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Mr. David Heath (Somerton and Frome): I hope that it will not be opportunistic if I intervene on behalf of the 150,000 members of the public who signed a petition in the Western Daily Press in support of their sub-post offices. If sub-post offices are to lose part of their income, how will it be replaced? If the Minister cannot answer that, how can sub-postmasters and mistresses plan ahead, put business plans together or have any hope of transferring their businesses to other owners?
Mr. Johnson: If the hon. Gentleman will be patient, I shall come on to those points in a few moments. I was setting out the Government's policy for reinvigorating the Post Office. The White Paper sets out a balanced package of reforms that will preserve those services and benefit the Post Office, its employees and its customers.
Under the reforms, for the first time, we will create an arm's length relationship with Government, based on a five-year strategic plan, giving the Post Office greater freedoms to develop new products and services; to price commercially; and to borrow for growth investments. For the first time, we will introduce a tough, independent regulator, the Postal Services Commission, to promote and protect customer interests, set high-quality standards, regulate prices, and promote competition and innovation. We will strengthen consumer representation through a revamped and reinvigorated Post Office Users National Council and we will put additional resources into the Post Office, more than doubling the post-tax earnings that the Post Office can keep for investment, rather than paying to government. Also for the first time, we will enshrine the universal service obligation and the single uniform tariff in law, and we will establish access criteria to protect a nationwide network of post offices.
As part of the package, we have already reduced the Government's take to a dividend at commercial levels--50 per cent. of post-tax profits for 1999-2000, falling to 40 per cent. thereafter. We have allowed the Post Office to invest substantially overseas by approving the acquisition of German Parcel, an investment of nearly £300 million and we have allowed the Post Office to borrow up to £75 million each year without prior approval, a facility that it has already used for further smaller European acquisitions in the parcels market.
Mr. Ian Bruce (South Dorset)
rose--
Mr. Johnson:
I shall give way to the hon. Gentleman.
Mr. Deputy Speaker:
Order. The hon. Member for South Dorset (Mr. Bruce) has just walked into the Chamber. It really is bad manners for him to intervene in a debate to which other hon. Members wish to contribute.
Mr. Bruce:
I was here earlier, Mr. Deputy Speaker, and I am most grateful to the Minister for allowing me to intervene.
The Minister said that he was going to get universal service enshrined in law. Does that apply to the counters side of the business, as well as to the postal side?
At present, it is enshrined in the contract with the Department of Social Security that that service will be delivered universally.
Mr. Johnson:
One of the greatest crimes in the post office is to jump the queue, but I hope to cover that point later in my speech.
Under the White Paper reforms, Post Office plc will be independent, publicly owned, and able to attract, quickly and effectively, the necessary interest from financial institutions that understand the plc model.
Although I spoke about this matter at some length last Wednesday, let me underline our determination to secure the future of the Post Office Counters network. As the hon. Member for Somerton and Frome (Mr. Heath) rightly said, post offices have been closing at a rate of 1 per cent. of the network a year for 20 years. Neither the Government nor the Post Office can guarantee that no post office will ever close in the future but, for the first time, we will introduce access criteria laying down minimum standards to ensure that everybody in the UK has reasonable access to Post Office Counters services, particularly in rural parts of the country and in areas of social deprivation. The postal services commission and the users council will monitor the network against these criteria.
The Horizon project is being put back on track and some 40,000 counter positions at more than 18,000 post offices will be equipped with a modern, on-line computer system to enable the Post Office to modernise and improve services to existing customers, and to win new business.
Mr. Tyler:
Will the Minister set out the time scale involved? If the operation is not complete by 2003, when ACT will have pushed more people to use banks, it will not be effective in saving so many post offices. In what particular way do his plans differ from those of his Conservative predecessors? I recall that, when he was on this side of the House--[Hon. Members: "He was only elected in 1997."] When the Minister's colleagues were in opposition, they stood four square with Liberal Democrat Members in attacking the very proposals that he is now pursuing.
Mr. Johnson:
I was amazed when I read the motion that we are debating. It has been public knowledge for some time that we will computerise the vast Post Office network by spring 2001. The migration to ACT will not even begin until 2003, and will be phased over the next two years.
We realise that, for many people, this is a worrying time. The interest in this and previous debates on the subject underlines the public's high regard for the Post Office and the services that it provides.
Mr. Steen:
I am grateful to the Minister for allowing me to ask my question. He has said that Post Office services and rural post offices are safe with the Government. If that is so, what are the Liberal Democrats whingeing about?
Mr. Johnson:
I suggest that the hon. Gentleman asks that question of others.
The very fine speech made in Westminster Hall by my hon. Friend the Member for Stroud (Mr. Drew) last Wednesday intelligently and clearly set out the arguments
for those concerned about access to postal services. My hon. Friend had taken the time and trouble to look into the matter. His constituency was the pilot area for the use of benefit payments cards, and those hon. Members who are genuinely uneasy about those matters should read my hon. Friend's speech. He set the positive tone that others should follow if we are to avoid the network being blighted by politicians talking down the Post Office, as the Liberal Democrats have done again in the motion that we are seeking to amend.
Mr. Phil Willis (Harrogate and Knaresborough):
I rise to help out the hon. Member for Totnes (Mr. Steen). He stated earlier that the debate was a waste of time, but he has sat through all of it so far. I can tell the Minister what Liberal Democrat Members are whingeing about. In his response to the speech by my hon. Friend the Member for Twickenham (Dr. Cable), the Minister has not yet answered the question posed by my hon. Friend the Member for Somerton and Frome (Mr. Heath). What is he offering to those sub-postmasters and sub-postmistresses whose businesses will be on the edge when he takes away 40 per cent. of their business? What practical alternatives will he propose that will mean that those post offices are safe in the Government's hands?
Mr. Johnson:
The hon. Gentleman should be patient. I have not yet finished my speech and, with the leave of the House, I intend to reply to the debate. All the points that have been raised will be covered--in fact, many of them were covered last Wednesday.
This is a time of change, and change is sometimes unsettling. It is our duty to give a positive lead, and I am confident that our package of measures will give the Post Office and its customers a future to look forward to.
The programmes that we have put in place for the Horizon project will provide post offices with an integrated and on-line IT platform that will modernise the way that they operate. Some cynical views have been expressed about the Treasury's role in this. However, I can tell the House that the Treasury is contributing £500 million to computerise and place on-line every post office in the country. It is inconceivable that that investment would be made only for the offices to close down afterwards.
A key benefit from the project will be the Post Office's ability substantially to extend its existing arrangements with the high street banks, under which it provides a range of banking services on an agency basis. That is a vital factor also in the attack on social exclusion.
The wider work that the Government have commissioned on the matter has demonstrated that financial exclusion is both a cause and an effect of social exclusion. It has highlighted the desirability of promoting the spread of bank accounts, and has shown that encouraging the unbanked--especially the disadvantaged--to open a bank account will provide financial as well as social advantages to them as individuals. It is also an important step in connecting the socially excluded to the mainstream.
Mr. Richard Allan (Sheffield, Hallam):
Has the Minister received commitments from the clearing banks to provide universal access to banking services? Will they take any customer who goes to them wanting benefit payments? Will he indicate the charges that a clearing
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