Sub-post Offices

Part of Opposition Day – in the House of Commons at 6:19 pm on 12th April 2000.

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Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs 6:19 pm, 12th April 2000

I think that right hon. and hon. Members will agree that the debates this afternoon and in Westminster Hall this morning show that the Government are mishandling sub-post office policy. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) advised us, the Secretary of State will be getting his cards in the next day or two—some 18,000 of them—from sub-postmasters.

The Government will be extremely foolish if they go ahead with the policy as it stands. They are out of touch not just with sub-postmasters but with their own constituency, as has been made clear in the debate. Many of the Government's aspirations are common sense, and we agree with them, but they do not add up to a viable policy. It is probably correct to argue that post offices should not depend in the long term on income from delivering benefits. I am a great supporter of the idea that the commercial banking system should subcontract provision of services to sub-post offices, particularly in rural communities. Horizon offers new conduits of business for post offices in the booking of theatre tickets and travel and so forth. All those things provide good opportunities.

The problem is that adherence to the automated credit transfer timetable is likely to cause the loss of one third of our sub-post offices. There will not be enough of a network to take up the opportunities. The Government must adapt their policy to address that problem, and there are several options. They must either provide a public underwriting of subsidies sufficient to sustain the post office network, which would allow ACT to be operative by 2003, or ACT should be postponed, perhaps for seven years but certainly until new revenues from bank subcontracting and Horizon allow post offices to phase in the income reductions that will result from ACT. The Government could also re-examine the Conservative swipe programme arrangements.

It appears that, of the projected £400 million saving on ACT, £100 million is purely from technology advance. The realistic reduction in payment is around £300 million. The swipe card arrangement is a compromise that would marginally reduce income to sub-post offices from benefit administration, but would allow them enough income to remain viable.

It was inappropriate of Ministers to criticise commercial banks for closing branches when the banks have made arrangements with post offices to provide services. The Government's own timetable on ACT is certain to result in closure of one third of our sub-post offices, and they have not made any provision to guarantee support for those post offices. In other words, the Government are being less helpful to customers than the banks are. The banks have done what they feel they must do because of advanced technology, but they have considered the impact and made alternative arrangements. The Government merely say that they must do what they are doing because of the need for ACT, and they could not care less about the people who have invested their life savings in running sub-post offices or about the public at large. It is humbug to criticise the banking sector while doing what they are doing.

I hope that the Government have received the message. They will pay a big political price if they have not. The most logical choice is to delay ACT until alternative revenues have come through.