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6.27 pm

Vernon Coaker (Gedling): I want to speak only briefly so that other hon. Members can contribute. Clearly, the Post Office card account is crucial to the future of the

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Post Office, but people who want such an account have experienced problems. We all have constituents who have told us that they are not being encouraged to take up the option. Labour Front-Bench Members should listen to some of the points that have been made in the debate if we are to give people a genuine choice.

The last line in the Government amendment states that


That is true to an extent, but I want to emphasise the points that have been made to me. Dispelling some of the ignorance about the services that are available at a post office is also central to the future of a modern Post Office. The Government should consider the way in which they will deal with that ignorance and make more of the public aware of what they can do at the post office. Part of that must surely involve looking at the kind of campaign we can have to encourage people. There was once a campaign for village shops and facilities—and, indeed, facilities in certain urban areas—which urged people to "use it or lose it". We need to say to people that post offices cannot live on emotional good will alone, and that they have to generate new business that will support them.

We can subsidise post offices. Indeed, we are considering doing that in rural areas and in some of the deprived urban communities. As well as that, however, we need to consider how we support post offices in terms of generating business and allowing them to have the business that will support them, so that they can remain available to people. This is of fundamental importance when we are talking about financial exclusion and about making the facilities that post offices offer available to everyone. In communities in which the bank has gone and many of the village shops have gone, the post office is often the last thing that is left. In terms of access, we need to regard the post office as a community bank—almost a people's bank.

The Post Office clearly has to modernise, and part of that modernisation will involve Post Office card accounts and the installation of the new computer equipment. It must also involve the Government supporting sub-postmasters in generating new business to help them to keep their post offices alive. The Government must support them in the advertising that they are producing to make clear the kinds of services that are available.

Joyce Quin: The situation that my hon. Friend describes is certainly familiar to me in my inner urban constituency. Having heard what has been said about rural post offices, I think that rural and urban areas have a lot in common in this sense, because in some urban areas, the post office is sometimes the main commercial outlet for an estate or a community. I would like to support what my hon. Friend said about diversification. Would he agree with me that it is important to—

Mr. Deputy Speaker: Order. The right hon. Lady seems to be inserting a speech into her intervention and we are very short of time. She has not been here for the whole of the debate.

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Vernon Coaker: I agree with the points that my right hon. Friend has made so well. Diversification is crucial, and the Government need to do what they can to support the generation of that new business if we are to have an extensive post office network that offers the opportunities that we want to all our people.

6.32 pm

Andrew Selous (South-West Bedfordshire): I think that we would all agree with the valid point made by the Minister earlier that it is important to reduce the administration costs of social security. However, when he was pressed on the question of retaining pension books by the hon. Member for Vauxhall (Kate Hoey), he effectively said that there was no choice. He gave a clear answer to her question on that. For existing pensioners, that is a great shame. They should be allowed to keep that choice.

The hon. Member for Cambridge (Mrs. Campbell) said that pensioners and others should be encouraged to have bank accounts. That sentiment will have widespread support in the House, but not giving people any choice is a funny way of encouraging them; it is more like forcing them. We should also be aware of the social costs to existing pensioners who want to keep their pension book and to go into the post office once a week because of the support that that gives them.

The National Federation of Post Office and British Telecom Pensioners, which has 100,000 members and is headquartered in my constituency, has told me that it is ridiculous that there should be seven steps involved in setting up a Post Office card account. The fact that someone can get a passport application form from a post office counter is really a killer argument, because what could be more important or secure than a passport?

I hope that the Minister will respond to the point about home helps having to memorise the PIN numbers of perhaps 20 different people. I mention that point in the hope that he will respond to it specifically when he winds up. I also hope that we shall get an answer to the question about what happens when a carer, who can hold a person's second Post Office card account, goes on holiday. From the information that I have seen, there is no answer to that, which must be a great worry to many people.

Post offices are losing 41 per cent. of their income through automated credit transfer, although, as we have heard, in some cases there are good reasons for that. Of course diversification is important—I agree with the hon. Member for Stafford (Mr. Kidney) that we need to encourage future viable businesses—but if there is no post office in the first place, because the income is gone and it has closed, it will be too late. Studham, the village where I live in my constituency, has lost its post office, as has Totternhoe, and an urban post office in Downside has also gone in the last month or so—although I am pursuing that closure actively, and have not yet given up.

Mr. John Horam (Orpington): Will my hon. Friend give way?

Andrew Selous: I hope my hon. Friend will forgive me if I do not. I have only one minute left, and another Member wishes to speak before the winding-up speeches.

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I do not think that the vital importance of the Post Office card account has been stressed enough today. It is the only account that requires people to go into post offices. That is critical, because post offices cannot survive solely on the basis of transaction payments for the processing of benefits. They need people to go in and buy other goods.

6.36 pm

Mr. Michael Weir (Angus): Every speaker today has talked about choice, but listening to the Minister talk about choice reminded me of Henry Ford's dictum on the model T: "Any colour so long as it's black". According to the picture that he painted, post offices will be used for all sorts of banking facilities; but that is not what will happen. As was pointed out by the hon. Member for Twickenham (Dr. Cable), many bank accounts cannot be used in post offices—and, as I said earlier in an intervention, the situation is even worse in Scotland.

The Minister said that choice was already being exercised, and that six out of 10 new applications for child benefit involved direct payment. That is hardly surprising, as those applying for child benefit are much younger than the many pensioners who are deeply concerned about the move to bank accounts. That move, however, will not just affect our constituents; it will affect the Post Office badly. Thirty-five per cent. of the network's overall annual revenue already comes from contracts with the Benefits Agency and its Northern Ireland equivalent. In many areas, more than 40 per cent. of small post offices' income comes from benefit payments.

The argument that claimants will be able to collect benefits at banks will not wash, as over the past 10 years, banks have been steadily cutting branches in rural areas and small towns. But those are not the only areas affected. A fast-expanding town in my constituency, Monifieth, has just lost the last of its bank agencies. As in many rural areas, a local solicitor had become the agency for the Halifax, which has recently closed. There are now no banking facilities in an expanding town where there are many new people and much new building. People in that town will not have the option of using banks if the post office cannot deal with their requirements.

I think we would all be happy if ordinary bank accounts could be used at the post office, but that is not the case. Many people who receive benefits will face a long journey, whose cost will eat into their already meagre incomes.

There are also serious problems for those who have no bank accounts or Post Office card accounts. That was discussed only this week during Trade and Industry questions. The Minister for E-Commerce and Competitiveness, the hon. Member for East Ham (Mr. Timms), said that 3.5 million people in the UK currently had neither a bank account nor a Post Office card account. Not all of them will be benefit claimants, but it is a fair guess that most of them are. What will happen to those people? Will they all be able to obtain bank accounts? What if they want Post Office card accounts? Will they be able to get them, given the complications of the system?

The Minister spoke of the number of card accounts that had been opened. I asked a parliamentary question about that, and I think that on 9 May there were about

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a quarter of a million. Now the Minister quotes a figure of about 300,000. That is still a very small amount of card accounts. Unless there is a way to ensure that all those who want one can get one easily, there is a serious problem. A total of 3.5 million do not have a bank account or card account.There is a substantial demand for benefits to be paid in the traditional way. If it ain't broke, why fix it?

Like all other hon. Members, I have heard from a stream of people who are concerned about the matter. They have tried to get a Post Office card account and felt that they have been put off. At trade and industry questions, the Minister for E-Commerce and Competitiveness said:


I do not know what he meant by "clearly". The literature that I have seen is far from clear. He did not comment on whether the Department for Work and Pensions, the Inland Revenue and the Veterans Agency have made it clear in their literature that the card account is available. The plain fact is that they have not, and many people have found it difficult to get the card accounts in the first place.


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