Universal banking services will be funded by the Government and the banks. Until the full details of universal banking services have been settled, it is too early to say what Government support may be required.
Not content with attacking people who sell in pounds and ounces, why are the Government attacking another group of traders—sub-post offices, which are shutting at the rate of almost two a day because of the Treasury-inspired decision, which the right hon. Gentleman's Department should have stopped, to remove about 40 per cent. of their income which they derive through the present system of encashment of benefits and pensions at post offices? Why has the right hon. Gentleman done nothing to stop that, and why will he not even tell the House the cost of his alternative plans? We know that the costs are mounting. Why does he not tell us what they are? If they exceed the eventual Treasury savings, why does he not just call the whole thing off and permit the vital local network of post offices to go on serving its customers and its local pensioners as it always has done, without the additional and wholly unnecessary threat from the Government?
Perhaps the House would like some facts, rather than relying on the right hon. Gentleman's prejudice. The highest rate of post office closures took place under a Conservative Government. Automated credit transfer, which the right hon. Gentleman blames for closures, will not be introduced until 2003 and has nothing to do with the present situation. I should have thought that the right hon. Gentleman would applaud the fact that on 20 December the six main high street banks reached an agreement with the Government for universal banking services. I am confident that within the next few weeks we will sign a memorandum of understanding with those banks, and with other high street banks as well. What the right hon. Gentleman is not prepared to accept is that the Government are giving new hope and a new future to the post office network. He does not like that, but that is the reality, providing new banking services for consumers which will also benefit the network.
I urge my right hon. Friend to be cautious about the term "universal bank". I do so on behalf of the Universal building society based in Newcastle in my constituency, which, I believe my right hon. Friend is aware, is concerned about that.
I congratulate the Government on their initiative in creating a payment method in the control of the Post Office which can deliver benefit payments and make direct debit payments, making the payment of bills cheaper for a much larger number of people, but I urge my right hon. Friend to be a little cautious in his dealings with the high street banks, which may well use this as an opportunity to secure a deal that will not be favourable to the Post Office and its prospective customers in future. When he drafts the memorandum of understanding, will he be careful to avoid a rip-off by the high street banks?
I take counsel from my hon. Friend. We shall need to look carefully at the details of the agreement that we enter into with the high street banks. The important point is that, as a result of the agreement that we have struck, two types of bank account will be operated through the Post Office, both providing a Post Office-based solution. There will be the basic bank account, provided by the banks themselves, and a Post Office bank account. The good news, particularly for people on low incomes, is that both accounts will offer direct debit facilities with utilities, which will lead to a reduction in the amount that individuals pay. Most of us are aware that families on low incomes, who at the moment do not have such benefits, pay a disproportionately high share of their income in fuel and other utility payments. As a result of this initiative, the Government will reduce those costs and ensure that many people who at the moment are financially excluded will have the benefits that most hon. Members simply take for granted.
In his negotiations with the banks, the Secretary of State must have suggested a figure of public money that the Treasury was willing to make available to the universal bank. That figure cannot be commercial in confidence because, clearly, it is public money. Surely the Secretary of State can now share with the House the amount that the Government are prepared to commit to ensuring that the universal bank is a success.
We want the other banks to come alongside the six that have signed up, because that will mean more income for the Government, so the negotiations are not yet complete, but when they are, yes, of course, that information will be made available to the House. Those negotiations have not yet been concluded, so most right hon. and hon. Members will understand why that information cannot yet be disclosed to the House.
Does my right hon. Friend agree that many car workers will want to use the Post Office's banking services, and will he take this opportunity roundly to condemn CGNU for its decision to ban the sale of mortgage protection insurance services to MG Rover employees? After the chairman of Rover has been to see the company, will he haul it in to ask it what it thinks it is playing at?
In response to a question in December, the Minister said that cost would be a consideration in choosing the software system for the universal bank, implying that the cheapest system might be chosen. As there have in the past been many high-profile examples of computer systems failing, will he assure the House that the system chosen will be the most effective, and that cost will not be the deciding factor? Who will be responsible for the universal banking system—the Post Office, the banks or the Government?
I think I told the House that cost would be a factor to be taken into account; the situation would be rather unusual if that were not the case. However, it will not be the only factor. We want to achieve value for money, which will involve looking at the quality of the service to be offered. Universal banking services will be a post office-based solution, and the memorandum of understanding will state clearly the various responsibilities of the key stakeholders—the Government, the Post Office and the banks themselves. If the hon. Gentleman can wait just a few weeks more, we will be able to publish the memorandum of understanding, and he will be able to see the details.
The important point for the post office network is that, as a result of the Government's initiatives, there will be universal banking services, every post office will be computerised by Easter, and Government general practitioners will start in pilots in March this year. The Government are acting for the Post Office, which is in total contrast with the approach of the Opposition, who simply let the market determine what would happen to the network and did not give any real hope for the future.