There was some criticism of the wording of the amendment I proposed in Committee. Although I divided the House, due to an insufficient number of your Lordships voting the House was counted out. In accordance with the rules, on 15th June I had a second bite at the same cherry. On that occasion, I told your Lordships that on the previous day I had received certain information that I had privately imparted to the Minister and that that information had suggested there was a cogent reason why the Government should have introduced a similar amendment. As I had not had a chance to verify the information, I did not repeat it to your Lordships at that time. The Government again rejected the amendment, which I withdrew in order to give them an opportunity to reconsider their attitude in the light of the information that I had given to the Minister. They did not do so.
On Report, I brought back my amendment in a revised form--the same form in which it appears today. I am afraid that it is necessary for me to quote from what I said on that occasion. I said:
I asked the Minister five specific questions: whether there was such a report; whether I was correct in saying what it recommended; whether the Government agreed with the report; if not, why not; and finally, if they agreed, whether they would undertake to bring forward a similar amendment on Third Reading. The Minister did not answer those questions. He merely said, at col. 1116:
The Minister rejected my amendment yet again on the same specious and unacceptable grounds as before--grounds that, I was given to understand, are in contradiction of the recommendations of the National Audit Office.
In a later letter to me, the Minister said that he wanted to secure the same objective as I did but that he felt it would be achieved by provisions in the articles of association of the new Post Office company, which are still under discussion. He also said that on Report.
That is not correct procedure. Every company has certain obligations of disclosure to its shareholders. In some cases, companies are required to obtain shareholders' approval before acquisitions or disposals, particularly those entailing issues of shares or loan stock. I am not seeking to make the Post Office report to its one and only shareholder; I want disclosure to Parliament. Parliament should make the rules of disclosure, not some cosy group of lawyers or accountants currently working in the public service.
The Minister's letter also confirmed the existence of the National Audit Office report. It said that,
More importantly, when the Minister glossed over the report while speaking on this amendment previously, I believe he should have known that his department had already accepted the principle. Therefore, I find somewhat surprising the Minister's failure to answer my questions on Report and his casually dismissive and absolutely minimalist reference to the report as though it were not relevant.
The report is even more emphatic than the short extract I have quoted. In a section headed,
The Government claim to be in favour of open government. On the three previous occasions that we have debated this issue, the Minister's speeches have been peppered with references to "transparency", a buzz word currently in high favour with the Government. But here they refuse to accept, in the face of clear advice from a most influential independent source, that once the Post Office is launched into the ordinary commercial world it should conform to the same rules--not more--as other public companies. The Government argue that it should be less open to public scrutiny in its dealings.
On Report the Minister's response was that the National Audit Office intends to produce a report. That suggests that he did not know the contents or, at the lowest, that he had not investigated the information that I had given to him some two weeks earlier. I believe that the Minister should tell the House what he knew of the contents of the National Audit Office report on 29th June, the date of the previous stage of this Bill.
Assuming that he has acquainted himself with those contents that I had discussed with him, we also need to know why the Government persisted in pursuing their negative attitude to this amendment, contrary to the independent and authoritative advice they had not only received but had accepted. Is the Minister telling the House that, despite my alerting him to the report, he was unaware of its contents when he last addressed your Lordships on this topic and found all sorts of irrelevant reasons for refusing to accept an amendment that carries the recommendation of the report into effect? Or is he saying that despite his department having told the Audit Commission that it accepted the recommendations, in fact it had no intention of doing so?
The Government have been dismissive of Parliament on more than one occasion. It seems as though they are also dismissive of an important, independent, supervisory body such as the National Audit Office. Who told the Audit Commission that the recommendations were accepted? Was it the Minister? If he did not, why was he not aware of his own department's policy? The House would also like to know whether the Government will take this opportunity to follow the advice fully and so ensure that a public company, of which the Government will be the sole shareholder, conforms to the same high standards of disclosure to which other companies are required to conform. Why does the DTI say one thing to the Audit Commission and do another in Parliament? I beg to move.
"at a considerable commercial disadvantage compared with its commercial competitors".
He added:
"Publicly listed companies are merely required, in certain circumstances, to announce acquisitions, once the terms of the transaction have been agreed".--[Official Report, 8/6/00; col. 1358.]
"I wish to turn now to another serious and major point. I am informed from a very reliable source ... that"--
the National Audit Office--
"had reported to the Government advising that the disclosure regime for the Post Office should be the same as the one I am now proposing".--[Official Report, 29/6/00; col. 1115.]
"The National Audit Office intends to produce a report, but the publication date is for the NAO to decide".
I remember saying that I would not ask when it would be published because I thought that that was not very tactful. Note the Minister's words,
"intends to produce a report",
as though it were not already in the hands of the department at the time of the debate. I shall come back to that in a moment.
"the report has not yet been finalised and I am sure you will appreciate that I cannot go into detail of what is being recommended while the report is still in draft".
I do not appreciate that. Whether or not the report has been finalised, there has come into my hands an extract of what the Minister says is still only a draft. I believe, although I am not sure, that the extract is from the second draft. From some of the text it is clear that the
report had been discussed between the National Audit Office and the department of the Minister and accepted by that department. The relevant passages call for,
"the disclosure to Parliament of analogous information to that which would have been required had the state-owned business been quoted on the London Stock Exchange. This would, where relevant, include information on the price paid ... and the effect of the transaction on the profit and loss account and balance sheet of the purchaser".
The report continues:
"The Department has told us that it accepts our argument that there is a case for the Post Office and other similar public bodies to accept analogous rules".
That could not be clearer. Whether or not the report has been published and whether or not the Minister was previously aware of it, once I had alerted him of it on 15th June there was plenty of time for him to find out what it said. Whatever alterations there may be in the final wording, there is no possibility that the National Audit Office would perform a complete somersault and reverse its key recommendation.
"What lessons of good practice can be learned from this transaction?"--
that is the German parcel office deal--it calls for detailed information on deals to be given to the board, which I would have thought went without saying, and a procedure to monitor acquisitions that preserves accountability and avoids second-guessing. Most important of all, it says that the department should consider the Stock Exchange requirements on listed companies.
Item (iv) states:
"the provision of transparent information to Parliament on the transaction as if the acquisition were subject to the London Stock Exchange disclosure requirements".
In Figure 13, the report even contains a checklist to illustrate the information to be provided for public sector acquisitions.
5.45 p.m.
Lord Razzall: My Lords, the amendment tabled by the noble Baroness touches on the point she has nobly struggled through at every stage of this Bill and which I raised initially at Second Reading. On this occasion I do not require the normal mandatory plaudits that she has given to me in relation to that. I assume she is aware of what I am about to say.
Next Section
Back to Table of Contents
Lords Hansard Home Page