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James Purnell: Had we not wanted to have a contract, we would not have had a process to create it and we would not now be awarding it to the Post Office, so this
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is the opposite of a U-turn. It is precisely because we are committed to the POCA that we decided to create the contract and now to renew it. The right hon. Gentleman is right that we should now look at how we can bring other services into post offices, and that is exactly what the task group will do. If he has any suggestions, we would be happy to look at them.

Mr. David Drew (Stroud) (Lab/Co-op): This is welcome news in rural areas. Although it has taken a long time to come, it is entirely the right decision. Can we now look at ways in which we can advertise and encourage the use of the Post Office card account? Those of us who have a Post Office card account find it a useful way of being able to draw out money. I am sure that all postmasters and mistresses would now want to see a full-scale campaign to show that the account is the right way for many people to draw out their money.

James Purnell: As my hon. Friend will know from the debate on Monday, we have agreed to look at our literature to ensure that exactly that is done. However, advertising Post Office services is primarily a matter for the Post Office. As an account holder, my hon. Friend will be glad to know that the new Post Office card account will offer improved services and functionality, so it will be even more helpful than it was in the past.

Mr. Nigel Dodds (Belfast, North) (DUP): I warmly welcome the decision announced today by the Secretary of State and thank him for listening to many millions of people up and down the country, not least the vulnerable and elderly. Can I urge him to look speedily at the expansion of financial and other services that will be made available through the post offices and to come to this House with some real decisions as quickly as possible?

James Purnell: Yes, the hon. Gentleman can do that. That decision would be primarily for the Department for Business, Enterprise and Regulatory Reform, but if his party has any suggestions, we would be happy to look at them.

Andrew Miller (Ellesmere Port and Neston) (Lab): In welcoming my right hon. Friend’s statement, may I refer him to his mention of the vital social service offered by post offices? There are a number of examples up and down the country of post office staff who have gone beyond the call of duty to ensure that a real social service is delivered, particularly to the elderly and infirm. Will he discuss with his hon. Friends in the Department for Business, Enterprise and Regulatory Reform how we can develop that expertise and identify best practice so that we can expand on that incredible social service?

James Purnell: That is absolutely right. Many of our constituents look forward to their visit to the post office as a key part of their week. For example, one of my constituents, Idu Miah, who runs the post office in Mossley, is right at the heart of his community. It is important that we should develop that, and I am sure that the Post Office will want to spread the already very good practice as widely as possible around the network.

Andrew Stunell (Hazel Grove) (LD): On Monday, the Secretary of State spoke strongly in favour of a Government amendment that said that all Government Departments
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should give publicity to how their services could be accessed at post offices. Will he give an undertaking that what he has said today applies to other Government Departments and agencies, particularly the Driver and Vehicle Licensing Agency, which has a conflict between its internal target of getting people to use its electronic system and the need to support the Post Office?

James Purnell: Of course, people can renew their tax discs through 4,000 post offices. That approach applies to the whole Government.

Ms Sally Keeble (Northampton, North) (Lab): I very much welcome my right hon. Friend’s announcement. When he looks at extending services, will he look in particular at allowing women to access child trust funds through the post office? That would mean that isolated young mothers could take their baby bond vouchers to the local post office to get their child trust fund, instead of having to go into town to a bank. It would make a big difference to social exclusion and child poverty figures.

James Purnell: My hon. Friend has been an ardent campaigner for her post offices, and we will certainly consider that suggestion. I shall respond to her about whether that can be done.

Greg Clark (Tunbridge Wells) (Con): Postmasters, postmistresses and customers in the remaining post offices in my constituency will be relieved at the announcement, although they are owed an apology for the months of uncertainty that they have had to endure. The Secretary of State talked about increased functionality. Will he allow people who do not have a bank account to make direct debit payments for their utility bills through the Post Office card account, thereby allowing them to access cheaper tariffs that could save them £100 a year or more on their energy bills?

James Purnell: I do not know whether the hon. Gentleman was in the Chamber during my statement, but if we had done that, this decision would not have been possible or at least would not have been so easy to take. Today’s decision would have been made more difficult, rather than easier. I am not sure that he wants to argue for that. It is perfectly possible for people to have bank accounts at the post office that offer direct debits, and obviously that choice is open to them.

Clive Efford (Eltham) (Lab): Will my right hon. Friend confirm that this contract does not start until 2010 and that those people who are accusing him of having delayed the decision need to understand the process in which we have been involved? It is imperative that Government agencies and local government direct services through the post offices if they are to be sustainable in the future. Can my right hon. Friend say whether today’s announcement means that there is a moratorium on planned closures? Will any sub-post office managers who want their post offices to remain open get an opportunity to restate their case? Many communities could benefit from the future arrangements for the Post Office that my right hon. Friend envisages if those post offices remained open.

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James Purnell: My hon. Friend is right that this provides the post office and sub-postmasters with certainly through to 2015 and, potentially, beyond that. That is exactly what Labour Members have been calling for. He is also right that local government has a key role to play, and we would encourage councils to make their services available through post offices. On his final point, the Post Office has said that this announcement, along with the subsidy, will allow it to preserve the network after the network change programme. Any individual decisions are clearly part of the process that has already been set out.

Mr. Brian Binley (Northampton, South) (Con): I was proud to be on the Select Committee on Business and Enterprise, which played a major role in encouraging the Secretary of State to change his mind. I am grateful that he has done so. However, he announced greater functionality for the card. Will he explain a little more about that, on the basis that we have been pushing for greater functionality throughout this exercise?

James Purnell: As I have said, if we had listened to the Conservative party, we would not have been able to make this decision—or it would have been difficult. I am happy —[ Interruption. ] If the hon. Gentleman will listen, I will answer his question. There will be a simpler opening process for Post Office card accounts. There will also be a facility to correct mistakes, for example if too much money is taken out. The exact decisions about how that should be done are for us and the Post Office to negotiate. That is exactly what we will do, and the Post Office will take forward.

Mr. Gordon Marsden (Blackpool, South) (Lab): I congratulate the Secretary of State on a decision that will be of great benefit to my sub-postmasters and to the above average number of people in the POCA-using category in Blackpool. In the interests of being more proactive about future use of the Post Office, will he ask his officials to consider the possibility of the use by the Post Office of new and innovative products that are brought forward and marketed by his Department? That should also include discussions on any ideas that come forward from the trade unions.

James Purnell: Yes, we can absolutely do that. One new area of potential business is ID services. I know that the Post Office is interested in that. At this stage, no guarantee can be given by the Government, but we know that if either of the other two parties were in government, the Post Office would not have the chance to offer those ID services, because both main Opposition parties are opposed to that policy.

Anne Main (St. Albans) (Con): In my constituency, we have lost five post offices, and that was opposed by all political parties, so it is not something that only the Government have a handle on. I noted with interest that in his statement the Secretary of State said that the post offices give a vital social service. That was exactly the point that was made by my constituents, but it did not cut any ice when it came to the round of cuts that we are now seeing. If the Government are going to say that it is an objective to deliver a valuable social service via the Post Office, how will they support that?

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James Purnell: We are supporting it by putting £1.7 billion into the Post Office, which the hon. Lady’s party never did, and through the decision that we have taken today. If she wants to be churlish, that is entirely up to her.

David Taylor (North-West Leicestershire) (Lab/Co-op): As a member of a family who for several generations ran the post office in my village of Heather in north-west Leicestershire, I welcome the announcement, although that post office was closed in February because of the reorganisation proposals. Is the Secretary of State aware that a good number of post offices in rural areas remain on the financial brink and need greater support? Will he confirm that, although a good number of older people particularly are unable to use bank and Post Office card accounts, the option to have cheque payment will continue and will be better promoted?

James Purnell: I recognise and pay tribute to the role that my hon. Friend has played in this House in relation to post offices, and to his understanding of the subject. Paying by cheque has a number of disadvantages, and is particularly open to fraud. We are considering how we can have a system that will fulfil the same goals, but in a more effective way for the customer. We are working through the process to achieve that. We will commit to delivering that outcome, although it might not be done through cheques because of the particular problems that they cause.

Dr. Richard Taylor (Wyre Forest) (Ind): May I add my congratulations to the Government on actually listening to people and taking the right decision? This is good news for many people, but not so much for those who can no longer cash their card account because a branch is closing under the network change programme. Is there any chance of an appeal against specific branch closures?

James Purnell: As I am sure the hon. Gentleman knows, there is an appeals process in the network change programme, and indeed some decisions have been overturned. However, I thank him for his kind words, and I shall be happy to write to him to set out the appeals process if he is not aware of it.

Charlotte Atkins (Staffordshire, Moorlands) (Lab): This is a very welcome decision, especially for rural areas such as my constituency of Staffordshire, Moorlands. I thank my right hon. Friend for listening to my constituents and to those of all hon. Members. The Post Office is a trusted brand in itself, but the people who run sub-post offices are seen as very trusted advisers to the elderly and vulnerable. My constituents tell me that they trust their sub-postmasters and sub-postmistresses as sources of advice who will do everything to help them with their bills. Will he therefore look at the possibility of encouraging post offices to help with the take-up of tax credits, and especially pension credits? Will he also extend the financial products that they are able to offer, especially to vulnerable people?

James Purnell: That is a good suggestion, and I am sure that the task group will want to look at it. I shall also ask my officials to look at it, but I want to pay particular tribute to my hon. Friend for the campaigning
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that she has done on behalf of rural areas. We have listened to the views that her constituents have expressed to her, and I am glad that she welcomes today’s decision.

Mr. Shailesh Vara (North-West Cambridgeshire) (Con): The Secretary of State has said that he will not disclose the amount of money to be paid in compensation to failed bidders, but his Department will have incurred considerable expense in the tender process. There is nothing commercially confidential about his Department’s expenditure, so will he tell the House how much money it has spent in the tender process? If he does not have the precise figure to hand, I shall be happy to receive an undertaking that he will write to me with it.

James Purnell: The point about expenditure is about the contract going forward, and the amount spent dwarfs any process issues. The deal is a good one for the taxpayer and for customers.

Kerry McCarthy (Bristol, East) (Lab): I too welcome this announcement very much, as will the hundreds of my constituents who have written to me about it. I chair the all-party group on credit unions, and I have just written to Lord Mandelson to see whether we can explore how credits unions can use the Post Office network to make their services more available, especially to people in remote areas. Will my right hon. Friend undertake to talk to Lord Mandelson to see how we can move those issues forward?

James Purnell: Yes, that is a very important point. The Post Office’s reach is clearly wider than that of credit unions, even after their growth under this Government. My hon. Friend is right that credit unions play a vital part in providing the services and advice that help people to get out of debt and improve their financial affairs. I have seen very clearly how credit unions in my constituency have literally turned around the lives of hundreds of my constituents. My ministerial colleague the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Burnley (Kitty Ussher), will be happy to meet my hon. Friend to discuss exactly how what she proposes can be done.

Mike Penning (Hemel Hempstead) (Con): I and thousands of my constituents have written in good faith to the Secretary of State over the past few months because we have been worried about the card account and the future of local post offices, both urban and rural. Sadly, while the decision was being made, three post offices in urban and rural parts of my constituency closed, but that decision has been made and I am now worried about the future service. Will the right hon. Gentleman give some indication of the revenue streams under the new contract? Will they be different from those under the previous contract? If so, is the new contract better or worse than the old one, as that will have an effect on the marginal post offices in our constituencies?

James Purnell: Clearly, that is a matter for the Post Office, and it depends on how many card accounts are opened. I know that the hon. Gentleman cares about this issue, but the terms of the contract have to be confidential. Even so, it is important that we look at how we can get other services into post offices so that they can become viable. That is exactly what they have asked for, and it is what they are committed to achieving.

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Ms Katy Clark (North Ayrshire and Arran) (Lab): I warmly welcome today’s announcement, and it is clearly the right decision. My right hon. Friend will be aware of recent media speculation about the possibility of an attempt to privatise Royal Mail, which would have a negative impact on the Post Office network. Is he able to give any reassurances today that no such proposals are being considered?

James Purnell: As my hon. Friend knows, and as Lord Mandelson confirmed earlier in another place, the Hooper report, to which I think she is referring, will be published very soon.

Mr. Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD): I hope that the Secretary of State will join me in paying tribute to Mervyn Jones, who is a constituent of mine—indeed, my next-door neighbour—and also president of the National Federation of SubPostmasters. He and his colleagues around the country deserve a great deal of recognition for their work in briefing Members of the House on this matter, and I welcome the decision that the right hon. Gentleman has taken.

However, notwithstanding the Secretary of State’s answers to previous questions, all the sub-postmasters and sub-postmistresses who are grateful for today’s announcement will now be worrying about how much they will get per transaction. Will he come clean about that, and put their minds at rest?

James Purnell: We have yet to award the contract to the Post Office. Clearly, we will be in discussions and negotiations about that, and that is the right way to proceed. We have made it clear that we will be awarding the contract, which will give people certainty between now and 2015, but the hon. Gentleman is right to say that we should recognise the work that sub-postmasters and sub-postmistresses do. I am sure that he will join me in congratulating George Thomson on the work that he has done as general secretary of the National Federation of SubPostmasters, along with all of his members.

Sir Gerald Kaufman (Manchester, Gorton) (Lab): May I thank my right hon. Friend for listening to his fellow Labour Members of Parliament and for deciding to extend a service that was created by a Labour Government? We have spoken on behalf of our constituents, who include sub-postmasters, and we hope that today’s decision will foreshadow greater strength and more services in our post offices. May I thank him on behalf of the 8,000 of my constituents who are Post Office card account holders—and on behalf of the 6,000 constituents in the constituency of Manchester, Withington, whose Member of Parliament is once again absent from discussion of these matters?

James Purnell: My right hon. Friend made a very good speech on this matter on Monday, and indeed pointed out that the hon. Member for Manchester, Withington (Mr. Leech) was not present then. It is a shame that he is not here now, but I am sure that there is a good reason for that. However, my right hon. Friend is absolutely right to say that it was this Government who created the Post Office card account, and that is why we are so strongly committed to it.

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