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House of Commons

Thursday 2 November 2000

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]


City of London (Ward Elections) Bill


Oral Answers to Questions


The Secretary of State was asked--

Postal Services

1. Mr. Tony Baldry (Banbury): How many responses he has received to the draft statutory, social and environmental guidance to the Postal Services Commission. [133887]

The Minister for Competitiveness (Mr. Alan Johnson): Two.

Mr. Baldry: If the Government intend to place extra responsibilities on the Post Office, those obligations will cost money. How does the Minister think that sub-post offices and rural post offices will make up the third of their income, which they stand to lose in a couple of years? On Report and Third Reading of the Postal Services Bill, the Government said that they might

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introduce a scheme to help post offices in difficulty. Will any money be paid out under that scheme, or was that just a sop to get the Bill through the other place?

Mr. Johnson: The scheme was not mentioned when we took the Postal Services Bill through the other place. We announced in the comprehensive spending review that we would put £270 million into the initiatives to implement the recommendations in the performance and innovation unit report. We also said that we were prepared to add substantial amounts to that sum because much of it depends on whether the pilots for various initiatives such as Government general practitioners work. If they do so, we can apply them across the country. Money is available, as has been announced clearly in the comprehensive spending review.

Mr. Norman Baker (Lewes): Will the Minister ask the Postal Services Commission to examine the terms offered by the Post Office to potential franchisees? Is he aware that in my constituency three post offices have closed and have not been reopened simply because the terms are so unattractive? One of them is the second main post office in the town of Lewes. Similar closures have been made across the country. Those terms possibly represent a greater threat to our post offices than that posed by automated credit transfers.

Mr. Johnson: The hon. Gentleman raises an important point. One of the PIU recommendations was that the Government should place an obligation on the Post Office to stop preventable closures. The Post Office does its best at the moment, but it makes the point that that is a purely voluntary action. The report says that the Government should insist that that course is followed as a matter of policy. As part of that, we will ask the Post Office to consider precisely the point that the hon. Gentleman raises--the terms and conditions with which new sub-postmasters have to comply when taking over an office. I hope that the letter that puts the obligation on the Post Office to carry out the PIU recommendation will be available in the House of Commons Library in the next couple of weeks.

Mr. David Heathcoat-Amory (Wells): How can the Government talk about social guidance to the Post Office when the Government and the Department of Trade and Industry in particular are vandalising the Post Office network by announcing the end of the cash payment of benefits at post offices? Is the Minister aware of the figures from the Post Office that show that the rate of closure of post offices since the election is running at one a day, and that the rate has been accelerating in recent months? Is he aware of the economic and social damage being caused to those small businesses and their customers in urban areas as well as rural districts throughout the country? When will the Government stop talking about social responsibility and inclusiveness and giving us all that waffle when in practice they are doing the direct opposite by closing the vital network of businesses and post offices on which so many people rely?

Mr. Johnson: That was a frivolous question on a very important subject. I welcome the right hon. Gentleman to his turn to be shadow spokesman on trade and industry for the next few months. Let me explain to him that the

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closure of post offices is important to all Members of the House. Some 25 per cent. of the network has disappeared in the past 20 years. In 1980 the previous Government--I do not criticise them for it--introduced payment of benefits through ACT for the first time. There was a record number of closures five years later. The Conservative Government extended ACT in 1990. There were record closures--479--again in 1992.

It will be interesting to hear whether the Opposition plan to reverse the move to ACT. We are finally grasping the nettle and are computerising the whole of the network--to date we have computerised 13,000 post offices. The Conservative Government computerised none. The Horizon programme will be finished by February next year and we will build on that to introduce network banking, e-commerce and ideas such as Government general practitioners so as to give post offices a stable and secure future. That future is supported by the National Federation of Sub-Postmasters, the Women's Institute and all the societies representing the countryside, including the Countryside Agency. [Hon. Members: "This is a speech."] It is a speech in response to a speech. The only organisation that has criticised that future is the Opposition Front-Bench.

Mr. John M. Taylor (Solihull) rose--

Mr. Johnson: The hon. Gentleman will get his chance in a minute.

Mr. Speaker: Order. Perhaps I can be diplomatic by saying that it was a very good question and a very good answer, but both of them should have been shorter.

Mr. Heathcoat-Amory: I wish it had been an answer to the question I actually put. We do not need to be told how important the issue is. The Minister tried to be patronising to me and--by implication--to all the sub-postmasters in the country, whose livelihoods are at stake because of this issue. He then tried to claim that the closure programme was larger under the Conservatives. I remind him that, according to the Government's own figures--I hope that he will not try to deny them--the rate of closure has tripled; it has gone up threefold if we compare the last year of our Administration with this year. The closure rate has accelerated--it is running at more than one a day--and all the Government do is dither. It was we who introduced the idea of wiring up the post offices and the Labour Government who abolished--

Mr. Speaker: Order. I am certainly not going to allow a speech--[Interruption.] Will the Minister answer the question? [Interruption.] The question was far too long. I would say the same to Back Benchers--

Mr. Heathcoat-Amory: My contribution was not as long as the Minister's.

Mr. Speaker: Order. I made the ruling; it must be shorter. A short reply would be appreciated.

Mr. Johnson: In rural areas, the number of closures at the half-year stage is down by 10 per cent. There is a worrying increase in urban areas, which we are addressing. The provisions of the PIU report will be brought in exactly as the report recommended.

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In 1985, there was a record number of 395 closures; it was exceeded in March 1992, when there were 478. That figure has never even been matched under the Labour Government.


2. Mr. Michael Fallon (Sevenoaks): If he will estimate the cost to small retailers of changing over to the euro. [133888]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): The cost to retailers will depend upon the detailed approach that they take to any changeover.

Mr. Fallon: How much has been allocated for conversion preparations in the DTI's own three-year spending plans? When exactly should small retailers begin to prepare?

Mr. Byers: The hon. Gentleman is right to raise the importance of retailers preparing for any changeover; that will allow the British people to make a genuine choice as to whether they want to join a single European currency. Only the Labour party offers the people that choice; the Conservatives would not give the British people that choice.

As for costs, that depends on how retailers decide to approach the matter. In the changeover plan, we laid down the precise way in which they can prepare; it will be for retailers themselves to take that decision.

Mr. David Kidney (Stafford): What benefits does my right hon. Friend anticipate would come from trading in a common currency rather than in different currencies? Does he estimate that those benefits would outweigh the costs of conversion?

Mr. Byers: The Government have made it clear that, in principle, we would join a successful single currency for three principal reasons: the benefits that would come from improved trade; the transparency of costs; and the currency stability that would clearly result from being part of a single currency. Those are the reasons why we are keeping the option open; why we have a policy of prepare and decide; and why we are prepared to give the people of this country a genuine choice--[Interruption.] I agree that the Liberal Democrats hold the same position. However, the Conservatives do not; they want to deny choice to the British people--the Conservatives are not prepared to hold effective discussions about the realities.

Mr. Alan Duncan (Rutland and Melton): The cost of changing over to the euro will not be merely a matter of amending invoices and tills. If the exchange rate is fixed, other economic variables--such as labour costs, taxation and prices--will have to take the strain, as the economies of other countries behave differently. Small businesses will feel that strain much more than big ones. What estimate has the DTI made of the extent to which, for instance, an inappropriate interest rate will hurt small retailers or of how much more volatile other economic variables will turn out to be if the European exchange rate

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is fixed? How does that climate of much higher risk for small businesses fit in with the Chancellor's five fatuous tests?

Mr. Byers: The economic conditions must be right before we would recommend to the British people joining a single currency, and we have said very clearly that we will test those five economic conditions early in the next Parliament. The hon. Gentleman is right to raise the important issue of those important conditions. Unfortunately, he failed to raise the constitutional issues, which I know concern him greatly, which is why he actually said during "Any Questions" on 20 October, "I have no intention whatsoever of voting in favour of the euro". [Hon. Members: "Hear, hear"]. I see that the right hon. Member for Wells (Mr. Heathcoat-Amory), who leads from the Conservative Front Bench on trade and industry matters--I welcome him to his new position--shares that view: he would not vote in favour. I wonder how on earth that can be reconciled with the official policy of the Conservative party?

Conservative Members know that, for principled reasons, they would never support joining a single currency. If that is the principle, and if there are constitutional reasons, why is it not ruled out for ever, and why is there this fudge in the Conservative party to rule it out for one Parliament? Increasingly, people are seeing through the cracks in Tory policy regarding the single currency.

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