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Mr. Lilley: When that point was put to the Minister of State, Department of Social Security, he said, in effect, that no one would be stupid enough voluntarily to opt for monthly payment by ACT through a bank, four weeks in advance, if they primarily depended on the basic pension. Some people may have been misled, as my hon. Friend suggested, but the Minister thinks that they are stupid if they take that course.
The Minister for Competitiveness did not answer my question last week; he obviously realised--as I could see from his expression--what a huge problem there would be if we suddenly required all pensioners to receive their payments monthly and up to a month late. There would be a gap of about four weeks when they would be without income.
When my right hon. Friend the Leader of the Opposition raised the issue of post offices at Prime Minister's questions last week, the Prime Minister, who had clearly been alerted to the problem during the two hours between the Westminster Hall debate and Question Time, gratuitously blurted out that he wanted to make it clear that pensioners would be entitled to receive their benefits not just in cash from the post office, but weekly rather than monthly. A bit of policy had been made on the hoof; the Prime Minister committed the Government to making pensions payments weekly, rather than four-weekly in arrears. In future, people can receive those payments through the post office.
I tabled a written question about what would happen if such weekly payments were extended to all the pensioners who currently have their pensions paid monthly, three or four weeks in arrears. The answer was that, by advancing everybody's payments by three weeks, there would a cashflow effect on the Treasury of £550 million. The Prime Minister has made a commitment that could cost the taxpayer up to £550 million in the year of its introduction--it would be a one-off cost, resulting from advancing the payments of those who, because they do not need continuity of payment, currently delay their payments and have them made monthly through a bank.
The actual amount would depend on how many people exercise that right; however, as it is an attractive one, we might assume that many people would choose it and that it would cost the Treasury a large amount. One has to wonder whether the Prime Minister had discussed that matter with the Secretary of State for Social Security during those two hours. Was he aware of the cost? When I tabled the question to the Department of Social Security, officials from the Department telephoned me to clarify the issue, so I had to explain to them how the system worked. They then confirmed in their answer that it would indeed cost £550 million. My estimate had been £600 million, but it was pretty close to the mark.
The Prime Minister, endeavouring to avoid a difficult headline, has committed the Treasury to paying up to £550 million in a one-off payment to get the Government out of a hole that they have created by a policy intended to save a couple of hundred million pounds a year at most. We have already heard how the Government have committed themselves to writing off £500 million of Post Office obligations to meet half the cost of the Horizon project. Therefore, a policy designed, notionally, to save money is already costing upwards of £1 billion before it has saved a penny, and before payment of any of the subsidies introduced by today's measure.
The policy is a disaster--a disaster that was waiting to happen. It has happened because two newly arrived former Treasury Ministers did the Treasury's bidding without working out what the implications were for their Departments--the Department of Social Security and the Department of Trade and Industry. Now, the only way that the Government can bail themselves out is to introduce an open-ended subsidy by means of the new clause.
We need some answers from Ministers today. Is that subsidy intended to be permanent or temporary? Will it be discretionary or automatic if, as a result of post offices closures, the access criteria are not fulfilled? Will the subsidy be to banks or just to post offices? Will it be a large subsidy--and, if so, how large--or small and insignificant? Above all, will it be sufficient to keep the post office network alive and vibrant, or will it be insufficient to do more than to slow its inevitable collapse, which the Government set in train when they announced that people would have to have their benefits paid, in the first instance, direct into bank accounts?
I hope that the Government will think again about the need for the new clause.
Mr. Mike Wood (Batley and Spen): I may not speak as briefly as did the right hon. Member for Hitchin and
Harpenden (Mr. Lilley), but I shall speak in support of the new clause, because I accept that the automated credit transfer proposals will place under threat the core work of many sub-post offices. It seems to me that the Government are right to proceed with their plans, as, to coin a phrase, doing nothing is not an option. If the experience of the previous Government does not show that, nothing does.The Conservatives said that they would not vote against the new clause but then spoke for a considerable time, and with considerable force, about its failings. They seem to forget that in 18 years, while Conservative Governments did nothing, thousands of sub-post offices went out of business. Therefore, doing nothing is not an option, and in the face of that history--in the face of the continuing closures of sub-post offices--it would not be sensible for the Government to retreat from this plan. Extra uncertainty will help nobody--certainly not sub-post offices in my area.
The Horizon project--to be completed by next spring, in spite of what the right hon. Member for Hitchin and Harpenden said--will open up new areas of business potential for sub-post offices. Of course there is a cost, but no one could argue that it will not open up that potential.
We look to the tripartite working party set up by the Government with the National Federation of Sub-Postmasters and the Post Office to find new work for sub-post offices--not just to re-arrange what is already there, or to make available to sub-post offices the work that is currently available only to Crown post offices. The potential of the network is woefully under-used. Surely, with the will of all the parties, extra work can be found.
6.15 pm
If we are to talk about subsidy for the community benefits of post offices and the community contribution that they make, the subsidy will need to be considerable. In my area, at least, many sub-postmasters and sub-postmistresses spend much of their time on the wrong side of the counter, as it were, helping pensioners with problems not directly related to their business, reading things for them because their eyesight is not terribly good, and taking people on one side when they have problems. If we suggest that there should be a subsidy to compensate for that dimension of the work, the subsidy will undoubtedly be considerable.
I stress to Ministers the scale of the threat that ACT can pose to sub-post offices, not only in rural areas and inner cities, but in areas such as my constituency, which is neither rural nor in an inner city. At least two of the 25 post offices there depend on the payment of benefits over the counter for more than 75 per cent. of their work. As always, averages hide the full extent of the story, but almost all the business of some post offices--not only rural or inner city ones--comes from the payment of benefits over the counter.
Therefore I hope that in his final remarks, the Secretary of State will give two assurances to postmasters and postmistresses such as those that I have mentioned, not only in my constituency but throughout the country, whose business depends on the payment of benefits.
First, I hope that my right hon. Friend will give an assurance that any subsidy offered by the Government to cover the transitional period as ACT is bedded in will not
be restricted to rural offices or to those in inner cities, but will apply throughout the country, and that offices will be treated on a case-by-case basis. Secondly, I hope that he will assure us that if all the efforts of all concerned, not just in the tripartite group but throughout the industry, to find alternative sources of income have not been successful by any objective criteria by, let us say, the end of 2001, consideration will be given to postponing the introduction of ACT until enough progress has been made to ensure that the changes, inevitable though they are, will not be introduced until we are sure that they will strengthen the post office network.If the Secretary of State gave those two assurances at this stage, there would be a collective sigh of relief throughout the network, and there would be much greater willingness to work with the Government to revitalise the sub-post office network, which has for so long been lamentably ignored and left out of proper consideration. If he does so, we shall be well placed to push the changes through.
Mr. Baldry: I am pleased to be able to contribute to this debate, as I was one of just four Conservative Members who sat on the Standing Committee considering the Bill.
First, may I say how sorry I am that my hon. Friend the Member for Rutland and Melton (Mr. Duncan) is not here today. He led for the Opposition in Committee and did an excellent job, being vigorous in cross-examining Ministers on the Bill's shortcomings. It is a cause for great sadness that he is today in hospital with, I understand, a ruptured appendix. Indeed, he appears literally to have bust a gut in his opposition to this measure.
The debate may well take a little time, not least because there is absolutely no reason why the new clause should not have come before the Standing Committee. The Secretary of State today seems to have introduced an interesting new constitutional convention: if Ministers are particularly interested in a new clause they do not have it discussed by the Standing Committee, but reserve it for Report and Third Reading. That undermines the whole purpose of Standing Committees, which is to scrutinise, rationally and deliberatively, measures brought forward by the Government, doing so line by line and clause by clause.
On the face of it, the Secretary of State is today telling the House "We always intended to bring forward this clause. We deliberately did not put it before the Standing Committee, because we thought it should be scrutinised by the House as a whole." The House as a whole will not have known that, but I question whether that is the truth and accords with the facts.
As one of those who sat on the Standing Committee, I know that much of the Committee's time was taken up with the concern about maintaining the integrity of the post office network in general and sub-post offices in particular. I suspect that during that time we visited practically every post office in my constituency, and the post offices in the constituencies of other hon. Members. I understand that the Minister himself was dispatched by his private office to visit rural post offices in north Wales.
At no time during the Committee's deliberations did the Minister tell us "Don't worry chaps. There is no problem. We shall sort it out, and come Report and Third Reading we have a wizard wheeze: we shall come up with
a new clause which will provide for a subsidy, so you can curtail these discussions." I for one would have been very grateful for that, because as well as being one of only four Conservative Members on the Committee, I was one of only three Conservative Members on the Trade and Industry Select Committee. The records of the House will show that on many days I was in both places at the same time, often on the Select Committee having to cross-examine the Secretary of State and others about their total incompetence in handling the Rover fiasco. So I would have been very grateful if we could have short-circuited proceedings in the Standing Committee.If the Minister for Competitiveness--for that is his title--could have told us "Much of this discussion can be curtailed, because we shall bring forward a new clause on Report", I suspect that many of us would have said that we would look at it, and the Standing Committee procedures could have been much shorter, but we never had a scintilla of a hint of that.
Moreover, the Minister for Competitiveness--because he clearly recognised that he was under considerable pressure from colleagues on his own side of the House, like the hon. Member for Batley and Spen (Mr. Wood), who urged him to consider delaying the introduction of automated credit transfer--decided to send out a "Dear Colleague" letter. We all know "Dear Colleague" letters; they are letters that Ministers send to every hon. Member, so that they cannot be accused of being partial, but they are really meant to give succour to their own Back Benchers and be sent to constituents who are raising problems. We had one today on pensions. It included charts, and I was surprised that it even included a video programme, on what the Government were supposedly doing for pensioners.
We had a "Dear Colleague" letter on the Post Office network. There was not a scintilla of a shadow of a suggestion of a subsidy in the letter and not even a hint that the Government might table a new clause on Report. Indeed, the Minister said:
- The Government has put its money where its mouth is.
That must cause the House to consider the vigour with which the Government are advancing the new clause today. Having heard the Secretary of State, one must have more than a suspicion that what really happened was this. Ministers hoped that they could brazen it all out, that by the time the Bill went through Committee the sub-postmasters and sub-postmistresses would have been bought off, and that the Minister for Competitiveness could visit sufficient sub-post offices throughout the country and reassure them that there was no problem. But, of course, the Government could not do that, because the sub-postmasters and sub-postmistresses knew that there was a problem, and they would not let up. What is more, customers of sub-post offices around the country were determined that their voice would be heard.
In every village in my constituency, and I am sure in all the constituencies of my right hon. and hon. Friends, people signed petitions. The petition of 3 million that was delivered to Downing street last week was but the tip of an iceberg, only part of all the petitions that had been signed. Many were produced through local newspapers
and regional newspapers, such as the Western Morning News. I suspect that huge numbers of people signed petitions.I am sure that if we could see the minutes of Cabinet meetings held a couple of weeks ago, we would find that the Secretary of State for Trade and Industry presented a paper to his Cabinet colleagues explaining that they were in some difficulty, that they were coming up to Report and Third Reading and that there was about to be a substantial lobby of Parliament by sub-postmasters and sub-postmistresses. What was more, local elections were coming up. In the local elections on 4 May the Labour party will defend many district council seats in rural areas and other parts of the country. I am sure that the Secretary of State is conscious that it is not particularly popular at present.
So the Secretary of State prevailed upon his Cabinet colleagues to allow him to table a new clause. I have no doubt that minutes went between the Department of Trade and Industry and the Treasury, with the Treasury saying "Of course, you can do that, provided it makes no commitment whatsoever and makes it absolutely clear that no subsidy will be introduced without express Treasury permission."
When one looks at what the Secretary of State said last week in response to the lobby by sub-postmasters and sub-postmistresses, one sees that his line to begin with was very robust:
- Next week we will table a new clause to the Postal Services Bill when it is debated on Report. It will enable me to set up a financial scheme to ensure that essential services can still be delivered through a nationwide network of local post offices. Our key target is a viable future for the network. We want to ensure that the Bill covers all possibilities.
The Secretary of State then said "It may"--that is the crucial word--
- well be that in future, because of changes that are being introduced, financial assistance should be offered to the network.--[Official Report, 12 April 2000; Vol. 348, c. 385.]
We support the National Federation of Sub-Postmasters in its desire for income, not subsidies, for sub-post offices. The clause is needed only because the Government are proceeding with their disastrous policy of switching to ACT, which threatens the survival of thousands of sub-post offices across Britain. Of course, the NFSP is not unaware of the fact that the new clause offers sub-postmasters no guarantee in the future. At the very best, it may offer them only an unspecified subsidy.
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