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Mr. Dennis Skinner (Bolsover): Is she for it or against it?
Mr. Byers: Now we know why 3,000 post offices were closed while the Conservatives were in government. Are they for it or against it? Who knows from the hon. Lady's contribution?
The hon. Lady asked some specific questions. The wonderful benefit payments card has been held up as the way forward. When we came to office, it had already overrun by three years, was over budget and was set to be obsolete by 2007. The Conservatives may deny it, but that was the reality. The hon. Lady knows it, and the right hon. Member for Hitchin and Harpenden (Mr. Lilley) knows it too, because he was the architect of the chaos that surrounded the benefit payment card.
The hon. Lady is right to say that there is difficulty with delivering goods over the internet because fewer people are at home during the day. That is because 970,000 more people are in work as a result of our policies.
The hon. Lady talks about the views of sub-postmasters. We shall wait to hear what they say about this afternoon's announcement. I am confident that, as members of a reasonable organisation, they will warmly welcome my statement and the PIU report because they provide a real vision for the future of the Post Office.
The hon. Lady raises the important issue of transaction costs. We know that, at the moment, a transaction cost is paid by commercial agreement between the federation, the Post Office and the banks if they are acting as an agency. That will not change when a universal bank is introduced, but those bodies will enter into commercial negotiation.
Mr. Nick Gibb (Bognor Regis and Littlehampton): What about the 17p?
Mr. Byers: The hon. Gentleman talks about 17p. In fact, for a pension the figure is 13p at the moment. He should get the facts right if he can. The figure will be part of the transactions entered into, and it is appropriate that that should be so.
We have made provision in the spending review to underpin the report's recommendations, and that will be made clear in July when we announce those proceedings.
The Conservatives' difficulties on the Post Office were very clear from the hon. Lady's response. Their policy was to privatise and break up the Post Office. We have given it commercial freedom and we will support modernisation and the development of new areas of
business. The message for the Post Office and rural and urban communities that care about it is clear: neglect, decline and closures under the Conservatives; vision, investment and a future under Labour.
Mr. Frank Field (Birkenhead): I warmly welcome my right hon. Friend's statement. Does he agree that the image that the media continuously put over of most vulnerable post offices being in the countryside is not totally accurate? Will he tell the House of his Department's analysis of measuring vulnerability by size of income that sub-post offices receive from social security transactions? On that analysis, do not the sub-post offices in his and my constituencies rank about 70th in the vulnerability league stakes? Will he therefore give an undertaking to those of us who represent inner-city areas that, when he gets down to the detailed implementation of his welcome announcement, he will pay particular attention to ensuring that inner-city post offices survive, as should rural post offices?
Mr. Byers: My right hon. Friend raises a very important point. In today's announcement, we draw particular attention to the important role that post offices play in deprived urban areas such as his constituency and mine, not just as a post office but as part of probably the only commercial retail outlet serving some of our most depressed estates. He is right to point out that they are the most vulnerable on the question of benefit transactions. We will be providing financial support to underpin post offices in those areas.
Many of my right hon. Friend's constituents and mine will be among the 3.5 million people who are unbanked and therefore cannot take advantage of direct debits and the cuts in bills for electricity, gas, the telephone and so on that that brings. The universal bank will, for the first time, allow those 3.5 million people to enjoy those benefits. The ability to enjoy the advantages of reduced basic utility bills, which many in this House take for granted, will make a huge difference to families and people on low incomes. Extending such benefits will be beneficial to individuals, communities and the Post Office as well.
Dr. Vincent Cable (Twickenham): I welcome the elements in the statement which give a firmer commitment to both public subsidy and the preservation of the network, and identify useful new sources of income generation. A similarly comprehensive approach adopted 20 years ago at the beginning of Conservative rule might have prevented the closure of many of the 4,000 branches which have closed.
How much of the lost £400 million income in 2003 will now be replaced by a combination of subsidy and new sources of income? I appreciate that the Secretary of State cannot identify the subsidy sum before the public expenditure review, but what will be the gap in the cash flow as a result of those two combined elements?
Secondly, can the right hon. Gentleman be more specific about his commitment to the preservation of the network? He said that there will be a guarantee for 10,000 sub-post offices. What will be the status of the other 8,000, many of which are loss-making? In particular, what is the status of those in urban areas, which have just been referred to? The right hon. Gentleman will have discovered in Tottenham last week that there is a lot of
sensitivity about the closure of sub-post offices. Clearly, many of those will be modernised, but of those that are not, how many are likely to shut, and what provisions are there for preventing the closure of sub-post offices in inner-city areas?Thirdly, will the right hon. Gentleman say more about what is meant by a jointly owned universal bank? What is the relative shareholding of the Government and the private banks? What will happen if a Barclays cash machine is installed in a sub-post office as part of the joint project? Will customers pay Barclays charges, which, as he knows, the bank is determined to impose in defiance of the anti-cartel provision of the Competition Act 1998?
Finally, I welcome the internet provision, particularly taking advantage of the logistics opportunities of the Post Office. But how will internet be provided in the many remote areas where there are no ISDN lines? How will the internet be universally available for the post office network?
Mr. Byers: The hon. Gentleman is right to say that, had our comprehensive approach been adopted some 20 years ago, the network would be in a far stronger condition than it is at present.
The hon. Gentleman raises a number of important questions. On the savings that will come from the movement towards ACT, clearly there will be an element of financial support to the network, which will be announced as part of the comprehensive spending review. We are confident that, coupled with the new areas in which the post office network will be able to develop--we mentioned three in particular on the basis of the PIU report--if there is any shortfall in the sums coming into the network, it can be made up by the new activities into which the post offices will be able to enter.
The hon. Gentleman made the point that some 10,000 post offices will be covered by the commitment that we have given to maintain the rural network. We calculate that probably 2,000 more will come within the category of urban deprived. The other areas will benefit from the new developments to which I have referred. There will be greater commercial opportunities for those post offices. In total, the package that we have put forward today has something to offer all 18,500 post offices presently in the network.
The Post Office and the major banks are discussing the detail of the universal bank. The Treasury, on behalf of the Government, has said today that high street banks that participate in the universal bank and make financial contributions towards its establishment would meet their financial exclusion obligations. That will make a big contribution to ensuring that the universal bank is a success.
I have asked the Post Office to present, by 1 September this year, a business plan giving details of how the universal bank will work in practice. In terms of internet access, once again I have asked the Post Office to present a report to me by the end of this year.
Madam Speaker: Order. More than 40 hon. Members are seeking to catch my eye. I shall not be able to call anywhere near that number. I ask for brisk questions and answers from now on.
Mr. Martin O'Neill (Ochil): I congratulate my right hon. Friend on the report. Some of us were worried when the Horizon project was substantially altered. Today's statement has dealt with most of our anxieties, and those who run post offices in rural and disadvantaged areas will have some hope. The package of support, the encouragement of diversification and the announcement about the universal bank are heartening.
I want to make a point about the record of Post Office Counters in negotiating with external bodies about franchised services. We all know about the loss of Powercard in the past couple of years, and the great disadvantages that that created for many of our constituents. I hope that my right hon. Friend, commercial freedom notwithstanding, will keep an eye on the rather macho approach that Post Office Counters sometimes takes in negotiations. I hope that we will not lose the opportunity of gaining access to important services through the Post Office because of the simplistic approach that Post Office Counters sometimes adopts.
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