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Mr. Heath: I am extremely grateful to the hon. Gentleman for drawing the important distinction between urban and rural post offices and explaining the fact that this applies to both. I was at pains to mention the sub-post office network rather than just rural post offices, because the impact of the loss of benefit traffic is often greater on the urban sub-post offices, which rely on it more heavily.

Mr. Hoban: The hon. Gentleman makes a valid point. Often, urban sub-post offices rely on the trade from benefit, as it were, to keep them afloat. They also often exist in some of the most deprived areas of our constituencies, where people are least likely to be able to travel from their homes to a main post office in the town centre. In our consideration of the hon. Gentleman's proposals, the importance of sub-post offices to elderly people and young mothers should not be underestimated.

The new clause and the amendments are designed to preserve some of the social fabric of our rural and urban communities and would help to reduce the costs imposed on businesses. We should not be too churlish about the actions that the Government have taken to reduce those costs through their reform of the tax credits system—in Committee, the Paymaster General referred to some of the representations that she had received from business organisations welcoming the changes—but I hope that the House will take advantage of the opportunity that we now have to reduce those burdens once and for all by enabling employers with fewer than 20 employees to have the tax credits paid directly to those employees, and by ensuring that other businesses have their costs reimbursed by those who impose them—in this case, Her Majesty's Government.

Mr. Swire: I am particularly interested in this group of amendments, tabled by ourselves and the Liberal Democrats, because I represent a constituency that, like that of the hon. Member for Teignbridge (Richard Younger–Ross), has a lot of small businesses. My local

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businesses employ an average of between three and five people. We are a diverse community, largely rural but with some urban areas—and, if I may do so without straying too far from the new clause, Madam Deputy Speaker, I want to talk about post offices and how they fit into that pattern.

Having sat through the Standing Committee stage—that was a steep learning curve for me—I believe that when the Government introduce new legislation they have an opportunity that they do not always get: the opportunity to get things right. Our amendments will steer them in that direction.

In Committee, my hon. Friend the Member for Arundel and South Downs (Mr. Flight) spoke lucidly about post offices and the role that the universal bank will play. It is true—although I must not go over old ground—that many of the neediest people, to whom the Bill will be of most benefit, do not have bank accounts. As my hon. Friend the Member for Fareham (Mr. Hoban) said, those people—such as the elderly and single mothers—would usually find it easier to go to their local post office, whether they live in a rural or an urban area.

New clause 2 says that anyone who so wishes should be able to

That raises the question of what an accessible post office is, and what is accessible once people get there. One of the problems in rural areas is the number of post offices that are closing. There is some evidence that the rate at which—

Madam Deputy Speaker (Sylvia Heal): Order. I must bring the hon. Gentleman to order. We are talking about tax credits, not the future of the post office network.

Mr. Swire: Thank you, Madam Deputy Speaker. I was trying not to stray too far from the new clause, but obviously I failed.

When we think about how we want people to receive their benefits, we must recognise the role of post offices. At this stage I shall make only a few comments about the burden on business, because we shall be debating that subject all afternoon. We have heard comments from the CBI, the Institute of Directors and others, but we should also listen to the Federation of Small Businesses and the British Chambers of Commerce.

As I have said, most of my local businesses in East Devon employ very few people. Small businesses represent the engine room of the economy, and any Government who want that engine room to grow should aspire to enable those companies to employ more people. Yet the Bill as it stands acts as a disincentive to employing 15 or 20 people. What on earth is the incentive to expand a business if that merely invites extra costs and red tape?

I fully agree with the comments that have been made about stigma; indeed, the stigma may apply more in small businesses, where people are more likely to know each other socially than people in larger businesses. The fact that people's pay packets may not be a true reflection of the job that they do could cause dissent, and will be bad for morale.

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I urge the Government to take on board what the Opposition are saying, and especially to recognise that post offices will have a problem, particularly between now and when the universal bank is set up. Our suggestions would give the Government a real opportunity to do what they claim they wish to do, and help those hard-pressed sub-post offices. They have the opportunity at least to nod towards the concerns expressed by the various bodies that represent small businesses, such as the British Chambers of Commerce and the Federation of Small Businesses, which are worried about ever-increasing regulation and red tape, and the interference in the lives of people employed by small businesses. I hope that the Government will take our amendments in good part, and respond to them later.

3.45 pm

Mr. Peter Luff (Mid-Worcestershire): I think that all those who served on the Standing Committee would admit that it was good natured throughout its proceedings. Whatever differences there might have been between the two sides of the Committee on some issues, there was a common desire to improve the lot of the poorer people who will benefit from this Bill. That spirit characterised our debates.

The Committee was intimidating, too, because it included not only the Financial Secretary to the Treasury, who is a distinguished lawyer, but the Paymaster General, who is one of the most talented Ministers in Her Majesty's Government, a professor of social policy representing the Liberal Democrats, and one of the most distinguished understanders of the City of London, my hon. Friend the Member for Arundel and South Downs (Mr. Flight). Those of us with no such qualifications—apart from a dim memory of an economics degree—felt inhibited from speaking.

On the issues relating to new clause 2 and the amendments that have been grouped with it, however, passions began to be aroused. Uniquely, we got the hon. Member for West Renfrewshire (Jim Sheridan) to intervene on that subject; it was his only contribution. The hon. Gentleman made the traditional old Labour case. I shall not quote his contribution in full, but he said:

I think that that was my hon. Friend the Member for Fareham (Mr. Hoban)—

Madam Deputy Speaker: Order. I hope that the hon. Gentleman's remarks will now be germane to the amendments that we are discussing.

Mr. Luff: They will be strictly germane, Madam Deputy Speaker. I am sorry for my rather lengthy introduction—that was always a fault with my university essays, and I was regularly marked down for it. [Interruption.] I did not hear what the Paymaster General said then, but I hope that Hansard has recorded it, because it is always worth listening to what she has to say.

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The hon. Member for West Renfrewshire continued by saying that in times like the dark days of the Conservative Government:

I understand the sentiments that the hon. Gentleman was expressing, but if he were here I would invite him to reflect on exactly what our amendments would do. In Committee I talked about the road to hell being paved with good intentions—and to use another cliché, this is the straw that breaks the camel's back. We all share a desire to enhance the lives of our poorer constituents, but we must look at the consequences of the mechanisms that we choose.

If we put unacceptable burdens on the businesses that support those people, we risk destroying the mechanism that creates the jobs, which lies at the heart of any Government's ability—and the private sector's ability—to remove them from poverty. That is the crucial point.

Ultimately, this is not a matter of great principle, but a matter of balance. We all accept that from time to time Governments must intervene in the affairs of the private sector to enhance some greater social good. As I made clear in Committee, that is a principle to which Conservative Governments have adhered down the centuries. The question is: when has that process gone too far? At what stage do we start putting that process at risk? Our amendments present the Government with a real case to be answered. They should say to themselves, "This may be the moment when the process has begun to go too far."

I have already said that I have a high regard for the Paymaster General—but she was a bit naughty when she quoted so selectively from the words of the brief that the CBI sent to members of the Standing Committee. She described the CBI's position as follows: She said that the CBI brief stated:

All well and good. That is indeed what the CBI said in its briefing note, but sadly for the Paymaster General, who quoted only the first two sentences, that same paragraph continues:

That is the full and complete CBI position, according to a paragraph from the briefing entitled "CBI position." With respect to the Paymaster General, that is what our new clauses seek to deliver: the CBI's position as fully expressed, and not as selectively quoted.

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I shall not trouble the House by quoting the briefing at length, because to do so would be tedious, but I shall read out its final paragraph, which is just one sentence long:

The CBI is advocating an interim solution, and the Paymaster General must address this issue when she winds up this debate rather more convincingly than she did in Committee.

Historically, the CBI has not been particularly good at speaking up for the interests of smaller businesses, but I am glad that, under Digby Jones, it at last seems to be doing so. That is the spirit and rationale that underlies the CBI's position. I am pleased to say that, typically, local chambers of commerce are rather better at standing up for smaller businesses, which would be affected by the amendments and new clauses tabled by the Liberal Democrats and by my hon. Friends.

The Herefordshire and Worcestershire chamber of commerce pointed out to me that a huge proportion of businesses in Worcestershire are smaller businesses. It said that 84 per cent. of businesses in Worcestershire employ 10 people or fewer, and that payroll costs create a real problem for such businesses. I shall read a paragraph from a letter from the chamber of commerce that I quoted in Standing Committee, because it is of huge importance and the whole House has a right to hear it:

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