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Lord Roberts of Conwy: My Lords, could the noble Lord tell us just how much of the growth increases in the first and second quarters was attributable to the new method of calculation? In other words, could we have both sets of figures?
Secondly, does the noble Lord agree that the Government should redouble their efforts to reduce bureaucratic costs in the public sector because they are taking far too much of the government increase in spending on public services?
Lord McIntosh of Haringey: My Lords, the components of the increase are much more complex than I can explain in the course of a Starred Question. But if I can send anything to the noble Lord, Lord Roberts, I will certainly do so.
On the noble Lord's second point, I am afraid that the so-called public sector inflation is a phoney figureit cannot be given any more dignity than that. The Government consumption deflator is the ratio of current price government consumption to constant price government consumption, and it does not mean anythingit often works in the opposite direction. For example, if you take the ratio of inmates in custody to gaol officers, the measurement is prisoner nights in custody. You could, of course, increase so-called public sector inflation by increasing the number of prisoners per gaoler, but I suggest that the noble Lord, Lord Roberts, and the House would not think that desirable.
Lord Newby: My Lords, will the Minister accept that the real problem with public finances is that even if the Government reach their growth target, current projections are that income from taxation will be some #10 billion less than the Government projected because their projections were based on a wholly exceptional period during which City bonuses meant that any increase in growth led to a higher than usual level of tax revenues? Therefore, even if the Government hit their growth target, they will be faced with substantially larger borrowing requirements than they set out at the time of the Budget.
Lord Davies of Oldham: My Lords, no one will benefit from a further strike by postal workers in London. It will disrupt services to consumers and businesses who rely on Royal Mail's services. Resolution of the dispute is a matter for the management of Royal Mail and the Communication Workers Union.
Baroness Miller of Hendon: My Lords, I thank the Minister for his reply although I suspect that it might cause problems for people who live in London and for businesses who were hoping for something a little more positive. Will the Minister confirm that in the national postal ballot postal workers turned down the idea of a strike, but that in a sense there was a different ballot of London postal workers who thought otherwise? Is there anything that the Government can do when faced with such a situation? Why are Her Majesty's Government spending so much time trying to force through legislation regarding the fire-fighters when the post is in such a mess? The post is, after all, a public service for people who live in our capital city.
Lord Davies of Oldham: My Lords, noble Lords will recognise that the fire service is an emergency service and that it is very different from the postal service. The legislation that we are taking through the House seeks to encourage the development of proper industrial relations in the fire service. Of course I recognise that the decision by the Communication Workers Union to strike over the London allowance will cause some disruption to the service although the impact of the first day of the dispute which occurred last week was not as extensive as some might have feared. As I am sure the noble Baroness knows, there was a vote against a national strike, but London postal workers voted in favour of strike action regarding the London allowance.
I say to the noble Baroness, Lady Miller of Hendon, who tabled the Question, that the postal worker who delivers her mail will receive as a London allowance in the outer London area the princely sum of #39 a week. Will my noble friend the Minister consider for a moment other allowances a little nearer to home and compare them with the #39 these people receive for getting up at the crack of dawn six days a week? It is not good enough for the Government to stand back and say that it is a matter between the two parties. The only shareholder in Royal Mail and the Post Office is the Government. When the Postal Services Act went through this House it was made clear that the Government would remainI say this in parenthesis at the momentthe sole shareholder. Does my noble friend agree that rather than washing his hands of this debate he would do well to get on the phone and tell the two sidesone of which today repeated its willingness to meet the employersto get some sense into the situation?
Lord Davies of Oldham: My Lords, I recognise my noble friend's deep interest in and long experience of the industry. Of course I recognise that the dispute is about more than just the London allowance but we expect that to be the subject of proper negotiation between management and the unions. After all, both management and the unions supported and, in fact, asked for, the Post Office to be a commercial operation from which the Government would stand back. That is exactly what we propose to do.
The national issues have gone a long way towards being resolved. I believe my noble friend will recognise that there has been an improvement in industrial relations in the Post Office in recent years, not least through the efforts and constructive work of my noble friend Lord Sawyer. I say in the spirit of the final point that my noble friend Lord Clarke made that it is for management and unions to meet together to resolve the issue.
Lord Newby: My Lords, are there any circumstances in which, should strikes continue in London, the Secretary of State might use the reserve powers in legislation to provide alternative methods for the delivery of the post in London?
Lord Davies of Oldham: My Lords, the Secretary of State has reserve powers to suspend the monopoly of Royal Mail in circumstances of dire emergency, but we are nowhere near that stage yet and I am confident that we shall not remotely approach it. However, it is necessary for the two sides to resolve the outstanding issues.
Lord Davies of Oldham: My Lords, I agree with the point that my noble friend made. I am sure that the whole House agrees that the potential disruption to the very vital service which the Post Office provides would be a massive inconvenience to all people in London. Of course, the impact would be felt beyond the capital city. My noble friend is absolutely right to say that it is very important that the two sides get together to discuss the issue as rapidly as possible.
The noble Baroness said: I rise to move Amendment No. 41 and also speak to Amendments Nos. 42 and 49. These amendments touch upon the position of the chairman of the board of governors and the overlap between the two boards. There are some complex issues here and I fear that I shall need several minutes of the Committee's time to explain them.
I start with the meatiest of the amendments, Amendment No. 41, which seeks to amend paragraph 11 of Schedule 1. Paragraph 11 currently refers to a person being a chairman of the public benefit corporation. My amendment would refer to the person being a chairman of the board of governors. I say in passing how refreshing it is to see that the word "chairman", rather than the politically correct nonsense of "chair", is used in this Bill.
Amendment No. 49 is in part a probing amendment. I do not understand how a corporation can have a chairman. Surely a person chairs a board or a committee or something like that. There seems to be a presumption in Schedule 1 that the chairman of the corporation automatically chairs the board of governors but I cannot see that that is actually specified. The powers of the corporation are exercisable by the board of directorsthat is what paragraph 14 tells usso I can see that if there is a chairman of the corporation he would expect to be chairman of the place where the powers are exercised: that is, the board of directors. However, I cannot see any natural presumption about the board of
That brings me to Amendment No. 49, which provides that a non-executive member of the board of directors may not be a member or the chairman of the board of governors. In our view, not only is it wrong to have a joint chairman, but there should be no overlap between the two. Paragraph 5.2 of the guide to developing governance arrangements states:
The amendment is probing, as I do not believe that the Bill adequately reflects a proper and balanced approach to governance. Amendments Nos. 41 and 49 would go part of the way to dealing with the issues, but the Bill almost certainly needs much more extensive changes if it is to make sense.
Amendment No. 42 is not probing but designed to fill a lacuna in the Bill. Paragraph 13 of Schedule 1 lists all the factors for which the constitution must make provision. The glaring omission is that it says nothing about the election of the chairman of the board of governors. Paragraph 16 states:
Amendment No. 42 will ensure that a foundation trust has proper procedures for the election of the chairman of the board of governors. That will ensure that a properly constituted board of governors exists with its own chairman.
I hope that the Minister will also shed some light on how the processes will ensure that an appropriate, skilled and experienced chairman of the board of governors will be chosen. The Minister in another place said on 15th May in Committee that:
As we discussed this morning, the Government have not thought through the governance arrangements. They are illogical, confusing and incomplete. I shall listen carefully to what the Minister has to say, but I shall take a lot of convincing that the schedule does not need significant alteration. I beg to move.
Lord Hunt of Kings Heath: I am glad that the noble Baroness has allowed us, once again, to debate governance and the relationship between the board of directors and the board of governors. However, I am concerned that if we were to accept the amendments, either now or if she returned to the matter on Report, we would have a totally different membership in terms of the non-execs on the board of directors from that on the board of governors, including the chair.
The noble Baroness does not share my view but she will know that I am concerned that there is potential for conflict in the construction that we now have, in which the board of governors is essentially an advisory council privileged to make comments on the running of the organisation but with no involvement whatever in its running. Anyone who has put themselves forward for election and been elected will believe themselves to have the legitimacy to make decisionsgreater legitimacy, I would suggest, than appointed non-executives. That is what elections do to peoplethey make them feel legitimate.
If under the amendments one completely separates the board of directors, who are appointed, from the governors, a majority of whom are elected, instead of making the governance arrangements more straightforward one is setting up a conflict between the two. I would be grateful if the noble Baroness would comment on my worry.
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