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The hon. Gentleman asked whether the decision required EU clearance. We do not believe that it does, and we believe that it complies with EU law. The decision has been properly and legally taken. He asked whether we would be compensating the companies that were not the successful bidders. We will compensate their reasonable
costs. That is the appropriate thing to do and there is no reason why we would not do it. It is a good deal for taxpayers and means a better service for customers. The exact amount is commercially confidential and that is exactly the way in which these things are done.
The hon. Gentleman spoke about direct debits. I am reliably informed that if we had moved towards the policy of the Opposition, this decision would not have been possible. The point that he has made would have made the award of the contract to the Post Office much more difficult. It is because of our policy that we are able to award the contract to the Post Office. He accused us of disarray, so I shall tell him what the disarray was—the situation that we inherited from his Government, whereby the only policy was the benefit payment card, which was millions over budget and years behind schedule, so we had to cancel it.
When one hears the hon. Gentleman speak, it sometimes sounds as if the POCA is a venerable British institution that has been around for decades, but as my right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman) pointed out earlier this week, it is something that this Government created. We have now renewed it and we are awarding it to the Post Office, and I just wish that the hon. Gentleman had supported our decision.
Kate Hoey (Vauxhall) (Lab): The Secretary of State will know that although some people will feel that this decision could have been taken a lot earlier, it will result in widespread relief across the country—relief felt by sub-postmasters, the national pensioners action group, members of the Communication Workers Union and the all-party group on post offices; we have all campaigned so much for this to happen. Does he agree that although the decision provides a breathing space for the Post Office, now is the time to get government business and local authority business back into our post offices, and to have the Post Office as a proper bank?
James Purnell: My hon. Friend is right to say that this is a vital decision for customers, particularly vulnerable customers, who depend most on the Post Office. She is also right to pay tribute to the campaigning done by Labour Members, who have been making their point in the appropriate way. As she said, we are examining how we can find further services for the Post Office to provide, and as I said to my hon. Friend the Member for Chorley (Mr. Hoyle) earlier this week, we will bring together a group of MPs to do exactly that.
Jenny Willott (Cardiff, Central) (LD): I thank the Secretary of State for advance notice of the statement. I wish to make it clear from the outset that the Liberal Democrats are delighted at today’s decision. It is good to see that the Department for Work and Pensions has listened to the vociferous opposition to the possible loss of the Post Office card account that has come from all parts of the House and from outside it. I understand that 2 million people signed a petition requesting that the POCA remained with the Post Office. Today’s decision could also be seen as a response to the Liberal Democrat Opposition day debate on Monday.
Today’s statement is a strange way of going about the decision. Cancelling the procurement exercise raises huge questions, some of which have been asked by the
hon. Member for Rutland and Melton (Alan Duncan). I should be grateful if the Secretary of State clarified why the Department decided to cancel the contracting exercise rather than award the contract to the Post Office. Does it mean that the terms of the tender would not have allowed the Department to award the contract to the Post Office? To enable us to make our own decision on that, will he release the specifications, the invitation to tender or negotiate, and the descriptive documents, which the Government have refused to release up to this point—indeed, on Monday, he again said that he would not be able to release them. I would be grateful if he made them public now.
The Secretary of State said that he has decided to award a contract for the continuation of the POCA within the terms of the relevant EC regulations. If he can do that now, why could he not have done it before or why did he choose not to do so? I would be grateful if he clarified that point. The reasons that he gave for the decision relate to the current economic climate. What is it about that climate that means that the Government can now reconsider? This situation leads to the suspicion that as 1,500 jobs are being lost every day in the UK, he knew that the Government could not afford to close a further 3,000 post offices—at least—with all the accompanying job losses. Will he tell us exactly what has changed?
The Secretary of State also said that he believes that it is not the time to do anything to put the network at risk, particularly as post offices are often the only provider in rural and deprived urban areas—that is what the Liberal Democrats have been saying for the past two years, as have a number of Labour Members. As that was the case when the Government decided to put this out to tender—it remains the case—what has brought him around to our way of thinking and to deciding that now the Post Office does need to be saved? Why did he think last week that it was okay to risk the only providers in those deprived areas, but that now it is not okay to do so?
As the hon. Member for Vauxhall (Kate Hoey) said, the DWP has behaved appallingly so far on this matter; there has been delay after delay. This has been going on for nearly three years and the decision was 11 months overdue. That has caused huge stress for POCA customers, sub-postmasters and all who are concerned for their community facilities. Why has there been such a delay? It also raises issues about the cost of the process and the waste of money involved. Legal questions have already been posed about changing the competition rules halfway through the process, but this has been a waste of money not only for the bidders that did not receive the contract, but for the post offices and the Government. The Secretary of State has said that he will be providing compensation, but will he finally give us an estimate as to how much money has been wasted? Why is the amount of compensation considered to be commercially confidential? Nevertheless, I welcome today’s announcement and the saving of post offices.
James Purnell:
I think that that was the sound of “Focus” leaflets being pulped in their thousands. This is the right decision, and I am glad that, at the very end of her questions, the hon. Lady acknowledged that. We all know that the Liberal Democrats will want to take credit for this. She says it is their way of thinking, but
the truth is that they were so confident of their way of thinking that they tabled a motion that was written by my hon. Friend the Member for Chorley (Mr. Hoyle). It was not their way of thinking at all, but that of Labour Members. We were glad to see the Liberal Democrats voting in support of his motion this week, but as we know, it had been overtaken by the changes that we had made in response to the lobbying and campaigning on behalf of their constituents carried out by my Labour colleagues.
The hon. Lady asked me what has changed. What has changed is that there has been a significant reduction in confidence about financial transactions, and people have turned to the Post Office because of its trusted brand. The Post Office provides a service that is not only a banking service, but a social service, and that becomes even more important when people are worried about financial circumstances. In the light of that, we commissioned legal advice, which has said that this is the right way for us to proceed. The truth is that for all the heat and bluster, everyone in this Chamber agrees that this is the right way forward.
The hon. Lady asked whether we would release the information about the tender, but as the tender has not been completed, it would be inappropriate to do so. As she knows, the advert in the Official Journal of the European Union has been placed in the Library, and she is welcome to look at that. I am sure that she will enjoy reading it. As I said to the hon. Member for Rutland and Melton (Alan Duncan), this is value for money, and it is the right decision for our customers, for taxpayers and for post offices. It gives them certainty to plan up until 2015 and allows Labour Members to concentrate on building a viable post office network.
Mr. Lindsay Hoyle (Chorley) (Lab): This is a great day for common sense, and I wish to thank the Secretary of State for taking the right decision. I thank him on behalf of my constituents, and the vulnerable and the pensioners who use the POCA, and I thank the sub-postmasters and sub-postmistresses throughout the breadth of the United Kingdom for the campaign that they have led. Of course, the Select Committee on Business and Enterprise report has done a lot to advise the Government on the role that they have played. I welcome the decision and look forward to the setting up of the taskforce, which will take us beyond 2015 to ensure that post offices in the United Kingdom have a viable and sustainable future.
James Purnell: I thank my hon. Friend for his kind works, and I pay tribute to his campaigning, along with that of many Labour colleagues. I also pay tribute to the Chairman of the Business and Enterprise Committee, as it has played an important role in examining this issue, and to the Treasury Committee and its Chairman, as it, too, published an important report. My hon. Friend is right to say that we should also pay tribute to the campaign run by sub-postmasters; they have left nobody in any doubt about the importance of this account and of the network. I reassure him that my colleagues in the Department for Business, Enterprise and Regulatory Reform will be writing to him shortly about the task group that we agreed.
Peter Luff (Mid-Worcestershire) (Con):
I hope that the Secretary of State will not think that I am being churlish if I say that the words that are haunting me
today are the powerful words from St. Luke about there being more joy in heaven over one sinner that repenteth. I genuinely welcome today’s announcement, and I am glad that the right hon. Gentleman has listened to the advice of my Committee, the Treasury Committee and the whole House on this matter. The hon. Member for Vauxhall (Kate Hoey) is right: we now have the opportunity to debate the future of the post office network and put it on a sustainable footing.
Does the Secretary of State understand that his Department still has one very important responsibility—to ensure that its agencies get fully behind the POCA? Many of us are very concerned by the attitudes taken, especially by the Pension Service, in that respect.
James Purnell: I thank the hon. Gentleman for his kind words. He is right to say that this service is vital to my Department and we want to ensure that people take it up appropriately. He has brought to my attention a few instances in which that was not the case, and we have addressed them and ensured that our training is appropriate. We now have a good basis on which to move forward and ensure that the POCA serves the most vulnerable people in our community, as well as that the post office network can grow on the basis of the certainty that it provides.
John McFall (West Dunbartonshire) (Lab/Co-op): In the light of the equivocation from Opposition Members, I wish to welcome this proposal clearly and unambiguously on behalf of the Treasury Committee. Two years ago we called for the successor to the POCA to be run by the Post Office, so this is excellent news for rural and low-income communities. I have spoken to Post Office executives, and they believe that these funding proposals should be the last and that, by 2015, the service should be a universal, stand-alone bank. I am looking for a commitment from the Government to that, as well as a recommendation for a cross-departmental approach to financial inclusion, so that the Post Office can play its part in that.
James Purnell: I know that that is the intention of the Post Office, and it will make it clear that this decision provides the basis on which it can plan for that future with certainty. My right hon. Friend makes an important point about financial inclusion, and we will work closely—especially with the Treasury, but also with other Departments—to ensure that both the Post Office and credit unions can play their part, alongside the banks, in improving financial inclusion. We want to ensure, especially in the run-up to Christmas, that people are not vulnerable to the excessive loan rates charged by credit companies.
Mr. Deputy Speaker: Order. Many hon. Members are seeking to catch my eye. I will endeavour to accommodate as many as possible, but it would be helpful if we had one brief question from each Member and hopefully a brief answer from the Secretary of State.
Mr. David Curry (Skipton and Ripon) (Con):
This is exactly the right decision for the large rural constituency that I represent, and I am sure that we are all grateful to
Lord Mandelson for it. Does the Secretary of State recognise that it comes against the background of a significant post office closure programme and that if there is constant attrition, it will not matter what services are offered because there will be no post offices to offer them? Will he ensure that the longer-term programme is based on a minimum level of post offices? If not, it simply will not be viable.
James Purnell: I believe that the right hon. Gentleman’s Front-Bench spokesman said in March that he fully expected the network to shrink, and that is the reality that people recognise. It has been a difficult but necessary process that has put the Post Office in a viable position from which it can make progress. As I made clear in my statement, the Post Office believes that the decision will enable it to preserve a level of post office provision after the network change programme is completed. It is also worth saying that this Government introduced access criteria for the first time, and they provide exactly the sort of undertakings that the right hon. Gentleman seeks.
Ann Clwyd (Cynon Valley) (Lab): This is the right decision and thousands of people in my constituency who wrote to me about this issue—especially pensioners—will be delighted by the news. It is a pity that the Opposition were caught on the back foot and cannot even bring themselves to say that it is the right thing to do. I can think of other political parties that will have to pulp their literature on this subject.
James Purnell: My right hon. Friend has campaigned very hard on behalf of her constituents, and I am glad that she welcomes the decision. I am sure that various parties will have to pulp all sorts of materials.
Mr. Hugo Swire (East Devon) (Con): Yes, this is the right decision, but it was a waste of time and money to have the tender in the first place. The most important aspect of the Secretary of State’s statement was about protecting vulnerable groups by preserving a viable post office network. That represents a sea change in Government thinking and is a welcome response to the poverty of imagination that has surrounded the future of that network. Given that the Secretary of State now recognises the vulnerability of many—especially the elderly—in these changed financial circumstances, is it not time to revisit the recent round of closures and allow some post offices that have been closed by the Government to make a new case?
James Purnell: It is not a sea change. What has changed is the approach taken by the hon. Gentleman’s Government, which the Chairman of the Select Committee outlined. That approach led to under-investment in the network in the 1990s. Money was taken out of the network then, but this Government have invested in it to ensure that it is viable. That is why we put in £0.5 billion into the IT system, which has enabled post offices to expand their services—for example, they are now the main provider of currency services. This Government introduced the POCA, and we have now awarded the contract to the Post Office. I wish that the hon. Gentleman had welcomed that.
Lynne Jones (Birmingham, Selly Oak) (Lab): Sometimes it has appeared as though my right hon. Friend’s Department was seeking to close down the Post Office card account for short-term gain, so I very much welcome today’s announcement, especially as it will enable me to use my Post Office card account to receive my state pension in 2012. It is not just vulnerable people who use it—I do not think of myself as vulnerable, despite my position on the Back Benches. Can my right hon. Friend assure the House that the Government will seek to expand the services available at post offices along the lines recommended by the watchdog, Consumer Focus, which I raised with the Prime Minister yesterday?
James Purnell: Yes, I can give an assurance that we will work to expand the range of financial and other services that are available. I know that that is something that the Post Office also wants to do.
Hywel Williams (Caernarfon) (PC): We on my Bench welcome this decision, however much we regret disappointing our printers. [ Laughter. ] What steps will the Government take to persuade the BBC, the Driver and Vehicle Licensing Agency and others to return their business to the Post Office?
James Purnell: The decision by the BBC was its decision, and I am glad that that the hon. Gentleman acknowledges that—unlike the Liberal Democrats earlier this week. As a way of supporting the Post Office, perhaps he could mail out some different leaflets to his constituents over the next few weeks.
Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): Many good ideas have recently come from our constituents, and I warmly welcome the decision on behalf of the 14 post offices and all their customers in my constituency. However, it will be important to understand the exact nature of what can and cannot be done, especially when it comes to water poverty and fuel poverty, and the advice that can be given to constituents. Will my right hon. Friend undertake to meet a group of Members of Parliament to explain from his Department’s point of view what can be done, so that we can rule out what cannot be done and get on with supporting the post offices in our constituencies?
James Purnell: Yes, from my Department’s point of view, we will be happy to have such meetings, and I am sure that other Departments will also be happy to do so. I certainly recognise that my hon. Friend has campaigned assiduously for her 14 post offices.
Mr. James Arbuthnot (North-East Hampshire) (Con): I am delighted that when the Prime Minister yesterday said “in due course”, he meant tomorrow. Will the Secretary of State accept that many of us do not mind U-turns, however screeching, as long as the car ends up pointing in the right direction, but because of the uncertainty of the past many months, many post offices have faced increased difficulties? What can he do to help them by pointing new business the way of the post offices?
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