Section 75: Dissolution of the Post Office

116. Section 75 provides for the Post Office to continue in existence after the day of transfer of the business of the Post Office to the Post Office company, for a transitional period. It gives the Secretary of State the power to dissolve the Post Office by order, following consultation with the Post Office and Post Office company, once he is satisfied that nothing further remains to be done under paragraph 9 of Schedule 3 or an order made under the Act.

Section 76: Accounts of the Secretary of State in relation to loans

117. Section 76 requires the Secretary of State, at the Treasury's direction, to prepare an account in the form required by the Treasury showing:

• sums issued to him from the National Loans Fund for lending to the Post Office company and its subsidiaries;

• repayments to him in respect of those loans and payments of interest on them; and

• how he disposed of the sums issued to him for lending and of the repayments of and interest on loans made by him, the repayments and interest being payable by him into the National Loans Fund.

118. The account must be sent to the Comptroller and Auditor General by 30 November following the end of the financial year in question and he will examine, certify and report on the account and lay copies of it and his report before each House.

Section 77: Publicity requirements for certain accounts and reports of the Post Office company

119. Section 77 requires the Post Office company to send to the Secretary of State:

• a copy of all annual accounts on which the company's auditors have made a report under section 235 of the Companies Act 1985, and

• a copy of the auditor's report

as soon as is practicable after the report is made. The Post Office company must also send to the Secretary of State a copy of its directors' report made in respect of each financial year under section 234 of the Companies Act 1985 as soon as is practicable after the report has been approved and signed. The Secretary of State is required to lay a copy of the accounts and reports before both Houses of Parliament. In this section, "annual accounts" means annual accounts within the meaning of Part VII of the Companies Act 1985 which relate to any year which includes the appointed day or to any subsequent year.

Section 78: Information requirements on the Post Office company

120. Section 78 empowers the Treasury to require the Post Office company to provide information (for example, forecasts of its capital expenditure and profits) for the performance of its functions in relation to public sector finance. The Treasury may apply to the court for any default under section 78 to be made good.

Section 79: Exercise of functions through nominees

121. Section 79 empowers the Treasury, or the Secretary of State with the Treasury's consent, to appoint a person to act as their nominee for the purposes of section 63 (government holding in the Post Office company and its subsidiaries), section 64 (government investment in securities of the Post Office company) and section 74(3) and (4) (further provisions relating to the capital structure of the Post Office company). Any nominees shall hold and deal with the securities or debt securities on such terms and manner as directed by the Treasury, or with the consent of the Treasury, the Secretary of State.

Section 80: Shadow directors

122. Section 80 exempts the Secretary of State and the Treasury from certain administrative duties which would be imposed on them under the Companies Acts in respect of the Post Office company, in the event that either of them fell within the definition of "shadow director". A shadow director is defined by section 741(2) of the Companies Act 1985 as "a person in accordance with whose directions or instructions the directors of a Company are accustomed to act;". As detailed in the White Paper, the Government aims to reserve to itself controls over certain functions of the Post Office company, but the formulation of strategy and the running of the company will be the responsibility of the board of directors.

123. This section does not remove any of the substantive obligations and duties falling on a shadow director. The Secretary of State or the Treasury would still bear the same substantive responsibilities and liabilities as any other director of the Post Office company in so far as those responsibilities would require the Secretary of State or the Treasury to behave with due care and diligence towards the company. But, in the event that the Secretary of State or the Treasury was a shadow director, no useful purpose is served by obliging them to comply with the provisions specified which are of an administrative nature, such as section 288 which imposes obligations on a company to keep particulars of its directors (name, address and occupation) and to notify the registrar of any changes.

Section 81: Tax

124. Section 81 gives effect to the provisions in Schedule 4, which sets out the tax provisions in relation to the transfer of property, rights and liabilities from the Post Office to the Post Office company. The provisions ensure that the transfer is tax neutral i.e. the Post Office company will not gain any tax advantage from the transfer or suffer any tax disadvantage.

Section 82: Interpretation

125. Section 82(1) defines various terms used in Part IV of the Act. Subsections 2 and 3 clarify the interpretation of property, rights and liabilities of the Post Office.

Part V Offences in Relation to Postal Services

Section 83: Interfering with the mail: postal operators

126. Section 83 provides for it to be an offence for a person engaged in the business of a postal operator to delay or open postal packets without reasonable excuse. It amalgamates the content of offences previously included in the Post Office Act 1953. It specifies a number of cases that are not to be regarded as offences under the section.

Section 84: Interfering with the mail: general

127. Section 84(1) provides for it to be an offence if persons intentionally delay or open postal packets without reasonable excuse. It amalgamates the content of offences previously included in the Post Office Act 1953.

128. Subsection (3) makes it an offence for a person, intending to act to a person's detriment and without reasonable excuse, to open a postal packet which he knows or suspects has been incorrectly delivered to him.

129. Subsections (2) and (4) specify a number of cases that are not to be regarded as offences under the section.

Section 85: Prohibition on sending certain articles by post

130. Section 85 sets out criminal offences of sending postal packets by post which either contain:

• articles, creatures or anything likely to injure other postal packets in the course of transmission by post or postal workers. This does not apply where the postal operator has given general or specific permission for anything to be enclosed in a postal packet; or

• indecent or obscene material. It is also an offence if such material is on the packet or cover of the packet.

131. The offences apply to postal packets handled by any postal operator. The section replaces section 11 of the Post Office Act 1953.

Section 86: Prohibition on affixing advertisements on certain letter boxes etc.

132. Section 86 contains criminal offences in relation to the fixing of advertisements, documents, boards or things onto post offices, post boxes or other property belonging to, or used by universal service providers in connection with the provision of a universal postal service, and other damage or disfigurement to such property. This section replaces section 61 of the Post Office Act 1953.

Section 87: Prohibition on misleading descriptions

133. Section 87 contains criminal offences intended to prohibit a person unless he has the authority of the universal service provider concerned from:

• maintaining a letter box or post office and placing on them marks, words or letters with the purpose of deceiving members of the public into believing that a post box or post office is operated by a universal service provider;

• using words, letters or marks which signify or imply that a ship, vehicle, aircraft or premises are used by a universal service provider to collect, receive, sort, deliver or convey postal packets in connection with the provision of a universal postal service; or

• using words, letters or marks which imply that that person is authorised by a universal service provider to collect, receive, sort, deliver or convey packets in connection with the provision of a universal postal service.

134. A person also commits an offence by failing, without reasonable excuse, to comply with a notice given to him by the universal service provider to remove the words etc, or remove/close up the letter box. This section replaces section 64 of the Post Office Act 1953.

Section 88: Obstruction of business of universal service providers

135. Section 88 sets out criminal offences in relation to:

• the obstruction, without reasonable excuse, of persons engaged in the business of a universal service provider in execution of their duty in connection with the provision of a universal postal service;

• the obstruction, without reasonable excuse, of the business of a universal service provider while in any universal service provider's post office or related premises; and

• failing, without reasonable excuse, to leave a universal service provider's post office or related premises when asked to do so by a person engaged in the business of a universal postal service provider on the basis that they suspect the person is obstructing their business.

136. It also enables the police to remove from the premises a person who is reasonably suspected of committing an offence under this section. This section replaces section 65 of the Post Office Act 1953.

Part VI Universal Postal Service: Supplementary

Sections 89, 90, 91 and 92: Schemes and limitation of liability

137. Sections 89, 90, 91 and 92 concern the legal relationship between a universal service provider and its customers in connection with the provision of universal postal services. They replace sections 28 to 30 of the Post Office Act 1969 which dealt only with the relationship between the Post Office and its customers. The new provisions provide for the same privileges to apply to a universal service provider if a condition of his licence is that he should provide a universal postal service.

138. These sections enable a universal service provider to make and operate schemes setting out terms and conditions for the provision of universal postal services (in place of contracts), which limit liability, in particular the liability for consequential losses. The purpose of having such schemes is to ensure that the universal service will continue to be provided. Where a universal service is provided through the use of post boxes (as is the case at present) there is no proof of posting or of the value of contents. The removal of immunity could result in universal service providers being forced to require proof of posting to determine eligibility for any compensation for service failure. These provisions provide for all universal service providers to have immunity to avoid this.

Section 93: Power to modify sections 89 to 92

139. Section 93 creates a power for the Secretary of State to modify sections 89 to 92 by order having first consulted the Commission, the Council, licence holders and any such persons as the Secretary of State considers appropriate. It is intended that the need for and scope of the provisions in sections 89 to 92 should be reviewed to ensure that they continue to be in the best interests of users of postal services. The purpose of this power is to ensure that the conclusions of any such review could be implemented without unnecessary delay.

Section 94: Power to require carriage of mail-bags by ship or aircraft

140. Section 94 provides that a universal service provider can in circumstances where there is no ready access to addresses by road, serve notice on the owner or operator of a ship or aircraft to carry mail bags in connection with the universal service. If the remuneration for providing such a service cannot be agreed, it can be determined by the Transport Tribunal or, where relevant, the Department for Regional Development in Northern Ireland.

Section 95: Provision relating to land

141. Section 95 gives effect to the provisions of Schedules 5 and 6, which relate, respectively to the compulsory acquisition of land by universal service providers and other provisions relating to land.

Section 96: Immunity from prosecution

142. Subsections (1) and (2) provide equivalent protection for persons engaged in the business of universal service providers against prosecution for possession of articles in the post where such articles are prohibited under any enactment or fail to comply with restrictions under any enactment on carriage or delivery as if they were a government department.

Section 97: Harbour charges on mail-bags

143. Section 97(1) and (2) protect the goods in the mail-bags of universal service providers and foreign postal administrations from harbour charges in respect of those goods.

144. Subsection (3) protects the mail-bags of universal service providers and foreign postal administrations from being detained by a harbour authority for non-payment of charges for a period of eight weeks so that they cannot be held up by a demand for immediate payment. This replaces section 66 of the Post Office Act 1969.

Section 98: Mail-bags not to be subject to control by harbour authorities

145.Section 98 sets out four cases in which harbour authorities may not detain mail-bags. It overrides any other statutory provisions. This replaces section 67 of the Post Office Act 1969 and extends the protection to mail-bags of all universal service providers. The cases are:-

• where a universal service provider is carrying the mail-bags himself in connection with the provision of a universal postal service;

• where another is carrying the mail-bags of a universal service provider on his behalf either within the UK or to a foreign destination;

• where mail-bags of a foreign administration are being carried by a universal service provider: and

• where a universal service provider is in charge of the mail-bags of foreign administrations in the United Kingdom in connection with the provision of a universal postal service.

Section 99: Common carriers

146. Section 99 states that universal service providers (so far as they are providing a universal postal service) are not "common carriers". According to the common law, a "common carrier" is a person who carries all goods of all persons wishing to use his services. He is bound to accept goods that are offered to him for carriage, but he may refuse to do so if he believes that he has lawful ground for such refusal. Being a "common carrier" has implications in terms of liability. Without this exemption universal service providers might be regarded as common carriers, which could make them absolutely responsible for the safety of goods entrusted to them for carriage. This would mean that they could be liable in certain circumstances if the goods they carry are lost or damaged, even without fault on their part.

Section 100: Certain exemptions from postage etc.

147. Section 100 provides for the exemption from postal charges for certain petitions and addresses forwarded or sent to Her Majesty, or to the Secretary of State for Northern Ireland, or sent to a member of either House of Parliament, the Scottish Parliament (or its Clerk), the Northern Ireland Assembly or of the Welsh Assembly. It also limits the amount of postage that the universal service provider may recover for the delivery of parliamentary proceedings.

Part VII Miscellaneous and Supplementary

Section 101: Directions in interests of national security etc.

148. Section 101 provides a power to the Secretary of State to direct the Commission or a licence holder as he considers appropriate if he considers it expedient to do so either in the interest of national security or in order to discharge an international obligation; to meet the object of an international organisation of which the Government is a member or agreement to which they are party; or to enable the Government to become a member of such an organisation or party to such an agreement. The Directions should generally be laid before Parliament but there are exceptions to this on specified grounds. It is an offence to contravene a direction or, in certain circumstances, to disclose it.

Section 102: Power to ensure compliance with the Postal Services Directive

149. Section 102 provides a power for the Secretary of State to ensure compliance with the EU Postal Services Directive. The purpose of this power is to ensure that the Government's obligations are always met, in particular in the event that the reserved area is removed and with it the ability to impose the universal service obligation and related requirements through licence conditions.

150. The power only applies where the Secretary of State is satisfied that a Community obligation under the Postal Services Directive is not being met or will not be met and where he has been unable to obtain any undertakings from any person which are sufficient to satisfy him that the situation will be remedied. In that case the Secretary of State may make by order such provision as he considers appropriate to ensure that a universal service is provided.

151. An order under this section may in particular: confer or modify the functions of the Commission or the Council; require a postal operator to provide all or part of a universal postal service; specify terms and conditions for such services; provide for payment from public funds for any purpose of the order; and for the enforcement of provisions in the order.

152. In deciding whether to make any such order the Secretary of State will have regard to the likely impact of the order on the person on whom the requirement is to be imposed. Before making such an order he will consult with any such person.

Section 103: Subsidy for public post offices

153. This section will allow the Secretary of State to make a scheme for payments for the purpose of assisting in the provision of public post offices or assisting in the provision of services to be provided from public post offices. Where the payments are made for services, they must ultimately assist in the provision of public post offices.

154. The Secretary of State must set the terms of the scheme, but may specify another person to make the payments. If that person is a statutory body or an office holder the Secretary of State has power to alter their statutory functions to allow them to undertake functions under any scheme set up under this section.

Section 104: Inviolability of mails

155. Section 104(1) and (2) provide for mail-bags, packets in the post and their contents, which are not the property of the Crown, to be given the same immunity from examination, seizure or detention, as if they were the property of the Crown.

156. Subsection (3) provides for exceptions to the above immunities where the Commission is investigating an offence of delivery of letters without a licence or where Customs and Excise is to exercise its powers.

Section 105: Application of Customs and Excise enactments to certain postal packets

157. Section 105 applies customs legislation to postal packets. It re-enacts and updates the provisions contained in section 16 of the 1953 Post Office Act.

158. Subsection (1) applies customs and excise legislation to postal packets that are being imported, exported or in transit through the UK from or to any place outside the UK.

159. Subsection (2) provides a power, similar to the one in the 1953 Act, for HM Treasury to make regulations specifying how the legislation should apply. The power allows HM Treasury to make regulations:

• specifying which postal packets the section applies to;

• making any exceptions or modifications in how those acts apply;

• enabling a postal operator to perform the duties of an importer, exporter or remover;

• giving effect to arrangements for foreign postal packets;

• securing observance of the acts; and

• punishing contravention of the regulations.

160. Subsection (3) allows duties and charges applied through this section to be recovered by the postal operator concerned and subsection (4) allows for a certificate from the relevant postal operator to be evidence in proceedings for that recovery.

161. Subsection (5) defines the term "foreign postal packet" used in this section.

Section 106: Power to detain postal packets containing contraband

162. Section 106 permits postal operators to forward postal packets to the Commissioners of Customs and Excise. It re-enacts and updates the provisions contained in section 17 of the 1953 Post Office Act.

163. Subsections (1) and (2) allow postal operators to detain and forward to the Commissioners of Customs and Excise, any postal packet that they suspect contains goods which are subject to duty which has not been paid, or which are subject to legislation prohibiting or restricting their import or export.

164. Subsection (4) and (5) allow the Commissioners to open any postal packet that is forwarded to them under this section, in the presence of the addressee, or - if the addressee has been notified but fails to turn up or the address is overseas - in the addressee's absence.

165. Subsection (6) enables the Commissioners if they find any goods that are prohibited or on which duty has not been paid to take proceedings in relation to them. Subsection (7) specifies that if, upon opening, the Commissioners do not find any such goods they must forward or deliver the package to the addressee.

Section 107: Conditions of transit of postal packets

Sections 108/109/110: Evidential provisions

167. Sections 108, 109 and 110 are intended to prevent delays in court cases arising from hearsay arguments.

168. Section 108 enables official marks of universal service providers in connection with the provision of the universal service or a foreign administration to be sufficient proof of the amount of postage due on a postal packet. It allows in legal proceedings for the recovery of postage or other sums due in respect of postal packets that the production of the packet with a universal service provider's or a foreign administration's stamp or endorsement on it is sufficient proof that the packet has been refused or rejected, is unclaimed or cannot be delivered for any other reason. It also states that a certificate of a universal service provider is sufficient proof that any mark, stamp or endorsement has been made by that universal service provider unless the contrary is shown. The section makes it clear that, in any legal proceedings, the person from whom a postal packet seems to have come will, unless the contrary is shown, be taken to be the sender of the packet.

169. Section 109 enables, on prosecution of an offence under the Act, evidence that an article is in the course of transmission by post or has been accepted by a postal operator for transmission by post will be sufficient proof that it is a postal packet. This applies to any offence in the Act. Subsections (2) and (3) apply certain provisions of the Theft Act to offences under sections 83 and 84 of the Postal Services Act.

170. Section 110 enables certification by a universal service provider to be sufficient proof, unless the contrary is shown, that any box or receptacle was provided by the provider for receiving and onward transmission of postal packets in connection with the provision of a universal postal service.

171. These sections replace sections 19, 72 and 78 of the Post Office Act 1953.

Section 111/112/113/114: Provisions relating to postal and money orders

172. These provisions, which replace those for postal and money orders in the 1953 and 1969 Post Office Acts, protect the Post Office company and bankers by limiting liability in certain circumstances (Section 111); allow the Post Office company to make schemes in relation to postal and money orders (Section 112); make provisions for the recoupment of losses on money orders wrongly paid to bankers (Section 113); and set out the treatment of special money orders issued by the Post Office company under an arrangement with a foreign Government or postal administration (Section 114). These provisions only apply to the Post Office company.

Section 115: Extension of existing powers relating to the Post Office

173. Section 115 extends certain existing powers of the Post Office (the statutory corporation) and the Crown under the Post Office Act 1969 and the British Telecommunications Act 1981 prior to the Post Office becoming a company. The purpose is to support the Government's policy of allowing the Post Office greater commercial freedom. The section provides:

• for the Post Office to enter into any financial transactions not already empowered by section 7 of the Post Office Act 1969 and the power will include, for example, power to enter into currency swaps required in connection with the business of the Post Office and its expansion outside the United Kingdom;

• for the Secretary of State, with the approval of the Treasury, also to make loans direct to any subsidiaries of the Post Office, and not only to the Post Office itself;

• for the Secretary of State, with the approval of the Treasury, to make loans in foreign currencies to the Post Office or its subsidiaries. The monies will continue to be issued from the National Loans Fund, but may be issued in sterling or a foreign currency if the loan is to be in that currency;

• for the Post Office correspondingly to have powers to borrow in a foreign currency from the Secretary of State;

• for the limit on the Post Office's total indebtedness, as permitted under the British Telecommunications Act 1981 and including borrowing by any subsidiary, to be increased from £1,200 million to £5,000 million and for the removal of the ceiling up to which the limit may be increased, although any increase will still need to be authorised by an affirmative resolution order.

Section 116: The Postcode Address File

174. Section 116 requires the owner (currently the Post Office) of the database of United Kingdom postcodes (known as the Postcode Address File) to make it available to those who wish to use it, on reasonable terms and on possible payment of a charge. It also requires the owner to maintain it.

Section 117: Records of the former Postmaster General's department

175. Section 117 recreates a power similar to that in section 75(2) of the Post Office Act 1969 to enable the Secretary of State by order to vest in the Post Office company the property in the pre-1969 records of the Postmaster General and to give directions to the Post Office company in respect of making those records available to the Crown for inspection and copying. The order-making power in section 75(2) of the 1969 Act has never been exercised, and so the vesting of the pre-1969 records remains an outstanding matter from the 1969 Act.