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Post Office Company

Baroness Blatch asked Her Majesty's Government:

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The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): The Government intend to lay copies of the proposed Memorandum & Articles of Association of the Post Office Company in the Libraries of each House as soon as they are ready to be put to an extraordinary general meeting of shareholders.

Baroness Blatch asked Her Majesty's Government:

    Whether it is the case that the only person entitled to enforce the terms of the Articles of Association of the Post Office Company will be the sole shareholder; and, if so, what steps would be taken by them and what sanctions would be available if there were a breach of the article requiring the prior disclosure of major transactions in accordance with Stock Exchange requirements.[HL4356]

Lord Sainsbury of Turville: The noble Baroness is correct that the Articles of Association of the Post Office Company will form a contract between the Post Office Company and its shareholder and it will be for the shareholder to enforce the terms of the articles.

The shareholder will be able to call the directors to account in all the normal ways available to shareholders, including calling Extraordinary General Meetings of the company, taking legal action for breach of contract and/or calling for and voting on dismissal of directors.

Baroness Miller of Hendon asked Her Majesty's Government:

    Whether it is still their view, as expressed by the Minister for Science on 11 July (H.L. Deb., col. 181) that, in comparison with inserting a provision in the Memorandum and Articles of Association of the Post Office Company, disclosure of major transactions in line with Stock Exchange requirements would be "unnecessarily onerous and inflexible"; and, if so, in what way do the Post Office Company's commercial operations differ from ordinary commercial concerns.[HL4354]

Lord Sainsbury of Turville: The Post Office Company will be subject to the Postal Services Act and to the relevant provisions of the Companies Acts.

Our purpose has been to ensure a regime for disclosure of information to shareholders analogous to that obtaining for the generality of commercial undertakings. Had the disclosure requirements been fixed by statute, they would not have been able to develop in line with changes in commercial practice and in the Stock Exchange Listing Rules. The Post Office Company would also have been denied the flexibility which is available to listed companies through consulting the UK Listing Authority at an early stage about the application of the rules to a particular transaction.

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German Parcel

Baroness Miller of Hendon asked Her Majesty's Government:

    Who were the "number of people" within the Department of Trade and Industry referred to by the Minister for Science on 12 October (H.L. Deb., col. 497) to whom the draft report of the National Audit Office relating to the acquisition of German Parcel was shown on 27 June.[HL4351]

Lord Sainsbury of Turville: Drafts of the National Audit Office report on German Parcel were shown to DTI officials responsible for postal services and for finance and resource management who commented on their factual accuracy. The Comptroller and Auditor General sent a final draft of the report to the DTI Accounting Officer on 27 June and he replied on 14 July.

Baroness Miller of Hendon asked Her Majesty's Government:

    On what dates the Minister for Science himself first saw a draft report and the final report respectively of the National Audit Office on the acquisition by the Post Office of German Parcel.[HL4350]

Lord Sainsbury of Turville: National Audit Office audit reports are concerned with the economy, efficiency and effectiveness with which departments carry out their role. Drafts are shown to the department being audited so that it can comment on factual accuracy. They are not normally shown in advance of publication to Ministers or to Members of Parliament.

I did not see a draft of the NAO report on the acquisition by the Post Office of German Parcel. I was, however, briefed about the report when the noble Baroness made clear that she had obtained a copy.

I first saw the published report on the weekend of 7-8 October.

Baroness Miller of Hendon asked Her Majesty's Government:

    Whether Sir Michael Scholar, or any other senior official of the Department of Trade and Industry, was aware when they received the draft report of the NAO on the acquisition by the Post Office of German Parcel prior to the Report stage and Third Reading of the Postal Services Bill that an amendment was being proposed dealing with the matter of disclosure of major transactions in line with the Stock Exchange procedures; whether the department's intention to agree with the National Audit Office's proposals was brought to the Minister's attention prior to either of the two debates on the amendment; and, if not, why not.[HL4353]

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Lord Sainsbury of Turville: The departmental accounting officer and officials were aware both of Ministers' policy on disclosure requirements and of the noble Baroness' amendment when they commented on the final draft of the NAO report. In seeking comments from the accounting officer on its draft report, the NAO was not inviting the department to agree to specific policy proposals. The department's comments related to the factual accuracy of the draft report.

Baroness Miller of Hendon asked Her Majesty's Government:

    How the Minister for Science reconciles his statement to the House of Lords on 11 July (H.L. Deb., col. 181) that, "when one refers to the department giving authority to the report, that must mean Ministers", with his reply to a question by Lord Razzall on 12 October (H.L. Deb., col. 498) that, "Noble Lords will appreciate that the report is agreed by the Permanent Secretary, not by departmental Ministers. It is a matter for the NAO and the Public Accounts Committee, and it is the Permanent Secretary who takes the role of accounting officer".[HL4352]

Lord Sainsbury of Turville: Policy proposals on disclosure of information about major transactions by the Post Office have been developed and implemented in the light of experience with Post Office acquisitions, including German Parcel. As I made clear during the passage of the Postal Services Bill, Ministers considered and agreed a number of specific provisions on disclosure that will be incorporated in the company's Memorandum and Articles. The aim of these provisions is to give effect to the White Paper commitment that the Post Office be transparent in its operations and accounting and demonstrate that it is competing fairly with its competitors. As I explained during debate on the noble Baroness' amendments, the requirements are analogous to those of the Stock Exchange.

Officials informed NAO of the policy on disclosure requirements adopted by Ministers. The NAO

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reflected this in its German Parcel report in the following terms:


    "The Department has told us that it accepts our argument that there is a case for the Post Office and other similar public sector bodies to accept analogous rules to those of the Stock Exchange." (p. 44, paragraph 3.12)

When, during Third Reading of the Postal Services Bill on 11 July, I spoke of ministerial agreement and authorisation, I had in mind that Ministers decide policy, as indeed they decided the policy on disclosure requirements which is being incorporated in the Memorandum and Articles and which is referred to in the NAO report.

On 12 October I was explaining the procedures relating to NAO audit reports and that responsibility for commenting on the accuracy and completeness of the facts as presented by the NAO rests with the Departmental Accounting Officer.

Departmental Cars

Lord Hoyle asked Her Majesty's Government:

    How the Government Car and Despatch Agency dispose of cars after use.[HL4007]

Lord Falconer of Thoroton: Responsibility for this matter has been delegated under the terms of the Framework Document to the Government Car and Despatch Agency. I have asked its Chief Executive, Mr Nick Matheson, to write to the noble Lord.

Letter to Lord Hoyle from the Chief Executive of the Government Car and Despatch Agency, Mr Nick Matheson, dated 25 October.

Lord Falconer of Thoroton, Minister of State at the Cabinet Office, has asked me in my capacity as the Chief Executive responsible for the Government Car and Despatch Agency to reply to your parliamentary Question about how this agency disposes of its cars.

GCDA's normal practice is to dispose of cars by public auction, so ensuring that the best trade price is obtained. However, cars that have been specially constructed to provide enhanced security are not made available to the public once they have reached the end of their working life, but are stripped down or used for training purposes.



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