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5.28 pm
Miss Geraldine Smith (Morecambe and Lunesdale): I am struck by the sheer effrontery of the Conservative party. You were in power for 18 years, but you did absolutely nothing for the Post Office. I marvel at the sheer arrogance of it. You have collective amnesia.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. When the hon. Lady uses the word "you", she is addressing me, and I have nothing to do with these matters.
Miss Smith: I apologise, Mr. Deputy Speaker.
For 18 years, the Conservative party did nothing for the Post Office. I know, because I was employed in the postal industry, that the Conservatives did not take one significant step to help the industry. A Post Office review took place between 1992 and 1997, but there was no outcome. The issue of privatisation was a shambles:
was the Post Office to be privatised or not? If it was to be privatised, where would that leave the Post Office Counters network? Where would it leave the small sub-post offices?The Conservatives are engaging in sheer opportunism. I will take no lessons from them about post offices. They cared nothing for the post office network; only of late have they begun to show some concern.
Mr. Duncan: Perhaps the hon. Lady could explain in all conscience why my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), when he was Secretary of State, chose the more expensive option of protecting the very network that we are debating?
Miss Smith: The more expensive option? To protect what? Let me go through some of the points in case Conservative Members have forgotten. Do they recall that, between 1985 and 1995, the Post Office was forced to hand over £1 billion of profits to the Government and that, despite having announced in March 1995 that they would reduce the burden on the Post Office, they subsequently hugely increased it and demanded a further £1 billion from the Post Office? Do they not realise that that money could have been invested in the Post Office network? We could have had computerisation of sub-post offices years ago. We should have had it years ago. The Conservative party caused unnecessary delays and, of course, there is the privatisation shambles.
Perhaps the Tories will remember that, during their 18 years in office, about one fifth of the Post Office Counters network was closed. They seem to have forgotten all about that. I worked in the industry throughout that period and I can recall no significant Tory Government measure to prevent the widespread closures. I recall no comments from Conservative Members at that time. They now have the cheek to say that we have no strategy or policy on the Post Office. What is their policy? Perhaps the hon. Member for Rutland and Melton (Mr. Duncan) will tell me.
Perhaps Conservative Members will tell me what their plans were for the Post Office. Were they going to privatise? During discussions on the Postal Services Bill, they said that they wanted privatisation. Today, Conservative Back Benchers have said they were not going to privatise and would not privatise if they got back into power. They seem confused about the whole issue of the Post Office.
Mr. David Drew (Stroud): Besides the confusion on the Opposition Benches, with Front Benchers saying that they are in favour of privatisation and Back Benchers saying that they are not in favour of it, Conservative Members say that they support the universal service obligation in the Bill at the same time as saying that they want privatisation. The two are not compatible.
Miss Smith: They certainly are not. Privatisation would have completely wrecked the sub-post office network. We have heard that sub-post offices are private businesses. They are, but they depend on the public side of Post Office Counters. I used to do stock requisitions for sub-postmasters, and used to send money to sub-post offices and do audits. I worked for a public organisation, the Post Office, not for a private company.
Sub-postmasters face problems that need to be resolved. Last Friday evening, I held a meeting with sub-postmasters in my constituency. The fact that more
sub-postmasters were at that meeting than there are Members in the Chamber says something about the strength of feeling.Sub-postmasters are concerned because there is a period of uncertainty. I understand that. No one likes change; it is difficult, particularly if people do not know what the future holds. I accept that some sub-postmasters may be having trouble selling their businesses because the future is uncertain. At the earliest opportunity we need to give as much information as possible to those people, so that they can carry on with their businesses.
ACT is already happening. To do nothing about it would leave sub-post offices to wither on the vine. They are already losing business. We know the arguments. All hon. Members know that, every year, sub-post offices lose business and close. We have to do something about it, and we have to offer them new business.
There is no point in Conservative Members going on about the payment of benefits, because we have to find other types of business, such as banking, for sub-post offices. Sub-postmasters and postmistresses do not want subsidies or hand-outs. They want new business, and I believe that we can help them to find it. Barclays and other banks are closing many branches, creating a real role for sub-post offices to play, especially now that they are being computerised and have the technology necessary to link up with other systems.
I visited a post office in my constituency and saw its new computer system, which is very good. Although of course they are having some teething problems, the system--it is a simple one--is generally working well. However, it needs to be connected with other systems, so that the sub-postmaster can offer banking facilities.
At my meeting on Friday, most of the sub-postmasters said that they would like to have a people's bank, which would not only be a community facility, but would offer a whole new opportunity. We need to help provide that opportunity. Sub-postmasters and postmistresses should be able to offer a cash-back facility to those who pay with a Switch card. We should examine the possibility of placing more lottery terminals in sub-post offices. We also need to provide more information to sub-postmasters on precisely how automated credit transfer will work. Until we can answer those questions, and until sub-postmasters have that information, there will be fear and uncertainty.
Mr. Evans: Having talked to the sub-postmasters and postmistresses in her constituency, the hon. Lady will appreciate that income from benefits payment sometimes constitutes 60 to 70 per cent. of a post office's income. She is therefore absolutely right that postmasters need more sources of income, derived from providing different services. Does she not agree, however, that the drive to move benefits payment from post offices to banks should be deferred until those new services can be offered?
Miss Smith: The hon. Gentleman does not seem to realise that ACT is already happening. When new pensioners are asked how they would like their pension to be paid, very many of them already opt to receive it in their bank account. We cannot re-invent the wheel. The change is already happening. The Government are grasping the nettle by saying, "This change is going to happen, so we have to find alternatives for sub-post offices."
Those alternatives will have to be found, and timing is crucial in doing so. Sub-post offices must have new business before ACT is implemented. If that new business is not in place, ACT should be delayed. However, we have three years to go before implementation. The Horizon project is already up and running in most sub-post offices. The initial difficulties with the project have been overcome, and the project is working well. We are now moving to the second stage, when we have to find new banking and other work for sub-post offices to take on. I believe that that is achievable in three years. I am sure that, at the end of the debate, my hon. Friend the Minister for Competitiveness will be able to tell me what progress has been made.
I welcome the Government's access criteria, which will guarantee postal services for everyone. I realise that the status quo is not an option but, as I said, it is essential to get the timing right. New business needs to be in place before ACT is implemented. I believe that we can find that new business, and that sub-post offices have a bright future.
5.39 pm
Mr. John MacGregor (South Norfolk): There are 120 towns and villages in my constituency. Some are very small and have never had a sub-post office and others have not been able to sustain one over the years, but a large number have one: there are 59 in all. I will not be able to give all the names as some colleagues have done, because it would simply take too long.
Like my right hon. Friend the Member for East Devon (Sir P. Emery), I recently conducted a survey of all my sub-post offices. I asked people whether, if the situation continues as at present, they will have to close their sub-post office. In an 80 per cent. response, 60 per cent. said either that they definitely will or that they probably would. Even allowing for some exaggeration, that is a very high figure. Of that 60 per cent., 45 per cent. said that they definitely will. The danger is that all the footfall trade for the village shop is lost, so not only the sub-post office but the shop will go.
My remarks are based on that survey and on all the responses that I have had both from sub-post offices and from many of the constituents who use them. Some hon. Members have commented on the fact that sub-post offices have closed over the years. Of course they have, given the changing commercial pressures and life styles and the fact that so many alternatives are available and so many communities are too small to sustain them.
I readily acknowledge that that happened under the Conservatives, too, but the average during our years in office was 143 closures a year, and compared with that trickle we now face a flood. With the loss of the benefit payments on which sub-post offices are so dependent, many will close in the near future. That is why I share the concern of both Government and Opposition Members about the impact on the more disadvantaged, including elderly pensioners in rural areas who do not have a car. About 10 to 25 per cent. of households in villages in my constituency do not have cars.
That is why I said to the Secretary of State that the argument about pensioners having the choice of getting their pension in cash or through the bank will be an unreal one if the anticipated closures go ahead. There simply will not be a sub-post office there to dispense the cash. I share
the concerns about the impact on people who are very dependent on their sub-post office. I shall not quote any of the many letters that I have received on the subject, because it would take too long.The real problem is not the fact that there is a three-year gap until 2003, when the ACT system comes in, but people's perception that it is on the way. The hon. Member for Twickenham (Dr. Cable) made the point very effectively that sub-postmasters are already aware of the likely fall in income that they will have to face. Many of them get very little income out of the sub-post office side of their business in any case. They foresee running into loss and they want to get out now. They will make that decision now unless they are given some clear idea of where future income will come from.
The Government have not yet found a satisfactory answer to that. I agree entirely with what my right hon. Friend the Member for East Devon and the hon. Member for Twickenham said about some sub-postmasters trying to sell and finding it extremely difficult, with grim consequences for their lifetime's savings and investment.
People are acutely aware that the substantial income that comes from dispensing benefit payments will disappear. It is as though they are being told to get on the plank and that they will have to jump off in three years' time, without knowing whether there will be a safety net or how far they will fall. The problem is that they cannot step off the plank and find an alternative, because they do not know what they are going to do with their businesses.
I recognise that some of the sub-post offices would have gone anyway. They are often run by elderly people who perhaps cannot cope with the new computer era and will get out either by retiring normally or because they cannot cope with the pressures. However, younger people, who are computer literate, will not take on the job, so the sub-post office will go.
I deal now with the alternative services. I entirely agree that the potential for such services exists, and it is important that they be built up. However, I am bothered by the pious claim that such services will replace altogether the income that currently stems from benefit payments. I have studied carefully the letter from the Minister for Competitiveness sent to us on 10 April and other comments that he has made about the matter. The difficulty is that none of the alternatives look really viable and no figures have been attached to them.
For example, 3,000 cash machines will be installed, which is obviously desirable for the communities that they will service. However, 18,000 sub-post offices are threatened, and I suspect that few of the 59 in my constituency will get a cash machine. It is not a real answer, and many sub-post offices would also face technical difficulties in the installation of the cash machines.
The option that pensioners will have in the future of still being able to opt for cash payments will be a problem for the reason I have already given--many of the sub-post offices will close in the meantime--and because we do not know how that option will operate. Much of the thrust of questions from my right hon. and hon. Friends has not concerned the position of pensioners, on which the Government have given a guarantee, but the income flow for sub-post offices. We are told that that will be the subject of a commercial agreement, but the situation is
so uncertain that, frankly, that is not much comfort to sub-postmasters, given what they will lose. That is also unlikely to be the answer.The provision of alternative banking services has potential as part of the solution. The sub-post offices have a network that should be able to pick up a large portion of the business that Barclays and other banks will lose through their regrettable closures. However, some real difficulties arise. Technically, it looks as though much of the necessary software will not be put in place until 2005. That is far too long for sub-postmasters, who are seriously considering their future, to wait. I have not seen any conclusive analysis of the situation, but it seems that alternative banking services will not be a credible replacement for the loss of income that the post offices envisage. I am told that the estimate is that they will replace at most half of the income from benefit payment.
Another alternative, as my right hon. Friend the Member for East Devon rightly mentioned, is the provision of other public services, such as driving licences, vehicle licences and passports. I am sure that the Minister is considering such issues and that it will be part of the unit's work. However, I suspect that that option will also face limitations and will not be enough to replace the loss of the benefit payment income. I wholly support all that is being done to look for alternative services, but they will not replace the 35 to 40 per cent. of income that the sub-postmasters know they will lose.
My final point concerns the need for the Government to give the guarantee that the sub-postmasters seek that the income they will lose in 2003 will be replaced. I should say first that I agree with my right hon. Friend that all the issues that have been raised about privatisation are a red herring and totally irrelevant to this debate. That is not only because the sub-post offices are privatised already, but because the income that will be lost comes from the public sector. It is the income that the sub-postmasters receive for delivering benefits. The question is whether private sources will supplement that income sufficiently to sustain the sub-post offices, or whether the Government should do something with public money to replace those payments.
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