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6.19 pm

Mr. Howard Flight (Arundel and South Downs): I think that right hon. and hon. Members will agree that the debates this afternoon and in Westminster Hall this morning show that the Government are mishandling sub-post office policy. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) advised us, the Secretary of State will be getting his cards in the next day or two--some 18,000 of them--from sub-postmasters.

The Government will be extremely foolish if they go ahead with the policy as it stands. They are out of touch not just with sub-postmasters but with their own

12 Apr 2000 : Column 408

constituency, as has been made clear in the debate. Many of the Government's aspirations are common sense, and we agree with them, but they do not add up to a viable policy. It is probably correct to argue that post offices should not depend in the long term on income from delivering benefits. I am a great supporter of the idea that the commercial banking system should subcontract provision of services to sub-post offices, particularly in rural communities. Horizon offers new conduits of business for post offices in the booking of theatre tickets and travel and so forth. All those things provide good opportunities.

The problem is that adherence to the automated credit transfer timetable is likely to cause the loss of one third of our sub-post offices. There will not be enough of a network to take up the opportunities. The Government must adapt their policy to address that problem, and there are several options. They must either provide a public underwriting of subsidies sufficient to sustain the post office network, which would allow ACT to be operative by 2003, or ACT should be postponed, perhaps for seven years but certainly until new revenues from bank subcontracting and Horizon allow post offices to phase in the income reductions that will result from ACT. The Government could also re-examine the Conservative swipe programme arrangements.

It appears that, of the projected £400 million saving on ACT, £100 million is purely from technology advance. The realistic reduction in payment is around £300 million. The swipe card arrangement is a compromise that would marginally reduce income to sub-post offices from benefit administration, but would allow them enough income to remain viable.

It was inappropriate of Ministers to criticise commercial banks for closing branches when the banks have made arrangements with post offices to provide services. The Government's own timetable on ACT is certain to result in closure of one third of our sub-post offices, and they have not made any provision to guarantee support for those post offices. In other words, the Government are being less helpful to customers than the banks are. The banks have done what they feel they must do because of advanced technology, but they have considered the impact and made alternative arrangements. The Government merely say that they must do what they are doing because of the need for ACT, and they could not care less about the people who have invested their life savings in running sub-post offices or about the public at large. It is humbug to criticise the banking sector while doing what they are doing.

I hope that the Government have received the message. They will pay a big political price if they have not. The most logical choice is to delay ACT until alternative revenues have come through.

6.24 pm

Mr. Martin Salter (Reading, West): I welcome the opportunity to take part in the debate as a supporter of a publicly owned post office network and a campaigner against the tide of financial exclusion that has engulfed many communities because of post office and bank closures. I also welcome it as a former deputy leader of Reading borough council, one of the few that installed a sub-post office in its civic offices and that was expanding postal services in its area.

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Labour Members will not be impressed by the crocodile tears of some Conservative Members. Their party presided over an unprecedented decline in the post office network. Over the past 25 years, one fifth of the network closed down. We all remember, to our horror, that we had a Conservative Government for 18 of those years, and it was that Government, in 1983, who introduced ACT.

I am partly reassured by statements from Ministers, including my right hon. Friend the Secretary of State for Trade and Industry, that cash payments will be available after 2003. I welcome the announcement that a new clause will be inserted in the Postal Services Bill on Report to provide subsidy, and I welcome the £1 billion capital modernisation of the post office network. Even a luddite like me can see the value of equipping post offices with modern online information technology.

It would be nonsensical for the Post Office to continue to rely on purely paper transactions. However, it would also be nonsense to suggest that the future of the post office network should be predicated on huge benefit payments resulting from the kind of mass unemployment that happened under the Thatcher Government.

There is an urgent need to find new business to strengthen the Post Office and guarantee its future. Having been broadly supportive so far of the Government's approach, I want to sound a couple of warning notes. We have, to be honest, come to this matter rather late. Cash machines have their place, but I first came to the fight on bank closures in local communities because Lloyds TSB was installing cash machines instead of cashiers in banks in my constituency. What use are cash machines to someone who is blind or disabled? What use are they to a jobbing builder who needs more than £200 a day? Machines are welcome, but they have their limitations.

We need more than talk from Ministers, and from politicians of all hues, if we are to provide the vital new business of banking services in the post office network. Bank closures, which are engulfing many communities, present an opportunity to open up the post office network. Last Friday, Barclays shut 172 branches, leaving 84 communities without a bank, and that is the tip of the iceberg. We have seen 4,000 bank branch closures over the past 10 years. Deloitte and Touche Consulting Group anticipates a similar number of closures over the next few years--1,000 more communities will be bankless. Barclays's last-minute, face-saving deals with the Post Office are fooling no one.

We need measures to support small, district shopping centres in general because post offices face the same pressures as they do. A review of services currently available only at Crown post offices, but which could be available at sub-post offices, is also necessary, as is proper regulation of the banking industry. Access to redundant bank premises--or the capital receipts, where appropriate--would help post office modernisation and extension. A co-ordinated approach is needed by the UK banking sector, Post Office Counters and the Government to ensure that basic banking services are available the length and breadth of the land.

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The Post Office is the best loved of all our public services. It belongs in the public sector. It is the fulcrum of community life. All we ask is that it should thrive and prosper in the 21st century. All that my constituents want is access to their own money. It is not too much to ask.

6.29 pm

Mr. Oliver Letwin (West Dorset): This is the third time that I have spoken about this subject today, something that I have in common with other hon. Members present. I shall take just two or three minutes at most. I wish to make one practical point, which has become clearer and clearer during the day. It has not yet entered the official doctrine of the Minister and his colleagues.

It is now almost five years since the swipe card system was first proposed. I have no knowledge of what went wrong with the administration of that system in the later years of its implementation, but clearly something did. In those five years, there has been a technological revolution. The Minister will be as aware of it as any other hon. Member present. Among other things, the extension of asymmetric digital subscriber lines and the presence of internet technology and IT-based solutions make it almost inconceivable that there should not now be available a simple and cheap variant of the swipe card arrangement, with or without cards, which would enable sub-post offices, with or without direct connection to the Horizon project and perhaps personal computer-based instead, to deliver cheaply and effectively the benefits and pensions that the Department of Social Security wishes to deliver at about the same cost as was originally envisaged.

I suspect that the way in which the DSS has traditionally gone about business precludes an approach that would work. However, the Minister is not at the DSS but the Department of Trade and Industry. He has the chance, through the Post Office, to adopt a modern solution that uses the technological revolution. The costs of installing remote computer networks have fallen not by half or a quarter but by perhaps 90 per cent. in the past five years. Whatever it would have cost then, it must be vastly less now.

I apologise for repeating the cri de coeur, but if the Minister will just give himself a little more time, personally take charge through the Post Office and remove from the hands of the DSS the means of implementing the changes on a cheap, cost-effective basis, we can get over the problem. We can find a way through that will preserve our networks and a system that enables people who are vulnerable and not particularly sophisticated to collect their benefits over the counter in existing sub-post offices throughout our land. Everyone will then be very happy and I promise the Minister that I meant what I said this morning in Westminster Hall. I will be the first to construct a statue to his memory if he manages that.


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