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Mr. Nigel Waterson (Eastbourne) (Con): Is my hon. Friend aware that the Post Office claims that the area plan system is an improvement on piecemeal closures, but that the truth, certainly in my area, is that other sub-postmasters would like to have been offered the same packages and that there is no guarantee whatever that other post offices will not close in due course, even after the area plans have been implemented?
Mr. O'Brien: My hon. Friend is entirely right, not least because of the sharp reduction in income that many post offices will suffer as the new card accounts and proposed banking arrangements take hold. That is a very serious concern.
The Government must take this opportunity to commit themselves today to using their position to insist on a strategic approach focused on future customer service and convenience, particularly for the most vulnerable. Those people depend on the network, geographically as well as socially, as a fundamental part of the community, and we all wish to see them have the access that they deserve.
Furthermore, the whole process of closures has created enormous uncertainty, and it falls to the Government to account for that, not because the Opposition propose a motion to hold them to account, but because that uncertainty is truly undermining confidence in Britain's postal services.
Postcomm reports that some sub-postmasters have told it that they do not see why they should invest in their post offices when it is not clear what their future levels of business will be. That brings me on to another area of great anxiety: the introduction of the new system for the direct payment of benefits, which has had a serious impact on the profitability and sustainability of local post offices.
In August 2000, the then Secretary of State for Social Security set out the Government's plan to move to automated credit transfer for benefit payments from April 2003. That change affects 14 million people who previously collected such benefits in cash from their post office. As of September 2003, nearly a third of customers who had responded to being contacted had chosen the Post Office card account, despite the fact that the application process and the Government's information campaign were designed to ensure that as few people as possible chose that account. Indeed, the National Federation of Sub-Postmasters says:
- "It is very clear that the Government prefers people to access their benefit payments through a bank account than via the Post Office Card Account. Government publicity makes this evident, and ministers have confirmed this on many occasions."
- "be even-handed, open and honest, and . . . promote all kinds of account".
Mr. O'Brien: I am grateful to my hon. Friend for highlighting that fact. He is my neighbouring Member of Parliament and I know from first-hand experience how assiduous he is on behalf of all his constituents. He is concerned not least about the combined pressure on his constituents' lives caused by the Government's total disregard for the interests of those who need to access post office services coupled with their relentless attack on motorists from rural communities who need to connect with services. The same situation is true in my constituency because our areas share many characteristics, such as sparse rural villages. I am grateful to him for his continuing campaign.
Most significantly, there is widespread concern that vulnerable pensioners and disabled people will not be able to use the new electronic card and personal identification number system. The PIN pad has been poorly designed, which means that disabled and blind people will have problems accessing their money. The Government have failed to explain how people who cannot use the new system will receive their money.
In response to those concerns, the Conservative party called a special debate in the Chamber on 11 June 2003 to highlight how the Government's drive was failing to
meet the needs of customers, especially the most vulnerable. The motion that was debated had previously been supported by nearly 400 Members from all parties. However, after the Government ordered all Labour Members to vote the motion down, it was defeated by 314 votes to 187. One hundred and twenty-eight of the 175 Labour Members who had supported the motion prior to the debate actually voted against it. Such breathtaking double standards do nothing to inspire the confidence of those threatened by the changes throughout the country, especially those Labour Members' constituents.Furthermore, if the Government agree, as they claim, that there is a need for an exceptions service for the often vulnerable people who cannot cope with their new direct payment options, will the Minister today at last commit to that and spell out details of how such a service will operate after 2005? Early-day motion 375, which was tabled by the hon. Member for Gordon and which my party and I support, calls for such action.
In addition to customers' concerns about the introduction of the system, we are equally concerned about the impact that the switch to ACT will have on the post office network itself.
Jim Knight: I understand that the hon. Gentleman has three children and that he will thus be in receipt of child benefit. Has he, like me, opted to open a card account at his local post office to ensure that he supports it?
Mr. O'Brien: If I am being completely honest, I have no idea, because that matter is dealt with entirely by my wife. It is far better for the wife to be able to access the money because she takes prime responsibility for ensuring that the children are fed and clothed. My wife is proud of the fact that she is a full-time working mother.
Before the automated credit transfer system was introduced, benefit payments accounted for about 40 per cent. of a post office's business, so the switch to ACT will lead to a considerable loss of revenue. Indeed, the Royal Mail has estimated that the move to ACT could reduce revenues across the post office network by as much as £400 million per year. However, that is only part of the danger. Sub-postmasters and sub-postmistresses depend, as we have said, on footfall generated by people collecting benefits to create a market for selling other goods such as groceries or stationery. Much of that business will be lost. Consequently, I share Postcomm's concern that
- "the reduction in income to Post Office Ltd from the Department for Work and Pensions as direct payment is introduced, and general trends towards decrease in use of post offices and neighbourhood shops, are together bound to have an effect on customer numbers and on the economic viability of post offices".
Mr. O'Brien: I shall, but I am conscious that as a result of accepting interventions I have spoken for longer than planned. I hope to conclude shortly.
Mr. Evans: My hon. Friend mentioned other products sold by post offices. Does he accept that they need
footfall to make a profit on items on which they make a gain of only 4 or 5 per cent.? Unless they achieve a certain turnover they will not get the cash income that they need.
Mr. O'Brien: I am grateful to my hon. Friend, not least because he is one of those unusual Members of Parliament with genuine business experience. It is rarely understood by Ministers making decisions on behalf of business people, whatever the size of their business, that the trade-off between volume and price is critical in the case of commodity products. A substantial volume must be shifted if people are to stock them at all and give customers a choice.
The National Federation of Sub-Postmasters commissioned the independent research company MORI to undertake a detailed comparison of sub-postmaster income before and after the introduction of direct payment. Will the Minister give an undertaking that the Government will act in the light of MORI's findings?
Rural post offices are supposedly protected, yet over the past two years nearly 80 per cent. of all closures have been in rural areas. All of us who represent rural areas know the immensely valuable role that those post offices play in the lives of their communities. Closures are therefore of primary concern to rural areas. In response to a consultation document by Postcomm on the preservation of the rural post office network, the National Federation of Sub-Postmasters concluded that some funding should be channelled to help sub-postmasters and sub-postmistress buy their post offices and receive sufficient income, good working conditions and adequate support. It also suggested that if those conditions are not met, sub-postmasters and mistresses would continue to leave, suitable replacements would become increasingly hard to find and many more rural post offices would close.
The Government announced a £450 million aid package on 2 December 2002, but the NFSP is concerned that none of that money will go directly to sub-postmasters and mistresses, even though many rural sub-post offices are barely viable. If a rural network is to develop modern sustainable services, post offices need to do more than simply struggle to survive, but we do not know whether funds will be available after 2006 to protect them. I urge the Minister to clarify the Government's intentions. Will there be funding for the rural postal network after 2006, and can he tell hon. Members on both sides of this House how the Government plan to sustain the rural post office network in the long term?
The post office network must adapt to accommodate changes in 21st-century lifestyles and consumer practices. It remains fundamentally the case, however, that the local post office plays a vital role in contributing to the social cohesion of localities small and large, rural and urban. The rushed and scattergun nature of the closures so far under the urban reinvention programme and the lack of guarantees to protect rural post offices in future are detrimental to the community in general, and are particularly damaging for its more vulnerable members—the elderly, the disabled and people on benefit. In that context, it is not the restructuring itself but the manner in which it is taking place that has given cause for complaint and created desperate anxiety about the Government's hurried and arbitrary approach.
In conclusion, while celebrating and paying tribute to the tireless service and dedication of sub-postmasters, sub-postmistresses and everyone who works on the front line in communities up and down the country in what survives of the post office network, I urge the Government to think again and for once avoid the knee-jerk reaction of amending our motion just because it was tabled by Her Majesty's Opposition.
Now is the time for the Secretary of State, and her Minister who will be replying today, to listen to the people in our communities who want the Government to heed what we and hon. Members in all parts of the House are saying on behalf of all our constituents, and for once to accept criticism and act. That is what will have to happen if the Minister and his Secretary of State are to have any hope of not going down in political history as the Ministers who presided over a record number of closures of the nation's community post offices on their watch, decimating the service and causing endless inconvenience and distress to people throughout the country, urban, suburban and rural alike, particularly the most vulnerable in those communities. Clearly, that reveals the true meaning of the words in Labour's 2001 manifesto, which says that Labour is
- "committed to . . . a dynamic Post Office"—
I urge my colleagues, the Liberal Democrats and all other parties to join me in the Lobby. In particular, I invite Labour Members to put their vote this evening where their assorted early-day motions, petitions, photo-opportunities and crocodile tear-drenched press releases in their constituencies are, and support our fair and reasonable motion, rejecting the Government's self-serving congratulatory amendment. I commend the motion to the House, especially to Labour Members, who have more than two hours and 20 minutes to reflect carefully how to vote tonight.
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