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Lord Sainsbury of Turville: My Lords, I share the respect that the noble Lord, Lord Dearing, has for Allan Leighton. I can only say once again that the overriding responsibility of Postcomm is to maintain the universal service obligation. If he opens up the market and it leads to a failure of that obligation, then to that extent he will have failed.
I know that the noble Lord is particularly concerned about the Post Office having a strong and profitable base in this country, from which it can become an international and global player. I would argue that if one looks across Europe, the strongest players internationally are those which have had to face the toughest competition. It is not at all clear that making certain that your national players have a cosy life—in fact the record is entirely against this—is the way to breed companies which can be very profitable on an international basis. I agree with him, however, that it is important that the Post Office, and the Royal Mail
in particular, is not constrained so tightly on a financial basis that it cannot take a global view of its responsibilities.
Lord Prior: My Lords, is the Minister aware that one can only excuse this Statement if one believes that it is written by a political adviser and not by the Minister at all?
To blame the last Conservative government five years ago for what is happening now is grotesque in the extreme, particularly as the Minister himself admitted that Parcelforce had been losing money for 10 years and had never made a profit. Surely that does impose some condition upon the Post Office, and perhaps even on the Government, to have done something before now?
Everyone blames the industrial relations, and the management must take the chief responsibility for that. My experience of the people who deliver the mail, however, particularly in country districts, is that they are loyal, decent, hardworking people.
Lord Prior: My Lords, I think that the whole House has a responsibility to the Post Office. At a time when the Government need support over this matter, the sort of Statement they have made will not go down well.
Lord Sainsbury of Turville: My Lords, the noble Lord made a very telling point when he said that this situation with Parcelforce goes back 10 years. To say that and then to blame it on the Government seems to me curious. It may be argued that we should have tackled it earlier. We did have a strategy to invest more into it, to try to put it on a sound footing, but we have not been able to do so. However, this has been going on for 10 years.
The point I make is that the Post Office did not have commercial freedom until recently, and commercial freedom is an essential part of this situation. I agree with the noble Lord that there are many areas, as we say in the Statement, where the members of the Post Office work both hard and very effectively in difficult situations to deliver the mail. However, one would be hard put to say that the industrial relations situation in the Post Office was not a major contributor to its difficulties, in particular the very marked service failures in recent years. If this business is to do well in the years ahead, it is absolutely fundamental that it improves that situation. A business like this cannot be run effectively and well if industrial relations continue as they are, taking up so much time.
As Allan Leighton said in a recent letter to the noble Lord, Lord Dearing, "If we spent as much time attacking the competition as we spend attacking ourselves, we would be doing a lot better".
Lord Hoyle: My Lords, I must first declare an interest, because the Commercial Managers Association is a section of Amicus, of which I am a
member. Could I ask my noble friend to join with me in expressing sympathy and concern for those who are losing their jobs? They certainly have not had a "cosy life", as he put it.Perhaps I may now ask about the regulator. The regulator, while he may have extended consultation, was due in April to open up 40 per cent of the most profitable part of the Post Office to competition. Will that be delayed? Will he also be asked to think again about the fact that he is not going down the line recommended to him by the European Commission, and also the fact that we are opening up our market far faster than anywhere else in Europe?
Lord Sainsbury of Turville: My Lords, I think that I have already said, but let me say it again, that I share the sadness about this Statement because of the many hardworking people who will have to change or lose their jobs. I do not think that I have said anything in the Statement about a cosy life.
It is for the regulator and Postcomm to make decisions about how quickly the market is opened up, subject to the overriding consideration I have mentioned with regard to the universal service obligation. He will have to do that. The most important aspect is that there is a proper dialogue between Consignia and the regulator to establish the facts, so that there is a clear view about what is happening and what can be done.
Finally, it is by no means clear that we are opening up our market faster than others. There are certainly some countries which have already opened up their market completely, in situations where the major national post office has maintained a very large share of the total market.
Baroness Byford: My Lords, may I return to the question posed by my noble friend regarding the closure of sub-post offices?
The Minister in his response to the noble Lord, Lord Clarke of Hampstead, said that the Postal Services Act did not have implications. Perhaps I may beg to differ with him. Under that Act, the Post Office has several responsibilities. One is for postal services and one is now to be for a parcel service. The other is the question of how we pay welfare benefits to millions of people.
It is one of the great problems that we have debated in this House. Indeed, we were reassured that it would happen by 2003. I understand that some £480 million was taken from the Post Office to invest in the Horizon project. We were told that it would all happen and that it would be perfectly all right. Now we hear of even more closures of post offices, urban and rural. Pensioners, and many people claiming welfare payments, already spend a good proportion of those payments in actually travelling to get them. If more post offices and sub-post offices close, I do not know what will happen.
This Statement does not refer to the implications it has for the payment of social benefits. Perhaps the Minister would comment on that?
Lord Sainsbury of Turville: My Lords, this is an issue that I remember well from the Postal Services Act. It was true then and is true now that the Postal Services Act has very little to say about these particular questions. In particular, there is no connection between the question of the new ACT system and the payment of benefits from post offices.
The original question of automation of the Post Office in relation to the payments of benefits goes back long before this Government. What has been debated and changed is the way that has been done.
However, that is an issue about automation of the postal network and the introduction of ACT in 2003. That is on track and moving forward. As I have said many times previously in the House, we are committed to ensuring that people are able to collect their benefits in cash from post offices, as they have been able to do in the past, without any additional charges.
Lord Davies of Coity: My Lords, I am extremely saddened by the Statement today, having spent most of my life representing the interests of workers and their families. I regard this as another stab at working-class people, who face tremendous difficulties.
I appreciate the Minister's views on commercial freedom and I know what the Conservative government did when they were in power, but I had expected more from a Labour government. The noble Lord, Lord Razzall, said that this is a matter for Consignia, not the Government. I had always thought that if, as a result of commercial freedom, anything happened which had an adverse impact on working people, then it was the Government's responsibility to intervene. There are many examples of such intervention. If I am not mistaken, I believe that it was a Conservative government that, for example, nationalised Rolls Royce. If the noble Lord, Lord Razzall, thinks that this is a matter for Consignia and not for the Government, perhaps he will take the same view when the next Statement on Railtrack comes before the House. There seems to be a measure of contradiction.
Over the past two decades, I have seen the closure of mines, the closure of steelworks and reductions in the number of people in work. What do we find? We have found that areas of this country are now destitute, with the male working population enormously reduced. We have found considerable increases in the levels of state benefits that have had to be paid. We have also found that many of these areas are becoming havens for crime and vandalism. If we anticipate, as has been reported in the newspapers, that something like 40,000 people are to lose their jobs in the Post Office and 3,000 post offices are to close, perhaps my noble friend on the Front Bench could tell me whether that will impact
on the Government and the public purse in terms of the increased benefit payments that will have to be made?
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