Sub-post Offices

Part of Opposition Day – in the House of Commons at 4:48 pm on 12th April 2000.

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Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry) 4:48 pm, 12th April 2000

I welcome the debate and pay tribute to the National Federation of Sub-Postmasters, which has assembled one of the largest petitions ever presented to Government. It has been extremely successful in promoting its agenda, for which, as a small organisation, it deserves great credit. Colin Baker came up with a phrase this morning that captures, in many ways, what is so important about the network. He described postmasters and postmistresses as the general practitioners of Government, the people who provide communities with government services. The network comprises not just a group of small businesses that have fallen on hard times, but people who play a key role in communities.

We must focus on what is happening in businesses. Much attention has been devoted to the decline in numbers, but that is just the tip of the iceberg. Anyone who talks to people who work in the post office network will confirm that behind those who have sold up stand many more who want to sell but cannot because of the collapse of asset values. Many more people would sell up their businesses if they could.

The Secretary of State made the particularly unhelpful suggestion that much of the crisis was caused by scaremongering by Opposition Members and others. We are talking about rational, hard-headed small business men and women who can make rational calculations about their future earnings and the value of their assets. If they have a crisis of confidence, it is because there is a crisis of confidence. That is what the Government are being called on to redress. We call on them to give a clear, unambiguous guarantee and undertaking to preserve the network. What the Secretary of State said today about subsidy is helpful, and it is an advance, but the Government still need to do a lot of work to remedy the crisis of confidence that underlies the closure programme and the collapse of asset values.

We keep coming back to the issue of the loss of income and what it means—what is the money flow. The answer to a question asked by my right hon. Friend the Member for Yeovil (Mr. Ashdown), the former leader of my party, established that the loss of income by 2005 would be about £640 million. We have used the figure of £400 million, but it would be due to rise to something of that magnitude. That is the income that is being lost to the post office network.

It is useful to break down that figure and analyse what it consists of. There are two main elements to it. One is genuine technological advance. The automated credit transfer process is a technological advance; it replaces a cumbersome paper-driven operation with electronic switching. There is a real gain in productivity there, and no one seriously argues that that process should be stopped. The other element in the £640 million is the payment that would otherwise be made to the post office network for performing a genuine service, which will still have to be performed by someone.

My colleagues and I have been trying to establish through letters and questions to the Department of Social Security the split between the technological improvement and the fee income to the post office for services. It is a clear question, and the DSS does not deny that such a distinction can be made. However, it has told us that it is a commercial secret. That raises a fundamental issue. We are dealing with a transaction between a Government Department and a state agency, albeit a limited, incorporated entity, which the Government choose to regard as a matter of Government confidentiality.

Some colleagues will recall that we voted a few evenings ago on whether information leading to advice, as well as the advice itself, should be kept secret. We have a good practical example here. Information crucial to an understanding of the debate is being unnecessarily withheld. The issue will be pursued with the ombudsman, but we have great difficulty understanding what is going on, because the Government simply refuse to divulge the split between the technological gain and the remainder of the fee income.