I am grateful for the opportunity to speak in this debate about the future of our postal services. I speak as both a Labour and a Co-operative Member, concerned to ensure that, as co-operative ideals and models become popular, there is clarity about the opportunities that those ways of working present and the models that can be used. I speak also as a Member who has tabled a ten-minute rule Bill for presentation next Wednesday on the benefits to be gained by securing affordable credit for all citizens, through credit union services in a tie-up with the post office network. I wish to focus on that point today.
I tabled my Bill because I am deeply concerned that the Government have not yet understood the nature of personal debt and poverty in communities such as mine, in Walthamstow. I therefore urge Ministers to do more to revise their plans to ensure that the post office network can offer affordable sources of credit. From the credit review that they are undertaking, they will be aware of the need to do more to ensure that people can access a wide range of financial services. I hope, through my Bill, to convince them not to ignore those for whom credit cards and store cards are not an option, and to protect those who can access credit only at extortionate prices through doorstep lending companies. They can do that, not least, by dealing with the lack of competition in the financial services market for those who are on low incomes or have bad credit ratings.
It is worth remembering that six lenders account for 90% of the home credit market, and that there is little competition to drive interest rates down. Provident, which accounts for 60% of the doorstep lending market, has stated that, thanks to the Government's policies, it expects a growth in its target market, which, in layman's terms, means the poor and those unable to access credit through mainstream banks. Increasing access to credit unions that offer loans at more affordable rates by working with the post office network would help tackle that monopoly and protect consumers. The Bill provides the ideal opportunity to do what the previous Government wanted to do and build on that partnership.
Consumer Focus, an organisation that many Members have quoted today but which the Government seem to want to dismantle, has been a powerful advocate of the potential for credit unions and post offices to work together. The suggestion has been promoted also by the Association of British Credit Unions, whose work on the matter I commend.
Today, we have heard that the Government intend to protect the post office network through the provision of a subsidy, but we have no detail about how much of that will actually go to post offices and how much could be diverted, for example into the costs of a restructuring. One suggestion that I would make to Ministers is that some could be used to support the one-off investment needed to provide the common back-office platform that would allow technical integration between Post Office banking services and those of local credit unions. Consumer Focus has championed that idea because of the benefits to both credit unions and post offices.
Such a link-up would enable post offices to offer a wider range of services, including, critically, instant small-scale loans of anything from £30 to £400, which are a vital service for many of my constituents. Credit union customers would also be able to access their accounts and make payments at the post office, and in turn each transaction would generate a transaction fee, which could provide a new stream of revenue for the Post Office.
So far so great, but the question is how to make that happen, not just in one post office but across the country. I wish to push the Minister to give some detailed answers on that point. The Bill is intended to keep the Post Office in public ownership by turning it into a mutual, but the devil is in the detail of the proposals. As the Government accept, only 370 of the 11,500 post office branches are directly managed by the Post Office. The rest are sub-contracted to franchisees. That means that the vast majority of post offices depend on other businesses as well as the Post Office to remain sustainable. Without a clear and confirmed business plan that will bring in new sources of funding, there is little hope that their services, and so their stores, will continue. Ministers must understand that that generates a lot of concern among those of us interested in the potential tie-in between credit unions and post offices.
The post office becoming the front office for government would offer one stream of revenue, but it is worth remembering that the benefits business of post offices has declined since 2003, a trend that is likely to continue given the Government's benefit reform plans. Even if that business is sustained, what they offer with one hand they risk taking away with the other. With no obligation for the reconstituted and privatised Royal Mail to work with the Post Office, we risk the core business of post offices shrinking. The Government have suggested that a privatised Royal Mail could still use the Post Office to provide its counter services and offer some protection through an internal business agreement, but given that they cannot guarantee that that will be commercially binding, it is not a certainty. That is why the Co-operative party has set out its concerns about the proposals today.
Let us be clear: those of us who are co-operators would like to see a people's Post Office, with the public, postmasters and others having a say in how it is run. However, there is deep concern that that cannot be delivered through the privatisation of Royal Mail, because it will put so much of the business on which post offices rely at risk. Royal Mail business accounts for approximately a third of Post Office business, so clearly, any reduction would mean that thousands of post offices will become unsustainable and close. We therefore do not accept the idea that the Post Office and Royal Mail should be treated separately. Those of us who see the relationship that could be achieved between the credit union movement and the post office network see the clear link between the Post Office and Royal Mail. We therefore see the importance of setting out how to protect the 11,500 post office branches.
As I said at the beginning of my speech, there is a desperate need to support those on lower incomes to access financial services and affordable credit. I failed last night to persuade Treasury Ministers to take those concerns seriously and to meet me and campaigners to discuss them and my Bill. I hope to fare a little better today, so I ask again for Ministers to meet me and campaigners to consider how we can extend affordable credit to all in our society, and how we can support that through post office network reforms. Only in that way will we be sure that the potential tie-in between credit unions and post offices can be secured. Without such guarantees, there cannot be an open branch network to support the credit union movement, and the Opposition will return the Bill to sender.