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Mr. John M. Taylor: Is not the proper interpretation of our constitutional affairs that a Government are collectively responsible? There are no separate Ministers in that sense; all are part of an entity. Is it not therefore curious and extremely offensive that one part of the Government has to seek the permission of another?
Mr. Forth: My hon. Friend, who has enormous experience of those matters, knows that what he says is literally true, but I fear that the entity that matters in this regard is that referred to in subsection (6)--Her Majesty's Treasury and the Chancellor. We need to hear a lot more from the Secretary of State about his relationship with the Chancellor, with specific reference to what the Secretary of State will no doubt claim are the reassurances in the new clause.
Mr. Forth: I give way for the last time.
Mr. Bercow: Does not my right hon. Friend agree that it is important, not least for the self-respect of the House, that we should be assured that we are not debating the matter in a vacuum? Would it not therefore be helpful to know whether the details of the scheme and the extent of the Treasury veto over them have already been determined, but, for political convenience, will be rolled out later, or whether the Government simply have not got round to thinking them out at all?
Mr. Forth: That remains to be seen. The debate may or may not be taking place in a vacuum, but our great fear is that the new clause is vacuous.
Mr. Brady: Will my right hon. Friend give way?
Mr. Forth: Yes, but then I must conclude.
Mr. Brady: I am most grateful to my right hon. Friend. Does he agree that it would be more convenient for the House, and that a lot of difficulties in the Government would be avoided, if the power to make the decision were given straight to the Treasury instead of the Secretary of State? We could cut out the middle man.
Mr. Forth: My hon. Friend has stumbled on an important answer. Subsection (3) refers to "another person"; obviously, that is the Chancellor. We may not need an answer from the Secretary of State; my hon. Friend has given it to us, which is very helpful.
My final question to the Secretary of State relates to subsection (5)(c), which contains a typically opaque reference to
- the modification of the functions of a body established by an enactment . . .
The new clause will not do, unless the Secretary of State is prepared and able to give detailed, specific and reassuring explanations and guarantees that it contains much more than any of us has hitherto been able to identify.
7.30 pm
Mr. Letwin: I find myself in the unusual position of joining my hon. Friend the Member for South-West Hertfordshire (Mr. Page) on an unaccustomed Front-Bench team. It is all the more unusual because I have a certain fellow feeling for the Minister for Competitiveness--in the past little while, we have both spent a large part of our waking hours thinking about post offices. The difference between us is that I dream about them, whereas I suspect that he wakes up having had nightmares about them.
New clause 1 has been introduced by the Secretary of State with all the appearance of a matter of settled policy. It would be fine if it were. As my hon. Friend the Member for Arundel and South Downs (Mr. Flight) eloquently mentioned, all hon. Members on both sides of the House attach huge importance--I do not exempt the Minister--to the post office and sub-post office network. That is common ground. If the new clause were an example of a clear-minded and settled policy to deal rationally with the future of our sub-post office network, we would all be happier.
What has come out in this debate often comes out in debates, even on Report, and I share the sentiments of many of my hon. Friends in decrying the fact that the new clause has been introduced only on Report: there is a great lack of clarity of purpose. As my hon. Friends the Members for Altrincham and Sale, West (Mr. Brady) and for North Norfolk (Mr. Prior) pointed out, when the Secretary of State was pressed and pressed again to state whether the new clause is a single, simple measure to enable sub-post offices to do what I think we all want them to do--invest in the technology that will give them a viable future alongside ACT--or whether the measure will permit the continued subsidisation of sub-post offices as a substitute for a viable future, the Secretary of State refused point blank to answer the question in a fashion that would have satisfied the House.
I suspect that the Secretary of State refused to answer for the reason to which many of my hon. Friends have drawn attention, not least my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth): because the new clause is not a matter of settled policy. It is something that the Secretary of State introduced at a late hour to solve the problem of having to face 18,000 birthday cards, 2,000 sub-postmasters and 3 million signatures. That is not the way in which to conduct public policy on any matter, let alone a matter that is as important to the nation as the maintenance of the sub-post office network.
As my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) pointed out, many of us predicted months ago that introducing ACT without a proper pause for reflection and without taking time to introduce alongside it the proper technology, which would enable sub-post offices to engage in activities that keep their footfall and revenues aloft, would result in subsidies. When I first mentioned that in the House, the Secretary of State looked as if someone had said something that was rather impolite. Apparently, it was far from his thoughts that he would end up spending the money that the Secretary of State for Social Security was ostensibly saving but, some months later, what do we have? We have a new clause with the vaguest and widest possible permissive powers to administer subsidies and to make up for some unknown deficiency, through the administration of an unknown quantity of grant. Our predictions were wholly fulfilled.
The ingenious interpretation of subsection (1) by my right hon. Friend the Member for Hitchin and Harpenden, which showed that, at least on a prima facie reading, the new clause could be used to subsidise banks as well as sub-post offices, points us in the direction of something that, either by the means in the new clause or by other means, we will in due course see. The Government will need not only to keep the sub-post offices alive, but to subsidise the banks.
From the beginning of the saga, the Department of Social Security never properly considered whether the banks could willingly take on as customers a very large number of people currently in receipt of benefit and pension. That deficiency will have to be paid for through taxpayers' money. If the Secretary of State thinks that that is an impolite thing to say, I challenge him to come back and to admit to the House, in due course, when he or another of his colleagues introduces a positive proposal to subsidise the banks, that we were right, just as our predictions earlier that sub-post offices would need to be subsidised have proved to be right.
What do we have here? We have what is becoming a familiar and important theme of the Government. First, action is taken which, although not necessarily ill-intentioned, is ill-thought through. Secondly, a major industry or service is adversely affected. Thirdly, a Government who came to power telling us that they had learned the lessons of free market economics engage in solving, or in attempting--usually unsuccessfully--to solve, the problem through increased subsidy. We have seen it in agriculture, in the car industry and in the coal industry; now we see it in sub-post offices. It is a lamentable rhythm, but it is beginning to become extremely familiar.
In the case of sub-post offices, it is highly ironic because the only reason for the adverse effect on sub-post offices is that the Secretary of State for Social Security thought that he was going to please his former master, the Chancellor of the Exchequer, by saving £400 million. That £400 million is an extremely mysterious entity. No one knows how much of it is due to payments that go to the sub-post offices, how much is due to payments that go to Post Office Counters and how much is absorbed in internal administration. However, let me take a guess that, at present, at least half of it goes to sub-post offices by one means or another.
Let us imagine that everyone who would come in to collect a benefit or a pension--who, in that case, will not spend, on the Secretary of State's figures, roughly 50p of taxpayers' money on having that benefit or pension available for collection at the post office--is also not going to spend at least as much again in gross profit contribution: he or she is not going to buy things in the post office. I do not know whether that is the right or the wrong number. The Secretary of State undoubtedly knows, but he has long since forsworn any effort to tell us.
As my hon. Friend the Member for Altrincham and Sale, West and my right hon. Friend the Member for Hitchin and Harpenden said, we need to know the answer. Let me speculate that the answer that I have given is approximately correct: £200 million will be directly lost by the sub-post offices, and about another £200 million will be lost through lack of customers. What, then, would the subsidy need to be wholly to replace that lost revenue? Amusingly, it would be £400 million. That is why we believe that, if the Secretary of State is continuously to re-subsidise the post offices to the point that they were at before the Secretary of State for Social Security began his attack on them, he will need to spend about £400 million a year of taxpayers' money.
The Secretary of State has not said so. He has not said a word about how much he will spend. He has not said whether it will be a large or small amount, but we are
justified in assuming that the cost of the injudicious measures of the Secretary of State for Social Security will be enormous.During the debate, two problems have emerged in relation to that enormous sum of money. First--my hon. Friend the Member for Altrincham and Sale, West made the point clearly--when subsidies are administered on a continuing basis, they create subsidy dependence. They divert the attention of the business man--in this case, the sub-postmaster or postmistress--from running the business and towards maximising subsidy.
That is a danger to the sub-post office and to any industry that suffers from it. It is a danger about which we thought the Government had learned because, before they came to power, they preached the virtues of a market that was not subsidised. However, it turns out that, when it comes to sub-post offices, the Government's knee-jerk reaction is to create the very subsidy dependence that we all suffered from for so long and so deleteriously.
As my hon. Friend the Member for North Norfolk said eloquently, another reason why we should worry about continuing subsidy is that the subsidies themselves are vulnerable. As many of my hon. Friends pointed out, the new clause is permissive. It will go on being permissive because subsidies are never given as a matter of contract. Governments always, under all regimes, take great care to ensure that no one can ever claim a subsidy as a right. Therefore, subsidies are necessarily tenuous.
In the terms of new clause 1, the subsidy is described as "a scheme". It is indeed a scheme. It is a scheme to avoid a principal problem, and it is a scheme that could be as quickly undone as it has been established. Every sub-postmaster the length and breadth of the country will know that. Consequently, they will know that they are constantly under the threat of the subsidy being removed. Therefore, their attention will be focused in the wrong place, and their livings will be precarious. That is in no way a satisfactory result for sub-post offices; nor is it the result that they have been seeking. Sub-post offices have been seeking long-term commercial viability--not a subsidised or precarious existence, but a well-founded existence.
There is, however, a way. That is why Opposition Members have not been arguing against new clause 1, but have merely been drawing attention--as my right hon. Friend the Member for Bromley and Chislehurst did notably--to its drafting deficiencies.
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