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Mrs. Browning: I refer the hon. Gentleman to the excellent speech made by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) in a debate on this subject in Westminster Hall in January. My right hon. Friend clearly spelled out the Conservative policy when we left office, and explained why we thought it was worth putting £400 million-worth of taxpayers' money into supporting the sub-post office network. We recognised that sub-post offices fulfil an important social function in communities--and the hon. Gentleman may be disappointed to discover that Ministers do not recognise that.
We agreed to introduce computerisation because of the problems of fraud associated with benefit books, which would have led to the use of swipe cards and, ultimately, of smart cards. Computers clearly have benefits in allowing small post offices to provide additional services. However, the difference between new Labour and the Conservative party is that my right hon. Friend, who served both as Secretary of State for Trade and Industry and as Secretary of State for Social Security, looked at both sides of the issue and made a value judgment, which was that we were prepared to spend taxpayers' money to sustain vulnerable communities.
Mr. Martin O'Neill (Ochil):
In the event of the Post Office being privatised, does the hon. Lady envisage that a privately owned company would subsidise a retail network that it did not own to the tune of £400 million a year?
Mrs. Browning:
Any policy that the Conservative party puts forward will be based on what we inherit, and I cannot second-guess what that will be. I shall certainly not speculate now on what might be in the Conservative manifesto, or a policy of the next Conservative Government. Labour Back Benchers seem to be interested in whether and how we would privatise the Royal Mail. If they are so nervous, they should seek a guarantee from the Secretary of State that the Bill is not a precursor to
Mrs. Browning:
I shall give way to the hon. Member for Plymouth, Sutton (Mrs. Gilroy) once more, because she is from Devon, and I should like to think that the people of Devon can feel that they are represented by somebody who understands the Post Office problem.
Mrs. Gilroy:
I spent some of my younger years in Ottery St. Mary and I am fully aware of the challenges faced by rural areas, as well as by deprived areas. If we were unfortunate enough to have a Conservative Government in future, would they give the guarantees on access that my right hon. Friend the Secretary of State has given tonight? My right hon. Friend said that there will be robust criteria to protect the post office network in the future. Would the hon. Lady uphold them?
Mrs. Browning:
I have explained fully the Conservatives' concern about the Bill, and that we would wish to examine what we inherited from new Labour. However, if the hon. Lady thinks that she has received any guarantees from the Secretary of State about access, she must have better hearing than I have. It is true that the right hon. Gentleman mentioned the subject, but he did not give any guarantees. Perhaps if she catches your eye, Mr. Deputy Speaker, the hon. Lady might like to press the issue, because we would be interested in the actual nature of the access guarantees. As I understand it, they have not yet been worked out and they await a Cabinet Office report.
Mr. Letwin:
Does my hon. Friend agree that, having decided to deprive the rural and other marginal post offices of a large sum of money in an attempt to save money, the Secretary of State has discovered that he is not going to save that money, and--having not saved the money--is going to subsidise them to make up the difference, the result being that those post offices get less money at more expense to him?
Mrs. Browning:
That was beautifully and succinctly put, as I would expect from my hon. Friend and neighbour. He raises an important point: the smash- and-grab raid by the Treasury to save £400 million from the social security budget seems to be rapidly diminishing because the Government will have to shore up other aspects of the Post Office--on some of which we have not yet heard the details--to save their face. It will be interesting to see the balance sheet when everything is done and dusted. My instinct is that little saving will made overall, although the £400 million will have been redistributed. It will not necessarily go through the accounts of the sub-postmasters, who regard it as an essential part of their income.
Mrs. Browning:
I have been generous in giving way and I shall now make some progress.
I hope that the Minister will be able to provide the answers to some important points when he winds up. The powers of the Secretary of State, especially in the financing of the Post Office, are important. I note that the Bill mentions
The Secretary of State will have the powers to extinguish certain liabilities of the Post Office or "any of its subsidiaries". Why does the Secretary of State believe that "any" of the subsidiaries should be eligible, as opposed to the "relevant" subsidiaries outlined elsewhere in the Bill? The limit on the loans that will be available to the Post Office is to be increased from £1.2 billion to £5 billion. That will provide reasonable access to the national loans fund for commercial acquisition. Can the Minister identify how that threshold was reached? Why was the sum of £5 billion chosen?
The Government have allowed the Post Office to spend a sum of money without permission, but when it comes to loans that require the sanction of the Secretary of State, we have the bizarre prospect of a Minister who claims that he wants to take politics out of competition policy authorising loans that could affect the market and give one company a competitive edge over another. How will the Government square that facility with their declared position on competition policy and the Secretary of State's desire not to make political decisions about competitive issues between companies?
The Bill contains provisions for far too much involvement by the Secretary of State, and he has created a confused structure. Why does the definition of "relevant subsidiary" vary throughout the Bill? Should not the definition in clause 52(8) apply throughout? We are concerned about that.
Another disappointment is the Government's failure to identify clear accounting procedures so that transparency is guaranteed. We shall be seeking a lot more information about how public money and public risk are to be analysed in a transparent and accountable way. Perhaps that information will be contained in the 200 or more amendments yet to be tabled. In any event, we shall certainly expect the proposals to be tabled before the Bill is considered in Committee, so that they receive full and proper scrutiny.
European Union countries and others exclude public corporations from their primary measures of public accounts. If the Government insist that the Post Office is not self-financing--which they do, because they have not allowed it the full freedom of the marketplace through privatisation--the accounting procedures and borrowing rules are important. We assume, because of Government ownership, that it will be financed out of public funds. Will the Secretary of State confirm that? Will he also say how those finances are to be presented?
How does the Secretary of State balance the threshold of the borrowing for the Post Office with the possibility that the investment required would not generate the required return? Is the £5 billion ceiling designed to ensure that the return would be guaranteed in any commercial situation? Could the limit prevent investment that was economically justified? If not, the Post Office would have difficulty in meeting the Government's targets.
If the Post Office owes the Government money via the national loans fund, the Government will have to borrow from the private sector to maintain their net borrowing or net debt repayment. In that case, why not let the Post Office borrow from the private sector in the first place through full privatisation? Will future Post Office borrowing be included in the primary measure of public sector borrowing?
We shall want to scrutinise many aspects of the Bill in Committee. I hope that, from what he has heard tonight, the Secretary of State will recognise that the Bill contains much that is confusing. It includes words such as "modernise", "commercialism" and "competitiveness", but it does not really set the Royal Mail free to take its place in a global marketplace, despite what the Secretary of State says.
The area of greatest confusion concerns the sub-post offices, which were discussed at the beginning of my speech. It is no longer acceptable for any Minister, including the Prime Minister, to dash around the country making statements and saying things simply to assuage public concern, particularly among the sub-postmasters. In the summer recess, the Secretary of State rushed into print, saying how the combination of Camelot and the Post Office in the new national lottery bid was going to be the answer for rural post offices. He must know by now--he clearly did not know then--that the procedures for installing a lottery terminal require a considerable number of transactions to be made a week. I believe that the minimum number is 3,000 a week, which is beyond many of the smallest and most vulnerable sub-post offices, which will not therefore benefit from the installation of a lottery terminal. In my, very rural, constituency, I occasionally have to fight to save a terminal in a small outlet where the number of transactions has dropped to between 1,500 and 2,000 a week. National lottery terminals are not the answer, and it is misleading for Ministers to make people think that they are.
Only last week, the west country saw the now rather infamous visit of the Prime Minister, who told people in the rural areas that we had never had it so good. On that visit, the Prime Minister told people in the west country that they would receive 3,000 cash dispensers, and that that would be the answer for post offices. That has nothing to do with the Government--it concerns a commercial transaction between post offices and banks. In some of the most fragile of my rural post offices, and in other areas where they operate from clapboard buildings, I cannot imagine a cash dispenser being installed: it would be the first target for ram-raiders. The Government need to get real.
"loans to the Post Office company or any of its subsidiaries."
Why have the Government used the word "any" rather than "relevant"? The Bill also provides for privileged loans, which could distort the market for other private sector companies, and we shall want to examine those provisions--including the interest rate for any such loans--carefully in Committee. The Secretary of State said that such loans would be at commercial rates, and I hope that we may take him at his word, as there could be distortion of the market if preferential loans were made through borrowing facilities made available by the Government which put the Post Office in a more favourable position than other operators.
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