Examination of Witnesses (Questions 180-193)
DEPARTMENT OF
TRADE AND
INDUSTRY
18 JULY 2006
Q180 Mr Binley: No, I said the Post
Office have said that.
Jim Fitzpatrick: The Post Office
has said hypothetically that were they go into an exclusively
commercial market, how many could they sustain, and they said
they think around 4,000.
Q181 Mr Binley: That is right.
Jim Fitzpatrick: Therefore we
know that we have a starting point of at least 4,000 which would
be able to survive in the hard-faced commercial world. The difficulty
I have got, sir—and, forgive me, I would love to be more
helpful—is if I were to put a figure anywhere between 4,000
and 14,500 to the Committee today that would almost automatically
become Government policy and a Government statement and give everybody
something to go and campaign about during the summer recess. We
are not in a position where we have arrived at that conclusion
because we are still studying the results of the £25 million
pilot schemes. I have only just concluded bilateral meetings with
ministers, your colleagues, from all the departments which have
a role or responsibility or rely on post office services; there
is a Cabinet sub-committee which I know has been reported in the
press as being set up, which will be looking at this particular
issue.
Q182 Chairman: That is a formal Cabinet
sub-committee is it?
Jim Fitzpatrick: Misc. 33, sir,
yes, which has been set up and will be formally bringing Government
departments together to examine the issue and to be able to set
out what patterns and be able to identify the figure that you
want me to say which, I am sorry, I am not in a position to say
today.
Mr Binley: Just between you and me you
could not say, Minister?
Chairman: We have given the Minister
a chance to give an answer to that question. Lindsay Hoyle.
Q183 Mr Hoyle: Obviously, Minister,
I can understand that you are being the honest broker, DTI are
saying we want to do the best by the Post Office, but at the same
time you are being undermined by other parts of Government because,
we have to say, this at the moment is death by a thousand cuts.
We have lost the TV licences: five million people visited the
post office to collect their TV licence, it has been taken away.
The fact is the DVLA are considering taking their business away,
the fact is that the Passport Agency is considering taking their
business away, what on earth is going on within government when
at the end of it, whatever we might think, this is taxpayers'
money, these are taxpayers' facilities. Surely we ought not to
be putting this work out to the private sector, to a private shareholder;
something has gone seriously wrong, what are we going to do to
get a grip of it? It is no use saying that Miscellaneous Committee
33 is going to be chaired and the Cabinet look at it, it will
be too late. It is action now to stop government departments giving
the work to other people; we need to see the work retained. We
are either serious about the future of Royal Mail, whether it
is rural, urban or town centre post offices; if we are serious
we have got to keep the work in-house. Whatever we do, the best
thing we can do now is get those government departments to make
a stand and say we will support the Post Office Network. We need
you to do that, you are the honest broker, please get on with
it and please save the Post Office Network.
Jim Fitzpatrick: I am very grateful
for your description as the honest broker. I can assure you that
I do find that in my role I have a dual purpose: in one sense
I obviously represent the taxpayer and the shareholder and want
to get the best deal possible, but in the other sense I am the
postal services minister and my job is to protect the Post Office
and Royal Mail. Therefore, one of the reasons why my officials
are doing as much as they have been and I have been doing as much
as I have—and I am grateful that we do have a Cabinet sub-committee
Misc. 33 which has been set up—is to hopefully help to do
the job exactly as you have described, Mr Hoyle.
Q184 Mr Hoyle: When does it report
back though, Minister? We know it is set up, but when does it
report back? Is it 12 months, 18 months, two years, three years?
The cuts are taking place now, the Post Office is being shafted
by government departments: we have to stop it now. When does the
committee report back, Miscellaneous 33?
Jim Fitzpatrick: We have not got
a date for formal reporting back but clearly with the SNP, the
Social Network Payment—
Mr Hoyle: I thought you meant the Scottish
National Party.
Q185 Mr Weir: Please do not blame
us for that.
Jim Fitzpatrick: Were that possible,
Mr Weir, you can be assured that we would! Given that the SNP
runs out in 2008 we clearly have a backstop. We do have the pilot
evidence, which was only completed in March of this year, which
is being examined, and we do have the commitment to a further
consultation period because we are not going to make an announcement
and say that is the conclusion, we are going to allow people the
opportunity to express a view, it is somewhere in between the
two. I do not have a date by which we are required to report back
to Cabinet.
Mr Hoyle: Can you stop the work going
out from the Post Office?
Q186 Chairman: There is another quick
question I really do want to ask you actually, which relates directly
to what Lindsay has been asking about. In your memorandum to us
you actually say that the Shareholder Executive has sought to
increase Royal Mail's accountability and its objectives are "the
delivery of government and other services effectively through
an efficient and fit for purpose"—God, I hate that
phrase fit for purpose—"Post Office branch network
which offers maximum access as needed." Which government
services will be provided through this Post Office Network that
you are trying to keep there to provide these services?
Jim Fitzpatrick: Again, I am sorry,
but I am not in a position to give a definitive response to that
because we are looking at the services that are being provided
and those that we may be able to provide in the future. I have
to say I agree entirely, I was irked when I saw the phrase "fit
for purpose" in a memorandum that was coming out from DTI.
Q187 Chairman: Do not worry so much
about fit for purpose, the point is your memorandum to this inquiry,
given to us a few weeks ago, says that it is your objective to
provide government services through the Post Office Network, so
which services?
Jim Fitzpatrick: The basic position
is that obviously there is a commercial dimension to this.
Q188 Chairman: Which government services?
Jim Fitzpatrick: Certainly the
baseline service which we are committed to in the 1999 White Paper
is the ability of individuals to be able to receive their benefits
in cash at the post office, that is an absolute given.
Q189 Chairman: You remain totally
committed to providing benefits in some form through the Post
Office Network?
Jim Fitzpatrick: We are.
Chairman: That is helpful.
Q190 Miss Kirkbride: Just on that
I would very much agree with the Government's objectives on all
of this because there is a social policy attached to the maintenance
of the Post Office Network and sub-post offices. Could you not
at least give this Committee an undertaking to go away and ask
government departments to stop farming out the business, to put
a stop to DVLA pursuing a tender for its business, to stop the
other organisations and be prepared to condemn the BBC for going
away with the TV licence now, because if all this business goes
and you do not stop it now, it does not matter what you decide
in 2008, there will not be a viable business.
Jim Fitzpatrick: I am sorry, I
am not in a position to condemn the BBC—
Mr Bone: Shame, go on.
Mr Hoyle: Go on, kick them.
Q191 Miss Kirkbride: Let the BBC
go on this one; the DVLA?
Jim Fitzpatrick: We might mention
it in Parliament tomorrow morning if that were to be the case.
What I have tried to demonstrate in explaining the degree and
the intensity of work that officials have been undertaking with
colleagues, both with the Post Office and with other government
departments, the bilaterals that I have been having with every
relevant government department which have now concluded with the
setting up of the Cabinet sub-committee, is that there is a degree
of awareness that this is an issue which we have to look at in
the round and is not something which can be looked at separately.
Q192 Chairman: Minister, we have
given you quite a tough time but this is a very important issue
indeed.
Jim Fitzpatrick: Of course.
Q193 Chairman: We all attach, around
this table, value to the post offices that serve our constituencies.
There was a consensus ruling in this country for many years that
the government would provide its services through the Post Office
Network; this hard commercial edge which New Labour has brought
to the Post Office Network is something quite new. Now that consensus
has gone, only value for money counts in terms of delivery of
services but we still think that post offices are important to
the communities they serve. Is it not time to have a major public
consultation about the social role of post offices and to agree
explicitly how that is funded? The cross-subsidy effect that was
there has gone, that consensus has been shattered by this Government;
we need a new method to protect the social role of post offices,
do we not need a big public debate to agree what that role actually
is and how it should be funded?
Jim Fitzpatrick: I mentioned a
few moments ago that we are committed to further consultation
which may very well be full, formal consultation. I cannot give
that commitment this morning because we have already undertaken
quite a bit of consultation over recent years and, therefore,
if there was a need to be able to arrive at quicker decisions
then we may short-circuit the full formal consultative period
of 12 weeks, but there will be an opportunity for the public to
express their point of view. I know that the National Federation
of SubPostmasters and Mistresses, with whom I also have met recently,
and whom I believe you are taking evidence from next, have had
their own public consultation and have some three or four million
signatures that they are going to bring to Downing Street some
time later on this year I anticipate; they will be ready to engage
whenever we have that consultation, as well as honourable and
right honourable Members right across the House because I obviously
do get quite a bit of correspondence from colleagues. I am seeing
the all party group at 4.30 later on today, I am meeting Labour
colleagues at six o'clock today and that is on exactly the same
issues that we have been covering this morning, Chairman.
Chairman: We cannot put this to you because
we have not had the evidence yet-we are running late as it is-but
I think we will hear from the subpostmasters that there is already
pressure from DWP on customers to abandon the Post Office Card
Account now, not even 2010. At least I hope the message you will
take away from this meeting, I think my colleagues would agree,
is please ask your colleagues in DWP to stop that pressure; at
least let the contract run its course.
Mr Hoyle: And have been given incentives
to actually change their account; great pressure is being put
on people who use the Post Office Card Account.
Chairman: We will take that evidence
next, Minister, but the situation is grim and we look to you to
act. Thank you very much indeed.
| 
