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Mr. Alan Johnson: Where is he?
Mr. Letwin: I am sorry that my right hon. Friend has departed the Chamber, but he lent much eloquence to us when he was here. He certainly drew attention to the lack of drafting. We have complained about that, and about many other matters.
We do not wish, however, utterly to oppose the new clause because it contains a better possibility--the germ of a decent idea. Rather than a continuing subsidy, there should be a pause--a delay and a reflection. In that time, the Secretary of State could use the powers provided in the new clause and by other means to install in sub-post offices proper technology, parallel--although perhaps different in character--to that which my right hon. Friend
the Member for Hitchin and Harpenden tried to install when he was Secretary of State, but which the new Government disrupted.
Mr. Letwin: Yes, the Government did disrupt it. I know that the Minister thinks that they did not, but he has forgotten that the previous Secretary of State for Trade and Industry was very clear in his statements that the project would be delivered, after which it was cancelled. I do not know why it was cancelled. I am sure that it was not Ministers' fault, and that they did not go round to destroy the computer. However, the fact is that, under this Administration, that project failed. It had not failed before. It did not seem to be failing, but when it did fail, the future of sub-post offices was put under threat.
There is now a chance that, if the Secretary of State uses new clause 1 not in the wrong way but in the right way--not to go on subsidising post offices permanently, but to inject, once for all, sufficient funds to provide them with the technology to enable them to go on providing benefits and many other services--post offices will keep their footfall and, therefore, their financial viability. If the new clause is used in that way, of course we would welcome it.
It is a sorry thing, however, when a Secretary of State--who is perhaps one of the more intelligent members of the Government--comes to the House with a new clause that is ostensibly derived from public policy and not merely a sticking plaster to deal with a political problem, but cannot answer the fundamental question: "Is this something that you intend to use as a means of permanently and unsatisfactorily subsidising sub-post offices into a gentle oblivion? Or is it a bold manoeuvre to try to give them, once for all, the modern technology that they need?" Why cannot he answer the question? He cannot answer because he has not decided.
In the past few weeks, to my certain knowledge, Ministers have had no fewer than six occasions in the House on which to announce their answer, and six times they have failed to announce it. That is why the new clause has been drafted in a manner that is--as many of my hon. Friends have said, using a polite word--opaque.
Mr. Letwin: Perhaps. However, the new clause's problem is not its opacity of drafting, but that the mind behind it is intentionally opaque because it has not yet been made up. It is a mind unmade. That is no way in which to introduce legislation.
I hope that, as a consequences of this debate, Ministers will go back to that dreadful place that they are forced to inhabit, think to themselves a little harder, and be able--perhaps in their Lordships' House--to include provisions in the new clause that tell us whether it is a devastating and disastrous piece of permanent subsidy or a perfectly sensible move to do what we have all been asking for for many months now.
Mr. Byers: This has been a debate of some interest, and I shall try to address the issues raised in it by right. hon. and hon. Members. It is worth reinforcing the point now, however, that new clause 1 simply gives the
Secretary of State for Trade and Industry the power to establish a scheme. The new clause is not about the details of that scheme or the form that it might take. It is purely about including in the Postal Services Bill a power for the Secretary of State to establish a scheme.7.45 pm
I can understand the concerns that hon. Members have expressed about the details--such as whether the scheme will be temporary, whether it will be operated by means of a lump sum, and whether it will be a continuing obligation. The House will be able to consider all those details. New clause 1 makes it clear that the matter will be dealt with by the affirmative process. Therefore, there will be a debate, and there can be a vote on the scheme when it is introduced by the Secretary of State--if there is a decision to introduce such a scheme.
As I have consistently made clear, the provision is permissive; it is a matter of "may", not "shall". It is permissive because we do not know what the future will bring. I hope that the Postal Services Bill will receive Royal Assent and be on the statute book for many years. As I said on 12 April, when speaking on the issue, it is right that we should have a safeguard in the Bill providing the Secretary of State with a power to introduce a scheme. That is exactly what new clause 1 does.
My hon. Friend the Member for Batley and Spen (Mr. Wood) raised the issue of whether the scheme could be tailored, dealing with post offices individually. Yes, it can. I think that the scheme will be able to do that, so that there will be some flexibility and some targeting of support. However--to reassure the hon. Member for Buckingham (Mr. Bercow)--it will not be adapted, evolved or produced in a way that is politically partisan in any particular form. It will be based on the support that needs to be given to individual post offices, either for a post office itself as an entity, or for the continuation of certain services offered by a particular post office that the Government wish to support.
The right hon. Member for Bromley and Chislehurst (Mr. Forth) raised the issue of repayment. I appreciate the concerns that he expressed on the issue, and it is a shame that he has not stayed to hear me try to answer his questions. Nevertheless, I shall try to reply to the relevant points that he raised. As he missed my opening speech, he missed some of the reasons that I gave for the new clause. He then asked questions about some of those reasons. However, he did raise the important issue of repayment. Other hon. Members, too, may be concerned about the circumstances in which repayment of a subsidy or financial support may be appropriate. The matter should be considered very much within the context of provision of services.
Many of us hope, looking forward to a vision of post offices in the future, that post offices will offer services that go way beyond the services that they currently offer. Although more diverse services may be offered, some of those services may be offered at a loss to sub-post offices. I think that most people would say that, in those circumstances, if they are services that the Government wish to support, and if they are offered on behalf of the Government, it is appropriate for the Government to make a financial contribution towards the cost of offering them. Therefore, effectively a contract will be reached between the Government and the individual post office.
I believe that "subsidy" is a pretty poor description of that arrangement, as it is not a subsidy, but payment given for a service offered by the sub-post office. Because of the way in which the parliamentary draftsman has arranged the clause, the arrangement is called a subsidy. However, we will be paying for a service that the individual post office can offer.
If we pay for that service, but for some reason the service is not offered--if there is effectively a breach of the contract--repayment would be appropriate, as the Government would not be receiving the service that we paid for. In those circumstances, a power to seek repayment of the subsidy is an appropriate one for the Secretary of State to have.
Mr. Bercow: I understand the scenario that the Secretary of State has just depicted, and his explanation is helpful. However, under the regulations, could a sub-post office face a demand for repayment if it were granted a subsidy for one service, but made a modest profit on another service? Would the Treasury use the profit on the latter service as justification for demanding repayment of the subsidy paid for the former service?
Mr. Byers: We are talking about support for a particular service, and the arrangement would involve the finance coming from the Government to provide that service. Provided that that service is delivered, the sub-post office will have delivered on its side of the agreement, and there will be no question of money being clawed back because of a profit that the post office may be making somewhere else. That is why new clause 1 makes the distinction between the entity of a post office as opposed to a particular service that the Government may wish to offer financial support towards.
Mr. Brady: Is the Secretary of State guaranteeing that the measure will in no circumstances be used to allow this to be a loans scheme, under which payments would be expected to be repaid?
Mr. Byers: I am pleased to be able to confirm to the hon. Gentleman that nothing in new clause 1 would lead to that outcome.
On the matter of Treasury consent, whether hon. Members feel comfortable with it or not, we all know how government works. Individual Departments do not have their own budgets, and government works because of funds provided by the Treasury. There are many examples of legislation passed by this Government, and by the previous Government, where Treasury consent has been required before a particular scheme has been funded. That is not unique--it is a common arrangement.
The hon. Member for West Dorset (Mr. Letwin) referred to a continuing subsidy for the network. Clearly, he is unaware of the way in which the post office network operates, as there is effectively a subsidy at the moment. Rural post offices get up to eight times as much as urban post offices per transaction from the Post Office. There is a recycling of finance within the network at present and, effectively, many rural post offices are subsidised in this way.
I agree with the hon. Gentleman that we do not want post offices to rely heavily on subsidies for the services that they offer. That is why it is important to ensure that people do not automatically assume that the power within the new clause will be implemented for every single post office. Hopefully, we are talking about exceptional circumstances. We want to use the new Horizon project and the diverse range of services that can be offered following the computerisation of the network to allow new customers to come into the post office network.
We want the network to diversify into new Government services, so that problems over footfall can be addressed by the new customers. If we can get that diversity, any loss as a result of the introduction of ACT can be more than accommodated in terms of the new customers using the post office network.
As a result of the Government's commitment that any individual pensioner or benefit recipient who still wants to have his or her pension or benefit paid in cash at a post office will be able to do so, a lot of the scare stories about a large loss of customers should come to nought. Post offices will be able to convince pensioners or benefit recipients that they should remain as they are and continue to have their cash paid at the post office.
The hon. Member for Weston-super-Mare (Mr. Cotter) said that, last year, there had been about 500 closures. That is not the case. There were fewer than 400 closures last year, and that is not the highest number that we have seen. In 1984-85, 389 sub-post offices closed. The number of closures last year was below that figure.
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