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Mr. Hoyle: Does my hon. Friend agree that it would be better if the Government made it easier for people to get the cards and keep their pension books?

Mr. Luke: The system has to be simplified and publicised more widely. There has to be a commitment that it will still be all right after 2005 for pensioners and people unable to get to a bank to obtain a Post Office benefits book. That commitment should be made public as soon as possible.

Lastly, 90 per cent. of people in Scotland use the three major Scottish banks. They have moved away from post offices because the major banks will not locate facilities there. That is one major element in ensuring that post offices in Scotland continue to be viable. I have made that point to Allan Leighton, and the Government should be pressing it home with the banks.

6.25 pm

Sir Archy Kirkwood (Roxburgh and Berwickshire) (LD): If the speech by the hon. Member for Dundee, East (Mr. Luke) amounted to support for the Government, I think that they face some difficulty. At best, it could be described as tentative, but the hon. Gentleman did as well as he could.

This is a very important debate. I congratulate the hon. Member for Eddisbury (Mr. O'Brien) on bringing this subject forward. Today's debate has come in our second week back after Christmas, but the theme will recur throughout the year. I am an officer of the all-party group on sub-post offices and we will be convening meetings in the very near future to try to keep track of events. The level of concern demonstrated by hon. Members of all parties is palpable and obvious. We need to watch this matter carefully.

In passing, I want to commend the work of the National Federation of Sub-Postmasters, which keeps all of us objectively informed about what is happening in our constituencies, and about the wider issues. The federation's general secretary, Colin Baker, is a particular expert on these matters.

I want to say a word about context of the issue. The problem has been evident for nearly a decade. I first became aware of it when I watched the right hon. Member for Hitchin and Harpenden (Mr. Lilley) wave a magnetic swipe card at the 1995 Conservative party conference. He claimed that it would be the answer to

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everything, but the project was cancelled after £800 million of taxpayers' money had been spent. That shows the extent to which policy on the matter has been mishandled, and the huge sums of money that have been spent and lost. That money will be needed in the long term to put matters right.

The year 2002 was an important one. I was present at Westminster's central Methodist hall when a massive rally involving nearly 1,600 people—ordinary people—was held. Those people wanted to demonstrate their support for continuing back-up and provision for their post offices. That level of public interest and willingness to demonstrate has been maintained, as the Government will find out if they are not careful to ensure that the proposed system is better organised.

I was delighted when, in 2000, the Cabinet Office's performance and innovation unit produced a report that I consider to be both enlightened and sensible. It provided a basis for taking matters forward, but its 24 recommendations have been more or less discarded.

When the PIU report was published, we were talking about making available a Government general practitioner service on an electronic basis. My hon. Friend the Member for Gordon (Malcolm Bruce) mentioned the "Your Guide" pilot schemes, which were discarded before they had been properly evaluated. Those pilots were an integral part of the PIU report. We were talking about all sorts of ways of generating a modern platform, and sub-postmasters and sub-postmistresses across the UK were pleased with the template for the future that the report provided. They are now totally disillusioned about what has happened since the report was published. I shall return to that matter a little later in my remarks.

The other point in terms of context is that the Government could make a potential saving, according to their estimates—I agree with the comment of my hon. Friend the Member for Gordon that those estimates are inexact—of £400 million each year, every year, starting in 2003 and continuing until 2005 when the current policy is implemented properly and fully. That huge amount of money is a resource that intelligent policymakers at a strategic level would use sensibly to put in place a transition process and underpin the network, but we have seen no evidence of such investment.

Let us bear in mind that post offices had 16 million to 17 million customers weekly in 2002 when we started looking at the issue of providing magnetic swipe cards, although the footfall of people going to post offices has started to collapse, for obvious reasons. Important issues and big amounts of money are at stake. We are dealing with domestic households that are financially disadvantaged, that work with cash week to week, that have had no experience of credit facilities, banking services and the rest, and that feel uncomfortable about the future. Clearly, even if 2 million people use the Post Office card account, there is a huge gap between 2 million and 16 million. That context needs to be recognised.

As I said earlier, the federation is increasingly disillusioned. It was a willing partner, and was enthusiastic about the PIU report, but it has been let down. In spite of all the evidence that has come from

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debates such as this, from parliamentary questions, from pressure groups, consumer groups and others, it feels that its arguments have been ignored, and, for the first time, it now has real concerns for the future of the post office network. It has been a willing partner and eager to make this project work, but now there is evidence of its concern about the good faith that the Government are bringing to bear on the matter.

Of course, the federation recognised the need for re-organisation and it, more than anyone, had an interest in making sure that that worked. It recognised that there was a need for a brighter and better network of post offices, more modern and high-tech, which offered beneficial services for customers—indeed, an ever greater range of services. It accepted that some post offices would have to close, which was part of the package in the PIU report.

The practice since 2000, however, has been different. The federation never anticipated 3,000 closures—I certainly did not anticipate that—and the programme, as the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) rightly said, no longer represents a strategy but a campaign of closures. Little evidence exists of bigger, brighter and more modern post offices, certainly in urban areas. The £450 million that has reputedly been put into trying to support rural post offices has never reached the local sub-post office network. Were it do so, it would merely keep an ailing network on its knees, and would not change anything in the long term. Since 2000 and the PIU report, the Government have given with one hand and taken away with the other. The remuneration for the new services being brought on-stream—I subscribe to the view that the Government need to put pressure on Scottish banks in the Scottish context—does not make up for the money previously received from direct payment.

The federation is astounded that the Department for Work and Pensions claims that there is an unbiased choice in the selection of the best future option for customers. As Chairman of the Work and Pensions Committee, I know that ample evidence exists of an active and aggressive campaign to prevent people from getting Post Office card accounts. That is a disgrace, and it should change. It should not just be a question of improving the forms—there should be a positive promotion campaign to increase take-up and access to the Post Office card account.

The federation is not afraid of the future. With the activities of the Department for Work and Pensions to which I have just referred, the problems surrounding the network reinvention, and the reluctance of the banks to get involved, however, it is nervous and concerned.

In his foreword to the PIU report in June 2000, the Prime Minister said he was


Instead, we have been left with confusion, uncertainty and a feeling of being cut adrift.

Like every other area, the biggest town in my constituency is experiencing a calamity. The largest post office there has just closed. It was part of Safeways in Hawick, but apparently it was notified about two years ago that the supermarket had decided it could make

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more money by selling baked beans than by providing a service for its customers. During that time there has been a lot of to-ing and fro-ing in an attempt to renegotiate the lease. Now the Post Office has decided that this is part of the reinvention programme. Consultation is in progress on the closure of the biggest, most modern and most service-rich post office in the biggest town of my constituency. Come April that will happen, and I shall be left with two branches.

Both those branches are run well. Indeed, the one in Sandbed wins prizes, and is managed by an enthusiastic, energetic man who knows a lot about the business. But there was no plan, no strategy, and no possibility of the six-figure investment that is needed to get retail premises kitted out properly and to inspire confidence that a future income stream will repay capital. Who in his right mind would go to a bank manager and say "I want to buy a couple of shops, knock them together and provide a service that is really needed by a town containing 16,000 people"? No one is going to do that.

I promise the Minister that this is the first of many debates. He will be brought back here time and again, for a Liberal Democrat if not a Conservative Supply day. He will return here, and to Westminster Hall, day after day and week after week until the penny drops and he realises that he must promote the Post Office card account and establish sensible capital investment programmes to ensure that urban networks are properly financed once the reinvention programme takes hold. He must also realise that the rural programme needs proper support; otherwise the service will dwindle, postmasters will go bankrupt and go out of business, and the people who suffer most will be our constituents.

The Government have a duty to act, and they have no more than the next few months in which to get the programme right for the long term.


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