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9.32 pm
Mr. Norman Baker (Lewes): My Liberal Democrat colleagues and I make no apology for holding yet another debate on the Post Office. The network of sub-post offices, and the services that can be accessed through them, are vital to our rural and urban communities. We have had to return to the subject because so many
questions were left unanswered. I hope that they will be answered tonight: if they are not, I predict that there will be further debates on the subject until they are answered.
The Minister has temporarily gone from his place, after being present for the whole debate. Excellent though he is, the Minister is working overtime, thanks to a shortage of other Ministers to deal with this matter.
Mr. Page:
When the news is good, the Secretary of State is present: when the news is bad, someone else is.
Mr. Tyler:
The hon. Gentleman speaks from experience.
Mr. Baker:
My short experience in the House leads me to believe that what the hon. Gentleman says is true.
We have heard that Britain still has more than 18,000 post offices, despite the closures that have taken place at an alarming rate over the past 20 years. Those offices serve 28 million people every week.
Under the Conservative Government, 4,000 sub-post offices closed. That decline has continued under Labour. Offices close every week, yet we know how important they are to rural communities and to estates in urban areas. Often they are the only community services left when the school, the pub and the other shops are long gone.
We also heard how important benefit payments are to postal business. The Post Office expressed its concern about the Government's policy trend in a press release issued on 8 July 1999:
The share of income for post offices deriving from the payment of benefits averages between 30 and 40 per cent., but it can be as high as 70 per cent. in some offices.
In my constituency of Lewes, more than 40 per cent. of the income of eight out of the 34 post offices derives from the payment of benefits. In the Secretary of State's constituency of Tyneside, North, where there are 22 post offices, 16--73 per cent. of them--depend on benefit payments for more than 40 per cent. their income. In the Prime Minister's constituency, 72 per cent. of post offices are so dependent. Interestingly, in Edinburgh, Central, the constituency of the Secretary of State for Social Security, only 5 per cent. of post offices are in danger of closing down, which is fortunate.
The Minister talked about an unhealthy reliance on benefits. In one sense, I can understand that--it does not do to put all one's eggs in one basket. Nevertheless the word "unhealthy" suggests that the Minister believes that dependence on benefits should be reduced, but is not yet clear what will replace it. That point concerns many Liberal Democrat colleagues and, I believe, hon. Members across the House. It seems that benefits will be taken away--that much is clear--but what will replace them is not at all clear.
How great is the Government's commitment to the network? What is their commitment to the vital lifeline that rural post offices in particular provide? The Minister
talked about access criteria, but it is not clear how they will link with the financial performance of a post office. If a post office is vital for a community because the nearest one to it is a long way away, will it survive because it performs an important function for the local community, no matter how unsuccessful it is financially? Or will it have to close because it is not financially viable, even though people will be inconvenienced? We need to understand the relationship between the social factors and the economic performance of each post office.
I have doubts about the appeals procedure, and I hope that the Minister can reassure me when he winds up the debate. The new appeals procedure sounds like a good idea, but it is not clear how it will deal with even the present volume of sub-post offices that are closing, never mind an increased volume if things go awry. Nor is it clear whether it will be based on simply financial criteria. If so, what is the point of an appeal? It will just be argued that the figures do not stack up and that the post office must shut.
We need to have clear and rigorous social guidelines in place that can overrule the financial performance of each unit. Post offices will be doing the best they can under the circumstances--it may not make financial sense, but it will make social sense. The Minister will have to clarify that point if we are to have confidence in the appeals procedure.
The Minister said that people must use their post office or lose it--we have heard that phrase many times. But what about those who have to use it because there is no alternative, but who still might lose it because it is not making money? Where do those people go when their sub-post offices close? The Minister said that there can be no guarantee that no post office will shut. The hon. Member for West Derbyshire (Mr. McLoughlin) spoke about people's individual circumstances and the difficulty of replacing postmasters. Of course that is true. But we want the Government's guarantee that except for those personal circumstances, they will maintain the network at or at about its present size. I have not heard the Minister give that guarantee--I hope that he will tonight. If not, what is the minimum size of the network that he is prepared to tolerate? It is currently 18,000--how low will it have to go before he says that it has gone too far?
The Minister mentioned that there is a small window of opportunity. The hon. Gentleman told us again tonight that automation will take place by spring 2001. We are pleased that the Government are pushing forward with automation. We know that ACT kicks in in 2003. That is not a very long time in which, to use the Minister's words, to grow new business. What happens if post offices do not grow new business in that two-year period?
The Minister praised the contribution of the hon. Member for Stroud (Mr. Drew), who was not called to speak in the debate tonight but who secured the debate last week in Westminster Hall. The hon. Gentleman said:
Considerable doubts remain about franchise arrangements in urban areas. Post Office Counters seems determined to leave perfectly good offices so that it can enter into franchise arrangements with retailers. However, in Newhaven, Post Office Counters left a perfectly good and serviceable Crown office--near the sorting office, which was in the same building--to move in with a retailer that soon went bankrupt. At three days' notice, the post office had to move into a portable cabin in a car park, which the disabled find it difficult to use. Meanwhile, the original Crown office lies empty. That kind of mess results when Post Office Counters refuses to go it alone when necessary, preferring to reach franchise agreements with partners that often seem fairly dubious.
In Lewes, the franchise post office does nearly as much business as the Crown post office--about two thirds or three quarters as much. The franchise post office has been given notice by W. H. Smith, and will close in three months' time. The Crown office is at the top of a hill, which is impossible to reach for the elderly and disabled. No alternative arrangement has been made. Post Office Counters does us no favours by reaching such franchise agreements. Why do the agreements include such short notice periods? Why should people's lives be disrupted without notice because of those agreements? We need confidence that Post Office Counters is as keen to maintain the network as Members of Parliament are.
Questions remain about cash transactions. The hon. Member for Tiverton and Honiton (Mrs. Browning) asked how much they will cost, and who will pay. Will the banks suffer a loss? Will the Post Office? Will the Treasury suffer a loss, or the Department of Social Security?
Mrs. Browning:
The hon. Gentleman will agree that banks tend not to suffer losses. I fear that if banks are not properly reimbursed, they will pass on the costs to their customers, which would be totally unacceptable.
Mr. Baker:
The hon. Lady makes a valid point.
The hon. Member for Forest of Dean (Mrs. Organ), who is no longer here--
Mr. Baker:
I beg the hon. Lady's pardon. She asked what cash is. That seems a simple question, but does cash include cheques? All sorts of fears surround that point. Many people do not want a bank account and want no truck with the banking system. They want to hand over a book and receive cash in return. Successive Governments have ensured that child benefit is paid in cash to women for the very good reason that it ensures that children are properly supported. We must now allow such money to be sucked into paying off overdrafts on bank accounts, or to go into joint bank accounts held with unsuitable husbands.
On 23 October 1999, a form was issued relating to child benefit. It lists the ways in which child benefit may be paid. It says that the benefit may be paid straight into a bank or building society account every four weeks, or through the Post Office by payment into a giro account or national savings bank account. The form does not mention cash payments over the counter. Will the Minister write to everyone who has received the form to make them
aware that they can receive cash over the counter, or will he allow the form to let people believe mistakenly that they cannot receive child benefit in cash?
The Liberal Democrats favour a fully automated, modernised, competitive, publicly owned Post Office, operating with greater commercial freedom. [Interruption.] There should be no surprise about that; it has been our position for a long time.
"The DSS's decision to pay benefits by Automated Credit Transfer from 2003 . . . would seriously threaten the income streams of many post offices, especially in rural areas."
That is the fact of the matter. It is why so many hon. Members are worried that the Government's plans will undermine the economics of the post office system, and lead to closures.
"it would be good to hear that, even with the introduction of ACT, the timetable of 2003 to 2005 is flexible".--[Official Report, Westminster Hall, 12 January 2000; Vol. 342, c. 49WH.]
The Minister should respond to that sound point. A question remains over the consequences of a mass take-up of use of the internet or new digital facilities. Will automation render the sub-post offices out of date? The key question remains: how far will the financial performance of each unit outweigh social factors?
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