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Westminster Hall
Tuesday 24 May 2011
[Mr Philip Hollobone in the Chair]
Post Office Card Account
Motion made, and Question proposed, That the sitting be now adjourned.—(Jeremy Wright)
9.30 am
Sarah Newton (Truro and Falmouth) (Con): It is a privilege to serve under your chairmanship, Mr Hollobone, and to introduce the debate this morning. I requested the topic as a subject for debate as I was concerned by the apparent lack of progress on an important part of the coalition agreement. I am delighted that the coalition Government have been so publicly supportive of both the need to provide an enhanced Post Office card account and the need to enable more income streams into the post office network to ensure the sustainability of our much trusted and widely respected local post offices.
The additional Government plans for the post office network have received a warm welcome. They include no further closures of our post offices; an extra £1.34 billion in funding for the network between now and 2015; and post offices becoming a front office for Government and offering an expanded range of financial services, including credit unions and existing high street banks giving access to personal and business accounts at post offices. Currently, an estimated 60% of accounts can be accessed through post offices. The Government aim for that to be increased to 80% of all current accounts, and they will seriously consider enabling the Post Office to become a co-operative or mutual.
I understand that, for a variety of good reasons, the Government are exploring the possibility of enhancing POCA while at the same time developing a new account that could replace it. For the purposes of this debate and brevity, I will refer to POCA covering both possibilities. Although I very much appreciate the considerable economic challenges the Government face, as well as the pressure on Ministers’ time, I hope that there is a lack only of visible progress and that the Minister today will take the opportunity to update hon. Members on the behind the scenes progress being made. That would allay the concerns in post offices and the communities that they serve around the country. Although they very much support the direction and words of the Government, they want to see action. There is significant potential for POCA to be developed into a fully transactional account aimed at low-income consumers. The account is also vital to the financial viability of post offices, which play an important role in rural areas, where the local post office is often the only access to cash for people, small businesses and voluntary groups.
To help our debate, I will provide some background information on POCA, starting with some history. The direct payment scheme was the Government programme that replaced traditional payments of state pensions and benefits by order book or girocheque over the post office counter with electronic payments made directly
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into an account. The programme began in 2003 and was completed in 2005. The loss of the payments of pensions and benefits cost post offices about 40% of their traditional income. The Government claimed that direct payment would help to tackle financial exclusion and provide a cheaper method of paying pensions and benefits.
Under direct payment, there were three main options for the receipt of state pensions and benefits: a current or savings account at any bank or building society; a basic bank account; or a POCA, which was introduced in April 2003. A small number of pensioners and benefit claimants were able to sign up to the exceptions service to have their payments continue to be made by the green giro.
At its peak, there were about 4.3 million POCA customers, and that was despite well documented efforts by the Department for Work and Pensions at the time to promote other payment methods and to discourage customers from opening a POCA. The account has unique features that are important to people on low incomes. In particular, there are no restrictions on who can open an account, as long as they are in receipt of a state pension or benefit, and it is impossible to get into debt. It is a straightforward product that enables benefits to be paid into accounts. In March 2010, POCA was enhanced to allow access to cash withdrawals, balance inquiries and other PIN services at post office ATMs and over post office counters.
POCAs have a great deal of public support. When in 2006 the Government announced that they would cease by 2010, the National Federation of Sub-Postmasters campaigned rigorously to overturn the decision, which led to more then 4 million people signing a petition that was submitted to Downing street. As a result, in December 2006, the Government decided to continue the accounts. Another effective campaign by the NFSP led to more than 3 million postcards being sent to MPs, which called for POCAs to be retained exclusively by the Post Office.
Both successful campaigns highlighted the importance of POCAs to sub-postmasters’ income. According to the NFSP’s most recent research, from June 2009, on sub-postmasters’ income, on average, sub-postmasters earned £220 a month—7% of net income—from POCA transactions. However, that average does not highlight the heavy dependence of certain post offices on POCA income, typically those in deprived urban or rural areas. The 2009 survey showed that 15% of sub-postmasters earned £400 or more a month from POCA transactions. When customers withdraw at a post office, they also spend money through other Post Office services, such as bill payments or mobile phone top-ups, or in the attached shop. That footfall is a key factor in maintaining the viability of thousands of post offices.
The NFSP estimates that the value of the POCA contract for Post Office Ltd has fallen from an estimated annual £195 million to £131 million in the period ending in the spring of this year.
Jim Shannon (Strangford) (DUP):
Further to the hon. Lady’s last point, which was very valid, there are a great many postmasters and postmistresses who have actively engaged with their local communities to ensure that POCAs are available. They have done all the hard work and are now looking at the possibility of those
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accounts being removed through the running-down of rural post offices. Does she agree that it would be detrimental, not only to rural communities, but to small towns, for the Government to pursue that policy?
Sarah Newton: I absolutely agree. It would be detrimental to the post office network if POCAs were removed, but I do not believe that that is the Government’s intention.
The reduction in the worth of the contract will be felt in the income of sub-postmasters and postmistresses. It is understandable that the DWP wants to drive down the transaction costs of benefits payments and so sees that reduction as a saving—costs have come down to about 50p from about 70p to 75p per transaction—and I understand why the Government want to look at efficiencies in that way, but there are significant implications for incomes, livelihoods and the sustainability of the network. That underlines why it is so important that the future of POCA and banking services more generally is secured. Existing and new customers would very much welcome enhanced services.
Research on POCA customers by Consumer Focus demonstrates that customers want additional transactional features and want to carry on using post office branches, which they know and trust, to access their payments. A fully transactional account could deliver significant benefits in terms of financial inclusion. Consumer Focus research shows that up to 1.75 million people are “unbanked” and could access a transactional account. By not having a bank account, vulnerable consumers can lose out time and again. Not being able to use the internet to buy goods and services or direct debit for household bills means that they pay more. They miss out on safer money management and convenient access to cash through ATMs. They find it difficult to access mainstream credit or insurance, or to save effectively, unless they are fortunate enough to have local access to a credit union or community bank. They will find it increasingly difficult to be paid for work; Consumer Focus estimates that by 2018 only 2% of employees will be paid in cash.
Richard Graham (Gloucester) (Con): I congratulate my hon. Friend on securing this debate, on a subject that is important to millions of people. Is she aware of the report recently published by the Association of British Credit Unions, which highlighted the opportunities for co-operation between the Post Office and credit unions? Although it is a difficult area and is connected with the mutualisation of post offices, which is taking time, does she agree that it could signify a huge step forward for the millions that do not have access to bank accounts, and will she join me in encouraging the Government to make progress on the matter as soon as possible?
Sarah Newton:
I thank my hon. Friend for that interesting contribution. I support the work of credit unions. We have an excellent credit union in Cornwall: Cornish Community Banking provides good services for people on low incomes. As the Government consider the future of the post office network, given its reach into our communities, it is important that they fully consider the positive benefits of post offices
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working with credit unions and community banks, and how that might work with co-operatives or mutuals. Indeed, credit unions and community banks might work alongside post offices and offer their products through the branches. I hope that the Minister will update us on that.
I return to the benefits of an enhanced Post Office card account. It could also offer a genuine alternative for consumers who are dissatisfied with their basic bank account. Figures provided by the Financial Inclusion Taskforce last year suggest that up to 40% of basic account holders either have dormant accounts or, because of the associated penalty charges, opt not to use the full range of transactional features, including direct debit.
As well as the 1.75 million unbanked people in the UK, there are just under 4 million POCA customers, and benefit payments of about £1.2 billion per annum flow through those accounts. Many people on low incomes are reluctant to open basic bank accounts or current accounts because they fear high charges if they go overdrawn. Treasury research shows that, for low-income households operating a conventional direct debit facility, savings are offset by the loss of an average of £140 per annum in penalty charges. The cost is borne disproportionately by low-income households, who have to juggle daily or weekly income and/or benefits payments.
Consumer Focus recently undertook research on a transactional POCA. The account that it tested offered post office counter withdrawals, LINK-ATM access, the ability to receive inward payments and a debit card. Crucially, it also offered a bill payment facility that allowed customers to benefit from cheaper utility rates. Equally crucial is the fact that, unlike other direct debit facilities, it would be for the consumer to determine the frequency and the amount of payments to be made—and the consumer would not be liable for penalty charges if a payment were missed. A level of control that prevents them becoming overdrawn and incurring penalty charges is important to low-income households, as they have to be careful to live within their means.
I understand that the Treasury has recently finished a feasibility study into accounts that have the additional and useful feature of weekly budgeting. Measures that help people on low incomes to obtain the best prices for essentials such as energy, and enable them carefully to budget incomes and expenditure, are to be welcomed. Many low-income families are susceptible to doorstep lending, with its exorbitant interest rates, which can quickly get them into unmanageable debt.
I hope that a new product can be developed before the POCA contract ends in March 2015, and that existing account holders will be migrated on to the new account. Such an account would have much broader appeal to post office customers. It could lead to a customer base large enough to give economies of scale, which would make the operation of such an account cost-effective. The introduction of a transactional POCA with a budgeting facility will be particularly important in helping to secure the migration to universal credit.
I have been an MP for a limited time. I can see that, despite their good intentions, Governments can find it challenging to work across Departments on joined-up policy. The delivery of an updated POCA or similar new product is one such policy. It needs to be given thoughtful consideration by the Department for Business, Innovation and Skills, the Treasury and the Department
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for Work and Pensions. However, I understand that, as in so many policy areas, there are conflicting priorities. I realise that the DWP will want to reduce transaction costs for benefit payments. The Department also has the key aim of lifting as many people as possible out of poverty, and the improved POCA could help with that.
I realise that 2015 seems a long time away. However, sub-postmasters, the vast majority of whom are self-employed small business owners who work long hours for low returns, need to know that the Government are committed to introducing an enhanced POCA or a replacement, and that they are on track to deliver a product that will not only benefit customers but give them certainty of income. The recent decision to award the green giro payment contract to PayPoint, with savings going to the DWP but with losses going to the post offices, is a concern to many sub-postmasters.
The post office network has reached a critical point. The previous Government’s closure programme, the withdrawal of Government services and major social and economic changes have resulted in 7,000 post office closures over the past decade. However, the remaining 11,500 post offices and 500 outreach services still provide a much bigger network than all the banks and building societies combined. Every week, 20 million people visit a post office, and for every £1 transacted, 14p is handled through the post office network.
Post offices are a vital resource for rural communities such as those in Cornwall. Only 4% of villages have a bank, compared to the 60% that have a post office. Between 2000 and 2010, rural areas experienced the loss of nearly 60% of their banks and building societies According to the Campaign for Community Banking Services, Barclays closed 22 banks during the last quarter, 12 of which were the last, or the last bank but one, in the town. HSBC and Lloyds each closed nine branches. That lack of services and competition for small businesses has been recognised by the Treasury Committee and the Banking Commission in reports in April. This could be a real opportunity for new services to be delivered by post offices, as 47% of small businesses already use the post office more than once a week, especially for stamps, mailing and cash.
Although many post offices run alongside shops—in small villages, they are often the only shop—sub-post office income is worryingly low. New work urgently needs to be brought into the post office network to increase income for the remaining post offices and to ensure that they can continue to serve local communities.
Having outlined some of the challenges that face the post office network and the real opportunity of developing POCA in the war against poverty and the delivery of the universal credit, I look forward to being reassured by the Minister that the coalition Government are taking action to deliver the important legacy of a sustainable post office network.
9.48 am
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op):
I congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on securing this important debate. I had intended only to make a couple of points in relation to my constituency, but the hon. Lady has raised a number of matters that I wish to pursue. I shall refer to the inquiry undertaken by the Select
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Committee on Scottish Affairs on postal services in Scotland. I have no doubt that my hon. Friend, if I may call him that, who is also a member of the Committee—I mean the hon. Member for Argyll and Bute (Mr Reid)—will want to say something about that report.
The Post Office card account was put in place by the Labour Government, particularly as a way to deal with financial inclusion. For those of us who are used to conducting our financial business online, either on the internet or by phone, it can be difficult to appreciate exactly what it is like for people who do not have access to a bank account. People on low incomes have to ensure that every penny is spent appropriately. We should not underestimate the difficulties that they face in trying to secure the best prices for electricity, gas and other utilities without access to the financial services that we all take for granted.
The post office is important for many elderly people, because they want to be able to conduct their business with a real person and a face they know. They do not want to have to press umpteen buttons on their keypad telephone to be told to hold on, with perhaps the vague promise that they may get to speak to someone at the end of the day. When we looked at the future of post offices in my area, I was grateful for the input from postmasters and postmistresses not only in Kilmarnock but in the surrounding rural villages of Fenwick, Mauchline and Kilmaurs. Post offices in such areas provide an important service, because their customers do not always have access to face-to-face banking. None the less, the amount of business that comes through those offices does not always make them sustainable. All the postmasters and postmistresses expressed real concern about the loss of business from the Post Office card account. In some instances, they believed that that might well make their local post office unviable in the longer term.
During the course of our inquiry in Scotland and in other debates, we have heard a lot from the Government about diversification and about how they are trying to ensure that post offices can adopt different business models at a local level. However, for a tiny post office, such as the one in Kilmaurs, there is simply no option to expand, to put in other retail outlets or to do anything other than provide a post office service, which is what it was set up to do. There are village shops; the Co-op is next door and there are other shops and independent retailers across the road, but the post office and the service that it provides are vital. I accept that the Government have no wish to undertake a closure programme, but if those small post offices are not protected and do not get enough business, they may end up withering on the vine.
We have heard about the option of linking up with credit unions, which would be a worthwhile path to pursue. Credit unions should not just be about the poorest people or the most financially excluded people in our society. They are a perfectly valid business model that is owned and controlled by the members. As part of our Scottish Affairs Committee inquiry, we visited the Pollok Credit Union in Glasgow, which runs a successful post office. We spoke to the people involved, and saw the post office in action at one of its busiest times. The number of people who came along and the types of transactions that they conducted spoke volumes.
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In conclusion, I should like to mention a couple of points that have been raised by the National Federation of SubPostmasters. Its general secretary, George Thomson, has made it clear that the Post Office card account, or something of that nature, should continue. It has raised concerns that the award of the contract to PayPoint may have been at below-cost price. Obviously, we want to ensure that every aspect of Government offers good value for money, and the benefit system is no different. Personally, I would rather see the money spent on benefits, so that people have a better quality of life, than being spent on administration. However, I want to ensure that everything is done absolutely correctly and that the Government take account of the social value of the post office in the context of providing a service to people generally and to people on low incomes specifically. I hope that the Minister addresses those points in his summing up.
9.54 am
Mr Alan Reid (Argyll and Bute) (LD): It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing this debate on the important issue of the Post Office card account and on presenting a good case on behalf of our communities. After spending nine years in opposition to a Government who were clearly urban based, it is a pleasure to be part of a Government who understand rural communities.
The coalition agreement includes a commitment to post offices and to making them the front office of government. For that to happen, they have to be financially underpinned so that they can provide a large number of basic services, including the Post Office card account. The importance of POCA to post offices derives not only from the income that sub-postmasters and sub-postmistresses get from it, but from the fact that customers collect their money from the post office and then spend it in the shop. In rural villages in a constituency such as mine, there is often just the one shop and the post office is an important part of that shop. Without the post office, the shop would not be sustainable.
My hon. Friend talked about the need for joined-up government and for all Departments to support the post office. Given the structure of government in this country, there is clearly a temptation for Ministers to engage in silo thinking and to be concerned only about their own Department. Although the Government inherited a terrible financial mess from their predecessors and the pressure is on Ministers to make savings in their own Departments, it is important that our Ministers do not pat themselves on the back for making savings in their own Department at the expense of other Government Departments. The Post Office is a case in point. We need all Government Departments to support the Post Office.
When I came back to Parliament after the election, I was unpleasantly surprised to find that the previous Government had issued tenders to replace green giros, which brought in a lot of money to post offices. People in rural areas were particularly dependent on such a service because it meant that they had a place in their own community to cash their green giros. When the new
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Government came in to office, they had to deal with the fact that the tender had been drawn up by the previous Administration, which greatly restricted their room for manoeuvre. I was further disappointed when the contract was awarded to PayPoint. Although there are a lot of PayPoint outlets in my constituency, they are all in the towns, and large rural parts of my constituency have no PayPoint outlet. There is no PayPoint outlet in the rural parts of north Argyll. There are about half a dozen in shops in Oban, but nothing outside.
Sarah Newton: I can echo my hon. Friend on that point. We have the same problem with access to PayPoint in parts of Cornwall. However, does he not agree that we should take some reassurance from the fact that the Government have said that people who currently receive the green giros will be given advice on their options, including signing up for a Post Office card account? I will work with my rural post offices to put up posters in branches so that as people cash in their green giros for the last time, they are encouraged to apply for a Post Office card account.
Mr Reid: My hon. Friend makes an important point that customers who use the green giros must be given the option of using POCA and must be encouraged to do so. I hope that this Government’s attitude towards POCA will be very different from that of the previous Government. Those of us who were MPs in the 2001 Parliament were inundated with complaints from constituents who were badgered and bullied by the Department for Work and Pensions call centre to move away from POCA to the banks. As I say, I hope that this Government will have a completely different attitude to POCA and that its use will be marketed positively rather than actively discouraged, as was the case under the previous Government.
There is a lack of PayPoint outlets in the rural parts of north Argyll, and there are several islands in my constituency that do not have a PayPoint outlet. Every time I mention PayPoint in a debate, I am conscious of the fact that a few days later a letter comes in from PayPoint saying what a wonderful service it provides. I say now to the person from PayPoint who will read the Hansard report of this debate that PayPoint still does not have outlets in rural north Argyll or on several of the islands in my constituency.
As we are discussing green giros, it is important to remember that many people who use them are people who were unable to use POCA for disability reasons. When my hon. Friend the Minister responds to the debate, I hope that he can tell us what facilities will be made available to people with disabilities who were previously deemed unable to use POCA to make it easier for them to access POCA. For example, if they live on a small island without a PayPoint outlet, what are they to do?
One of the lessons to be learned from the green giro contract is the importance of Government consultation before contracts go out to tender. When some of my hon. Friends and I attempted to lobby Ministers to give the green giro contract to the Post Office network, we were told the standard line that all Ministers in any Government use—that once a contract is out to tender and a legal process is under way, Ministers cannot engage in discussions about it. It is therefore important
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that we consult before contracts are put out to tender rather than, as was the case with the green giro contract, only finding out after the contracts have been put out to tender.
Of course, my hon. Friend the Minister has a responsibility to run his Department as efficiently as possible and to save as much money as possible. However, any savings that are made should not be at the cost of making the problems of financial exclusion worse. I understand that one of his remits is to be the Minister with responsibility for financial inclusion. If the only place in a rural community where people can access cash is a village post office and that post office closes, we will see real financial exclusion. Although pensioners may have bus passes that allow them free bus travel, in a rural community in the highlands there are not that many buses. Even on the days on which the buses run, it is often the case that there is only one bus from a village to a town at 9 am and there is only one bus back at 5 pm. What is a pensioner on a low income to do if they go into a town on the 9 am bus to collect their pension from the post office and they have to wait until 5 pm for the bus back?
Cathy Jamieson: Does the hon. Gentleman accept that for many people, particularly elderly people, the fact that they are able to conduct their business at a post office gives them some particular comfort? There are circumstances in which they simply do not want people to know their business if they have to conduct transactions in a very public place such as another shop.
Mr Reid: Yes. The hon. Lady makes a very important point, because the post office has a certain privacy that, say, a PayPoint outlet—I might as well say “PayPoint”, because I will get a letter about it anyway—in a filling station rarely has. Also, the staff who work at the checkout in a supermarket or filling station do not have the training that the post office staff have. That is another very important point.
Sarah Newton: Does my hon. Friend accept that staff in local post offices, such as those in villages in my constituency, know the regulars who come in, particularly elderly or vulnerable people? They can help those people if they have forgotten their PIN numbers; I am sure that that goes against the regulations, but it is a vital thing that they can do. They also notice if Mrs Smith or Mrs Jones does not come along. That sets off an alarm, and they either go round themselves or they ask other people to check on them. That is a vital social service for elderly people and people with disabilities in many of our villages.
Mr Reid: My hon. Friend makes an important point. I hope that the Minister and other Ministers will bear it in mind when they consider the importance of post offices.
The Government have a commitment to the Post Office network, as set out in the coalition agreement:
“We will give Post Office card account holders the chance to benefit from direct debit discounts and ensure that social tariffs offer access to the best prices available.”
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I hope that my hon. Friend the Minister can tell us what progress the Government have made towards achieving that objective in the coalition agreement.
In conclusion, post offices are very important to our rural communities. As I have said, the post office often underpins the only shop in a village and there will be all sorts of problems for villagers, particularly elderly people on low incomes, if post offices close. I hope that my hon. Friend the Minister will agree that it is worth the Government spending money or perhaps giving up the opportunity to make some savings to retain the Post Office network in such areas. That means supporting Government services through the Post Office network and, crucially, it means that when the present POCA contract runs out in 2015 its successor is a post office-based product, and hopefully one that offers even more services than POCA offers at the moment. The successor to POCA must be a post office-based product. Otherwise elderly people on low incomes in our rural communities will really suffer.
10.6 am
Nia Griffith (Llanelli) (Lab): I congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on making an excellent opening speech. She outlined the history of the Post Office card account very clearly, but she also showed that she is way ahead of many other hon. Members in thinking about 2015 and the fact that in order to secure the future of post offices any incoming sub-postmaster will immediately ask, “What will be my income in five or 10 years from now?” They see no hope of any inter-business agreement coming through, as a result of the privatisation of the Royal Mail; very disappointingly, such an agreement has not been enshrined in legislation. Consequently, they will ask, “Well, what of the promise that the post office will be the shop front for Government business? What is going to come of that promise?” So it is very timely that the hon. Lady has secured this debate today.
Labour first introduced POCA as a measure to boost financial inclusion. It was designed to give people who had perhaps always dealt in cash an opportunity to collect their pensions or benefits from their local post office. Indeed, by 2008 4.5 million people had a POCA, of whom 30% had no other bank account. Obviously, therefore, the future of POCA is vital for that particular sector of the population.
Those of us who were here in the last Parliament will remember the box-loads of cards that came in begging us to lobby to keep POCA and to have it extended beyond the finishing date of its first phase, which was 2010. Obviously that renewal of POCA was made by the last Government. They put in place the present arrangements, which will run until 2015. Now we need to look towards 2015 and consider what will happen next.
As has been pointed out, the Royal Mail Group used to earn about £195 million annually from POCA. That figure has now dropped to about £135 million annually, but the income from POCA is still a very significant source of income for post offices. Furthermore, it is not necessarily very evenly spread and therefore some post offices will be disproportionately hit if a lot of Government business is withdrawn from the network.
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POCA is important for consumers because it was part of the last Government’s financial inclusion plan. It exists so that customers can obtain their benefits or pensions if they cannot use or do not wish to use any other kind of banking account. It allowed account holders or a nominated helper to withdraw cash free of charge at any post office branch using a plastic card that could not be used for other purposes. It also meant that the problem of people getting into debt, and all the difficulties associated with some types of account, were avoided. The important thing now is to say, “Where do we go next?”
In its 2010 manifesto, the Labour party made a clear commitment to a people’s bank with a full range of competitive, affordable products, and the hon. Member for Argyll and Bute (Mr Reid) mentioned that there was a commitment in the coalition agreement not only to an enhanced Post Office card account but to a people’s bank. The Minister himself stood on that manifesto for a people’s bank, so what is happening about it? Why have we not yet seen any steps towards creating any sort of additional banking services in the Post Office? I hope that the Minister today is able to tell us something about the plans, because at the moment it looks very much as if that coalition promise has been broken. There is no plan for any form of people’s bank at the Post Office, and we do not yet know what sort of enhanced services the Post Office card account will have—perhaps the Minister will enlighten us.
Richard Graham: The hon. Lady glosses over a bit of the history of the Post Office card account. My memory is pretty clear that in 2007 the account was put out to tender and that by the beginning of 2008 it was clear that the tender would not be given to the Post Office. The previous Government changed direction only in November of that year, after an enormous campaign that showed the unpopularity of the suggestion.
The hon. Lady is right that in March—I think—of last year, the Government started to recommend that the Post Office card account be extended to cover other financial services, and that her own party’s manifesto included more of the same, but that does raise the question of why, after 13 years in government, her party took so long to arrive at some proposals for extending the account. It would be fair to say—I hope that she agrees—that this Government have made substantially increased commitments. The question, however, which she rightly raised, is how we will take forward those commitments to using post offices as the front office for more Government work.
Nia Griffith: It was indeed decisive action by the Labour Government in late 2008 that ensured that the contract went to the Post Office. My question here, however, would be, “What has happened to the green giro?”
I refer the hon. Gentleman back to the letter, with which I am sure the Minister is familiar, that George Thomson wrote to the Secretary of State for Work and Pensions in September. It contained a list of ways in which he thought further Government business could be put the way of the Post Office, including, among
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other ideas, assisted applications for all benefits, assisted benefit withdrawals, signing on, payment in cash and various housing benefit validations. He obviously wanted to discuss in detail with Ministers in the Department for Work and Pensions his ideas about the Post Office becoming a front office for DWP business—the DWP is probably the Department that would most use the Post Office. Instead, however, what do we find? We see the green giro awarded elsewhere, and that is a very significant blow for the Post Office.
Mr Reid: Yes, it is a blow to the Post Office, but the hon. Lady must recognise the part that her Government played. It was that Government who put out the contract and wrote the specification, and if it had specified a widespread rural network, the Post Office would have won the contract.
Nia Griffith: What we want to know now is what the Government will do about securing more Government business for the post office network. It is absolutely clear that unless there is more business, the worrying situation of hundreds of post offices being temporarily closed—for months, or two or three years—will continue. Post offices are closing because it is extremely difficult to identify people who want to take on a sub-post office. They want to see guaranteed income, but instead they see much less security in what they will get from Royal Mail in the future, both because of the drop in the volume of postal items and because there is no guarantee in the Bill currently going through Parliament of any definite business from Royal Mail for the post office network after privatisation.
Richard Graham: The hon. Lady is, of course, absolutely right that the risk at the moment is different from what it was. The risk under the previous Government—the reality, in fact, not the risk—was the Government-led closure of some 8,000 post offices across the country. The risk today is that the network of 11,500 post offices that remain after the Labour closures programme could be weakened—she is quite right about that—if sub-postmasters either retired and no one took over or if they decided that the business was so unprofitable that they had to give it up, again with no one prepared to take over. I must point out, however, that that risk is a very different one.
In Kingsholm in my constituency of Gloucester, a profitable post office was closed. The sub-postmaster was one month short of having served 25 years and wanted to continue in the job, but my predecessor as MP and his Government closed the post office. Under this Government, a post office closed in Quedgeley when the sub-postmaster decided to give it up, but after a while a new sub-postmaster was found and a new post office opened, with the support of Post Office Ltd and the Government. The hon. Lady is right that there is a risk, but it is not the same, and it is much smaller.
Nia Griffith:
The hon. Gentleman conveniently forgets that although about 8,000 post offices probably met the previous Labour Government’s access criteria we kept 11,500 open, and put in a £150 million subsidy each year to do so. He was very lucky that a new sub-postmaster was found for Quedgeley, but in my constituency, and those of many Members, post offices have remained closed for much longer, and the real
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difficulty will be in enticing people to take on the businesses if they cannot see a viable future in them. I am so grateful to the hon. Member for Truro and Falmouth for securing the debate today, because the Post Office card account will be a key part of that viability.
Alex Cunningham (Stockton North) (Lab): I was absolutely delighted this week to receive a letter from the Post Office saying that it is reopening a post office in Port Clarence, a community in my constituency. That has been made possible by the local authority, voluntary organisations and the local community working together. Is there not that wider responsibility on a whole community, even though the Government also need to be in there to ensure that things happen?
Nia Griffith: Indeed. It is very much a partnership, and where that can happen, all to the better, but a key part of that partnership is the Government business, which is what we are talking about today.
I hope that the Minister is able to shed some light on what the Government mean by Government front office. What is the additional business that they hope to give to the post offices? What is the enhancement of the Post Office card account that they can offer at this stage, and what is the future for the account after 2015? Without that security and that business coming into the post offices, it is very difficult to see how we will encourage new entrants to take on post offices, particularly in areas where there is little opportunity to do much else in the post office, because they are very small, for example. Sometimes there is little else in the village that would offer people the opportunity to get enough money just to pay the milkman or the fish van that comes round. I have constituents who cannot get the cash they need for very small, simple, everyday transactions without a local post office. It is absolutely vital, therefore, for the future of the Post Office that we get that Government business, and I hope that we will hear how the DWP will contribute to that and, in particular, what its views are and its plans for the future of the Post Office card account.
10.19 am
Rachel Reeves (Leeds West) (Lab): I congratulate the hon. Member for Truro and Falmouth (Sarah Newton) on securing this debate, which I know will be welcomed by people up and down the country who rely on post office services in their local community and value the Post Office card account. As she said, this debate is a chance for the Minister to alleviate some of the concerns felt by sub-postmasters and postmistresses and their customers. Consensus is building on the importance of guaranteeing Royal Mail business for the Post Office. I hope that the Government will take note.
Two key issues are at stake. The first is ensuring access to pensions and benefits, especially for vulnerable people and those in rural communities. The second is ensuring that the post office network as a business is viable and vibrant in the long term. The importance of both those issues rings true in my constituency, where temporary closures include the Hawksworth Wood post office, which has been closed for nearly a year, despite Government promises that there would be no more post
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office closures. Since the closure, local residents have had to travel to other areas for the post office services that they value, either tackling a long, steep hill or paying for a bus to another part of the city. The closure has been devastating to the community served by the post office. It has been particularly hard on older people and more vulnerable people, as many hon. Members have said, because the face-to-face service that they are used to is extremely valuable.
I am sure that many hon. Members have experienced similar closures in their constituencies and know at first hand the difficulties that they create. Currently, 424 post offices are temporarily closed, 417 of which have been closed for a prolonged period. It is vital that we strive to keep post offices open and help them adapt to changing demands from their customers and, particularly, to protect the vulnerable. Post offices are at the heart of many of our communities, and we need to make it easier for them to survive. The business generated by the Post Office card account can help them to do so.
Labour did not get everything right on post offices, but POCA in the post office network was a proud achievement. POCA was introduced by the Labour Government to improve financial inclusion, as my hon. Friend the Member for Llanelli (Nia Griffith) said. That is particularly important in deprived and remote areas. I am proud of Labour’s decision to introduce POCA and the decision in 2008 not to allow it to leave the post office network, which would have diverted business away from the Post Office and jeopardised the viability of many of our local post offices.
About 4 million Department for Work and Pensions benefit and account payments were made through POCA in 2010, to a group of customers who rely on a simple service to receive their pensions and benefits. Many of them are elderly: 55% are pensioners. POCA is a core aspect of Post Office business and a key driver of footfall, but it is also designed to promote basic financial inclusion. Unlike most financial products—I say this as someone who used to work in financial services—POCA has huge support among the people who use it. When the POCA contract was on the agenda in 2006, as has been said, it generated 4 million signatures in support of keeping it in the post office network. I believe that that is the largest ever peacetime petition.
A Help the Aged survey of its members also found that they were overwhelmingly in favour of the service. Help the Aged’s report highlighted the importance of post offices, particularly to older people who rely on POCA, and POCA’s popularity in rural areas where no local bank is easily accessible. That is also an issue in some of the most deprived urban areas.
The Post Office card account has several key advantages for its customers. Some 71% of people without access to a bank account depend on POCA to receive payments. POCA customers are often people who cannot or do not want to access bank accounts; 30% have no other bank account. According to Age UK, someone from an unbanked household is 23 times more likely to use a POCA than someone from a household with access to bank accounts. POCA is also the only facility for receiving benefits or pensions open to people who have been declared bankrupt. Another good feature is that the facility offers no risk of getting into debt. POCA also offers a crucial facility for people with mobility problems. Almost 10% of Post Office card account holders have a
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second card that can be given to a carer to draw cash on their behalf, a facility not available through high-street banks.
POCA was introduced as part of a wide-ranging approach to financial inclusion as a simple facility for people who could not or did not wish to use a bank account. However, POCA alone is not enough to ensure that older, vulnerable and hard-to-reach customers are financially included. To do so, the Government could work to identify links with credit unions and consider carefully what steps are needed to increase the accounts’ functionality in the interests of post offices and their customers. Like other hon. Members, I urge the Government to increase POCA’s functionality and consider whether direct debits could be introduced. Even now, people with a Post Office card account but no bank account do not get the direct debit service that helps save money and time on utility bills and other payments, a service that most of us take for granted.
There are, of course, risks involved in introducing direct debit functionality. The Treasury financial inclusion taskforce has documented the excess charges often incurred by new users of bank accounts, and they must be taken into account, as average losses are £140 a year and charges are focused on the poorest households. Consumer Focus also has concerns, but none the less supports a more flexible POCA account, and its research indicates that POCA users do too.
“We will give Post Office card account holders the chance to benefit from direct debit discounts and ensure that social tariffs offer access to the best prices available.”
In answers to parliamentary questions, the DWP has also said that research is being conducted on the subject. What steps have been taken to ensure that that promise is delivered?
Members are keen to ensure that POCA lasts beyond 2015 and that we have some certainty about the future, as my hon. Friend the Member for Llanelli said. The year 2015 may seem like a long way off, but POCA customers and sub-postmasters—like many Liberal Democrat MPs, if I may say so—look to 2015 with some trepidation.
When exploring options for increased functionality, it is important to consider that the Post Office has unprecedented access to the consumers whom credit unions are best able to support. Credit unions do an immense amount of good in our communities. The Leeds and Bramley credit unions have a tangible impact on the lives of my constituents, too many of whom, lacking access to the services that credit unions offer, are driven into the arms of loan sharks. However, credit unions in my constituency lack a shop front and a high-street presence. The post office network could help change that.
Despite sending a mixed message with the financial inclusion fund, the Government have supported credit unions and could take a serious step to support them by linking them with the Post Office when considering the Post Office card accounts. Will the Minister update us on what practical measures the Government are taking to support that aim? Hon. Members support credit unions as an important source of affordable finance within our communities and welcome the opportunity to increase footfall in our post offices.
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We must make it easier for post offices to survive. POCA is one of the services that ensures the viability of post offices. About 20% of total visits to post offices, or 6.5 million visits a week, are made to access POCA payments. POCA brings in a significant portion of income for sub-postmasters up and down the country. The National Federation of SubPostmasters has estimated that it provides 10% of sub-postmasters’ net pay. In rural and deprived areas such as Truro and Falmouth, Argyll and Leeds West, that proportion jumps significantly: it is about 12% in deprived urban areas, for example. Indeed, 15% of sub-postmasters earn £400 or more a month from POCA transactions. Nationally, POCA brings in about £195 million a year.
POCA customers ensure vital footfall and additional income to ensure that post offices remain at the heart of our communities, but a Government supposedly committed to preserving the footfall have already failed one test by handing the green giro contract to PayPoint. Now 250,000 people who would previously have gone to post offices to collect their green giros will no longer do so. That is a negative step that could damage our post offices and reduce the services available to customers.
The Minister of State, Department for Work and Pensions (Steve Webb): The hon. Lady will be aware, as has been said, that the previous Government initiated a competitive tender and set criteria for bidding. All of it was undertaken according to strict European Union competition rules. If one of the two bidders was substantially cheaper than the other, does she think that the Government should have gone with the higher bidder?
Rachel Reeves: As the Minister knows, that decision would have been outside my domain, but we should consider the Labour Government’s decision in 2008 to award the Post Office card account to the Post Office rather than continuing with the tender. That is an example of what this Government could have done if they had chosen to do so, but they did not.
In evidence to the Select Committee on Scottish Affairs for its report on postal services, the general secretary of the Communication Workers Union, Billy Hayes, described the decision to remove green giros from the Post Office, at a time when the Government were committed to increasing the use of the post office network, as being
“about as joined-up as spaghetti”.
This is a hit to the footfall in post offices, and I urge the Government to ensure that POCA remains a Post Office account.
With the POCA contract subject to competition tendering requirements, and considering the fact that only 4,000 of approximately 12,000 post offices are viable independent of the shops in which they operate, the stakes for the future POCA contract could not be higher. Moreover, with Government commitments to the post bank seemingly in the long grass, as my hon. Friend the Member for Llanelli has said, and with little tangible progress towards making the Post Office the front office for government, what assurances can the Minister give us that POCA will be part of securing the commitment to maintaining post office services?
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Richard Graham: The hon. Lady has mentioned—with, I think, approval—the remarks of Billy Hayes from the CWU about this Government’s approach. Does her party support Billy Hayes’s mantra of no cuts?
Rachel Reeves: That is outside the domain of today’s debate. I quoted what Billy Hayes said about taking the green giro account away from the post office network. I do not think that he supports that. I think that he would have preferred to have kept it in the post office network. That is the context in which I quoted his comment that the Government’s policy is
“about as joined-up as spaghetti”.
Richard Graham: What does the hon. Lady estimate would have been the cost to Government of re-awarding the green giro contract, and how would her party have funded that?
Rachel Reeves: As the hon. Member for Truro and Falmouth has said, it would be good to see the Government working on a more joined-up basis. Savings for one area of government put costs on another area of government, and this is a prime example of that. It also goes against the commitments in both the Conservative and the Liberal Democrat manifestos. They would have put more services into post offices, but awarding the green giro account to PayPoint goes against those principles.
Mr Reid: The hon. Lady keeps forgetting that it was the previous Labour Government who wrote the tender specification, which could have specified the need for an extensive rural network. That would have meant that only the Post Office would have qualified, so why did her Government not specify the tender in that way?
Rachel Reeves: As I have said, the Labour Government did not get everything right in relation to post offices. The Labour party is using the period of our policy review process to look at a large number of our policies. I return to the point, however, that both the Liberal Democrat and Conservative manifestos made it clear that those parties were committed to giving more services to post offices, not to removing them. That is why the decision on the green giro was so disappointing, because it went against those commitments.
To return to another point that I made earlier in response to the Minister’s question, although POCA was put out to tender, the previous Labour Government recognised the public concern, ended that process and gave POCA to the Post Office. That decision was welcomed by our constituents and by post offices up and down the country.
Richard Graham: Will the hon. Lady give way?
Rachel Reeves: I will, but we need to get to the Minister’s remarks, so this will be the last intervention that I will take.
Richard Graham:
I am grateful to the hon. Lady for her generosity. It is worth highlighting the fact that the commitment in my party’s manifesto was to maintain
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the post office network. The commitment by this Government to provide £1.35 billion to make sure that Post Office Limited maintains that network is the single most important example of expenditure to maintain a post office service that I can think of over the past 15 years. Does she not agree?
Rachel Reeves: The Conservative manifesto said:
“Nothing underlines the powerlessness that many communities feel more than the loss of essential services, like post offices”.
We all know, however, that removing services such as the green giro from post offices makes it harder for them to be viable in the long term. The Government may be giving money in one way, but they are taking money away from post offices by removing from them services such as the green giro.
Today’s debate has been consensual, with representatives from all parties saying that they want to support their local post offices. We should welcome that consensus and try to work together to support post offices and the people who use them in all our communities. That has been the tone of my remarks. I have admitted that Labour did not always get things right, and it would be good to hear other Members say that not everything that their parties are doing is right in representing the people whom we are here to serve—our constituents.
In conclusion, we have heard useful and interesting contributions from Members who represent both urban and rural areas, who know first hand how important post offices are in their communities. I have set out what I think are the key questions surrounding POCA and some wider questions that the Government must answer on the future of postal services.
I have already quoted the Conservative manifesto, but the Lib Dems also promised a post bank as a central plank of their efforts to keep post offices open. People who rely on the post office are keen to know what is happening now that those two parties are in government. They are keen to hear whether the coalition partners are making POCA part of realising their pre-election promises, both up to and beyond 2015.
The post office is at the heart of communities up and down the country. In an era of falling trust in financial services, the Post Office remains a beacon of hope for restoring trust. I welcome this debate—I congratulate the hon. Member for Truro and Falmouth again on securing it—as an opportunity to lend support to POCA and post offices, and to emphasise that decisions about POCA should be made with the intention of making sure that the post office is a viable and vibrant part of our communities in both urban and rural areas, offering services that pensioners, families and the most vulnerable in society rely on.
10.36 am
The Minister of State, Department for Work and Pensions (Steve Webb):
Good morning, Mr Hollobone. I join the congratulations to my hon. Friend the Member for Truro and Falmouth (Sarah Newton) on securing this important debate. I am delighted that, although this is the final day before the Whit recess, we have a good turnout and that, as has been said, we have
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heard perspectives from rural and urban England, rural Scotland and Wales—indeed, from around the United Kingdom.
Steve Webb: Before the hon. Gentleman seeks to intervene, I should say that, when I said the United Kingdom, I thought that I was including Northern Ireland.
There are a lot of common threads. Any community-minded constituency MP will echo much of what has been said this morning. My own constituency is a mixture of market towns and villages, most of which, notwithstanding the series of cuts over the past year, either have sub-post offices or, in some instances, have reopened them as community ventures—community shops, co-operatives and so on. I think that we all share that commitment to the post office network.
My hon. Friend the Member for Gloucester (Richard Graham) is absolutely right to say that, although money is tight, the Government should prioritise spending on the post office network. I encourage him to think about which Government Department identified £1.34 billion for the post office network, and about the other spending issues that that Department faced that raised some political issues. He will recall that there were other calls on the Department’s money, yet it prioritised the post office network, because we are about not just words, but deeds in relation to that. To be clear, in return for that £1.34 billion, Post Office Ltd must maintain a network of at least 11,500 branches and continue to adhere to the strict access criteria that mean that 99% of the population live within three miles of a post office.
Nia Griffith: Does the Minister agree that, under the previous Labour Government, it was £150 million per year and that that went up to £180 million per year in the last year in which we were responsible for setting the subsidy? That is half of what the present Government are giving to the post office network, and it was sufficient to keep open those 11,500 post offices. Why on earth has such a large amount of money been given to the Post Office when it would be far better to create the streams of business that make post offices viable and sustainable for good, so that they do not need that type of subsidy? I find it very difficult to understand why doubling the subsidy is the best way forward when making things viable would really be the best way forward.
Steve Webb: I could not have written that question better myself. Why is it necessary to double the subsidy to keep the post office network going on a viable basis? Because so little was done over the past 13 years to make the post office network sustainable. That is precisely why we have had to put temporary subsidy in while we get the Post Office back on its feet.
I shall quote from the Department for Business, Innovation and Skills document, “Securing the Post Office Network in the Digital Age.” On the very point that the hon. Lady raises, it states:
“Senior management at Post Office Ltd… estimate that without action and modernisation”—
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“keeping the network operating at its current size would result in the annual subsidy required from taxpayers rising from £150 million this year to £400 million by 2016—and would carry on climbing.”
That is the legacy. That is what would have happened had we done nothing. I sense, Mr Hollobone, that you are not a great PowerPoint fan, but it is at such moments I wish we could have a screen and slides because I would simply refer hon. Members to chart 3 of that document.
I will point that document in the direction of Opposition Members because it shows that the long-term gradual decline in the post office network is partly because of demographic trends—sub-postmasters retiring and not being replaced—and partly because, during the 13 years of a Labour Government, the number of post offices has fallen off a cliff. During the two closure programmes between 2003 and 2009, 5,000 branches were closed. People have stood in this place and in this Chamber for the past 13 years pleading loyalty to the post office network, yet those were the people who carried out two massive closure programmes.
Nia Griffith: Does the Minister not agree that the fundamental reason for the Post Office’s loss of business is the complete revolution in how we correspond with each other? Personal letters were of immense importance 20 years ago, but the growth of the internet and so on is clearly the main factor in the reduction in the amount of mail business going through post offices. That is the be-all and end-all and the real reason for the existence of many post offices, in addition to what Government business they can do.
Steve Webb: The reasons for the decline of the post office network are many and varied. When I go to my local village post office, I am told that eBay is keeping it going. The fact that people buy postage for parcels and so on brings a whole range of different customers into the post office network. One of the biggest trends, which was accelerated by the previous Government through direct payments, was people being paid via their bank accounts, rather than by traditional giros at post offices. That was one of the single biggest changes that accelerated the demise of the post office network. Opposition Members ought to take just a tiny bit of responsibility for the trends that we have seen.
On the Post Office card account specifically, the perspective of POCA users has been missing from the debate. The Post Office has recently published some startling research that it undertook on what POCA holders wanted from the account. The Post Office talked to 930 people and asked the following about the POCA:
“is there anything you would change about it, for instance any additional services you would like it to provide?”
Some 80% of respondents said “nothing.” I will return to that significant point. Some 80% of respondents did not want any changes to the account and they valued POCA for its particular characteristics, which we should think carefully about changing. The next most popular answer to that question had a 4% response rate. I shall read down the list of things people would change about POCA, which have a response rate of between 4% to 2%:
“deposit/cash cheques into it; more cashpoints; use any ATM; comments relating to PO service in general; more flexible like a debit card; interest on account balance; online account access.”
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Hon. Members will have noticed that direct debit is not on that list. Some of these issues are counter-intuitive. I will not say that I like nothing better than to go online to use my bank account—which, I should just add, I access at the post office—but the folk who use POCA value it for what it is. As a number of hon. Members have said, we need to ensure that the people who have POCAs can benefit from things such as direct debit. However, that may not imply sticking things on to POCA.
Why might it be a good thing to provide access to those services but not to do so through changing the POCA? It is striking that many hon. Members have said that 30% of people with a POCA do not have another bank account. However, I tend to think of it the other way around. Some 70% of people with a POCA have a bank account or some other sort of account. So why do they have two? If they have a bank account with direct debits and all the rest of it, why do they bother having a POCA? Because people like to budget in different ways and they like a simple account that cannot go overdrawn.
Some of the evidence on charges is startling and worth repeating. I have been known occasionally to go overdrawn without planning to and I am shocked when I see the charges. The evidence of what happens shows that most people do not simply face one charge in a year. Once things have gone wrong, the charge is debited. People are then more overdrawn, they perhaps do not notice it and so another charge goes on. Just to give a feel of the situation, in 2008, out of 12.6 million active bank accounts, about a quarter incurred at least one penalty charge and the average charge was £205. Of that 2008 sample, a quarter of people had one charge, 15% had two charges and 39% had at least six charges.
Hon. Members can start to see why such an overdraft facility—there might also be a situation where someone had a POCA that could not go overdrawn but a direct debit bounced and somebody somewhere had to pay a charge for that—is not necessarily what people are asking for. People do not want to pay more because they are on a low income, so we need to find ways of giving them access to the best prices. However, grafting the ability to use direct debit on to an account that people like because of its simplicity may not necessarily be the best answer.
I absolutely stand by our coalition agreement commitment. The coalition programme for Government includes a pledge to give POCA holders the chance to benefit from direct debit discounts, but that should not necessarily be done by grafting direct debit on to POCA. We have listened to what the account holders are saying to us and our impression is, yes, people want the best prices they can have, but not necessarily by taking a product they value and turning it into something else.
That brings me on to the point my hon. Friend the Member for Truro and Falmouth made about the fully transactional account. One of the problems with the fully transactional POCA is that it would be so different from the product that was originally tendered, we would have to retender. The postcards will probably go to the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), but I have a feeling we might be going through it all over again. The comment rightly made by the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) was that there is uncertainty about
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the future. There always is. If we said that we need a full transactional POCA, so we are going to retender for it, I suspect that there would be riots on the streets of Kilmarnock.
We do not want more disruption and uncertainty. What we want—and as a Government what we are trying to do—is to work in partnership with the Post Office far more. Rather than those involved with running post offices being people to whom we do something, they should be in here as people we do something with. That is a profoundly different approach. The hon. Member for Leeds West (Rachel Reeves) talked about joined-up government and different Departments not damaging the Post Office. The Department that springs to mind is the Department for Transport. I renew my car tax each year at my village post office because, having talked to the sub-postmistress, I know it is one of the biggest transaction charges it gets. The Department for Transport would rather I did not do so. It sends me letters that say, “Do it online—you don’t have to go to your post office.” One year, it had a prize draw—or a raffle or lottery—in which I could win a free car.
The fact that Departments are not working in a co-ordinated way on the Post Office is not new. I work closely with the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton, and the Financial Secretary to the Treasury. The three of us have discussed financial inclusion issues, particularly credit unions. The post office network and credit unions could work together. There are exciting possibilities on that. One of the challenges is that, although credit unions are often very good and strong in a localised way, there are some very small credit unions and, in large parts of the country, if we asked someone on the high street where their nearest credit union is, they would not know what we were talking about. The potential for linking post offices and credit unions and access is very exciting, but it is also very expensive. That is the trade-off and the challenge.
We do not want credit union accounts with hefty charges because that would defeat the object of the exercise. We are wrestling with how to bring those two things together, but there are real opportunities for the post office network to build closer links with credit unions. In recent years, credit unions have made great progress in bringing affordable, financial services to people who would not otherwise be able to access them. I want credit unions, in partnership with the Post Office, to provide more services more efficiently to more people. That is what we want to see.
I was asked about the Post Office as the front office for Government. A number of Government Departments are looking at ways to do that, and I want to share briefly with the Chamber some measures that the DWP is taking. The hon. Member for Llanelli (Nia Griffith) mentioned George Thomson at the National Federation of Sub-Postmasters, who wrote to the Secretary of State. I am delighted to say that, in response to that letter, the Secretary of State had a face-to-face meeting with George Thomson. Several points that she read out, and which were on his list, are now being piloted in Government.
For example, a pilot for document verification started last week. The Pension Service, for which I am responsible, is piloting a check-and-send style service. That is for applicants who claim state pension or pension credit,
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and who are required to submit additional documents in support of their claims, such as birth or marriage certificates. Many people do not like sending their marriage or birth certificate in the post, so why not go into a post office and let post office staff check the documents, as they do when people renew their car tax? Post office staff could say, “Yes, that is fine; I have seen it. I am authorised to say that.” That would be quicker, and would give the Post Office revenue and footfall—everybody would be happy. That is not a—I do not think the word “piddling” is parliamentary—little pilot. Some 106 post office branches in the north-east of England are involved—a big pilot. It started last week and will run for three months in the Seaham pension centre catchment area. It will include a mix of Crown branches in urban, urban deprived and rural locations.
That is one concrete example; let me give the Chamber another. Later this year, we will be looking at a national insurance number pilot, which will investigate whether applications from what we call low-risk groups—EU citizens in states that are already members of the EU, not including the accession countries—could be directed to the Post Office for the evidence-gathering interview to get a national insurance number. Although the Post Office currently carries out document checking for the Driver and Vehicle Licensing Agency and the Identity and Passport Service, the DWP requires something qualitatively different. We are working closely with the Post Office to see if we can have an efficient but secure service, and hope to go live with the project later this year.
We want business in post offices, but we do not want dirty great queues. In other words, if I am queuing up to buy a stamp, I do not want someone in front of me trying to verify a national insurance number. We have to try to think of what post offices are good and efficient at, and harness that without disrupting the core business of the post office. That is why we are conducting these pilots.
The hon. Member for Llanelli mentioned signing on. In rural areas, getting to a jobcentre can be quite a trek, so why not sign on at the post office? At the moment, I was surprised to learn that customers in rural areas, intriguingly, sign on by post. The pilot will test whether there are benefits in requiring customers to attend and sign on in a local post office instead. We will evaluate that approach across a wide geographical spread and range of labour markets. We have identified test locations in Essex and in the highlands and islands—a range of areas.
Cathy Jamieson: That is very positive. Does the Minister agree that there are potential lessons for local authorities? Will he undertake to ensure that the outcomes of pilots are conveyed directly to local authorities, including in Scotland, as they may wish to look at doing something similar, particularly the check-and-send style service?
Steve Webb:
I am very happy to undertake to do that. Those are some examples of what the DWP is doing. Other Government Departments are also looking at things, including our friends in the Department for Communities and Local Government
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and in the devolved Assemblies and Parliament. We want to see everybody working together, alongside and with the Post Office, rather than simply taking bits of business away.
The issue of the green giro was, properly, raised. I was intrigued by the hon. Member for Leeds West. Having quoted Billy Hayes, she then said that, having issued competitive tender for a second time, we should have ripped it up and just given it to the Post Office anyway. I do not think that that was the intention of the previous Government when they issued the tender. It would raise one or two issues about tendering if, every time the Government issued a tender with the Post Office in it, they panicked half way through and then just gave it to the Post Office anyway. That might undermine the concept of tendering, not just with the Post Office but across Government as a whole. Indeed, I have a suspicion that if we kept doing that we would probably end up subject to legal challenges too, which might cost a good deal more than the money we spent on the contract.
It is worth putting the issue in context. I take the point that there are variations between post offices, but the green giro, on average, delivers a fiver a week to the average sub-postmaster, just to give a sense of scale—a fiver a week, and falling. The number of people with these cheques and green giros is falling. It is therefore worth retaining a bit of scale. They are important, and my hon. Friend the Member for Argyll and Bute (Mr Reid) is right to mention the importance of rural access. I can assure him that, before the contract was awarded, I stood in my office with a map of the United Kingdom with dots on it, marking out the PayPoint network and the Post Office network. I was pleasantly surprised by the rural extent of the PayPoint network, but I take his point about north Argyll and the islands. I hope that PayPoint reads Hansard and does something about that. I can tell his constituents, through him, that my hon. Friend has been a pain in my side on this issue, and properly so. He has represented those concerns very strongly.
My hon. Friend asked specifically about disabled people. I stress that all the outlets that can be counted for the tender have to comply with the Disability Discrimination Act 1995. The new service, the replacement for the cheque, is specifically designed to be simple for that group of clients. There is no need to sign and there is no need for a PIN—it is only necessary to present a card. It is designed to be analogous. In a sense, it is converting a piece of paper to a plastic card. Beyond that, it is essentially the same process designed for the same people. Access was very important to us.
We covered a wide range of issues in the debate. I was interested to hear the hon. Member for Kilmarnock and Loudoun mention her visit to the Pollok credit union. That is a positive example of a credit union and post office working together.
I was interested in the point made by my hon. Friend the Member for Gloucester in an intervention. He pointed out the difference we now see with the post office network. The Post Office has had the promise of a subsidy to undertake to maintain the network at the 11,500 level, so when there is a closure of a post office, effort is now going in to replace it. Rather than the gradual attrition that has gone on, frankly, for decades, there is now a Government in place who are committed
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to protecting the network. That is a sea change in attitude, and one that post offices will very much welcome.
A question was asked about the tender process. Clearly, such processes are done under strict rules. We are required, under the EU, to be specific about what we are tendering for, and to include both cost and qualitative factors. We can take account of access—that was part of the consideration. I have no reason to think that that process was not properly undertaken, but if the hon. Member for Leeds West has further evidence on that she is welcome to send it to me.
My hon. Friend the Member for Argyll and Bute mentioned the issue of what happens when a village or a community does not have PayPoint access. One thing that the Post Office can do—I think that my hon. Friend the Member for Truro and Falmouth mentioned this—is to see this as an opportunity to offer customers a Post Office card account, or to remind them that there are approximately 30 different sorts of accounts that can be accessed at post offices. Hitherto, when people turned up with a green giro, there was no incentive to say, “Why not have a Post Office card account?” Now that there is, I hope that many of his constituents will do so.
We have heard about the excellent work of post office staff, with their friendly, familiar approach and knowledge of people. An interesting mix of people receive green giros. It is not necessarily overwhelmingly people who struggle with signatures or plastic. Often they are young unemployed people, whose financial situation is a bit chaotic. The mix is diverse. Many community post offices will be able to provide a facility for the people my hon. Friend is rightly concerned about, so that they can access their money at the post office through a POCA, with the help and support that post office staff so often give. I place on the record my appreciation, and the Government’s appreciation, of the sub-postmasters up and down the land, who are very often the heart and soul of our community.
What I want as a Government Minister, instead of warm words while presiding over a halving of the post office network, is to put the money in to ensure that post offices are there, and to give them that breathing space to modernise the network. Ultimately, that has to be the key. Rather than presiding over declining business, and Departments across Government withdrawing a bit here and a bit there to save some money, let us look forward. Let us look at new services of the sort being piloted by the DWP. Let us look at modernising the premises. There are some exciting ideas. I will not go into detail, but there is the idea of a “post office local”, whereby the rather intimidating screens will come down and post offices will be much more friendly and welcoming.
The post office network has huge potential. It is worth remembering that it is still the biggest retail network in the country, notwithstanding everything that has gone on. My commitment, as a member of this Government, is to ensure that we are not passive bystanders watching the network decline, but that we are active participants encouraging and supporting the Post Office, and making sure that it has the bright future that everyone in this House wants to see.
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Night Flights (Heathrow)
10.59 am
Mary Macleod (Brentford and Isleworth) (Con): I am grateful for the opportunity to speak in this important debate on night flights at Heathrow.
The debate is timely because it takes place during noise action week, which is organised by the charity Environmental Protection UK. Noise action week highlights the impact of excessive noise on our communities, and it encourages communities and organisations, including business and government, to work together to find solutions. I hope that today’s debate is a constructive contribution to that goal.
The Government are assessing the noise action plan for Heathrow and will shortly consider the new agreement on the number of night flights allowed at the airport from 2012 to 2017. The Department for Transport also has an open consultation on the Government’s future aviation strategy, “Developing a sustainable framework for UK aviation”.
My position on Heathrow is clear. With a constituency next door to Heathrow, where some residents work, and as a former frequent business traveller, I appreciate the value that Heathrow brings to our area and the importance of the aviation industry to the economy and for creating jobs for the future. I am proud of our engineering capability and our world-class airlines. I want tourists to come to this country, and businesses to come and invest in the UK economy. For that, we need great airports, supported by the best customer service from the airlines.
My aim is to ensure that Heathrow continues to thrive but, at the same time, that we take into account the quality of life of people living and working around the airport—local residents, businesses, schools and community groups. That is why I was delighted that one of the first decisions by this Government was to stop the third runway at Heathrow and to maintain the runway alternation that allows local residents some respite from aircraft noise. I thank MPs in west London, including my hon. Friend the Member for Windsor (Adam Afriyie), who is present, HACAN—Heathrow Association for the Control of Aircraft Noise—which is an action group representing people living under the flight path, Hounslow council, the 2M Group, the Mayor of London and the then Opposition team responsible for transport, for working with me during the campaign against the third runway.
I cannot commend the Government highly enough on their decision. We did what the previous Government did not have the courage to do. The decision was an example of a listening Government. I was told, when I started on the campaign against the third runway, that the task was impossible—politicians told me, residents told me—but I do not believe that anything is impossible. Being told that only makes me more determined. I thank my right hon. Friend the Minister for all she did to achieve that decision.
Today, I wish to address three basic themes. First, is noise, particularly from night flights, an issue at Heathrow? Secondly, are night flights necessary? Thirdly, I have some considerations for the Government on the issue of night flights at Heathrow. My constituency of Brentford
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and Isleworth stretches from Chiswick to Hounslow Central and Hounslow Heath, and it lies under the Heathrow flight path, so I am well aware of the problems caused by noise, particularly for residents who are frequently woken during the night. I receive lots of correspondence on the matter, and a constituent from Isleworth summed up the sentiment of many people in a recent e-mail to my office:
“As someone who doesn’t sleep easily, I am writing to you to complain about planes landing early in the morning—six flew over this morning at around 4.30 am. This seems like a totally unreasonable time to be woken in the morning.”
As part of my campaign against the third runway at Heathrow, I took the then shadow Transport Minister—now my right hon. Friend the Minister—to Grove Road primary school in Hounslow Heath, where the pupils clearly explained the impact that the aircraft noise, both at night and in the day, has on the quality of their learning.
When we talk about night noise from aircraft at Heathrow, we need to be clear about our terminology. A “night flight” takes off or lands at Heathrow between 11 pm and 7 am. The Government set strict quotas for how many night flights are allowed at Heathrow, but those quotas apply only between 11.30 pm and 6 am. A number of factors influence the number of flights: noisier planes take a higher quota; figures are different during summer and winter; and the noisiest planes are restricted altogether from scheduled take-offs and landing during the night flight period. On average, over a year, 16 flights are allowed per night. No restrictions apply after 6 in the morning—indeed, that is one of the busiest hours of the day. People such as my constituent from Isleworth could, if they are light sleepers, be woken up on many occasions during the night and in the early morning.
Does that really matter? Yes, according to several respected studies. New research from Warwick medical school, published in the European Heart Journal in February this year, studied the experiences of hundreds of thousands of people across eight countries. The study found that chronic lack of sleep produces in the body hormones and chemicals with a severe impact on health. It concluded:
“If you sleep less than six hours per night and have disturbed sleep, you stand a 48% greater chance of developing or dying from heart disease and a 15% greater chance of developing or dying from a stroke.”
Adam Afriyie (Windsor) (Con): My hon. Friend is making a powerful case for a review of the number of night flights. As a resident of Old Windsor, I must declare an interest—I am right underneath the flight path. On behalf of my constituents, I want to reinforce the point that only one noisy night flight is needed to ruin a night’s sleep—it is not about average volumes or levels. One noisy flight can damage a night’s sleep and induce those stress hormones.
Mary Macleod:
Absolutely, I could not agree more. We want to legislate against that lack of sleep and disturbed sleep. The World Health Organisation and the HYENA—Hypertension and Exposure to Noise near Airports—report from Imperial College London
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also found that, even if people do not wake up, there is evidence that noise from night flights causes immediate increases in blood pressure.
The latest World Health Organisation guidelines suggest that night-time noise should be kept at no more than 55 dB to ensure no adverse effect on health, which is roughly equivalent to being in a noisy office—certainly my office, although that is because they work so hard. However, more than 20 miles from Heathrow, the noise of night flights can exceed 70 dB, which is roughly the equivalent of driving down a busy street with the window down. The effect is more pronounced given that the background noise level during the night is low. Ironically, this week, owing to the volcanic ash cloud, we might get some respite and peace because of flight cancellations.
Secondly, are night flights necessary? There are no scheduled take-offs between 11.30 pm and 6 am, and the first flight to Heathrow is scheduled to arrive at 4.30 am. Which planes, therefore, are flying to Heathrow during the night quota period, and where are the passengers travelling to and from? Are they really benefiting our local and our national economy?
Around a third of the passengers arriving on the very early flights to Heathrow transfer directly to other flights across the country and beyond, so the economic benefit to our economy of such flights might be limited to BAA and the airlines with which those passengers are flying. This year, a CE Delft report commissioned by HACAN concluded that a ban on night flights at Heathrow is likely to be beneficial to the economy, as the economic costs of the ban would be outweighed by the savings on the health costs of sleep disturbance and stress from night-flight noise.
A European Commission report in 2005 stated that airlines, when restricted on flying at night,
“seem to be able to adapt their schedules and get over slot availability, congestion and connections and fly by day.”
Can we conclude that night flights are operationally convenient for the aviation industry, but not essential?
In the consultation by the Department for Transport on future aviation strategy, it is recognised in the document that
“night noise is the least acceptable impact of aircraft operations”
“it continues to be a major concern for local residents.”
Night flights are not only an issue for UK airports such as Heathrow. No major airport in Europe has a night ban on flights, and many airports, such as Paris, Frankfurt and Madrid, have more night flights than Heathrow. However, rather more than an estimated half a million people are overflown by Heathrow night flights—more than any other place in Europe. Given the dense residential population around Heathrow, surely we should set the standards for other airports to follow, with our residents, businesses schools and community buildings benefiting from best practice in noise control and mitigation.
A report commissioned by Hounslow council from Bureau Veritas demonstrated that, far from leading the way, Heathrow’s neighbouring residents, schools and community buildings receive a worse deal in funding for insulation against the noise of aircraft than people near many other airports in the UK, including Gatwick, Birmingham, Liverpool, East Midlands and London City. The most generous scheme internationally is at
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Nice airport, which provides support for insulation for those impacted at the 55 dB and above. A similar scheme at Heathrow would stretch from Windsor in the west to Barnes in the east.
Thirdly, I have some issues for the Government to consider. Heathrow airport makes a significant contribution to the local and national economy, which is desperately needed now more than ever. However, the issue is the quality of life for people who live under Heathrow’s flight paths. Their sleep is affected night after night, and their health and ultimately their life expectancy are impacted by noise. Illness caused by sleep deprivation hits business, and is also a major burden on the NHS, as taxpayers’ money is used to care for them. Quality of life and health must be considered, and I urge the Minister to do so when preparing the night flights agreement for Heathrow airport.
Aircraft are becoming quieter, which is welcome and should be encouraged, but should be used to benefit our residents, not as a way of arguing for maintaining or increasing the number of night flights. We are used to conflict in the aviation industry, and I hope that the Government’s future aviation strategy will be a first step in a more productive and professional relationship between Government, industry and other relevant groups.
How far can we go? First, in the short term, like my hon. Friend the Member for Ealing Central and Acton (Angie Bray), who has campaigned hard on the matter, I would like stronger enforcement of current quotas, especially for flights that come in early, before 6 am, from the Pacific rim—Hong Kong, Singapore, Johannesburg, Lagos and Kuala Lumpur. Secondly, if quotas are not adhered to, there should be more transparency and publication of which airlines continue to breach quotas, and higher fines for persistent offenders. Thirdly, in an ideal world, and like my hon. Friend the Member for Richmond Park (Zac Goldsmith), I would like a ban on night flights. However, I recognise the significant challenge of reducing flights between 6 am and 7 am, and I understand the resistance from business to changes during that period. I certainly do not want the debate on mixed-mode operations to be reopened. There will no doubt be consideration of operational efficiency at Heathrow, whether it is possible to reschedule those flights later in the day, and what impact that would have on Heathrow’s competitiveness against other airports throughout Europe. Landing between 6 am and 7 am allows people time to go home, get ready for work, and be in the City at 9 am for a productive working day.
I would like a commitment from the Government significantly to reduce or eliminate scheduled night flights at Heathrow. I recognise that that may have to be achieved in stages, but we could put a mechanism in place now to assess feasibility, and set reduction targets more regularly. The final step is to fight for the very best noise mitigation for those who are worst affected.
Finally, night flights have a serious implication for the health and well-being of those who live under flight paths, which has an ongoing effect on spending on the national health service. We have an opportunity fundamentally to improve the quality of life of many thousands of people, and we must take that responsibility seriously. In the light of the recent evidence that I mentioned, I urge on the Government stronger enforcement of the current quotas, more transparency on breaches,
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and stronger fines for repeat offenders. They should consider carefully the issue of night flights as they prepare the 2012-17 night flight agreement for Heathrow; consider whether we can significantly reduce or eliminate scheduled night flights between 11.30 pm and 6 am; and encourage effective noise mitigation and insulation support from the BAA and the airlines. I believe that such action will allow us to create a really strong partnership between local residents, who will have enhanced quality of life and better health outcomes, and a world-leading aviation industry that we can all be proud of.
11.13 am
Adam Afriyie (Windsor) (Con): I want to say a few words to urge the Government to take action in a certain direction. As a long-time campaigner against the third runway and for a reduced number of night flights, I very much welcome the work by my right hon. Friend the Member for Chipping Barnet (Mrs Villiers) both as Minister of State and in opposition as shadow Minister to ensure that the third runway did not proceed. The policy approach and the way in which it was adopted were bold, courageous and elegant, and they reflect her status.
On night flights, I understand that a lot of work is being done to review, research and consider the evidence, and my hon. Friend the Member for Brentford and Isleworth (Mary Macleod) drew out two key issues. First, there is an impact on the economy around the airport and on the economy at large if thousands of people are struggling with health concerns because they are woken during the night.
Secondly, we should consider carefully whether night flights are necessary. There may be a commercial way of shifting flights in the early hours of the morning, between 4 am and 6 am, to a little later in the day. On behalf of Windsor, I urge the Government to consider the evidence carefully, and as a former shadow Minister for Science and Innovation, I am keen that that is done. If the Government have more bold and courageous policies in them, they should try to reduce those flights, not necessarily immediately, but over a period, because I suspect that any economic disbenefits would be overcome by the economic benefits for people who live and work around the airport.
11.16 am
The Minister of State, Department for Transport (Mrs Theresa Villiers): It is a pleasure to serve under your chairmanship today, Mr Hollobone. I congratulate my hon. Friend the Member for Brentford and Isleworth (Mary Macleod) on securing this debate on this important issue, on which she has campaigned so hard for so many years. I also congratulate her on a powerful and well-informed speech, and I welcome the contribution from my hon. Friend the Member for Windsor (Adam Afriyie), who is another steadfast campaigner on behalf of his constituents on noise issues generally and night noise in particular.
My last visit to Brentford and Isleworth ironically coincided with the day on which air space was shut because of last year’s volcanic ash crisis, but I recollect my earlier visit to Grove Road primary school with Councillor Barbara Reid, who is another leading
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campaigner on these issues, which gave me a real and personal insight into the impact of aircraft noise in the constituency.
As my hon. Friend the Member for Brentford and Isleworth said, this is a timely debate, but I must acknowledge at the outset that we have a long and detailed process ahead of us before final decisions are made on the new system of controls on night flights at Heathrow. She will appreciate that there are some questions that I simply cannot answer now because that could prejudge the outcome of the consultation. However, the debate has provided valuable input into that decision-making process, and all the points that she and my hon. Friend the Member for Windsor made today will be carefully considered as part of the consultation process and in the run-up to the decisions.
I agree that night noise is widely viewed as one of the least acceptable impacts of aviation. My hon. Friend the Member for Brentford and Isleworth set out with clarity the quality-of-life concerns that many of her constituents have about night flights. I am aware that it remains a key concern for people under the flight path in areas such as the constituency of my hon. Friend the Member for Windsor. I assure my hon. Friends that the local impact of aviation on communities around airports and under flight paths is important for the coalition, and that is why one of our first decisions in Government was to scrap plans for a third runway at Heathrow, and to make it clear that we oppose new runways at Gatwick and Stansted. I thank them for their kind words about my role in that decision.
In September last year, I confirmed that there would be no revival of Labour’s proposals on mixed mode. I also confirmed that the airport will start to use alternation when operating with easterly winds, which will ensure a fairer distribution of aircraft noise around the airport. As has been said today, we recently published a scoping document kicking off the debate on how to deliver a sustainable future for aviation, which harnesses the economic benefits that my hon. Friends mentioned in relation to Heathrow and aviation generally, but does so in a way that also addresses the environmental impact of aviation, including its noise.
There have been controls on night flights at Heathrow for many years, with limits on movement and noise quotas to restrict the level of noise emitted. Restrictions prevent the noisiest aircraft from landing at night, and Heathrow operates a policy of runway alternation overnight to give residents a degree of predictability on flight paths and some respite periods. Even with those restrictions, however, I appreciate that night noise continues to be a key concern for local communities, as my hon. Friends have made clear this morning.
As has been pointed out, current protections are time limited, and in the coming months the Government will need to make a decision on the regime that will replace the existing controls when they expire in October 2012. That provides an opportunity to take a fresh look at the issue and explore the scope for a more effective night noise regime. The scoping document already mentioned began an extensive process of public engagement that will ultimately culminate in a decision about a new set of rules and controls for night flights over Heathrow. During that process, we will seek evidence on how best
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to balance the economic benefits of night flights against the social and environmental costs that they undoubtedly impose on communities that lie under the flight path. We want to hear from the widest possible range of stakeholders about how the current arrangements are working and what elements people would like to see changed, and I welcome the comments made this morning by my hon. Friends on that issue.
My hon. Friend the Member for Brentford and Isleworth referred to the recent HACAN report, which suggested that a ban on night flights at Heathrow would produce a net benefit to the economy. I recently met John Stewart from HACAN to discuss that report, and my officials will give it proper consideration alongside other representations that we receive on night noise. Such representations will help inform the debate on policy development, and we must analyse evidence on the social impact of night flights, and the health issues mentioned by my hon. Friend.
One important issue for consideration is whether it is possible to deliver a more extended period of respite from night noise. I recognise that flights that arrive between 4.30 am and 6 am tend to be the most controversial, and we need to analyse carefully any evidence on the potential benefits that are derived from such early morning arrivals, and properly explore the operational scope for change.
My hon. Friend mentioned her concerns about enforcement, and when we look at the shape of the new regime we will certainly consider arrangements for its administration, transparency and enforcement. Transparency can be a real help in such situations, and give communities that are affected by all types of noise from Heathrow the confidence that rules are being complied with. Aircraft that breach departure noise limits are fined by the airport, and the revenue is used to finance local community projects. It is important that appropriate steps are taken to ensure that the current regime is properly enforced.
Mary Macleod: Does the Minister think that it might be worth looking into the levels of the fines imposed? They need to be a real deterrent or else airlines will keep breaching the existing noise limits.
Mrs Villiers: My hon. Friend makes a good point. That issue should be included when considering the new regime, and the airport is already looking at that matter in relation to current arrangements. There may well be a case for change.
My hon. Friend made an important point about the importance of mitigation and insulation as a fall-back method for dealing with the problems of noise. BAA has recently launched a local consultation on noise mitigation schemes, which could potentially broaden the scope of the existing schemes. It is important that my hon. Friend takes part in that consultation, and I will ensure that BAA is given a copy of this debate in Hansard so that it is made aware of the concerns felt by my hon. Friend’s constituents, and their desire to see a stronger and more effective regime in terms of insulation and mitigation.
Another issue for consideration is how we create the right conditions and incentives for airlines to deliver technological improvements that will support the policy goals we wish to achieve. As I have said, the current
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regime already bans the noisiest planes, and UK technology and know-how plays a major role in making commercial airliners quieter and more fuel efficient. Developments such as the A380 and the Boeing 787 Dreamliner also help to mitigate the effects of noise. As well as encouraging the aviation industry to reduce noise by improving aircraft technology, the Government are working with the International Civil Aviation Organisation to seek improvements in air navigation and airspace management in order to deliver quieter approaches and climbs.
Having obtained and considered responses on the broad themes regarding night noise that are included in the scoping document, we will then develop more detailed proposals for a new night noise regime. We plan to issue a consultation document on that next spring. Carrying out that process in the most effective way possible may require a limited roll-over of the existing regime. We have not made a final decision on that, but if we decide to run the current regime beyond its expected termination date of October 2012, we will need to consider whether to use temporary movement and quota limits to maintain the trend in progressive noise reduction required under the existing regime.
My hon. Friend referred to noise action plans, which are a requirement set out in the EU environmental noise directive. Seventeen major airports have been asked to produce such plans and noise maps, and we are in the final stages of considering whether draft plans submitted by Heathrow, Gatwick, Stansted, Manchester, Birmingham and East Midlands airports meet the requirements of the directive. The directive does not require a complete reassessment of airport noise policy, but the plans have been a useful exercise and have prompted airports to reassess their approach and strengthen existing measures. Such plans will, I hope, be an important tool in maintaining
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the pressure on airports to take action on the issues of noise, insulation and enforcement mentioned by my hon. Friend.
The plans that emerge from that process should be seen as a starting point rather than an end conclusion. They should be treated as living documents and serve as a driver of good practice and help improve performance on local noise management and mitigation. As such, they should be subject to regular review and be adaptable to changing circumstances, including the new night noise regime.
I conclude by restating the Government’s commitment to addressing the local environmental impacts of aviation, and state that we acknowledge the concerns that local communities have about night flights. We now wish to move forward to develop a better night flights regime, and explore the scope for change. It is important that we engage fully with all interests and understand all the differing views, and today’s debate has provided a valuable opportunity to bring this important subject before the House and highlight some of the key issues.
Although I cannot give my hon. Friend all the answers she needs, I view this as one of the most important issues that I will face as a Minister. I have listened with care to all the points she raised, and I will continue to listen as the debate unfolds over the months to come. I urge her, together with my hon. Friend the Member for Windsor and their respective constituents, to take part in the consultation process on which we have recently embarked. I am confident that broad engagement from my hon. Friends and their constituents will strengthen and improve the eventual outcome of this important matter.
11.29 am
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Treatment of Christians
[Mr Joe Benton in the Chair]
2.30 pm
David Simpson (Upper Bann) (DUP): It is a privilege to introduce the debate under your chairmanship, Mr Benton, and I thank other hon. Members for attending. I acknowledge that this is a wide-ranging subject. The issues that it raises could not be fully incorporated in a single debate, but given where we are meeting and where we as a nation are in our collective history and given the current complexion of our national politics and some of the international happenings that surround us, it is a subject to which we would do well to turn our attention.
Today, I want to consider two issues: the violent persecution of Christians internationally and restrictions on or the denial of civil and religious liberties for Christians in some parts of the world. Let me begin by making it clear that I am not blind to the abuses or atrocities that have been perpetrated by individuals who took to themselves the name “Christian” or by the professing Christian Church down the ages. However, it is not true, as some assert, that religion has been the one great persecutor in human history, for we should never forget Lenin and his use of slavery, the war that he waged against his own poor, the famine that that created, which left 30 million people facing starvation and death, and his slaughter of people of religion. Nor should we forget Stalin and his labour camps and the culling of the disabled—his Russian holocaust with victims numbered in the tens of millions and human beings regarded only as commodities to be exploited and expended in the interests of the state. We should not forget the repression of religion, including so-called accidental assassination carried out against people of faith.
There is also Chairman Mao, with an estimated 40 million victims—a figure that combines the outcome of his policies and the many millions deliberately killed. We could consider Pol Pot and those who were responsible for the killing fields and the deaths of between 25% and 30% of the entire population of Cambodia. Could we forget the many victims in Romania, where it was forbidden even to own a simple typewriter? I could also mention the East German experience and that of Poland and Albania under the rule of atheists. To that I could add the innumerable atrocities perpetrated by atheist authorities in central and south America, Africa and the far east.
It is not true, as some try to allege, that above all other things, religion is the great persecutor and the cause, source and substance of all the world’s great woes, for when atheism has been anointed as the faith of the state, to that, too, we can trace all kinds of brutality, inhumanity, violence and death. However, although that is undoubtedly the case, no one could deny that religion has played a grim role in far too many of the world’s sorrows or that those who profess faith in Jesus Christ have been the guilty party far too often, so I am not blind to the horrors of the crusades or the fires of the Inquisition. In this week when we look back on the visit of Her Majesty the Queen to the Republic of Ireland, I am not blind to the role played by professing Christianity in the darker episodes of Irish history, from the day when Pope Adrian donated Ireland to
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Henry II right down to present-day scandals involving the evil of child abuse. I make that very clear at the outset.
I do believe, however, that we need to turn our attention to the troubles and tribulations faced by Christians across the world today. This is the subject of the debate. There is violent persecution of Christians across the world. There are numerous areas of great concern. In the short time available to me, I cannot go through all the individual countries or list every example. I will just draw hon. Members’ attention to some particular cases.
In parts of Africa, Christians face intense, violent persecution. Nigeria continues to witness wave upon wave of violence directed against Christians. Hundreds of Christians have been killed in the aftermath of the election. Massive simultaneous attacks against Christians were launched in almost every northern state. Mobs massacred hundreds of Christians, burned more than 300 churches and destroyed countless Christian homes. It has been estimated that in Kaduna state alone, at least 300 people were slaughtered. Nigerian Government authorities were in such a hurry to hide the extent of the massacre that they organised mass burials of the victims almost immediately after the attacks. As a result, the exact death toll remains unknown.
Just this month, Muslim attackers reportedly killed 17 Christians, including the wife and three children of a pastor in northern Nigeria. Several Christian homes were burned in the village of Kurum. Among the victims in Nigeria are indigenous missionaries, pastors and leaders. Last year, more than 2,000 Christians were killed in targeted Nigerian violence.
Thousands of Christians are fleeing violence in western parts of Ethiopia. Muslim extremists killed several Christians and burned dozens of churches. Some 55 churches and dozens of homes are reported to have been burned in recent days near the city of Jimma, in the western Oromia region.
In Somalia, the radical organisation al-Shabaab has led the way in killing Christians, especially those who have converted from Islam. In Sudan, Christians have endured long decades of violence. In a recent debate in the other place, the Bishop of Bath and Wells said the following regarding Zimbabwe:
“The Anglican Church in Zimbabwe is undergoing a sustained and brutal persecution with its origins in a dispute over church properties and the non re-election of Dr. Kunonga, the former Bishop of Harare and someone widely regarded as a plant of the Mugabe regime…This is something that I have witnessed, all too painfully, for myself in a number of places.”—[Official Report, House of Lords, 10 March 2011; Vol. 725, c. 1809.]
When we turn to Asia, we find that Pakistan’s notorious blasphemy laws have been used as a cover to justify violent attacks. The President of India recently expressed her shock at the upsurge in violent persecution of Christians, especially in states such as Karnataka and Orissa. Christians in Karnataka have suffered serious violent attacks since 2008, including physical attacks on individuals and places of worship.
The sufferings of Christians in Orissa state are long standing and are truly horrendous. They include murder, kidnapping, forced marriage, the burning of churches and the forced removal of people from their homes, with about 18,000 people being injured, and 6,000 houses and 296 churches and smaller places of Christian worship in some 400 villages being burned. More than 56,000 people
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were displaced and more than 10,000 have yet to return home; and 1,000 have been warned that they can come back only if they convert to Hinduism.
To that could be added the long enduring plight of Christians in China, Burma, North Korea and Vietnam, where death is common and suffering is intense. In the middle east, there are numerous and disturbing examples that can easily be assessed.
Mr Gregory Campbell (East Londonderry) (DUP): I congratulate my hon. Friend on securing this debate. Before he moves on from the middle east, will he join me in noting that a couple of months ago The Independent drew a dramatic picture of the demographic decline that has resulted in the almost total elimination of non-Muslim groups in many countries in the middle east? Hopefully, we will see some recognition of that with international action to stem it, and the promotion of inclusivity rather than expelling people on religious grounds.
David Simpson: I thank my hon. Friend for that intervention. He is 100% right; I shall deal with the matter later in my speech.
Mr Edward Leigh (Gainsborough) (Con): The hon. Gentleman mentioned Pakistan. I know the Government have said that their influence is limited—we condemn all this but we are limited in what we can do—but we are extraordinarily influential. We were very influential in Iraq: we invaded it, and the plight of Christians has become much worse since. We are extremely influential in Pakistan, where we are a major donor. The Government therefore have a lot of clout, particularly with regard to the blasphemy laws, to ensure that Christians are treated fairly.
David Simpson: I thank the hon. Gentleman for his intervention. He is absolutely right. Again, I shall deal with that later.
Although the Orthodox Church in Iran faces discrimination, Protestant Churches face severe persecution and are regarded as enemies of the state. Throughout 2010 and 2011, dozens of Protestant believers were prosecuted for no reason other than practising their faith. Protestant groups in Iran are often formed of converts, who actively seek to make more converts. That has brought down upon them a particular form of state opposition; they are targeted and tried under political charges, and are treated as politically subversive.
Since the collapse of the Saddam Hussein regime, more than half of Iraq’s Christian population has, as a result of violent suppression, been forced to flee their homes or else flee the country altogether. In 1991, the professing Christian population totalled some 850,000. By 2003, that had fallen to just over 500,000. Today it is reckoned to have fallen to fewer than 250,000 individuals. That should surprise no one, given that there have been beheadings and even crucifixions. In the old Soviet bloc countries—from Russia itself through to Belarus—violence, prosecution and imprisonment are common.
I now turn to restrictions on, or the denial of, civil and religious liberties for Christians. Again, we can see this in many parts of the world. I shall cite a few examples, for I know that others want to contribute to the debate. Pakistan’s notorious blasphemy laws are
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used deliberately to settle personal disputes or disputes over land, or to carry out personal vendettas. However, they are also used to ensnare Christians into expressing any kind of criticism of Mohammed or the Koran, and thus to enable the bringing of charges. In the middle east, religious liberty is limited. In places like Kuwait, Syria, Yemen and Saudi Arabia, evangelism is prohibited and conversion is not allowed. In Saudi Arabia, expatriate Christians are supposed to be allowed to worship privately, but many are still prosecuted for doing so.
On the wider question of the denial of religious freedom, the United States Commission on International Religious Freedom identifies a number of countries of particular concern. They are Burma, China, Egypt, Iran, Iraq, Nigeria, North Korea, Pakistan, Saudi Arabia, Sudan, Vietnam and a number of others. It also lists what it calls watch list countries. These include Afghanistan, Belarus, Cuba, India, Indonesia, Laos, Turkey, Venezuela and Russia.
We must also acknowledge the inherent dangers that accompany what has come to be called the Arab spring. Right across the countries affected, groups are emerging that seek to exploit recent developments in order to establish a purist society in which the plight of other religious groups will be made worse. Indeed, Members will doubtless have read reports this week of the concerns expressed by pro-democracy elements in Tunisia and Egypt—that if the G8 fails to give financial assistance to strengthen the democratic cause in those countries, it could sound the death knell for democratic hopes in the region, thereby strengthening repressive regimes and providing a boost for radical movements that would seek to legislate away whatever minimal freedoms remain.
Although the current situation for Christians in many middle east countries is difficult, it could become increasingly dangerous in the coming months and years. What I have outlined represents a record of blood, a trail of suffering and a denial of basic humanity to many tens of thousands of people. We, as a Parliament and a nation, should not be like the priest and the Levite in the parable of the Good Samaritan and simply pass by on the other side. Many of these nations are important trading partners. Some are in receipt of aid. Still others are members of the Commonwealth.
Mr David Burrowes (Enfield, Southgate) (Con): I congratulate the hon. Gentleman on securing this important debate. He has outlined the extent of persecution, and I understand that three quarters of all persecution across the world is directed at Christians. We must condemn that, and seek to do something about it, but what about the modern-day form of persecution? He mentioned a number of countries, particularly Pakistan. Does he agree that it is the rise of Islamist threats there, and the Islamist Governments of other countries, that are causing or contributing to that persecution? Indeed, we have particular concerns about education in Pakistan—that hate education fomented by Islamist opinion is causing many of these problems. The Government should be held to account for the financial aid that they provide for education, given where it is actually going.
David Simpson:
I thank the hon. Gentleman for his intervention. The rise of Islam is strong in those areas, which is a particular problem. Indeed, as I outlined earlier, in years to come we will see more persecution of
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Christians in those countries. We may not even have to go to other countries to see Christian persecution, but simply look to our own back door.
I diverge slightly, but the hon. Gentleman has raised the matter. In the United Kingdom, the policy seems to be that people can do whatever they like against Christianity—criticise it or blaspheme the name of Christ—as long as they do not insult Islam. It is sad because this country is based on civil and religious liberty for all. When Queen Victoria was on the throne, the secret behind England’s greatness was its open scriptures and open bible. Today, that policy is being hammered into the ground, and that concerns me greatly for the years and months that lie ahead.
As a Parliament and as a nation, I do not believe that we should be like the Levite and pass by on the other side. There is no doubt that many of these nations are important trading partners. Some are in receipt of aid, and others are members of the Commonwealth. It is clear that silence should not be our response. I am not advocating that we intervene directly in such countries, but we can and should apply diplomatic and political pressure on Pakistan and other countries, as the hon. Member for Enfield, Southgate (Mr Burrowes) suggested. We should use as much influence as possible and apply pressure either individually or through organisations such as NATO, the EU and the United Nations. We could be far more proactive in the whole of this regard than we have been thus far. I am not saying that we have done nothing to help out, but we could do a lot more.
Recently, the MEP Peter van Dalen urged the EU to make more rights for the Egyptian Coptic community a policy priority and to develop a strategy for religious freedom. Mr van Dalen pointed out that more concrete European action is needed as the position of Christians worsens across the world. He correctly pointed out the “new big threat” towards Christians in the middle east, drawing attention to a structural neglect of, and discrimination against, Christians in several countries.
In conclusion, I urge the Government not simply to chase the financial bottom line in our dealings with neighbours and partners. As one of the great economies of the world and one of the beacons of democratic freedom, we have a duty to use all of our influence to help those who suffer injustice around the world. There is a rising tide of affliction that is swelling around Christians across the world. This nation and this Parliament should be more to the fore in the campaign against that and for civil and religious liberty. I urge the Government and all hon. Members to rise to that challenge.
2.53 pm
Tony Baldry (Banbury) (Con): The hon. Member for Upper Bann (David Simpson) has done the House a considerable service in initiating this afternoon’s debate. It is depressing that, in the 21st century, when the world is, in some ways, getting smaller, intolerance of other faiths and beliefs is growing in all too many parts of the world.
The best means for ensuring the fair treatment of Christians internationally is through the strong advocacy of the right to freedom of religion or belief for people of all faiths, as outlined in article 18 of the universal
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declaration of human rights and article 18 of the international covenant on civil and political rights. Although the UDHR is non-binding on UN member states, it contains significant moral and normative force. The international covenant is legally binding on those member states that have ratified the treaty.
Freedom of religion or belief should be viewed as not some peripheral right, but a right that is central to the identity and well-being of all people. Looking around the Chamber this afternoon, I see hon. Members with views and faiths that are fundamental to their identity as individuals. The coalition Government should be complimented on raising the profile of freedom of religion and belief, as evidenced in the most recent human rights report of the Foreign and Commonwealth Office, for which my hon. Friend the Minister is responsible.
The hon. Member for Upper Bann was entirely right to say that the British Government should set out clear benchmarks for progress on religious freedom issues in bilateral and multilateral dialogue with other states. Pakistan will soon be the largest recipient of UK bilateral development aid, which legitimately gives us some leverage in our dealings with it. We should continue to make representations in the strongest and most forceful way about the impact that its blasphemy law is having on its people.
Many of us were present at St Margaret’s, Westminster, for the memorial service for Shahbaz Bhatti, who was assassinated in Pakistan for being a Christian. Sadly, his death is symptomatic of the growing divisions in Pakistan as well as symbolic of the silence of those in Pakistan seeking to confront forces of extremism.
There are many ways in which the UK Government can exert pressure on countries in which religious tolerance and religious freedom are being ignored. Perhaps the most strategically concerning issue at the moment is the situation facing religious minorities in north Africa and the middle east, given the current phase of various uprisings and revolutions. Egypt is particularly crucial because a significant minority are Christians—Copts and Catholics.
There have been an increasing number of attacks on religious minorities in Egypt, particularly on the Coptic community. The most recent incident to gain widespread attention was the attack on 7 May on two churches in Cairo. One was gutted following false allegations that it was forcibly detaining a female convert to Islam.
What is rather sad is that such events took place after the events in Egypt and the Arab spring when so many people were full of hope and optimism. The President-Bishop of the Episcopal Church in Jerusalem and the Middle East, the Most Reverend Mouneer Anis, observed:
“The fear now is that the revolution is being kidnapped by these extremist groups, and there is a lot of effort being made by more democratically minded Muslims and Christians to rescue the revolution.”
That is absolutely correct. What has also been impressive is the extent to which many Christians and Muslims are still trying to protect minorities in Egypt. Despite the recent violence, efforts to promote sectarian tolerance continue. Indeed, several thousand Copts and Muslims recently held a joint march through Imbaba in Cairo to denounce the burning of the churches.
Nevertheless, the scenes that one has witnessed or read about are horrific. I was particularly struck by reports that a guard—I suppose that here we would
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describe him as a sexton—at St Mary’s church in Cairo had refused to denounce Jesus Christ and his own Christianity and that, as a consequence, his throat was cut. He was a man who was just doing his job but he was confronted and attacked. That is intolerable.
Only last weekend, up to 80 people were injured in Cairo when a group of Copts demonstrated outside the state television building. They were simply calling for more effective police protection for Christians and their property in the aftermath of the clashes in the Imbaba district, in which 15 people were killed and two churches were set on fire.
In the coming days of the Whitsun recess for Parliament, I am going to Cairo. I will meet Christian friends—both Catholics and Copts. Not only are they going through the turmoil of what is happening with inter-faith challenges in Egypt, but they are going through the political turmoil in the country. They wonder where they fit into that situation.
As the hon. Member for Upper Bann said, it is not only Egypt that is affected. The tragedy is that Christianity in the middle east is on the slide. Indeed, it is not just sliding into obscurity; it is almost in danger of being extinguished in many countries, such as Iran and Iraq. About 50 years ago, this was a part of the world where Jews, Muslims and Christians lived side by side. Now, for various reasons, it is extremely difficult for Christians to profess their faith in many middle east countries.
As the hon. Gentleman said, part of that process is about the rise of Islamic fundamentalism, which is also on the rise in Nigeria and other parts of Africa. Some of the stories—indeed, some of the facts—about what is happening in northern Nigeria, a leading Commonwealth country and another significant recipient of UK development assistance, are frightening. A system of religious repression is developing in parts of northern and central Nigeria and effectively there has been imposition of sharia law in those areas.
For example, there are parts of northern Nigeria where non-Muslim subsistence farmers are being subjected to an extreme form of usury that is known locally as bada kaka. Under that system, those non-Muslim farmers are obliged to pay for every bag of fertiliser that they buy from Muslim traders with two bags of goods that have been harvested and that fee doubles if they default on repayments. Ultimately, those who are unable to pay off such loans risk being deprived of their land, their possessions and, in a few extreme cases, their children, following a sharia court ruling. Those are things that we do not tend to hear about when we are debating international development and other related matters in this House, but they should have a far higher profile.
There are other parts of the world where Christians seem to be under considerable pressure. In countries such as India, there is an increase in nationalism. As a result, the position of Christians in India is being made increasingly difficult. In a number of communist or quasi-communist states, such as China or North Korea, life is incredibly difficult for Christians.
All the rights set out in the universal declaration of human rights are very important. However, I am concerned that the world is allowing there to be a creeping acceptance that religious intolerance is to be tolerated, or at least not challenged. There comes a time when we all have to ask ourselves, “To what extent can the tolerant tolerate the intolerant?” There comes a point where increasingly
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we have to challenge some countries in the world about what they are doing to defend their minorities and people who may have belief systems that are different from those of most of their citizens.
Mr Gregory Campbell: The hon. Gentleman is touching on a very important point. It is not only in other countries but here in the United Kingdom that these types of things are happening. Does he agree that some of the issues that the far right in the United Kingdom thrive on are exactly the issues that we are talking about today? The far right in the United Kingdom feed on the paranoia of some communities that anyone coming into the United Kingdom from any of the nations that we have discussed today is to be abhorred and treated with contempt and disdain. We will see in our society the seed bed of problems for the future if we do not deal with these issues internally in the United Kingdom as well as in other countries.
Tony Baldry: The hon. Gentleman makes a very good point. I go back to what I said at the beginning of my speech, that it is generally depressing that here we are at the start of the 21st century and we are actually going backwards in this regard. I hope that all of us—in our family lives, in our communities and in the constituencies that we represent—will seek to inculcate an atmosphere in which there is a built-in mutual tolerance and mutual respect of other people’s beliefs. I am more than willing to walk hand in hand with people of other faiths or people of no faith at all in the journey of life, provided that I tolerate their views and beliefs and they tolerate mine. That is fundamentally important.
I think that what we are saying this afternoon is nothing more than that. I do not think that it can be said in any of the countries where Christians are under pressure that Christians are seeking to challenge or overthrow the existing norms or established customs of those countries. They are being persecuted simply because they are Christians and in the 21st century that is wholly unacceptable.
3.7 pm
Jim Shannon (Strangford) (DUP): May I apologise to everyone for not being in Westminster Hall at the very beginning of this debate, as I was attending the debate on financial assistance for the eurozone in the main Chamber? I thank Mr Deputy Speaker for allowing me to exit that debate early before going back later—I think that that was the way in which he put it to me.
I congratulate my hon. Friend the Member for Upper Bann (David Simpson) on securing this debate on a topic in which I am particularly interested and which needs to be highlighted. My hon. Friend and indeed other contributors have spoken eloquently. The Palace of Westminster, where laws are made, is certainly the right venue for this type of discussion and the importance of this subject cannot be denied.
I am very conscious of a particular verse from the Bible:
“In the world you will have tribulation; but be of good cheer, I have overcome the world.”
That is from John, chapter 16, verse 33. It gives many Christians in this world the strength to face daily something that we cannot imagine for one second—persecution. Hon. Members have spoken about that persecution very clearly today.
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The horror stories are numerous. There is a tendency almost to become desensitised to the plight of others, but that must not happen. It is important for us all to remember those people who are persecuted and to help them, both practically and prayerfully. We must listen, be stirred by what we have heard, then do all we can to help.
The website, Persecution.com, says:
“Around the world, and especially in Africa and Asia, Christian populations are suffering severe discrimination and brutal attacks. Thousands are being killed. Systematic campaigns are being waged against Christians simply because of their faith, and it is not too dramatic to suggest that these are forms of ethnic cleansing and genocide.”
I believe that that is exactly what they are. The website continues:
“Yet there is little awareness of these continuing atrocities in the West, and even less response.