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15 Oct 2002 : Column 237—continued

Mr. Robathan: If the Post Office were a private company it would be insolvent.

Mr. Timms indicated dissent.

Mr. Robathan: I think that it would. We could argue the toss at length.

This is a very real crisis, and if Post Office Ltd. and Consignia were not supported by the Government, they would be in danger of going bankrupt. In the Minister's judgment, is it likely that the Post Office, in part or in whole, would call in the receivers if it were not backed by Government money? Could the Government allow that? What is their attitude to the current situation?

Why have Consignia and the post office network reached a position where we have to authorise the spending of #210 million of taxpayers' money today? The Government used to take a dividend from Post Office activities and the Post Office used to make a profit. Of course there were growing problems, and we sympathise with the Government about that. The previous Conservative Government recognised the problems nearly 10 years ago, but the Post Office still made a profit for the taxpayer.

Some 28 months ago the PIU reported, and we are implementing part of that report today, but why has it taken the Government so long to get their act together? The website of the Office of the Deputy Prime Minister says, under the heading XFund for Deprived Urban Post Offices", that the Government announced in the urban White Paper in November 2000 that they would establish a #5 million a year fund to sustain and improve post offices in deprived urban areas. It continues:

XIt is expected that the fund will become operational in Summer 2002."

Nearly two years on, the Minister tells us that part of the money that we are talking about today is that fund for deprived urban post offices, but when will it become operational? The temperature this morning told us all that summer is long past. Why has there been a delay?

The Minister has pointed out that the Office of the Deputy Prime Minister will have responsibility for introducing the fund. The website says:

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XFurther details when available will be posted on this page."

I printed off that quote just over an hour ago. Obviously the Office of the Deputy Prime Minister needs to update its website, especially as I understand that it is meant to be about modernising e-Government. It would be funny if it were not so sad. I suggest that we may judge the likely success of the Deputy Prime Minister's measures by that out-of-date website. Page 5 of the PIU report says:

XNow is the time to modernise",

but that was 28 months ago.

Mr. John Redwood (Wokingham): Does my hon. Friend think, as I do, that the decision to expend an awful lot of money on converting the Post Office, a profitable, successful and much-loved public service, into Consignia, with all the costs that that entailed, showed that third way economics do not work? Only third way economics could turn a successful, profitable public service into a loss-making corporation in need of subsidy, and which is about to close many of its main outlets.

Mr. Robathan: I am grateful to my right hon. Friend. We all recognise that Consignia is a totally ludicrous name. Allan Leighton must recognise that because I believe that the name will be changed back to Royal Mail on 4 November. This is one thing for which Labour Members cannot blame us.

The problem is not just endless delay and prevarication. Let us look at the PIU report's proposals for a sustainable future for the post office network. Some #30 million of today's money is being set aside for additional investment, which is only one sixth of the amount being spent on closures. One proposal in the report was for access to e-Government. That is a good idea, applauded by all, and for that reason, a year ago, as the Minister said, XYour Guide" was piloted in Leicestershire and elsewhere. It was welcomed and seemed to be a success, although it was insufficiently publicised. Now, however, the Minister tells us that XYour Guide" has been put in the bin. I understand that other Departments, in a classic example of Labour's joined-up government, refused to sign up to the scheme because they think that it would cost too much. That is a great pity, and I think that postmasters who saw XYour Guide" will agree.

What about the proposal for e-commerce? Has there been any action to encourage post offices to become distribution centres or pick-up points for goods purchased over the internet? The PIU report commented:

XThe Post Office has been slow to react to this new opportunity".

Has there been an improvement?

What about the famed universal bank and, in particular, the card account? That is to be in place by April 2003. The clock is ticking, with six months to go. Everyone I talk to says that the Government are unhappy about allowing post office customers to apply for a card account, yet some 15 per cent. of benefit claimants currently do not have a bank account. The Government's unhappiness is caused by the fact that not enough money will be saved by introducing the account. That fact lies behind the card account customer journey,

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a copy of which I have here. After stage 1, a customer who has a bank account supplies the details and no further customer action is required. In an effort to browbeat claimants who do not have an account into opening one, there are 20 steps before the journey says:

XCustomer starts to use account—withdrawing money on a regular basis."

Nothing could be much more complicated than that.

Moreover, I understand that the chief executive of the Post Office has been told by the Department for Work and Pensions that postmasters are not allowed to put up posters telling claimants that they can still get benefits in cash from the post office—all because the DWP does not want to pay the small extra cost. For that reason, too, there is a presumed limit of 3 million card accounts. In today's letter, Age Concern told us that

Xmany older people expressed a desire to continue to collect pensions and benefits over Post Office counters."

Mr. Mark Francois (Rayleigh): May I amplify my hon. Friend's remarks by reporting that quite a few senior citizens in my constituency have made representations to me, both in writing and during my surgeries, saying that they are very anxious about the new arrangements, which they feel have not been properly explained? They are not at all keen to have to use them—they want to be able to collect their pension as they always have, and they bitterly resent the Government's preventing them from doing so.

Mr. Robathan: I agree entirely. That is an example of Government bullying: they are forcing people to do something they do not want to do in a typically nanny state way. At the heart of the issue of the card account is the conflict between the DWP, backed by the Treasury, and the DTI. Sadly for the post office network, the DTI is proving to be much the weaker Department.

Plenty of postmasters want to get out of the network, as the Minister said. Some 3,000 postmasters want to take the compensation package under the urban reinvention programme, which says something about morale. Last May, Allan Leighton said:

XPeople want to know, they want to know if they are in or they are out—what is my future".

There are plenty of takers, but the appalling uncertainty and prevarication surrounding the issue needs to be ended as soon as possible. Postwatch's annual report said:

XThe slow progress is very disappointing. The sub-postmasters this year have become increasingly desperate as rumour fed rumour".

At last, we have today's debate, but it was on 3 January that a DTI announcement said:

XPost Office Ltd. will be embarking on a restructuring programme in the new year and where appropriate compensation will be made available for the sub-postmasters affected".

However, that referred to the new year past—not to the coming new year. How far has the restructuring programme gone? We heard no details from the Minister.

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Mr. Peter Viggers (Gosport): Does my hon. Friend recall the Prime Minister's welcome for the PIU report in June 2000:

XI welcome this report which the Government fully accepts."?

Does my hon. Friend share my anger about the fact that only during this debate, in response to a question, have we learned that the Government have reneged on one of the commitments in that report? Does he agree that the best way for the Government to proceed now would be to restate what they intend to do as a result of the PIU report, and to announce a timetable?

Mr. Robathan: I agree entirely. I do not remember the Prime Minister saying that, but it does not surprise me at all, given that he says so many things on which he reneges the following month—but we will not go into such matters.

Postwatch does not know how far the restructuring programme has gone and it is extremely concerned that, far from a sensible restructuring, it, customers and everyone else will be presented with a fait accompli—earlier, the hon. Members for Manchester, Central (Mr. Lloyd) and for Ilford, North (Linda Perham) expressed their concern about that. Postwatch will be told that a post office is to close and that it can comment, but it suspects that the Post Office will not listen to its comments, which are made on behalf of the public.

Postcomm's annual report is more concerned about lack of investment to achieve

Xbigger, brighter, better offices on the scale envisaged by the PIU report".

Remaining sub-postmasters in the urban network believe that they will need to improve earnings by between 25 and 33 per cent. a year; otherwise, they will not be able to stay and make that matching investment in their businesses that the Minister talked about.

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