Examination of Witnesses (Questions 740-746)
SIR MIKE
HODGKINSON, MR
DAVE MILLER
AND MR
GRAHAM HALLIDAY
CBE
10 FEBRUARY 2005
Q740 Chairman: The research indicates
that, in terms of cash withdrawals, it is people with lower incomes
largely who make the cash withdrawals. These cash withdrawals
at Post Offices in my area indicate that there is a clear pattern
that shows the more deprived an area is, the greater the number
of cash withdrawals. There is a big financial exclusion agenda
for you to tackle there, not just in my area but overall. Would
you agree with that?
Mr Halliday: We acknowledge that
and we think the best way we can tackle it is to ensure that all
customers can actually access the cash that they want over our
counters, and that is our aim.
Angela Eagle: There is one thing that
ties in with what the Chairman has said about the Post Offices
in his own area where very large numbers of people using ATMs
in Post Offices are charged when they could actually get their
cash free by going to the counter. This pattern is reproduced
in other places, including Speke. Spending £6 million on
telling them that they can get their cash free is perhaps not
the biggest advertising campaign we have ever seen. There must
be some lack of information here. You can assume that some people
are in a rush and so they pay the fee, but that does not account
for the very high percentage of people who are actually subjecting
themselves to a fee in Post Offices to get cash when they can
get it free. You cannot be communicating with them properly.
Q741 Chairman: When that happens to four
out of ten, there is a problem.
Mr Halliday: First of all, can
we check the four out of 10 figures just to understand that?
Q742 Angela Eagle: I have some other
figures here from Speke that say the same thing is happening there.
Sir Mike Hodgkinson: It is in
our core interest to try to get as many people to use free cash
over the counter because we are trying to encourage that use through
the network.
Q743 Chairman: As my colleague says,
you need to man the tills and not have queues of 15 or 20 minutes.
That is the issue. There is just one last point about the figure
of £10 million. We are really interested to know where that
is going because you are not making money and the sub-postmasters
are not making money. Goodness knows who is making the money.
I think an answer is required on that mystery £10 million.
As a large network, you have a unique opportunity to provide free
cash machines and improve financial inclusion. In fact, that is
the reason why you were invited here this morning. You invited
yourselves because you sent us your submissions, which we were
happy to receive. We support the efforts of the Post Office to
improve over-the-counter services. We will write to the banks
and others to see what the barriers are to further progress to
try and assist in that.
Sir Mike Hodgkinson: That would
be extremely helpful.
Q744 Chairman: It appeared to us this
morning, Sir Mike, that you are not meeting your responsibilities
at the moment and that increasing charging is contrary to the
objectives of financial inclusion. There does not seem to be any
measurement of financial exclusion when deciding whether to install
free or charging machines. I think we need some more information
from you on that. Restricting competition to three suppliers is
resulting in more charging machines, not less. The sub-postmasters
indicate to us that they need more freedom about whether to install
a free or charging machine in their branch. It was very clear
from the letter to the sub-postmaster in Garmouth that there was
no choice there; a charging cash machine was installed, and there
was no choice. That seems contrary to the principles of the market
that you are espousing. Given that all the banks are installing
free machines in their branches, and they are doing that because
it is quicker and more efficient for the consumer, the Post Offices
seems to be the only financial institution going in the other
direction, and that causes us concern. We will be focusing on
these issues in our report and, hopefully, the submissions you
make to us will help answer some of these questions.
Sir Mike Hodgkinson: May I say
one thing in conclusion? We would be delighted to take up the
potential offer this morning from Nationwide to put in a significant
number of more free machines in our network. We are already in
discussions.
Q745 Chairman: Do not let us kid the
public, Sir Mike. You will have agreements with Alliance &
Leicester and whoever else and they will be coming to you afterwards
and saying, "Wait a minute".
Sir Mike Hodgkinson: But these
things always take time.
Q746 Chairman: It is more complicated
than you are indicating at the moment, although your intention
is good. We wish you well with that intention.
Sir Mike Hodgkinson: That is what
we are pursuing.
Chairman: Thank you very much.
| 
