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6.45 pm
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): This is the second debate on this issue today; the first was in Westminster Hall this morning, when I heard several constructive contributions. During this afternoon's debate, we were asked--at least twice--to read the Hansard report of the speech made this morning by the right hon. Member for Hitchin and Harpenden (Mr. Lilley). I commended the work of the right hon. Gentleman. I also pointed out that he was a politician of ability and effectiveness--that is obviously why he no longer sits on the Opposition Front Bench.
Furthermore, I noted that the right hon. Gentleman understood the arguments on this matter because the NFSP had held two previous, well-attended rallies at the House. As a member of the Communication Workers Union, I worked shoulder to shoulder with the NFSP on the Post Office Users National Council, so I know that the federation is a very effective organisation.
Those rallies were held in the early 1980s and the early 1990s; both were about ACT--as was the rally today. As this is an Opposition day debate, and as the hon. Member for Tiverton and Honiton (Mrs. Browning) referred to the history of the Conservative party on this matter, we shall make the same point this afternoon that we made throughout this morning's debate: the Conservatives introduced ACT, for the first time, in the early 1980s.
The NFSP held a rally at which its members made several demands. First, they said, "No ACT." Secondly, on the back of the Rayner report--commissioned by the then Conservative Government--they said that pensions should not be paid fortnightly. Thirdly, they said that child benefit should not be paid monthly, but should continue to be paid weekly. The rally was most effective. The Government rejected the federation's arguments on ACT and on monthly payment of child benefit and went ahead with ACT.
The next rally was held in the early 1990s--when the right hon. Member for Hitchin and Harpenden held office--over the extension of ACT. Not only did the previous Government introduce ACT--they extended it in the early 1990s to cover benefits such as those for
unemployment and disability. The federation argued against extending ACT and the right hon. Gentleman advanced many arguments--recorded in Hansard--in its favour.The right hon. Gentleman argued that ACT was an especially effective and secure form of payment. He argued:
- People are increasingly accustomed to receiving payment into their bank accounts: 70 per cent. of claimants have bank accounts, and many find payment into their accounts more convenient and safer.--[Official Report, 19 May 1993; Vol. 225, c. 259.]
As a result of that NFSP rally--in which I took part--the right hon. Gentleman introduced the well-intentioned benefit payment card. We can forget all the Conservative hype and all their poor attempts at political point-scoring. "Why did the benefit payment card scheme collapse? Why cannot we return to it?" was a question put by the Leader of the Opposition at Prime Minister's questions this afternoon.
We tried hard to continue that system. The most instructive information available on the matter is in a report from the Select Committee on Trade and Industry, which pointed out that, since 1 May 1997, the Labour Government had probably tried too hard to rescue the system--to pull the fat out of the fire. However, the Committee was extremely critical of that disastrous PFI--it was a turkey of a PIF. The Trade and Industry Committee made four points, on which we are still awaiting a report by the National Audit Office to the Public Accounts Committee.
However, the essential facts are as follows. The benefit payment card collapsed. We had to rescue the computerisation of the Post Office, and we have taken that forward. As a result, 5,000 post offices are already computerised, and by spring 2001 the whole network will be online under the Horizon system.
Mr. David Davis (Haltemprice and Howden): Will the Minister give way?
Mr. Johnson: I will give way in a second.
It is important that we should know, in this debate, where the Opposition stand on this issue; after all, it is an Opposition day debate. They need to tell us what they would plan to do. Would they have continued with a benefit payment card project that was three years behind, vastly overspent and heading for disaster?
We have been told time and again that the issue of privatisation is irrelevant to the debate.
Mr. Johnson: The issue of privatisation is extremely relevant, for the following reason. Conservative Members are still committed not only to privatising the Post Office but to breaking it up. As every sub-postmaster and sub-postmistress in the country knows, anyone who proposes ripping the Post Office Counters network away from the rest of the Post Office must be two foils short of an order book, because the Post Office depends on the Royal Mail for 24 per cent. of its income. Parcels returned to mail order companies create a major part of its income. Therefore, breaking up the Post Office is an essential feature of Conservative policy.
I give way to the hon. Member--I am sorry; the right hon. Member--for Haltemprice and Howden (Mr. Davis).
Mr. Davis: The hon. Gentleman is right that the National Audit Office report will appear in front of my Committee in due course, but it will be some time before it does so. Will he undertake today to place in the Library immediately all the documentation relating to the costing, which we have heard amounts to hundreds of millions of pounds, of this PFI--I imagine that he meant PFI, not PIF, when he was speaking earlier--so that the whole House can be aware of the basis of this £100 million overcost now instead of, perhaps, in nine months' time, when my Committee considers it?
Mr. Johnson: I do apologise to the right hon. Gentleman. As I understand it, the National Audit Office has access to papers that the Trade and Industry Committee was entitled to see on a confidential basis, and that means that that report is extremely important.
The Opposition still labour under the misapprehension--this is crucial to the point made by the hon. Member for Rutland and Melton (Mr. Duncan)--that the Post Office Counters network is in the private sector. It is not. For the absence of doubt, let me explain to Opposition Members that sub-postmasters and sub-postmistresses have sunk £1 billion of their own money in in total, as private business people, subcontracting to a publicly owned organisation, driven from the centre in terms of policy, and actually driving forward a system where there is already cross-subsidy, so that the sub-postmasters and sub-postmistresses are not in control of the arrangements for subsidising post offices, or for cross-subsidising post offices, which is an essential element of keeping half the network open.
Mrs. Browning: The hon. Gentleman is aware that twice in previous debates I have asked the Secretary of State for Trade and Industry whether, in turning the Post Office into a publicly owned plc, he would guarantee that the Government, if they continued in office, would never sell shares in that plc. Will the hon. Gentleman now continue that debate by guaranteeing to the House that that will never happen?
Mr. Johnson: The hon. Lady knows full well that we have made it quite clear on the face of the Postal Services Bill that any move to privatise the Post Office by any future Government would need primary legislation, which would have to pass through the House.
Mr. Johnson: We are looking for a public sector solution. The problem with the Conservative party is that it was driven by dogma; it could not see any solution other than privatisation. It was for those reasons that the Conservatives suggested breaking up the Post Office.
Mr. Duncan: Will the Minister give way?
Mr. Johnson: I will give way one more time.
Mr. Duncan: Given the time, may I respectfully ask the Minister now to answer the questions that I asked him about the kernel of the debate--questions about the future shape of the income?
Mr. Johnson: The hon. Gentleman thinks that he has struck the kernel of the debate. I consider that the hon.
Member for West Dorset (Mr. Letwin) and other Conservative Members did so. I think that, if anyone did, it was the hon. Member for South Devon--[Hon. Members: "East Devon."] I apologise. I believe that the right hon. Member for East Devon (Sir P. Emery), and Labour Members, struck the core of the debate.The core of the debate is the question, "How do we modernise the Post Office, equip it for the 21st century, attract new work into the business and then ensure a successful future for the post office network?" We shall not solve this problem--and the previous Government would not have solved it--by using the benefit payment card, which was a swipe card. It was an interim measure. The Post Office had said that it wanted to move on to smartcard technology. The contract was for only eight years, concluding in 2005, and there is every evidence that whichever Government were in power would be moving to ACT following that eight-year contract.
There was a problem in the early 1980s, and there was a rally in the 1990s, when sub-postmasters and sub-postmistresses had to come to the House because of the problems that ACT was causing. We shall not solve this issue until we find a way forward that both ensures that there is a proper future for the Post Office in a modernised, computerised network and resolves the dilemma about how we can cause people to visit post offices to collect their benefits and pensions in an automated network.
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