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Paddy Tipping: My right hon. Friend has used the phrase “due process” on a number of occasions. Will he take it from me, from those of us on the Government Benches, from the Post Office and from its customers
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that the sooner he comes to a decision and announces it, the more it will be in his interest and that of everyone else?

James Purnell: I know that this is a difficult thing to say, but due process is important. It is important that we take decisions legally, and I am sure that everyone in the House would agree with that. On the subject of the timing, I can reassure Members that we will take the decision very soon— [ Interruption. ] The House will find out exactly when that is when we make the decision.

Sir Robert Smith: It is not so much that the House needs to find out. All the sub-postmasters and sub-postmistresses who have had the restructuring of their businesses taken on by the Government and who have faced the closure programme now need to know what to do with their businesses. The businesses are being closed as people have to retire. How does the new investor know what kind of business they are taking on if the Government will not make up their mind? It is an issue not just for the House, but for all those hard-pressed sub-postmistresses and sub-postmasters out in the country who want to know how to run their businesses. They need to know how soon the decision will be made. Will they have a decision before Christmas?

James Purnell: They will definitely have a decision way before that. The hon. Gentleman has to bear with me as the decision must be taken in due order. I cannot take a decision before all the necessary options have been completed. Indeed, the worst possible thing would be to take a decision that was then unwound. I do not want to try the patience of the House by using up the time—

Mr. Nigel Waterson (Eastbourne) (Con): You already have.

James Purnell: The hon. Gentleman, in his normal courteous way, says that I already have, so I shall take that as a further injunction to complete my remarks and will make some progress, if he will allow me.

We renewed the Post Office card account because it provides an important service for our customers and is an important way of helping people who would otherwise be financially excluded. Many people in many communities value it. I want to make it clear that I completely understand the strength of feeling that has been expressed in the House and by the thousands of people who have written to all Members to explain how strongly they feel. I feel that I have already made it clear—at boring length—that I cannot say anything further on that point.

Several hon. Members rose

James Purnell: No, I have given way enough.

Let me pick up on the points about cheque conversion. There is a difference between cheques and POCA. As far as POCA is concerned, we have not been writing to our customers instructing them to open bank accounts. There was one mistaken letter, for which we have apologised, and the hon. Member for Mid-Worcestershire has brought
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another two incidents to my attention; we have corrected the problem and will be providing further training. I can reassure him that that is not the official policy of the Department; we have not written to people to ask them to transfer their POCA accounts to bank accounts. We have with cheques and we have been doing that since 2005. There is nothing new about that at all. Indeed, I have amended the leaflet in the light of the hon. Gentleman’s letter to me.

It would not be true to say that we are not opening new POCAs. We are opening 12,500 POCAs every month, precisely because we inform people about the availability of that service.

Rob Marris: Does my right hon. Friend understand from the debate what the Liberal Democrat policy is? I intervened on the hon. Member for Cardiff, Central (Jenny Willott) and gave two figures. The first was the £450 million annual cost of sending out giros, and she said that that was wrong. She then said that it was not her party’s policy to cut Government spending by 3 per cent. The adjective she used was “inaccurate”, but the reference to 3 per cent. is a quote from the leader of her party in a speech made in the City of London on 12 May 2008. Does the Secretary of State understand the Liberal Democrats’ policy or is he as confused as I am—perhaps because they are confused?

James Purnell: My hon. Friend makes an excellent point. The answer will be familiar to my hon. Friends: it is the magical Liberal Democrat money tree, which produces both cuts and increases in public spending without their ever having to be squared in any way at all. He is right to say that the Liberal Democrats want to make cuts of £20 billion. If I were running a post office I would be more worried about their being in power, because they will need to find those cuts. That stands in clear contrast to our policy of increasing spending on the Post Office.

Mr. Russell Brown (Dumfries and Galloway) (Lab): My right hon. Friend said that about 12,000 new customers every month were entering the Post Office card account system, but I am sure that he will also be aware that about 22,000 leave the system every month. Although we all want the Post Office card account contract to be awarded once again to the Post Office, he will recognise—as I hope the rest of the House does—that it is not the complete answer and that it cannot continue ad infinitum.

James Purnell: My hon. Friend is absolutely right. The other services that I mentioned are part of the answer; ID services could be part of the answer, as could other services that the Post Office is developing.

Richard Younger-Ross: Will the Secretary of State give way?

James Purnell: No, I am bringing my remarks to a close.

My hon. Friend the Member for Dumfries and Galloway (Mr. Brown) is right, too, to say that other types of financial service are part of the answer. Sixty per cent. of bank accounts are available from post offices, which in itself increases footfall, as well as increasing people’s ability to find a job because their salary can be paid into
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a bank account. It increases their ability to make reductions in their energy costs through the use of direct debits. As he says, there is no single solution.

The solution lies in modernising the Post Office, investing in it and having access criteria that preserve the level of service that people expect. That is exactly what Government policy is doing and I commend the amendment to the House.

8.20 pm

Chris Grayling (Epsom and Ewell) (Con): I listened carefully to the Secretary of State, but my clear view is that the Government should be ashamed of their handling of local post offices. Over the past few years, I have heard time and again how little Ministers have done to find a new role for post offices at a time of change. The big fear today is that Ministers’ lack of judgment on the future of the Post Office card account will ring the death knell for yet another large swathe of the post office network.

No one on either side of the House has ever argued that the post office network should go through no change at all. It has changed under Governments of all persuasions, but for years it has felt as though Ministers have no interest in finding ways of ensuring that the local post office has a future role. The Secretary of State says, “Trust us and what we are doing”, but we have only to remember how the Government and their Ministers handled the launch of the Post Office card account in the first place. They published booklet after booklet. There may have been corrections in one—as we heard today—but over the years booklet after booklet has explained to people how payments can be made directly into their bank account, and has set out other new ways of dealing with the Department for Work and Pensions and its agencies. However, to the fury of local postmasters and postmistresses in my constituency and around the country, the Post Office card account was mentioned only as an afterthought, buried in the small print in leaflets that most reasonable people judged as completely biased against it.

There was real frustration in post offices that customers had to turn page after page to find out whether the card account was even an alternative. At the time, I read the leaflets and promotional material and it certainly looked as though the Government hoped that the Post Office card account would not take off.

The product had an unhappy childhood, but despite all the Government’s efforts large numbers of pensioners now depend on it—far more than expected. More than 4 million people use the accounts, half of them pensioners. Much more could be done with the card accounts to make them of even greater benefit to those who use them.

Daniel Kawczynski: The Secretary of State said that a decision would be made before Christmas. Will my hon. Friend lobby the Secretary of State to ensure that the decision is not announced on the last sitting day, just before we go off on our long recess, and that it is made way before then so that we can debate it in the House?

Chris Grayling: My hon. Friend makes an extremely good point. Given the Secretary of State’s undertaking, I invite him to intervene with a commitment that he
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will not only announce the decision before Christmas but will make time in the House for a debate on the outcome.

James Purnell: It is not up to me to decide whether there should be a debate, as the hon. Gentleman knows, but I can absolutely give him the commitment that it will not be on the last day of the sitting before Christmas.

Chris Grayling: None the less, I trust that the right hon. Gentleman will use his good offices and his influence to ensure that the House has time to debate the decision.

Frankly, there should be no need for a debate on the decision. The Secretary of State has heard the views of Members on both sides of the House. We think the product is vital, and the fact that we are debating even the possibility of the Post Office losing it is a huge failing on the part of the Government, and represents a huge problem and a huge challenge for our post office network.

I am glad to hear the Secretary of State’s assurances that he is trying to do his best with marketing, but only today I received a letter from a postmaster in Liverpool who asks why the Government are still making things difficult for people who want to take out a Post Office card account. He said,

That was said not by a politician, but by someone who is dealing with customers in the front line right now. I applaud the Secretary of State for rewriting the brochures, but he has a much bigger problem to address.

Mr. Hoyle: I am rather shocked. Yes, the Government have not been enthusiastic about getting people to use POCA, but if a sub-postmaster is worth their salt, especially in my area—I cannot understand why this is not reflected in other areas—they encourage people to sign up to POCA. POCA has been successful because of sub-postmasters. I am a little shocked that that sub-postmaster does not understand the rules that they are using.

Chris Grayling: It is an issue not of sub-postmasters not understanding the rules, but of the people with whom would-be customers are dealing still not supporting the Post Office card account. That remains a major problem today.

Peter Luff: The Secretary of State indicated that these are all isolated occurrences. There have been far too many isolated occurrences, one of which occurred in my constituency last week, when the wife of a sub-postmaster was told on the phone by the Pension Service that POCA would not be renewed after 2010. When she challenged him, because she knew exactly what the situation was, the chap said, “I wish our bosses would tell us to say that, but they don’t.”

Chris Grayling: My hon. Friend makes an important point. I have no doubt that we will hear from him later if he manages to catch the Deputy Speaker’s eye. He and his Committee have been doing important work in this area.

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The long delay in the announcement of the contract makes it look pretty clear—this is one of the things that is unsettling the post office network—that Ministers have decided to move the account elsewhere but have realised that the political consequences of doing so will not be pretty, so the impression left is one of Ministers struggling behind the scenes to soften the blow.

David Taylor (North-West Leicestershire) (Lab/Co-op): Does the hon. Gentleman agree that we would have the worst of both worlds if the decision allowed the Post Office to run the card account in rural areas but split it with PayPoint in suburban and urban areas?

Chris Grayling: I absolutely agree. This is a Post Office card account—the Secretary of State continues to use that title—and that, to my mind, means that it should be handled in a post office. It would be a tragedy and a travesty for our post office network if that did not apply in future. It would be a huge blow if it were a hybrid or a total loss. I am certain that thousands more post offices would disappear. Even with the kind of hybrid that has been mentioned, the National Federation of SubPostmasters estimates that some 3,000 post offices will disappear if the decision goes the wrong way.

Jo Swinson (East Dunbartonshire) (LD): Does the hon. Gentleman agree that the Government have failed to grasp the depth of anger felt by the public and sub-postmasters about the fact that, after years of post office closures under the urban reinvention and network change proposals, it looks as though there could be a wave of new closures because of the Post Office card account? People are asking, “Where will it all end? What will be left of our post office network?”

Chris Grayling: The hon. Lady makes an important point, and I hope that Ministers will listen to the comments coming from both sides of the House. The issue does not divide on party political lines; concerns are shared across the House, and most Members do not want change. I hope that that message has reached Ministers loud and clear in the decision that they are taking. They have taken so long to take the decision. If people say that they will take a decision and then delay it month after month, it not only creates a sense of real insecurity and uncertainty in the post office network, but sends a message of a lack of commitment to the product.

Albert Owen: Both the hon. Gentleman and I want the Post Office to deliver the card account, and does he agree that there have been some successes? I think that he said in his opening remarks that things have gone downhill. For instance, the foreign currency exchange is good for the Post Office, because it can compete on a level playing field. Does he not also agree that, to sustain the network for the future, it needs a substantial subsidy of some £1.7 billion to 2011? Will the Conservative party match that policy?

Chris Grayling: If the hon. Gentleman had been listening to my hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Business and Enterprise Committee, he would know that the Post Office’s objective is to return itself to where it was
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10 years ago, which is being commercially viable. The tragedy of the way in which the Post Office card account has been handled is that the Government have actively sought to discourage people from signing up. At no point has any hon. Member on either side of the House called for a cut in the support to the Post Office, but we all want the Post Office to be in a position to restore itself to balance. That would give it longer-term security and, frankly, free it from the vagaries of decisions taken by Ministers.

Mr. Roger Gale (North Thanet) (Con): The Hansard record of the debate will show that the Secretary of State said—I quote him—that far too many people still do not have a bank account. Is not the reality that the Government are trying to drive people towards the banks? Is it not the fact that the Government do not care about the Post Office card account—the only successful piece of information technology that they have managed to introduce?

Chris Grayling: My hon. Friend makes an extremely important point.

James Purnell: For the record, I hope that the hon. Gentleman will allow me to make a correction; I did not say what the hon. Member for North Thanet (Mr. Gale) said I did. I said that 2 million people do not have bank accounts, which is why POCA is so important. That is the opposite of what he quoted me as saying.

Chris Grayling: The Secretary of State is absolutely right that the issue that we are debating today is not simply access to the Post Office card account to enable pensioners to get pension payments. The issue is also about social deprivation and the challenges that exist in many of our communities. It is a crucial issue for families in the battle against poverty. It is all very well for us; we have easy access to financial services, banking, credit, cash to pay our bills, and funding for major purchases such as a car to get to work. However, the truth is that one in 25 families still has no bank account of any kind, and 800,000 children are being brought up in households with no bank account. Some 7.8 million people in the UK are unable to access mainstream credit. That puts huge extra financial pressure on families. That is why the debate has deeper significance; it is not simply about the future of the post office network, however important that is. We are dealing with a vehicle that can address some of the biggest social issues in our society.

Mr. Roger Williams (Brecon and Radnorshire) (LD): Some of my most vulnerable constituents have been told that they will no longer be able to receive their giros. They are unable, even with the help of their local postmaster, to access POCA. That leaves those very vulnerable people in an even more difficult position.

Chris Grayling: It is enormously disturbing that people are finding it difficult to sign up to POCA. It should be as easy as anything to sign up for it. If it is difficult to do so, it is a sign that the system is still not working.

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