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Opposition Day

[9th Allotted Day]

Sub-post Offices

Madam Speaker: We come now to the motion on the future of sub-post offices. I have selected the amendment that stands in the name of the Prime Minister.

3.42 pm

Mrs. Angela Browning (Tiverton and Honiton): I beg to move,

That this House condemns the Government's failure to provide a coherent strategy for the future of sub-post offices; expresses concern that nearly a year has elapsed without any solutions to the problems created by the arbitrary announcement to withdraw income from community post offices in return for the payment of benefits; believes that the acceleration of post office closures in 1999-2000 will continue as a result of the Government's policies; applauds the determination of the last Conservative Government to maintain a national network of post offices; supports the computerisation project started by the last Conservative Government to tackle fraud and improve technology available in post offices without cutting their income; calls upon the Government to recognise the social value of post offices to local communities; and now requires the Government, as a matter of urgency, to identify new income streams for sub-post offices in the future and to end the confusion for benefits recipients about the future payment arrangements at local level.

Today, 2,000 sub-postmasters are in London because they fear for the future of their businesses. Nearly a year has elapsed since the Secretary of State announced Labour's Treasury-driven decision to switch the payment of benefits and pensions from post offices to automated credit transfer. Since that announcement was made, there have been many debates in the House; indeed, this is the second Opposition day debate that the Conservative party has introduced.

In the past year, there has been an acceleration of post office closures--double the number the previous year. Post offices are being advised by their banks not to extend their borrowing and we know that the National Federation of Sub-Postmasters fears for the future of 8,000 sub-post offices, which are privately owned businesses at the heart of both rural and urban communities. Indeed, it was shocking to hear at Prime Minister's questions this afternoon that the Prime Minister still seems to believe that Britain's network of sub-post offices is part of a nationalised industry and that it is not made of private businesses that invest their own capital and need to prepare their own business plans for the future.

Mr. John Greenway (Ryedale): My hon. Friend has touched on one of the most important aspects of this issue. Six post office closures in my constituency have already been announced this year. Four were very much part-time post offices and two were small village shops with a post office. Does she not agree that we are seeing a process that cuts at the bone of the rural network of small businesses that support small village and rural communities?

Mrs. Browning: My hon. Friend is absolutely right. The network is made up of businesses that provide a range of services and they often combine the post office with

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the village shop. Like everyone else, sub-postmasters have to make business decisions and plan for the future. In the uncertain world that the Government have created, many choose to get out altogether rather than sell their businesses on. That is an indictment not only of the Government's arbitrary decisions a year ago, but of the way in which they have subsequently handled matters.

I want to place Conservative achievements on record. When we were faced with a choice between more savings for the Treasury and ensuring the survival of the post office network, the previous Conservative Government, by contrast with Labour, opted for the more expensive benefit card project to ensure the survival of the sub-post office network for rural and urban communities.

As the National Federation of Sub-Postmasters said in its submission to the Select Committee on Trade and Industry:

the decision of the previous Government to automate the delivery of benefits payments using the benefits payment card was based on the need to reduce costs, eliminate fraud and ensure beneficiaries would be able to continue to receive their payment in cash from the post office, thus ensuring they retained a choice as to the method of payment which best suited their individual circumstance . . .

The submission continued:

this was recognised to be the only way to ensure the future survival and prosperity of the post office network.

Earlier today, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) introduced a debate on sub-post offices in Westminster Hall. It is not the first time that he has spoken on this subject in the past year. The fact that he puts on record the background to the way in which the Conservative party introduced the switch from the book to the payment card, and the proposals that this Government inherited, clearly identifies the previous Government's priorities.

My right hon. Friend speaks with the authority of someone who has been Secretary of State in the two key Departments--the Department of Trade and Industry and the Department of Social Security. He said:

When I moved to the Department of Social Security, my interest deepened further, as I saw how essential the network was to the effective delivery of benefits to many of the most vulnerable people in our communities. I helped to ensure that that delivery mechanism and the network would continue by agreeing to the horizon project, about which the Government are now trying to rewrite history . . .--[Official Report, Westminster Hall, 12 January 2000; Vol. 342, c. 52WH.]

Mr. Andrew Miller (Ellesmere Port and Neston): The hon. Lady will recall that, in the last Parliament, I praised the approach of the right hon. Member for Hitchin and Harpenden (Mr. Lilley) to merging benefits and taxation issues. However, I am not sure that I could praise his handling of the original Horizon project. I have followed its progress from the beginning. Will the hon. Lady put on record the fact that it is Conservative policy to reintroduce the previous plan, exactly as it was, for the system? We will then know precisely what the debate is about.

Mrs. Browning: The hon. Gentleman knows what the Government inherited, and what they did with that inheritance. The Conservative party will consider what we inherit and what we can salvage from the damage and the mess that the Government are creating.

In the past year, we have asked many questions to which we have received few answers. Even today, the Prime Minister failed to answer questions in terms that

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could provide comfort to the 2,000 sub-postmasters who have given up a day's work to persuade the Government to think again and identify new streams of income to replace the income that has been lost through the Government's policies. We have debated the matter often in the past, but the Government do not intend to listen. I want to focus on the future, because today's debate is about that. That is why sub-postmasters are here today.

Sub-post offices are businesses and, like any other small business, they need to plan for the future. When the Prime Minister received the sub-postmasters at No. 10 this morning, he pointed out that the Government still have many issues to sort out between now and 2005. However, businesses do not have the luxury of time: sub- postmasters have to make business decisions today, and their bank managers are advising them today. What a luxury it is for a Government to think that such considerations can all be kicked into the long grass while they set up another focus group or advisory committee. We know that in the meantime sub-postmasters are going to the wall.

The Government should be focusing on possible extra streams of income for sub-post offices and prioritising those Government services that might be such a source of income in future. However, as we heard again from the Prime Minister this afternoon, this is all about saving money from the Department of Social Security budget, which is a failure if ever there was one, because the Government have not fulfilled the pledge to cut that budget which they made when they came to office.

The DSS and the DTI are packed with former Treasury Ministers who have rolled over and allowed the Treasury to recoup that £400 million, taking it out of the pockets of sub-postmasters, yet Ministers need four years to think up ideas that will enable post offices to plan for the future. In this matter, as in so many others, the DTI ministerial team do not understand how businesses work, and despite all the wringing of hands by Labour Members, they do not care.

Since the last summer recess, I have visited dozens of sub-post offices throughout the country. Only last month, in Sadberge in the Prime Minister's constituency, I visited the small post office, which sells a few groceries and is clearly important to the local community. With the sub-postmaster and the national president of the National Federation of Sub-Postmasters, I posted a letter from that post office to the Prime Minister at No. 10. He did not reply, and I was rather surprised because I should have thought that even he would have time to recognise that in his constituency sub-postmasters are struggling, as they are throughout the country.

The Prime Minister's office sent my letter to the Minister of State, Department of Social Security, who I see is on the Treasury Bench this afternoon. He sent me a two-page reply in which he comes to the crunch and makes a point that may explain why the Government have been so slow in deciding how to help post offices and how they can contribute to replacing their income streams in response to the smash-and-grab raid by the Treasury. The right hon. Gentleman said:

Therefore, sub-postmasters' remuneration is a matter between POCL--

Post Office Counters Ltd.--

and the post-masters themselves.

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In other words, this is nothing to do with the Government, and yet they have decided to end a contract halfway through its duration and, without giving any notice, they are removing a huge chunk of post offices' income, without the slightest idea of how the loss will be made up, jeopardising post offices and accelerating their closure.

According to the federation, 8,000 small businesses are now at risk, representing about 24,000 jobs throughout the country. If 24,000 jobs were at risk in any other industry, one would expect that the Secretary of State would have set up a taskforce by now, but instead the Minister of State, Department of Social Security, writes to me saying that it is not a matter for the Government.

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