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Listening to the Minister’s opening contribution, I detected a surprisingly Marxist line of thinking in the Government’s approach to post offices. We are told that an inevitable tide of history is sweeping away the need for a post office network. Factors such as e-mail and lifestyle change mean that the post office network will naturally wither away. As my hon. Friend the Member for Somerton and Frome pointed out, the Minister also
quoted with approbation a postmistress who apparently said that people may think that they need post offices but they do not; he also said that we have too many branches with too few customers. In other words, our villages are too small. I have to tell the Minister that the disappearance of the post office network and the closure of thousands of post offices is not inevitable. It is a choice being made by Ministers, and they cannot evade responsibility.
Many hon. Members have discussed the Government’s attitude to the post office network, as exemplified by their actions. The Government say that they support post offices. The Minister confirmed that today. Indeed, it is fair to say that the social network payment is on the credit side of that equation. However, while that subsidy continues for the moment, the progressive withdrawal of Government services is fundamentally undermining the entire post office network. Postcomm reported that Post Office Ltd has lost £168 million of revenue from Government services in the past 12 months. That is more than the social network payment for a year. In other words, the Government are giving with one hand but taking away even more with the other.
The Post Office was told that it could not even apply for the contract for the new passport offices, to allow face-to-face interviews. We know that the Post Office’s revenue from DVLA work is falling, and hon. Members have mentioned the efforts to ensure that people use the internet, not the post office, by failing to mention that option in publicity material.
The contract for the issuing of road fund licences is up for renewal next year. I hope that the Minister can assure the House that he will make every effort, as part of the new joined-up thinking that we are promised, to ensure that the Department for Transport gives that contract to the Post Office again. Many hon. Members have mentioned the Post Office card account, which is worth £1 billion to post offices over the term of the contract. It is used by some 4.5 million people, who now face uncertainty. Some 40 per cent. of benefit recipients who were invited to convert to direct payment when pension books were withdrawn chose to convert to a Post Office card account.
Mr. Cox: Does the hon. Gentleman agree that the success of the Post Office card account has been despite the Government rather than because of them? He may have received in his constituency—as I have in mine—constant anecdotal evidence of the Government undermining, or trying to undermine, take-up of the card account; in fact, it is the efforts of postmasters and postmistresses that have made POCA such a success.
Danny Alexander: I am grateful for that intervention.
Greg Mulholland: Does my hon. Friend agree that the Government have pulled the rug from under post offices? Susanne Duncan, the postmistress at Pool in Wharfedale post office said:
“We have all worked so hard to retain as many customers as possible...This news is another nail in the coffin...a scandal, an injustice and betrayal.”
Does my hon. Friend agree with her words?
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) should try to leave some space between interventions—this is beginning to look more like Question Time.
Danny Alexander: That is something I have not yet had the opportunity to take part in, but I hope that I will one day.
I agree with both interventions. One of the reasons why POCA is so popular is that it is a post office-based product; it is simple and easy to use. We now know from an answer given earlier at Work and Pensions questions that people will face multiple POCA options. In the light of the interventions made during the debate, will the Minister guarantee that pressure will not be applied to current POCA users about the option they should choose when the change is made? There must be a free choice and people should decide which option is best for them. If there is a repeat of what happened when the pension book was taken away, when enormous pressure was exerted through phone calls and mailings to persuade pensioners—against their better judgment in many cases—to move away from use of the post office, it will be a travesty of the sentiments the Government have expressed today.
We have heard about the television licence contract being taken away from post offices, but the Minister’s response is, “It wasnae me.” Apparently it is not his fault but that of the BBC. However, in a letter to me, Ms Pipa Doubtfire, the head of revenue management at the BBC, gave the lie to the idea that Government policy had no influence whatever on the decision. She said that
“the Post Office, which now has fewer than 15,000 branches, could not give us any assurance that its network would not continue to decline”.
In other words, if the Government had made a clear commitment to the long-term viability of the network the BBC’s decision might have been different.
Michael Connarty: On the hon. Gentleman’s point about the reply from the Post Office, it is clear to members of the Communication Workers Union that those who run the Post Office, Mr. Leighton and Mr. Crozier, have no interest in the sub-postmistresses and sub-postmasters network. The reply to which the hon. Gentleman referred was made on behalf of people who have no interest in that part of the network. They indicated to the BBC that they could not guarantee that the network would not shrink, because they do not actually care about it. Like the hon. Gentleman, I want the Government to care about it.
Danny Alexander: I, too, want the Government to care about the post office network, but my quotation was not from the Post Office but from a representative of the BBC, which should also care about the future of the post office network.
If the Government had made a long-term commitment, the result might have been different. In the meantime, people in the highlands and islands and other rural areas sometimes face round trips of 50 or even 100 miles to buy a TV licence, whereas before they could have gone to their local village post office. One of my constituents received a letter telling her the location
of the nearest PayPoint. She lives in Gorthleck, on one side of Loch Ness, and was told that the nearest place where she could collect her TV licence was “seven miles away” in Drumnadrochit. The letter failed to mention that the body of Loch Ness was between those two locations, and the round trip would actually be about 80 miles.
There is a huge lack of joined-up government. We have heard that a Cabinet Committee under the Deputy Prime Minister has been appointed to look into the problem, and I wish it well. However, there is no real appreciation of the value of post offices, especially those that serve rural and deprived urban areas. In many such places, the post office is the only access point for public services, where people can get access to cash and other basic financial services and, indeed, experience basic community interaction. The people who need those services locally—the elderly, the disabled and those without access to transport—will suffer most. It is no surprise that Age Concern found that 99 per cent. of older people in rural areas consider their local post office to be a lifeline service.
The Government make the point that it is not worth continuing to support post offices serving only a few people—but in many cases those are the people who need the service most. Like many Members, I too conducted a tour of villages in my constituency during the summer, and an old lady in the village of Tomatin, whose post office had closed three months before, said that she was now expected to travel 15 miles to Inverness to collect her pension. That may work when public transport is running, or in the summer months when there is no snow and ice on the roads, but in the winter it is almost impossible for her to collect her pension using her POCA.
Before Ministers kill off the so-called loss-making parts of the post office network, they should reflect on research that shows that every pound spent on rural post offices delivers £4 in measurable social and economic benefit to the communities that they serve. About £3.7 billion-worth of expenditure in rural communities is directly facilitated by having a local post office as its anchor. Closing post offices means closing local shops, increasing transport costs for vulnerable groups and, in some cases, threatening the long-term sustainability of the community as a whole.
The Government’s policy seems to be to allow the life of the post office network to drain away rather than to kill it with a direct blow. Perhaps it is a Blairite conspiracy to make the first decision on Prime Minister Brown’s desk the elimination of much of the post office network— [ Interruption. ] Or Prime Minister Hutton.
Today, the Financial Times said that the Government’s plans, when they are finally announced, will involve the closure of thousands of post offices. When the Minister responds, will he confirm that? In his earlier remarks, he said that the figure would not be 6,500 post offices. As he knows what the figure will not be, will he tell us whether the actual number will be, more or less? What will be the import of his policy—when it is finally announced?
Either way, the British public deserve better. They deserve a full and open debate, where the Government put their plans openly on the table and people have a chance to comment on them. More than that, the British people, 4 million of whom have signed petitions,
want a positive vision for the future of the post office network. As my hon. Friend the Member for Kingston and Surbiton said when he opened the debate, the Liberal Democrats have set out a clear, coherent and sensible plan for getting investment into post offices and the Royal Mail. We are the only party to have done so today; for example, we have not heard from the Conservatives what their policy would be.
We need the Government to see the broader social and economic value in a network of post offices across the country; the post office is often the only official presence in rural and deprived urban settings. We need to be willing to direct more Government services through those outlets, not fewer. Post Offices can help to decentralise services and allow direct engagement. They can help promote financial inclusion and they can be the hub of their communities. We need to end the spiral of decline in the post office network in which this and previous Governments have connived. We must provide investment to give hope to hard-pressed sub-postmasters and postmistresses and to the communities they serve. By supporting the motion the House will make it clear that thousands of post office closures cannot, will not and must not be tolerated.
7.18 pm
Jim Fitzpatrick: With the leave of the House, I will try to respond to some of the points made during the debate and make some concluding remarks.
The hon. Member for Rutland and Melton (Mr. Duncan), among others, asked about people who cannot use a bank account, or even open one. We have said that there will be a new Government-funded product for people who cannot pay into a bank account. There will be a successor to POCA and the Department for Work and Pensions is negotiating about it. I hope that also covers the point raised by my hon. Friend the Member for Vauxhall (Kate Hoey).
The hon. Member for Rutland and Melton asked about the costs of POCA. He asked why every payment made into a bank account costs the taxpayer 1p but every payment into a POCA costs £1. The difference is because it costs only 1p to move money electronically from DWP systems to customers’ bank accounts, while the POCA cost is £1 because it includes payments to sub-postmasters, Post Office central costs, marketing, call handling and call centres.
The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) pointed out that customers were worried that they might become overdrawn. The 17 basic bank accounts that can be used in post offices in the same way as POCA do not have overdraft facilities. If that does not answer his point exactly, I shall be happy to write to him if he wants to drop me a note.
The hon. Gentleman also asked about the universal service provision being watered down. I can assure the House that the provision of the universal postal service order remains at the heart of the Government’s policy. The Government enshrined it in legislation for the first time that Postcomm’s primary duty is to ensure the provision of the universal postal service. It has defined the USO, and where it proposes changes it is obliged to
consult to ensure that the views of all interested parties are taken fully into account. As the hon. Gentleman might know, at present it is consulting on the concerns expressed on collection times, particularly in rural areas.
My hon. Friend the Member for Stroud (Mr. Drew) claimed that sub-postmasters are prevented from having a PayPoint terminal in the retail side of their business. There is no restriction on sub-postmasters having a PayPoint terminal. I will drop him a line as he does not appear to be in his place. He also asked about whether there is a restriction on sub-postmasters providing a PayPoint terminal at sub-post offices. There is no restriction on sub-postmasters having a terminal, provided that the terminal is not used for transactions categorised as key products and services. BBC licensing work has not, and never has been, covered by that restriction.
My hon. Friend also asked about credit unions. Benefits and pensions can be paid into credit union accounts. I think that he is aware that the Government are investing £36 million through the growth fund to help credit unions grow, and I am sure that he supports that.
The hon. Member for Manchester, Withington (Mr. Leech) raised the question of a directly managed, or Crown, network. Let me clarify that there are fewer than 500 directly managed, or Crown, branches in a network of more than 14,000. The rest—some 97 per cent.—are sub-post offices that are already operated as franchises. Directly managed post offices represent only 3 per cent. of the network, yet they made a loss of some £50 million last year alone, and losses are predicted to rise to £70 million this year. That is money that could be better used for the benefit of customers, and it is absolutely right that Post Office Ltd take action to find a more cost-effective way of providing the main post office service.
The hon. Member for Solihull (Lorely Burt) claimed that Post Office Ltd was prevented from bidding for the 70 passport authentication-by-interview offices. The Post Office was not prevented from bidding. Having reviewed what it could offer, the Post Office made the commercial decision to withdraw from the tender process. However, the planned interview offices will not take any existing business away from post offices or offer any alternatives to the passport check-and-send service available from selected post offices.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) said that I rejected the figure of 6,500 post offices in my earlier comments. What I said—I think the record will show this—is that I was not going to be tempted to make a comment on any number, and 6,500 was one of those that I was not going to comment on.
The post office network as it presently stands is unsustainable, and it must change to meet today’s needs. People are choosing to access services in new ways, and to ignore that would be foolish. The Government recognise the important role that post offices play in rural and deprived urban communities, and, in drawing up our plans, we will take full account of their needs.
In response to Members who accused the Government of abandoning or neglecting the Post Office, the figures are clear and contradict that: £2 billion has been invested since 1999, including £550 million invested in the Horizon
project, bringing modern computers into every office, and also including the £150 million spent per annum in 2003 to 2008 to protect the rural network. However, notwithstanding that investment, Post Office Ltd lost £2 million every week in 2005-06, and this year the loss is expected to rise to £4 million per week.
Sub-postmasters know the situation better than anyone, but even they recognise that things have to change. We are working closely with them to deliver the certainty that they are asking for: a long-term strategy that equips the Post Office for the future. The post offices run a number of experimental pilots. We discussed them earlier and I will not repeat what was said. But the results are positive and they are being examined.
Changing technology means that people are not using post offices as they once did: 8.5 million pensioners—out of 10.5 million—now get their state pensions paid into a bank account, and 98 per cent. of people making new state pension claims have chosen to have that paid directly into their bank, building society or post office account. An increasing number of people choose to renew their tax disc online——more than 3 million people have done that so far this year, compared with 860,000 in 2005. Nevertheless, the Post Office still provides one of a number of ways in which the Government can deliver services, and it still has an important role to play.
Members have raised questions about the Post Office card account. The Department for Work and Pensions is in discussions with the Post Office about what should happen after 2010, which is the year earmarked for the phasing out of POCA. The aim is to ensure that people have a range of choices about how they can access money at the post office. Labour recognises the important social role that the Post Office plays, and the Government will take that into account.
The Opposition parties have no credible alternatives. The Conservative party briefing for this debate is markedly light, as the hon. Member for Inverness, Nairn, Badenoch and Strathspey mentioned. The Tories’ statement of aims and values, “Built to last”, has nothing to say about Royal Mail or the post office network. The only idea that their leader has apparently had was confided to the East Anglian Daily Times during the Tory party conference. He is quoted as saying:
“Rural Post Offices could be saved under a future Conservative government by giving them lottery terminals”.
There we have it. There are, in fact, no limits on sub-postmasters asking to have lottery terminals in their store.
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