Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Skelmersdale: I do not envy the Minister because, of course, the cat is out of the bag as far as concerns the delay in the publication of the PIU report. As my noble friend Lady Byford made clear, at the annual conference of the Women's Institute last week the Prime Minister certainly gave the impression not only that the report and an accompanying announcement would be made later this month but also that he would make the announcement himself. That rather queers the pitch, if I may so describe it, of the Minister at this moment.

None the less, the questions asked by the noble Lord, Lord Clarke, and by my noble friends Lady Byford and Lady Miller are absolutely right. Before the end of the proceedings on this Bill, we all need to be satisfied, wherever we sit in the House, that the Government have come forward with the right answer in Clause 102. We also need to know how the wretched system will work.

6.15 p.m.

Lord Sainsbury of Turville: Not for the first time in this House, or in the other place, the important issue of whether financial systems can be provided for the support of public post offices is under discussion. Clause 102 is an extremely important clause. It will enable the Secretary of State to set up a financial scheme for the purpose of supporting public post offices. As the Secretary of State said in another place on 12th April, this power is a safeguard which is intended to keep open the option of financial assistance.

15 Jun 2000 : Column 1808

Perhaps I may stress again that this is an enabling clause; it is not a scheme. Therefore, to ask that all the details should be laid out now is to miss the point. In such a piece of legislation it is sensible to include the power. But that is not the same as saying that a scheme will be brought in tomorrow to cover the provisions in the clause.

I should like to deal, first, with the whole question of the loss of income from post offices by the switch to ACT, which will take place between 2003 and 2005. It will not happen tomorrow. Therefore, it may prove to be necessary to take such action in the future; it may not be right to take it now. That is why we have introduced this enabling clause and not a scheme.

I agree with the noble Lord, Lord Clarke of Hampstead, that long-term subsidies are not the answer. However, we must try to ensure that the Post Office company will be able to develop alternative revenue streams. That is why we are equipping 40,000 counter positions in 18,500 post offices with computer equipment to modernise the network at a cost of almost £500 million. This will give the Post Office the ability to offer an improved service and a wider range of services. For example, we have already seen more banks seeking to offer services through post offices.

Perhaps I may also deal with an issue that has frequently arisen in this Chamber; namely, how benefits will be paid in the future. Again, this will take place in the year 2003, not tomorrow. I believe that we have made it absolutely clear that people on benefits will be able to receive them in cash from post offices without any additional payments. That situation is clear. With the systems that we are putting in place, it is not difficult to imagine many ways of how that could be done.

If you believe in the future of the Post Office, as I do, you cannot continue to argue the case that the current system of payment, which is totally antiquated, should be the way forward. It is not surprising—

Baroness Byford: I apologise for interrupting the Minister, but I do not believe that any of us has made that suggestion today. To be honest, I do not think that anyone said that we wished the current system to continue. I just wanted to put the record straight. I am sure that the Minister was about to deal with it, but what we want to know is the actual cost involved. We have received no real answer in that respect. We are told that it will cost one penny, but I do not believe that that is the full truth.

Lord Sainsbury of Turville: Some noble Lords have implied throughout this debate that there is a choice as regards not going ahead with the new system and that we could somehow retain the current one. Some people seem to believe that that is a sensible way forward. However, if we believe in the future of a Post Office as a modern system providing a service to customers, we should ensure that such systems are properly automated in line with other computer-based systems that exist today. It should not surprise anyone that such systems are likely to be cheaper than the current systems, which are essentially paper based.

15 Jun 2000 : Column 1809

The calculations available show £500 million in savings in reduced administrative costs, compared to paper-based systems, before taking into account the £140 million savings through reduced instances of fraud and theft of order books and giros.

Without having checked all those figures myself, I have to say that I do not find that at all surprising. In this modern age when every other kind of business is going over to this kind of system and saving large sums of money, I do not think that it is right to go on arguing for the retention of an old system. Similarly, I do not think it right to continue to raise concerns by implying that we cannot issue cash through this method just as we do through any other system.

I hope that I have not misunderstood the noble Baroness, but she asked how we would get cash to post offices for this purpose. But that is exactly what we have to do today. I cannot see that there is a difference in having to get cash to the post office, compared with the other systems. Post offices have always had to use large amounts of cash to make benefit payments, and this is not generated by their own system.

However, the Government recognise the real concerns of many people throughout the country about continued local access to postal services, particularly in rural areas, but also, and importantly, in some of our inner cities. The clause provides an additional safeguard allowing the Secretary of State to provide financial assistance if it proves necessary to do so. That clearly underlines the Government's commitment to a nationwide network of post offices.

I turn to Amendment No. 94. We have made it quite clear that the clause as it stands will enable the Secretary of State to make a scheme to support public post offices. Again, as we have repeatedly made clear, this will enable financial assistance to be given if necessary. The noble Baroness's amendment assumes that a subsidy is needed. I do not share her pessimism about the current situation, although we should be prepared for the future. We are giving the Post Office the commercial freedom that it needs. We are modernising and creating opportunities. The Government are committed to ensuring that post offices are equipped and redesigned to face the future and are thereby able to continue to play their role as an essential part of the country's fabric.

As I have said, the Government's aim was to provide an enabling power for the Secretary of State to make a scheme. If financial assistance proves necessary, then as a matter of fact, commercial considerations are likely to take second place, particularly if it is a particular service which is to be subsidised. A service can be subsidised under the clause only if the person making the payments considers that the provision of the service through post offices assists in the provision of the post offices themselves. It may well be the case that without the subsidy the service concerned would not otherwise be provided on a commercial basis through post offices or indeed other outlets within the vicinity.

15 Jun 2000 : Column 1810

However, commercial considerations will be important, since one of the ways in which we shall determine the level of assistance needed is to look at the cost at which the service could be provided on a commercial basis. I fear that the noble Baroness's amendment amounts to an invitation to write a blank cheque now for a scheme.

As I have said, we value post offices greatly and have taken steps to support the network. If a scheme is necessary, it will be because certain wider public policies cannot be delivered by commercial means alone.

I hope that the noble Baroness will consider withdrawing the amendment.

I appreciate the strength of feeling in the Committee and more widely about the recent wave of withdrawals of bank branches from small communities. However, I do not believe that the noble Baroness's amendment on this point is the correct reaction.

Clause 102 provides for payment for services that support public post offices. This may involve asking commercial bodies to do something that is inherently uncommercial for them, and the Government may wish to provide assistance for that purpose. More specifically, an amendment such as we have before us might prevent payments to the Post Office company itself, since it is planning a universal bank which will play a potentially important role in combating social exclusion. There are many other businesses that may have banking connections, and we would not want to rule them out either.

Similarly, it might be sensible to ask a financial institution to have a hand in running a scheme, although it would be the Government's general intent to appoint a government agency or similar body to act as the "person" deciding to make payments. In such circumstances, it might be reasonable to pay fees in respect of work done by a bank or building society.

Therefore, while I accept the intentions behind the amendment, I must ask the noble Baroness to withdraw it.

Similarly, I would hope that Amendment No. 97, in the name of the noble Baroness, Lady Byford, will be withdrawn. My principal difficulty with it is that it is based on the supposition that there will be a single scheme for the provision of financial assistance to public post offices. In fact, there may be a number of schemes targeted at certain types of post office. For example, the Post Office presently has around six types of contract with different classes of sub-postmaster, and we might want schemes that were tailored to those arrangements. We might want to offer different support in rural areas from that in inner cities, or have special schemes aimed at delivering certain other services through post offices.

That is not to underestimate the importance of benefit payment to post offices or the wider concerns about the network. As I have said repeatedly, the Government are committed to the national network of post offices.

15 Jun 2000 : Column 1811

The amendment would unnecessarily fetter the discretion within the Bill. Any scheme will have to come before Parliament for approval by affirmative resolution, and there will therefore be plenty of opportunity to comment on the merits or demerits of a specific scheme. I would therefore ask the noble Baroness to withdraw the amendment.

I turn to Amendment No. 100, which would appear to constrain the scheme before the Secretary of State even has a chance to present one for the approval of the House of Lords. The Opposition have tried to suggest that without these controls the scheme could be used for political purposes, with greater assistance being given to areas with strong Labour representation. As my right honourable friend the Secretary of State assured another place, there is no suggestion whatever that this would happen or should happen. The Government's only interest is to enable a scheme to be put forward for the support of public post offices.

As I have said, any scheme will require the approval of both Houses. There is no question of the Secretary of State being able to sneak through an unsuitable scheme.

We want to ensure that a suitable body would provide the assistance. I turn now to that issue. It could be the commission, as the noble Baroness, Lady Miller of Hendon, suggested, but it might be more economical and make more sense for a body with experience of administering this type of scheme, such as the Countryside Agency, to do so. Clearly, it will depend on the type of scheme that is needed.

Against that background, I find it rather extraordinary that delivery through local authorities would be ruled out, even if that were the most suitable means. Furthermore, local authorities are already involved in giving financial assistance to post offices through a scheme which, although enhanced and made more generous by the present government, was instituted by the previous administration. I am, of course, referring to the village shop rate relief scheme, which provides a sole general trade store and/or post office in a settlement of fewer than 3,000 inhabitants with 50 per cent mandatory rate relief. Local authorities also have discretionary powers to top up that relief to 100 per cent. They also have the discretionary power to grant up to 100 per cent relief to any other rural business in the settlement which is important to the community.

If the amendment was designed to probe the Government's intentions, I can assure the Committee that we would want to deliver any scheme in the most targeted way possible. That might involve a national body, since, after all, we are talking about a national network. However, I would not rule out regional or local bodies assisting in the administration of a particular scheme or schemes.

With regard to this amendment, I end on a technical point. The amendment suggests that any person who administers a scheme should be appointed by the commission. It is our intention that the person to administer the scheme should be named in an order

15 Jun 2000 : Column 1812

placed before Parliament, and therefore approved by the House of Lords and another place. If we were to follow the amendment, that oversight would appear to be removed from Parliament and delegated to the commission.

I should like briefly to touch on some of the other points raised by the noble Baroness, Lady Byford, although I have tried to deal with them generally in terms of the question of cost. We inherited a scheme, the benefit payment card, from the previous government's plans. That was a magnetic strip card, an integral part of the Horizon project, which was running three years behind schedule and hugely over budget. We have put the project back on track by removing the outdated technology and complexity of the benefit payment card. ACT is an established, convenient and fraud-resistant method of payment, and all post offices will be equipped with the Horizon platform by this time next year. In that way we can significantly improve the cost structure of what the post offices are doing.

I hope that that broadly deals with the issue of concern to the noble Baroness, Lady Miller, as to how the system will work and whether the costs can be reduced in the way suggested. The main point on which this Committee must deliberate is that this is an enabling power and that the parameters laid down constrain it in an appropriate way. Any scheme will have to come back to the House for affirmative resolution. At this point we are not putting forward any specific scheme; this is simply an enabling clause. On that basis the amendments are not appropriate and I hope that the noble Baroness will feel able to withdraw her amendment.

Next Section Back to Table of Contents Lords Hansard Home Page