Postal Services Bill completes report stage

18 May 2011

The Postal Services Bill completed its report stage – consideration of amendments made to the Bill – in the House of Lords on Tuesday 17 May. An amendment which sought to protect the business relationship between Royal Mail and the Post Office was defeated.

Amendment 63B, moved by Lord Rogan, sought guarantee business between Royal Mail and Post Office Ltd for 10 years. Introducing the amendment, Lord Rogan explained he was concerned that over the Royal Mail would ‘downgrade its contact with the post office network, putting it under even more financial pressure.’ He said: ‘An inter-business agreement (IBA), enshrined in law for 10 years, provides the stability that the post office network needs to survive. Without an IBA, the future of post offices across the United Kingdom looks bleak and further closures will undoubtedly follow.’ 

The House of Lords voted against the amendment by 235 votes to 165.

Amendments 58, 59, 61 and 62, 63, 68, 69, 70, 71, 72 and 73 were agreed to without voting.

The third reading takes place on Tuesday 24 May where final amendments can be made.

Day one

The House of Lords defeated four amendments to the Postal Services Bill in the third reading on Wednesday 4 May. The amendments concerned the sale of shares in Royal Mail.  

Amendment 1, moved by Lord Lea of Crondall sought to insert a new clause limiting the initial public offering of shares in Royal Mail. Explaining the amendment, Lord Lea said his concern was how to protect the public interest: ‘If the Bill reaches the statute book in its present form, in a year or so we will almost certainly have a repeat of the public interest being prejudiced by the modalities of the sale by merchant banks, as has happened some times before.’ The amendment was defeated by 227 votes to 155.

Amendment 2, moved by Lord Young of Norwood Green, also sought to insert a new clause that would require Royal Mail to remain in public ownership at all times. Moving the Lord Young acknowledged that the Government did ‘not wish to see the demise of the post office network’, however, Ministers had admitted they could not stop the closure of sub-post offices if sub-postmasters do not see a viable business. ‘The fact is that if a privatised Royal Mail, or a different company charged by Ofcom with meeting the universal service, were to pull the plug, probably after 2015, many local post offices would be in severe difficulty,’ he said. There were ‘significant difference of opinion on the fundamental question of overall majority ownership of Royal Mail and the risks that come with 100 per cent privatisation.’ The amendment was defeated by 218 votes to 165.

The House of Lords also voted against amendment 4, moved by Lord Stevenson of Balmacara, which sought to insert a new subsection requiring Royal Mail employees to be represented on the board of any new body. Moving the amendment Lord Stevenson said: ‘Postal workers already have a major stake in the company, and their livelihoods are dependent on its viability. This is more than just an issue of immediate employment, because postal staff invest their livelihoods and pensions in the company.’ Employee representation was commonplace in Europe, he said: ‘In fact, some of the companies that are held up as shining examples of privatised postal services have employee representatives on their boards.’ The amendment was defeated by 198 votes to 175.

The House of Lords agreed without voting to amendment 6, concerning the report that the Secretary of State must provide to Parliament on the disposal of shares in Royal Mail, moved by Baroness Wilcox. This amendment would require the report to contain information about the expected commercial relationship between the Royal Mail and any Post Office company after the proposed disposal. It would also require the report to give details of any scheme if the disposal results in shares or share rights being owned by or on behalf of an employee share scheme.

Amendment 7, moved by Lord Whitty which sought to modify proposals in amendment 6 was defeated by 191 votes to 137.

Amendments 6, 19, 22, 24, 28, 29, 31 and 32, 50, 53 and 54 were agreed to without voting.

Further information

The Postal Services Bill makes provision for the restructuring of Royal Mail, including allowing the sale of shares in Royal Mail and providing for Post Office Ltd to remain in public ownership; the transfer of Royal Mail's pension deficit to Government; changes to the regulatory framework including transferring regulatory responsibility from Postcomm to Ofcom; and a special administration regime to protect the continuation of the universal postal service.

The Bill started in the House of Commons. It completed its committee stage in the Lords on 6 April.

Report stage in the Chamber gives all Members of the Lords further opportunity to consider all amendments (proposals for change) to a Bill.

Image: Press Association

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