|Previous Section||Back to Table of Contents||Lords Hansard Home Page|
Baroness Miller of Hendon: My Lords, the first time I mentioned this amendment I gave all credit to the noble Lord, Lord Razzall. He knows very well that I congratulate him on having brought the matter to the attention of the House.
At Second Reading I was concerned about "transparency", the point that the noble Baroness has raised at every stage of the Bill. I agree with her, as do other noble Lords on these Benches--I understand the
Far be it from me to lecture her or the Minister, considering his previous guise, about the way that listed companies work in the public company arena. However, I fear that the point made by the noble Baroness does not work because, as the Minister has said previously, to attempt to incorporate the listings into the legislation as applicable to the Post Office ignores the fact that the listing rules, by and large, are there to protect the interests of shareholders. As the noble Baroness rightly says, if a significant transaction takes place in the market that can affect the price at which shares are dealt in, the companies involved have to make an announcement. That is right and proper. Of course, in relation to the Post Office, that cannot happen because there are no shareholders who can buy or sell shares in the Post Office.
Secondly, if under the listings rules the acquisition is a significant one, approval has to be sought from company shareholders and documents under the listings rules have to be published with details of the transaction requiring the approval of the company shareholders. Again, that does not apply to the Post Office. Despite this lengthy report from which she has quoted endlessly and which noble Lords have not had an opportunity to see, the noble Baroness is left with the third obligation under the listings rules, namely, that an announcement has to be made by the company after a certain transaction has taken place.
The Government appear to be saying that the listing rules do not apply to the Post Office and that to attempt to make them do so simply will not work. Therefore they are trying to take the principle of the listing rules--that is, that transactions of a certain size have to be notified to the public at large and to Parliament--and put that requirement into the articles of association of the Post Office. In so doing they will comply with the recommendation of the National Audit Office that, to the extent that it is practicable, the principles of the listing rules should be applied to the Post Office.
It is not a difference of principle between the noble Baroness, myself and the Government; it is simply an argument as to how in practice we can insert the substance of the listing requirements. The only one which can apply to the Post Office is the requirement to notify a significant transaction after the event. That is why, despite the fact that I support the principle of what the noble Baroness is trying to do, I do not believe the mechanism she chooses can possibly work and why, as long as the Minister repeats the undertaking he gave on Report that this requirement will be entrenched in the Post Office's articles, from these Benches we will support the Government.
Lord Skelmersdale: My Lords, of course this is an issue of transparency. But I disagree with the noble Lord, Lord Razzall. For example, Parcel Force, which is a Post Office entity, may bid for and secure International Carriers Limited (ICL). On its side,
I believe that, since we all seem to be agreed with the principle of the intentions of the amendment--that is, to have transparency on the face of the Bill rather than in the memorandum and articles of association--the Bill is where it ought to go. Our difficulty is that we are now at Third Reading of the Bill. But if the principle that this matter should go on the face of the Bill is accepted, then it is up to another place to change the details of that principle in order to fit in with the wishes both of another place and of your Lordships' House. Therefore I say to my noble friend, "More power to your elbow".
Lord Sainsbury of Turville: My Lords, when we discussed this same amendment at Report stage, the noble Baroness asked me a number of questions about whether the National Audit Office had made similar recommendations regarding the disclosure of information on acquisitions and disposals. She asked me to write in response to those questions before Third Reading. For the benefit of the House, perhaps I can repeat the points I made in my reply.
The National Audit Office has been examining the DTI's role in approving the Post Office's acquisition of German Parcel. But I repeat that the report has not yet been finalised and therefore has not been seen by Ministers, formally replied to or had consents given to it.
However, that is not the issue here. We accept the principle that, if the noble Baroness is correct, the report recommends; namely, that there should be transparency about this issue. I wish to reinforce the point of the noble Lord, Lord Razzall, that, while we accept the principle of transparency, it must be said clearly that this is not a public company in the sense of having shareholders on the Stock Exchange who have to be kept informed because of the implications and possible impact of that information on the market-place.
Lord Mackay of Ardbrecknish: My Lords, before the Minister does that, perhaps he will give way. I have been observing this debate almost from afar, and my noble friend has been keeping me informed. The Minister is almost dancing on the head of a pin in relation to the National Audit Office report, saying that the department does not know anything about it.
If I read the extract correctly, the department clearly told the National Audit Office that it accepts its argument that there is a case for the Post Office and similar public bodies to accept analogous roles. Therefore the department must know the view of the NAO, otherwise it would not be able to make the response that the NAO intends to publish. I suspect
Lord Sainsbury of Turville: My Lords, I thought I was clear on this point. I did not say that the department did not know of the report. I said that the report had not been finalised; that no Ministers had seen the report and that no agreements to its contents had been given by Ministers. That is the substantive point in this case. Clearly officials in the department would know of the report; it would be inconceivable that they would not.
Lord Sainsbury of Turville: My Lords, I cannot comment on what is presumably a quotation from internal documents of the National Audit Office. All I can say is that, when one refers to the department giving authority to the report, that must mean Ministers. I can assure the House that Ministers did not give authority for the statements being made. I cannot say any more than that. The noble Baroness obviously has access to an internal memorandum from the National Audit Office, which I have not. The substantive point is that Ministers have not agreed to this.
I turn to the question of how we handle this issue. The Government made clear that we are proposing to formalise the requirement for the Post Office company to disclose information by making provision for disclosure in the Post Office company's articles of association. I said that we are currently discussing the draft memorandum and articles of association for the Post Office company with the Post Office. We shall be discussing the inclusion of an article which requires the disclosure to the Secretary of State of information about major acquisitions and disposals relating to transactions involving 10 per cent or more of consolidated profits, turnover or gross assets. The provision will require disclosure within a specified period of business days after the transaction in question has been agreed and will also require the Post Office company to issue a press announcement giving certain prescribed information.
During Report stage I explained at some length why we did not agree that the noble Baroness's amendment was the best way of securing transparency for the Post Office company and so I shall not repeat that argument. But I stress that we wish to achieve the same objective as the noble Baroness, without subjecting the Post Office company to an unnecessarily onerous and
The noble Baroness asked me during the Report stage whether the Government would be bringing forward an amendment at Third Reading to the same effect as her own. But I can only repeat the comments I made on Report. We consider that our proposals achieve the transparency the noble Baroness desires, but without inflexibly shackling the Post Office company to a regime which is intended for another purpose entirely and to which no competitor would be bound in the same way. And perhaps I can reiterate that the difference here is that other companies have the possibility of going to the authorities and discussing the need for specific disclosures to be made. That would not be possible if this were simply a legal requirement on the Post Office.
In addition, our proposals better reflect the requirements that are placed on other companies. No competitor would be required by law to disclose the information demanded by this amendment about transactions undertaken by its subsidiaries unless they were material in the context of the group as a whole. Again, this amendment goes far beyond what would be required if the Post Office was a quoted company. I am all in favour of ensuring a level playing field, but the noble Baroness's amendment would tilt the balance too far against the Post Office company. I urge Members of this House not to contemplate shackling the Post Office company in that way with an amendment which in fact would make its task more difficult than that of a public company.
I very much hope that the noble Baroness is now persuaded that our proposal is the best means of securing the transparency that she seeks while at the same time being fair to the Post Office company. We want both a fair and level playing field. I believe that our proposal for securing that off the face of the Bill will achieve our joint objective. I ask the noble Baroness to withdraw her amendment.
Back to Table of Contents
Lords Hansard Home Page