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Baroness Miller of Hendon: My Lords, along with other noble Lords, I thank the noble Lord, Lord Clarke of Hampstead, for introducing the debate, which he did so excellently, from his vast experience. It enabled other noble Lords, all with experience of their own, to contribute.

I take note of what the noble Lord, Lord McKenzie of Luton, said. We have all run over the time allocated for speeches. I know that I am only just starting—

Lord Razzall: I did not, my Lords.

Baroness Miller of Hendon: No, my Lords, the noble Lord, Lord Razzall, most certainly did not, but he was about the only one. Doing so means that the Minister has less time in which to respond. So I shall refer to the points that other noble Lords have made and suggest that one reads them and then make one or two other points myself. I hope that that will give the Minister as long as he needs.

The noble Lord, Lord Cameron of Dillington, spoke beautifully about rural post offices, as did others. Anyone wanting to know more can read it in
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Hansard. The noble Lord, Lord Brookman, spoke very movingly about how the pension problem affects individuals working in the Royal Mail. Others touched on pensions and one could certainly read what was said with interest. The noble Lord, Lord O'Neill of Clackmannan, blamed quite a lot of the problem on management and said they should have seen it coming. However, people did not disagree with him totally, and his speech is certainly worth reading.

The noble Lord, Lord Brooke of Alverthorpe, made the interesting suggestion that something like NATS might be the answer. The noble Lord, Lord Dearing, pointed out the world problem—we are competing in India and China. He made the valuable point that the one thing we must keep for rural post offices is the Post Office card account. However, the noble Baroness, Lady Prosser, said that if the underwriting is not there, that would make it impossible. There is enough there for the Government to take away and see what has to be done.

I speak as someone who ran a mail order business for 18 years. It was very successful, enabling me to go into Germany and Australia. I give grateful thanks to the enterprise and co-operation of all those who worked at Royal Mail. I was once told that 11 postmen were working as a result of the work that we gave them.

This debate is very timely; the Trade and Industry Committee's Royal Mail after Liberalisation report has only just come out, and this is the first time anyone has had a chance to think about what it said will happen to Royal Mail after liberalisation. The debate is also timely because there will be plenty of competition from service providers. Other forms of communication are becoming increasingly popular and as no one else has mentioned them, I thought I might.

The committee and Royal Mail made a fleeting reference to e-mail as a competitor to "through the letterbox" mail services, but none at all to the impact of fax. Yet fax is cheaper and swifter for ordinary mail that does not include bulky enclosures. You can save money on your stationery and do not even have to buy an envelope. I confess that in my office, if it is possible to send a fax, we do. It is cheaper. As a result of Royal Mail's problems, the price of postage will have to go up; I understand that it is much lower than the rest of the world, but people in this country have been trained to pay a certain price, and they will try and do things cheaper if they can.

Despite the much trumpeted improvement in the postal delivery services, in the west end, where my office is, we get one delivery a day and are lucky if it has come by midday. People running a professional office, like that of a solicitor or doctor, need to be able to deal with mail before they go home for the evening.

E-mail has advantages in cost and speed. Just before I started to write this speech—before I went away for eight days and had to finish it at two o'clock this morning—I had to write to eight colleagues at once. I sent one e-mail at no cost, but it would have cost
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£2.40 if I had sent the letters by post. Competition has won the day and it is not for the Royal Mail. I do not believe there is any way that Royal Mail or, for that matter, new entrants into the market will ever be able to compete even if, as the noble Lord, Lord O'Neill of Clackmannan, said, they should have seen this coming. They may have done, but ultimately, what does one do?

The Conservative Party supports the liberalisation of the postal services market, but the timing has to be right. The money needed for the pension fund and the new investment makes it rather difficult.

I shall miss out quite a bit regarding what has been said because I am determined that the Minister shall be able to speak as long as he needs to. He has to answer the questions; all I have to do is highlight them and say how interesting it was to hear them.

The capital investment in the Post Office is terrible. The Post Office has been starved of the money needed to make sure that the infrastructure was ready for competition. If it liberalises, how can it compete with very old machines, where everything has to be hand sorted and is very labour-intensive? Cutting back on essential capital expenditure is short-sighted and counter-productive to say the least.

I am going to miss out another bit, not because it is not important but because I do not want to run over my time. I know that the noble Lord, Lord Sainsbury, is nodding in agreement.

Buried in Royal Mail's briefing note is the phrase:

As the representative of the solitary shareholder, will the Minister tell us what those options are? That would be really interesting, although I do not expect him to tell us the conclusions.

I am sorry that this sounds so jumbled, but I want to miss out the bits that are not so important.

The other matter apart from investment is the yawning gap in the pension fund, which other noble Lords have mentioned—no less than a staggering £4 billion. The Royal Mail admits that:

so is it proposed that this deficit should be funded by the customers by what will be abnormal price increases, in a sort of 12 to 20-year hire purchase scheme? That would immediately reduce the competitiveness of Royal Mail over its new rivals who will not be carrying this millstone into the new market place.

The Committee's report says:

Well, I do not have to be so coy. The guilty party is none other than the usual suspect—the Treasury. The Treasury, under several governments—I make that clear so that the Minister will not attack me—has treated the Royal Mail as a sort of milch cow from which a form of stealth tax could be extracted without the need to consider investment or the pension fund as
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a priority. The Treasury took many pension holidays when times were good and got better dividends. The same Treasury, this time under our present Chancellor, looted the pension fund in its annual £5 billion raid. The answer is obvious. As this money was milched from the Post Office in the first place, and did not go to the customers sending letters around the country, the Treasury should pay it. Can you imagine what would happen to a company on the FTSE 100 which had the cheek to tell its customers that they would have to pay more for goods because the shareholders had given themselves the pension money as dividends?

The question of privatisation was briefly discussed and discarded. I must agree that it is wiser that way because who would want to take shares in a company right now which has a massive £4 billion debt to its employees, has to use clapped-out machinery and is open to competition from outsiders who do not have the burden of having to provide a universal service to the remotest part of the country at an affordable standard price?

I have had 10 minutes. When the clock says "nine", that is the beginning of the 10th minute, so I shall not say any more other than to thank the noble Lord, Lord Clarke, again for allowing us all to make these points. I wish I had been able to say it all because I recommended that everyone should read everyone else's speeches. I would like to have read all my suggestions, but I will no doubt discuss them with the Minister in due course.

1.42 pm

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