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Mr. Byers: My hon. Friend raises an important point. There is no doubt that, as we map out a programme of genuine change for the post office network, we need Post Office Counters managers who will be able to take advantage of the new opportunities. Some new management has already been put in place, and we are beginning to experience benefits from that.
The Powercard problem was a Scottish matter, but it shows the way in which mistakes can adversely affect post offices, communities and individuals. They should not be repeated in future. We will therefore ask the Post Office, with Post Office Counters, to prepare business plans and make detailed proposals so that the Government can ensure that we are discharging our responsibilities to the post office network and the communities that it serves. If we can move together in a genuine partnership, we shall be in a strong position to meet the challenges that lie ahead.
Mr. Peter Lilley (Hitchin and Harpenden): I am sorry that the Secretary of State chose to repeat a falsehood for which the Minister of State has already apologised to me.
Madam Speaker: Order. Perhaps the right hon. Gentleman will withdraw the word "falsehood" and select another word that is acceptable in parliamentary terms.
Mr. Lilley: I am sorry that the Secretary of State chose to repeat a statement for which the Minister of State has already apologised to me and the House. That statement conflicts with that made by his predecessor.
Let us now concentrate on the key issue. Will the Secretary of State tell the House whether sub-post offices will receive the same amount or less per transaction than they currently receive from the Post Office? Will the same number of transactions or fewer transactions be made? If sub-post offices receive the same revenues, from where will the savings come that the Secretary of State anticipates? If they receive less revenue, will not post office closures accelerate in future?
Mr. Byers: The right hon. Gentleman will know from experience the way in which the transaction costs are negotiated. He also knows that the Government are not
involved in the details of the transaction costs of those commercial negotiations. There is no reason for post offices and sub-postmasters to receive less than they currently receive in transaction costs. Nothing in today's statement will lead them to receive less. It is a matter of commercial negotiation.The right hon. Gentleman asked whether the number of transactions will diminish. That depends on whether the Post Office can persuade people to choose to have their benefits or pensions paid in cash at post offices. The individual will have that choice; that is perfectly appropriate. The right hon. Gentleman knows that the current order book system has massive potential for fraud. We calculate that approximately £100 million a year will be saved by preventing fraud through the introduction of the universal bank system. I hope that the right hon. Gentleman will be prepared to support that saving.
Mr. Gerald Kaufman (Manchester, Gorton): I note that my right hon. Friend's statement today would have been impossible if the Tory Government's plan to privatise the Post Office had gone ahead and I also note that the welcome given to the statement by the hon. Member for Twickenham (Dr. Cable) contrasts starkly with the lies spread in Liberal Democrat "Focus" documents about the Government forcing pensioners to collect their pensions from banks.
Will my right hon. Friend accept from me, as a representative of an inner-city constituency, that my constituents will welcome the increased facilities that will be available to people on low incomes and benefits and will be grateful for the fact that the support structure in inner cities for local sub-post offices will continue?
Mr. Byers: My right hon. Friend makes an important point. The post offices in inner-city areas provide a valuable resource to many constituents who need the support that a local post office can offer. I am pleased that the announcement that we have been able to make today can both address the understandable concerns of the rural network and, at the same time, discharge our responsibility for those people who live in our cities and towns. The announcement is a balanced response to a good analysis of the state of the network, and will offer new opportunities and a totally new vision for the Post Office for the 21st century.
Mr. Archy Kirkwood (Roxburgh and Berwickshire): As an officer of the all-party group, the importance of the core income of sub-postmasters was drilled into me at the recent lobby. Does the Secretary of State accept that the Government are likely to save annually between £400 million and £600 million? That core income must be replaced, somehow, after 2005. Like my hon. Friend the Member for Twickenham (Dr. Cable), I am prepared to give the statement a qualified welcome, but I was anxious about the answer given to the right hon. Member for Hitchin and Harpenden (Mr. Lilley) in which the Secretary of State said that the issue was nothing to do with him but with the Post Office. Does not he accept that if he does not drive Government business in the direction of the sub-post office network, it will wither on the vine whether he likes it or not?
Mr. Byers: The core income that sub-postmasters receive has been in decline for several years because
people have voluntarily chosen to move to ACT. The announcement today will enable us to ensure a greater diversity, so that new sources of income will reach the post office network. The hon. Gentleman knows that it is not for the Secretary of State to negotiate the transaction costs, because that is a commercial matter. I do not negotiate the pay of those working for the CWU or the pay of sub-postmasters and mistresses, because that would be inappropriate. What we can do is to ensure that the post office network is attractive and that people will wish to visit it for their transactions. The statement I have made today will achieve that.On the specific point of government business, I am able to announce today that whenever government services are to be provided, the Post Office will be entitled to tender for that work. That has not been the case in the past, but from now on the Post Office will automatically be on the list, and that will make a big contribution.
Mr. Martin Salter (Reading, West): My right hon. Friend's statement is welcome news for many of the communities left high and dry by the decision of Barclays bank earlier this year to close 172 branches on one day, leaving 84 towns and villages bankless. The statement has the potential to provide a financial lifeline to communities facing financial exclusion. The all-party group on community banking, which it is my privilege to chair, has long argued for creative solutions to financial exclusion, using the existing post office network. In what way will the new and welcome universal bank differ from the Girobank, which was privatised by the Tories? If the Tories ever get their hands on power again, what guarantees will we have that the universal bank will not suffer a similar fate?
Mr. Byers: My hon. Friend has been a great champion of providing financial services to many communities, and he has done valuable work on exposing the actions of some high street banks. He is also right to point out that the strategy adopted by many banks gives the Post Office a golden opportunity to provide financial services to many individuals who are now denied them as a result of that strategy. The role of the universal bank will be quite different from that of Girobank, which has now been linked with Alliance and Leicester. Essentially, the universal bank will be geared to the 3.5 million people who are unbanked. Those who do not want to use it as a banking facility can simply access their benefits or their pensions at their local post office, but those who want to use it for a wider range of financial services will be able to do so. It will be a matter of choice and we believe that that is the appropriate approach.
Mr. Oliver Letwin (West Dorset): The statement does indeed sound good, but the Secretary of State will be aware that sub-postmasters and others have come to realise that there is sometimes a difference between how Government statements sound and their real meaning. How much will it cost to install the new technology that will be required for the new services at sub-post offices? Who will pay those costs?
Mr. Byers: The hon. Gentleman is right to point out the importance of working closely with the National Federation of Sub-Postmasters, which is what we have been doing. That is why I hope that it will feel able to welcome the announcement this afternoon.
The hon. Gentleman asked about the costs of installing the new facilities. It will cost over £500 million to provide the modern online computer facilities that will be in every post office by the spring of next year. As he will know from last week's Post Office accounts, some of that money will come from the Post Office and some from the Government. In terms of the additional facilities over and above the online computer facilities, as I made clear in the statement and in reply to hon. Members, I am asking the Post Office to present me with a business plan for the universal bank by 1 September, and for the other proposals by the end of this calendar year, so that we can see exactly how much will be required to deliver those new opportunities to the post office network.
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