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Baroness Ashton of Upholland: My Lords, the noble Lord referred to low population. Where we have
falling rolls, there is an issue about ensuring that we are using our school estate appropriately. I support him wholeheartedly in wanting to see broadband introduced so that we have the ability to use technology for learning.
Lord Brooke of Sutton Mandeville: My Lords, as an ancillary question, is the Minister aware that the salaries available to staff recruited for her department's Connexions programme for counselling young people is draining experienced staff from the youth service, with the corollary consequence of leaving the youth service, which is also within her department's purview, to try to recruit at lower salaries new substitute staff for the more testing task of leading and supervising larger groups of young people?
Baroness Ashton of Upholland: My Lords, that rather plays back to the previous question that I answered, about the workforce unit. It is very important that the workforce unit is able to look at where our people are recruited from and to ensure that we have appropriate salary levels and career structures to keep people working for children and young people without draining from each other.
Baroness Seccombe: My Lords, may I take it from the Answer that the Minister gave that she can guarantee on behalf of the Government that the use of teaching assistants will never result in their replacing qualified teachers in schools?
Baroness Ashton of Upholland: My Lords, in the regulations debates, we have described the ability of schools to consider the broader workforce. I have made it plain that the reports in the Times Educational Supplement have no bearing on the policy that we pursue. We believe that schools should make good use of qualified teachers. We also believe, as I know that all noble Lords do, that there are some highly qualified and experienced teaching assistants, who should be used appropriately. The regulations give us that appropriateness for the first time.
Postal Services: Liberalisation
3.1 p.m.
Lord Roberts of Conwy asked Her Majesty's Government:
- What is their current policy on the liberalisation of postal services.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, under our reforms of the postal services market, we created Postcomm, and gave it a primary duty to maintain the provision of a universal postal service, subject to which it is also responsible for introducing more competition into the postal services market in the interests of consumers. Postcomm has developed a framework for the introduction of competition in three stages that started on 1st January
2003 and will lead to full market opening in 2007. Postcomm's key policy documents on market opening and licensing of operators can be found on its website.
Lord Roberts of Conwy: My Lords, I am grateful to the noble Lord for that enlightening reply, which is summed up in the phrase that he used, and which the Chancellor also used in a recent speech, when he referred to,
- "full market opening of postal services by 2009".
How do the Government reconcile that policy with their manifesto commitment to high quality universal postal services in the UK? Are they taking steps to strengthen the delivery network that is so important to us all at this time of year?
Lord Sainsbury of Turville: My Lords, as part of our Postal Services Act 2000, we created Postcomm and gave it a primary duty to maintain the provision of a universal postal service, with all that that entailed. It is subject to that primary task that Postcomm is responsible for introducing more competition into the postal services market where it benefits consumers.
Lord Clarke of Hampstead: My Lords, is my noble friend aware of the regulatory results report, published in the summer by the Royal Mail? Those results show that, for letters weighing up to 100 grams, which is 75 per cent of the 82 million letters handled each day by Royal Mail, the Royal Mail lost £480 million. Does my noble friend agree that it would be totally unfair if under the Postal Services Act 2000, which requires the Post Office to take in the work of Royal Mail's competitors, the cost passed to the competitors was less than the cost to deliver? That would be terribly unfair and not competitive at all, but a burden on Royal Mail.
Will the Minister ensure that Postcomm, the regulator, is transparent in making its report on the amount that is being charged to competitors, and ensure that Royal Mail is allowed to charge a commercial rate to the competitors that it is likely to be subsidising?
Lord Sainsbury of Turville: My Lords, a final decision has not yet been taken on the question of access pricing, but Postcomm hopes to make an announcement on developments later this week. It published a draft determination on 19th May; unsurprisingly, there are differing views on prices of access. Postcomm proposes a price of 11.46 pence for the cheapest type of access to Royal Mail's network, but Royal Mail wants 20 pence. The aim of Postcomm in those circumstances is to arrive at a price that covers the company's costs and allows Royal Mail to make a modest profit.
Lord Razzall: My Lords, does the Minister not accept that this mini-debate demonstrates the problem—that there is a significant lack of clarity in who is responsible for postal services in the Post Office? Would he not agree that currently the Post Office has all the disadvantages and none of the
advantages of the old nationalised industries, in that the Government claim the credit when things are going well but say that it is nothing to do with them when things go badly? Is this not a moment at which there should be greater transparency and clarity?
Lord Sainsbury of Turville: My Lords, one advantage of the system is that there is much greater independence and clarity. Postcomm must determine on the issue of access, which is how it should be; it is transparent and very open to the public.
Baroness Miller of Hendon: My Lords, would the Minister agree that the £161 million profit that the Royal Mail made in the last half of the year was mostly due to a penny increase in first and second class mail and an increase in the volume of letter post by 3 per cent over the corresponding period in the previous year? It was not exactly due to productivity. In those circumstances, would the Minister agree that, when the markets are liberalised, the Royal Mail will have to become much more productive to become a truly competitive and profitable company, as everyone in the House wishes?
Lord Sainsbury of Turville: My Lords, I agree, and I suggest that Allan Leighton, the chairman of the Post Office, made that very point in his interim statement, when he said that,
- "the increase in profit from our letters operations did not come from cost savings but was largely due to the Royal Mail tariff increase in May, when First and Second Class basic postage prices rose by 1 penny, and increased revenue from economic growth. The Letters business therefore remains the segment where the biggest operational changes have to be made, yet it's the area where we have made the least progress in the Company's overall Renewal Plan".
Lord Roberts of Conwy: My Lords, will the Government continue to resist the European Commission proposal that there should be VAT on state monopoly postal services?
Lord Sainsbury of Turville: My Lords, I believe that continues to be the Government's position, and that we continue to oppose any move on that front. If that is not the case, I shall write to the noble Lord with the exact situation.
Iraq: Reconstruction Contracts
3.8 p.m.
Lord Lamont of Lerwick asked Her Majesty's Government:
- Whether they support the decision by the United States Government and the Coalition Provisional Authority in Iraq to restrict certain contracts for reconstruction in Iraq to countries that supported military action by the United States and the United Kingdom.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, the United States is one of a number of countries, including France and Germany, which places restrictions on their spending of taxpayers' money as overseas aid. Her Majesty's Government stopped the practice of tying aid to trade in April 2001. We believe that aid-related contracts should be awarded on the basis of value for money. We shall continue to try to persuade our partners in the European Union and allies elsewhere that that is the fairest and most efficient policy.
Lord Lamont of Lerwick: My Lords, I thank the Minister for that highly interesting reply. I declare an interest as the director of a UK company that could theoretically benefit from the reconstruction of Iraq, although the question that I wish to ask is directly opposed to that interest.
Given that the United States wants other countries to take over some military tasks after next June, that it has asked Germany and Russia to write off large amounts of Iraqi debt and has asked Canada to donate hundreds of millions of dollars to Iraq—as Canada has done—is it not short-sighted and wrong-headed of the United States to impose financial penalties on countries that simply failed to support military action?
After the capture of Saddam Hussein and the hope that that gives rise to, I urge our Government to use their influence to persuade the United States Government in general, and Mr Wolfowitz in particular, to look to the future and to forget about settling old scores.
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