Sub-post Offices

Part of Opposition Day – in the House of Commons at 5:39 pm on 12th April 2000.

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Photo of Mr John MacGregor Mr John MacGregor Conservative, South Norfolk 5:39 pm, 12th April 2000

There are 120 towns and villages in my constituency. Some are very small and have never had a sub-post office and others have not been able to sustain one over the years, but a large number have one: there are 59 in all. I will not be able to give all the names as some colleagues have done, because it would simply take too long.

Like my right hon. Friend the Member for East Devon (Sir P. Emery), I recently conducted a survey of all my sub-post offices. I asked people whether, if the situation continues as at present, they will have to close their sub-post office. In an 80 per cent. response, 60 per cent. said either that they definitely will or that they probably would. Even allowing for some exaggeration, that is a very high figure. Of that 60 per cent., 45 per cent. said that they definitely will. The danger is that all the footfall trade for the village shop is lost, so not only the sub-post office but the shop will go.

My remarks are based on that survey and on all the responses that I have had both from sub-post offices and from many of the constituents who use them. Some hon. Members have commented on the fact that sub-post offices have closed over the years. Of course they have, given the changing commercial pressures and life styles and the fact that so many alternatives are available and so many communities are too small to sustain them.

I readily acknowledge that that happened under the Conservatives, too, but the average during our years in office was 143 closures a year, and compared with that trickle we now face a flood. With the loss of the benefit payments on which sub-post offices are so dependent, many will close in the near future. That is why I share the concern of both Government and Opposition Members about the impact on the more disadvantaged, including elderly pensioners in rural areas who do not have a car. About 10 to 25 per cent. of households in villages in my constituency do not have cars.

That is why I said to the Secretary of State that the argument about pensioners having the choice of getting their pension in cash or through the bank will be an unreal one if the anticipated closures go ahead. There simply will not be a sub-post office there to dispense the cash. I share the concerns about the impact on people who are very dependent on their sub-post office. I shall not quote any of the many letters that I have received on the subject, because it would take too long.

The real problem is not the fact that there is a three-year gap until 2003, when the ACT system comes in, but people's perception that it is on the way. The hon. Member for Twickenham (Dr. Cable) made the point very effectively that sub-postmasters are already aware of the likely fall in income that they will have to face. Many of them get very little income out of the sub-post office side of their business in any case. They foresee running into loss and they want to get out now. They will make that decision now unless they are given some clear idea of where future income will come from.

The Government have not yet found a satisfactory answer to that. I agree entirely with what my right hon. Friend the Member for East Devon and the hon. Member for Twickenham said about some sub-postmasters trying to sell and finding it extremely difficult, with grim consequences for their lifetime's savings and investment.

People are acutely aware that the substantial income that comes from dispensing benefit payments will disappear. It is as though they are being told to get on the plank and that they will have to jump off in three years' time, without knowing whether there will be a safety net or how far they will fall. The problem is that they cannot step off the plank and find an alternative, because they do not know what they are going to do with their businesses.

I recognise that some of the sub-post offices would have gone anyway. They are often run by elderly people who perhaps cannot cope with the new computer era and will get out either by retiring normally or because they cannot cope with the pressures. However, younger people, who are computer literate, will not take on the job, so the sub-post office will go.

I deal now with the alternative services. I entirely agree that the potential for such services exists, and it is important that they be built up. However, I am bothered by the pious claim that such services will replace altogether the income that currently stems from benefit payments. I have studied carefully the letter from the Minister for Competitiveness sent to us on 10 April and other comments that he has made about the matter. The difficulty is that none of the alternatives look really viable and no figures have been attached to them.

For example, 3,000 cash machines will be installed, which is obviously desirable for the communities that they will service. However, 18,000 sub-post offices are threatened, and I suspect that few of the 59 in my constituency will get a cash machine. It is not a real answer, and many sub-post offices would also face technical difficulties in the installation of the cash machines.

The option that pensioners will have in the future of still being able to opt for cash payments will be a problem for the reason I have already given—many of the sub-post offices will close in the meantime—and because we do not know how that option will operate. Much of the thrust of questions from my right hon. and hon. Friends has not concerned the position of pensioners, on which the Government have given a guarantee, but the income flow for sub-post offices. We are told that that will be the subject of a commercial agreement, but the situation is so uncertain that, frankly, that is not much comfort to sub-postmasters, given what they will lose. That is also unlikely to be the answer.

The provision of alternative banking services has potential as part of the solution. The sub-post offices have a network that should be able to pick up a large portion of the business that Barclays and other banks will lose through their regrettable closures. However, some real difficulties arise. Technically, it looks as though much of the necessary software will not be put in place until 2005. That is far too long for sub-postmasters, who are seriously considering their future, to wait. I have not seen any conclusive analysis of the situation, but it seems that alternative banking services will not be a credible replacement for the loss of income that the post offices envisage. I am told that the estimate is that they will replace at most half of the income from benefit payment.

Another alternative, as my right hon. Friend the Member for East Devon rightly mentioned, is the provision of other public services, such as driving licences, vehicle licences and passports. I am sure that the Minister is considering such issues and that it will be part of the unit's work. However, I suspect that that option will also face limitations and will not be enough to replace the loss of the benefit payment income. I wholly support all that is being done to look for alternative services, but they will not replace the 35 to 40 per cent. of income that the sub-postmasters know they will lose.

My final point concerns the need for the Government to give the guarantee that the sub-postmasters seek that the income they will lose in 2003 will be replaced. I should say first that I agree with my right hon. Friend that all the issues that have been raised about privatisation are a red herring and totally irrelevant to this debate. That is not only because the sub-post offices are privatised already, but because the income that will be lost comes from the public sector. It is the income that the sub-postmasters receive for delivering benefits. The question is whether private sources will supplement that income sufficiently to sustain the sub-post offices, or whether the Government should do something with public money to replace those payments.