Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 100 - 119)



  100. Apart from universal banking, which I accept is a separate but important issue, we are getting continuing complaints that the Post Office does not help with new equipment, new security, CCTV cameras—there is a massive outbreak of crime against rural sub post offices at the moment. Are you taking measures to sort this problem out? Is there going to be a future for rural sub post offices?
  (Mr Roberts) Yes, I think there is because one of the other things that we are in the process of discussing with the Government—and again this came out in the Performance and Innovation Unit Report—is the Government is intending, via help from Postcomm, to look at ways in which they can help us sustain rural post offices, in other words to put some money into rural post offices.

  101. That does not come in until 2003.
  (Mr Roberts) No, and that is the big problem because it is the uncertainty between now and 2003 where we are working as hard as we can to try to make sure people do not leave sub post offices. We have done a lot of work in rural areas to try to make connections with the local authorities and the various rural bodies to maintain them. I think we have now got sub post offices in virtually every conceivable place in terms of making it easier for people to maintain them. What is difficult, and I do not think it is just a case of advertising, we do help them on security, is getting people at a time of uncertainty to say "Oh, I am prepared to put my money into running a sub post office", ie the private side of that business. Now I am not as well qualified as the Federation of Sub Postmasters to make this case but it does seem to me that is where the major impact has happened. The stable income that people could have expected from the post office side of their business—

  102. Is it not your job to resolve that issue?
  (Mr Roberts) No, it is not. It is our job to help by making sure that we can give people the best opportunity of understanding the kind of income they are going to get from the post office business. It is not my job to resolve the issue of whether the local village shop in a rural area is going to be sustained or not, it is normally the two things. I can only do the part that I understand and have control over.

Mr Lansley

  103. Can I just follow this up. Very often when rural sub post offices are closed, and you are looking for somebody to take them over, you are also, at the same time, asking them to commit themselves to turnover targets and in effect to guarantee the levels of business in advance. Now how often are you remitting that kind of obligation?
  (Mr Roberts) I think we have taken that away. Certainly we used to have the idea that there was an upfront fee and that people then had to have those targets. Certainly since the PIU report we have taken that right away, so there should be no pressure on them to deliver a certain level of business. That has gone, Mr Lansley, gone completely.

Mr Hoyle

  104. It has been mentioned about security, and security is very important to rural post offices. They feel they are being failed all around. I do not know what help and support you are giving, as I know that the police have withdrawn direct press button alarms to themselves, they now go through some security company and by the time that has happened, one, they have been robbed and, two, weapons have been involved. I do not know what you are doing nationally to negotiate on behalf of these rural post offices which are suffering violent crimes which are taking place at the moment. We are seeing a reduction in service coming from the police and somehow it has been said to me that you actually turn a blind eye to supporting them.
  (Mr Roberts) No. I do not think that is true at all. We do quite an intensive—I will bring Mr Rich in in a second—risk based assessment around the 17,000 post offices. We have, also, a fairly substantial budget every year which is about giving them—I will not go into the detail but I can let you have it if you want it—the various security measures that we now put into post offices.
  (Mr Rich) If I may add to that. You are right that we have seen a general pattern of crime spreading from some of the urban areas back out into the rurals. In fact, we are adopting plans now to spread that security and introduce new security arrangements and invest in rural sub post offices over the next few months.

  105. Can I pursue this particular point. They did have the panic button which went direct to the police station. That has been taken away in some rural post offices even though they have already been robbed, that has been taken away. What are you doing nationally to ensure that link is put back direct to the police?
  (Mr Roberts) I do not think that was a link we put in.

  106. It was a link that rural post offices had.
  (Mr Roberts) It may have been that the rural post offices—

  107. It has been taken away because the police say "We do not think it is appropriate". What have you done to try and help the rural post offices who are insisting that they need it?
  (Mr Roberts) They may have put it in on the private side of their business, I do not think it is something we have had in on the post office side of the business. You get two different levels of security.


  108. On this issue perhaps you could write about it.
  (Mr Roberts) It may be better if we do that, Chairman.

  Chairman: If you could clarify the matter. We are maybe not quite understanding each other here.

Sir Robert Smith

  109. At the heart of this insecurity for all rural sub post offices, all post offices in a sense, what is the figure, again, that you are going to lose in income or they will lose in income with the change in the way benefits are going to be paid?
  (Mr Roberts) It is about 30 per cent.
  (Mr Rich) In some cases it is up to 37 per cent.

  110. A global figure.
  (Mr Rich) At the moment 35 per cent.

  111. I wondered if you had a ballpark figure in the hundreds of thousands?
  (Mr Rich) About £400 million.


  112. Can I just pick something up. It would not be in rural post offices the £400 million, it would be in all post offices.
  (Mr Rich) Yes, in all post offices.

  113. And urban ones where there are higher levels of benefit payment, it will be more significant than it will be in a rural situation?
  (Mr Roberts) Yes. Except that in the rurals, Chairman, most rural post offices, the major activity is the payment of pensions and benefits and the sale of stamps, so rurals do tend to get hit heavily.

Sir Robert Smith

  114. With all that going out of the system that is a big uncertainty. Where do you find progress is on the universal banking which is supposed to be part of the unravelling of the uncertainty? Where are the proposals at in terms of universal banking?
  (Mr Roberts) In terms of the universal bank at our end, we are in the process of developing the link between the automation at the front of the counter and the banking engine, which IBM will be preparing for us, which will then link through the link network to the back system and from there to the Department of Work and Pensions so that money can then be automatically brought to a post office or somebody's account. We are on track to deliver that before, obviously, 1st April 2003. Where we are less sure at the moment is what happens after that in terms of the migration from benefit payment to ACT because that is under the control of DWP. I think what is an important development for the next few months is that the Office of Government Commerce is going to look at this project of the universal bank from end to end and do what they call a gateway review and that will look right across, whether we are up to speed and whether we are ready to take all this on. I think it will start from the Department of Work and Pensions' end and look at all their systems as well. That is a check which I think has come out of various select committee reports here and I think will be a very good signal of exactly how ready we are. We believe we are ready and up to speed with what we have got to prepare and this will be a test for us and it will test the whole thing from end to end.

  115. Just over a year away and it is still—
  (Mr Roberts) That is okay. The planning has always been that it will be during 2002 that all of this will come on stream to be ready for April 2003.

  116. The universal bank is not the whole picture, is it, in terms of the benefits? The basic bank account is not going to please everyone.
  (Mr Roberts) No, you are quite right. There are three types of banking. We have some commercial arrangements with high street banks where they can use our post offices for simple transactions, cashing cheques, that kind of thing. There will then be, as I understand it, once the ACT is introduced, the option for the individual customer either to have their benefit or Government payment made through one of those types of banks, ordinary joint stock bank, or through one of the PAT 14, the limited bank accounts that joint stock banks also run, or through what we are now calling the post office card account which is something which we will run through post office branches. They will have a choice of receiving their money through either of those three routes. Where we have commercial arrangements with the banks we will be able to handle, at post office counters, any one of those routes. The system that I tried to describe will cope with those transactions on behalf of banks or direct to the card account.

  117. Is your understanding that there will be some kind of cap on the number of card accounts?
  (Mr Roberts) I think that is a great debate at the moment about what level of accounts will come through the post office card account. We have said that in one sense we do not mind, the issue for us is retaining as many of the payments as we can across post office counters. Now whether that is through the post office card account or a PAT 14 account or another bank account, I do not think we really mind. The issue is that we retain it in the post office. What I would hope is that we will let this find the right level and the customer will be given some kind of choice of exactly how they want to receive their payments. It is then up to us to make sure that as many as possible come through the post office.

  118. You have had no indications then from any Government Department that they want to put a cap on the number?
  (Mr Roberts) I have heard all sorts of things about caps and not caps and whatever but we have nothing at the moment which says there is going to be a specific cap. I have heard all sorts of figures quoted over the years but nothing definite.

  119. Have you been given a timetable when you will know for certain what the relationship will be between these accounts?
  (Mr Rich) The migration plan from ACT to banking is held by the Government. We support them and help them on that. They have not given us a final date for that to be done yet.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 12 February 2002