Automated Credit Transfer

HC Deb 19 May 1993 vol 225 cc245-97

Madam Speaker

There is a great deal of interest in the two debates today. I appeal to hon. Members for short speeches. I am not in a position to put a time limit on speeches, but I do ask for co-operation from hon. Members when they are speaking.

I have selected the amendment standing in the name of the Prime Minister.

3.47 pm

Mr. Donald Dewar (Glasgow, Garscadden)

I beg to move, That this House calls on Her Majesty's Government to make clear without qualification that the use of Automated Credit Transfer in the payment of pensions and benefits is a decision for the free choice of the individual customer and that there will be no element of compulsion or undue pressure from the Department of Social Security; and condemns the uncertainty for customers that has resulted from the Government's current campaign on Automated Credit Transfer and the threat to the important social and economic role in the community of sub-post offices which is being undermined by this Government's mismanagement of the economy and its determination to pave the way for privatisation. This is a debate about choice and about fairness. I want to make it clear at the beginning that I am not arguing against the use of automated credit transfers. That option is properly available to clients of the DSS and is used by them in increasing numbers. Our case is essentially that the method of paying pensions is a matter for the customer, and for that person alone.

Replying to the Adjournment debate last Thursday, the hon. Member for Tatton (Mr. Hamilton) said that scaremongering is behind this campaign. That was an irresponsible statement. The basis for this debate is the widespread and genuine concern that has been reflected in the mail of every hon. Member, irrespective of party. This is particularly an issue in rural areas, but not only in rural areas.

Mr. Phillip Oppenheim (Amber Valley)

I thank the hon. Gentleman for his courtesy in giving way. Does he recollect that a couple of years ago his hon. Friend the Member for Livingston (Mr. Cook) went around the country telling the sick and the elderly that the new GP contract would lead to doctors spending less time with patients? That proved untrue. It was a scare story put around for party political ends. Is not this story out of exactly the same mould?

Mr. Dewar

No. The hon. Gentleman's question was a rather clumsy attempt at a diversion. I at least intend to speak about the subject of the debate.

The cause of the dissent is the open determination of the Government to encourage the use of ACT and the methods that have been used to promote that. We must be clear about the complaint. The starting point is the decision to review the form sent to those who have become eligible for retirement pensions inviting them to opt for a method of payment. Three types of form have been tested, each sent to 8,000 customers. That in itself is not sinister, and Ministers have persistently offered reassurances to customers.

A typical example was the Under-Secretary of State for Technology in the Department of Trade and Industry, who on 19 April wrote to my hon. Friend the Member for Fife, Central (Mr. McLeish). He said: I understand that all three versions of the form made clear to recipients that there was a choice of payment methods. The Minister may understand that—he can understand what he likes—but the forms do not do that, and that is the essence of our complaint.

The first version is the one that clearly sets out the options. As well as variations of ACT, it contains a clear invitation to opt for post office payment. The recipient is invited, if he or she wishes, to complete a form specifying the post office that is to be used. That is fair enough, but the second version is quite different. The first page is an extensive sales pitch for ACT and the page contains no mention of a post office order book.

On the section that is to be completed to indicate choice, there is an extensive invitation to opt for ACT. People have to read what can properly and fairly be described as a footnote which says that people may express an interest in payment through a post office. If people say yes to that method, they are told that they will receive a letter about it, which is hardly an open invitation.

The third form which has been distributed and market tested is even more ingenious. There was a four-page hard sell for ACT alone, and again the alternative was relegated to the small print. This time it merely states: Do you want to be paid by other means? At no point was post office payment mentioned. Those who stood firm and expressed interest in other means were told that they would be written to—to what effect is not yet clear.

Mr. Patrick Nicholls (Teignbridge)

Does the hon. Gentleman accept that, whatever retrospective deficiencies there may have been in some pilot forms, the Government have made it obvious on every occasion that it is up to the customer to decide? The hon. Gentleman said that he accepted that ACT was used and that many people want to use it. Therefore, his position is exactly the same as that of the Government and he does his personal reputation no credit by indulging in the scaremongering that has been going on.

Mr. Dewar

I am sure that the hon. Gentleman recognises that, if I am scaremongering, then over the past week the hon. Members for St. Ives (Mr. Harris), for Taunton (Mr. Nicholson), for Gravesham (Mr. Arnold), for Rochford (Dr. Clark), for Corby (Mr. Powell) and many other hon. Members have been scaremongering as well. But they have not: they are reflecting the genuine worries of their constituents, and the hon. Gentleman should recognise that.

Mr. Jacques Arnold (Gravesham)

Will the hon. Gentleman give way?

Mr. Dewar

Of course I will, as I mentioned the hon. Gentleman.

Mr. Arnold

Although the hon. Gentleman mentioned me, he clearly did not hear what I said. In the debate last night I said that it was quite reasonable for the Government to issue samples to test the reaction to different forms. The clear response was that people wanted to continue to be paid through the post office. The sampling is quite in order. I did not engage in scaremongering.

Mr. Dewar

rose—

Hon. Members

Withdraw. [Interruption.]

Mr. Dewar

The flying picket for debates such as this is in the Chamber. Hon. Members will have to live with the fact that it beggars belief to argue, as the hon. Member for Teignbridge (Mr. Nicholls) argued, that in retrospect there might have been an odd mistake but, basically, the whole thing was well intentioned. There was a deliberate attempt to restrict choice by withholding information, and there is no escape from that.

If it is suggested that that was some sort of idle exercise carried out on a dull afternoon by a civil servant on a whim which meant nothing, we are being asked to believe the unbelievable. The Secretary of State for Social Security allowed his enthusiasm for ACT to override common sense and sought to persuade a large number of people to opt for it by suggesting that that, in effect, was the only option open to them, and that borders on the dishonest.

Mr. William O'Brien (Normanton)

Will my hon. Friend add to his sentiments the representations that I have received from hundreds of my constituents and those of thousands of other constituents who have written to their Members of Parliament? There is no scaremongering. People are concerned about the devious way in which the Government have approached the issue. It should be impressed upon Conservative Members that this is a serious matter about which millions are concerned.

Mr. Dewar

I agree with my hon. Friend. I am not aware of the results of the test, but I need not be fearless and run risks to predict that those who were given the form that did not even mention the post office option almost certainly opted in much larger numbers for ACT, and that was the whole point of the exercise.

Mr. Stuart Randall (Kingston upon Hull, West)

Is my hon. Friend aware that the Government have let the cat out of the bag by stating in their amendment that their aim is to reduce cost, and they are doing that by forcing people to use the means of payment that they wish them to use, which is causing great resentment throughout the country? It shows the Government's ruthlessness that they are prepared to disregard the wishes of the British people in order to reduce costs.

Mr. Dewar

I agree with my hon. Friend.

Several hon. Members

rose—

Mr. Dewar

I take this opportunity to say that I heed your statement, Madam Speaker, about the need for reasonably short speeches. If I give way constantly, I shall stop others speaking. Therefore, I shall give way once or twice in a little while, but—

Dame Elaine Kellett-Bowman (Lancaster)

Will the hon. Gentleman give way to me?

Mr. Dewar

I cannot resist that.

Dame Elaine Kellett-Bowman

I have the three forms here and all of them say: Ask at your local post office".

Mr. Dewar

I have the forms here. [Interruption.] The hon. Lady has made a point that I cannot confirm. What I have here is a form that has on the front page a hard sell for ACT and, on the second page—what one might call the executive section—an invitation to go for ACT. At the bottom it says: Do you want to be paid by other means? Against the yes box it says: We will write to you about this". Is that a fair and unbiased attempt to offer choice?

Mr. Gyles Brandreth (City of Chester)

rose—

Mr. Dewar

It is as if, if I may say to the hon. Gentleman who is looking so keen, at one of the excellent restaurants in his city, six items were provided by the kitchen and there was to be a fair choice, but only five were put on the menu and then surprise was expressed that no one had opted for the sixth—of course, because no one knew it was there. It is that kind of weighted choice that is deplorable.

It is the Secretary of State who will reply to the debate, so he must tell us what the test was about. What was it meant to achieve? If it was not a whim or a joke, if it was not something done, as I say, to fill an afternoon, what on earth was it all about? Why should we not believe the point that has been put by many of the Secretary of State's right hon. and hon. Friends—certainly by his hon. Friends—that it was no more than an attempt to weight choice?

The Secretary of State will remember that it was the hon. Member for Rochford who said—I paraphrase—that the only conclusion that he could draw from what had happened was that it was a way of discovering how the wool could most effectively be pulled over the eyes of the customer. That was the considered view of a responsible Conservative Back Bencher and someone to whom the right hon. Gentleman should pay attention.

Let us consider in passing a little of the history of the matter and take, for example, the reply given to a parliamentary question on 12 March by the Under-Secretary of State for Social Security, the hon. Member for Maidstone (Miss Widdecombe). She said: Post Office Counters Limited was made aware of the trial."—[Official Report, 12 March 1993; Vol. 220, c. 751.] That is true up to a point; but it was not made aware of what was happening in detail or the form that the trial would take.

A letter that I received from Mr. R. T. B. Dykes, who I understand is managing director of Post Office Counters, is of interest in terms of the honesty and openness with which the matter has been handled. There was a discussion with Post Office Counters last September, when it was told—and this came as no surprise, according to Mr. Dykes—that the Government were examining possible ways of increasing ACT penetration. Mr. Dykes writes: At that stage there were no firm plans and our negotiators requested details of the nature, location and timing of any trials of such new approaches. We also stressed to DSS that it was essential that we be provided with as much information as possible of their plans, as they would be a source of considerable concern both to Counters and to the National Federation of Sub-Postmasters. There the matter rested for two months until December 1992 when DSS told us that they had been specifically targeted to increase ACT take up from its current level of 14 per cent. to 20 per cent. by 1995–96. When Counters asked how they proposed to do this their response was vague, but they repeated that they would be seeking to trial new claim forms, as well as extending ACT to groups to which it was not available. Our negotiators repeated their request for details of their plans. We heard nothing more until 2 March when they were told by the National Federation of Sub-Postmasters that they had found the forms in circulation. I also have to tell you that our requests for information on the outcome of the trial have been rejected by DSS and that they have refused to give us any details of their plans for Mailshots to existing beneficiaries. I hope that this letter will reassure you that we had no involvement in, nor were we consulted about, the trial of which you rightly complain. It does seem to me that DSS have been less than straightforward in their handling of this matter, and I have expressed my extreme concern about this issue to Michael Bichard, the Benefits Agency Chief Executive I express my concern also on behalf of the Opposition, and of a large number of Conservative Members. Some Conservative Members accuse us of scaremongering, but that account learly shows that Mr. Dykes and his colleagues at Post Office Counters believed they were kept deliberately in the dark—and I put it at at least that. No one can say that we have been scaremongering in raising the matter on the Floor of the House.

Ministers should remember the Government's rhetoric. We hear about choice, protecting choice, level playing fields, and open government. Over the past few months, we have seen an example of the reality—and that is very different from the rhetoric. One cannot exercise choice if one has no knowledge of the options available.

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

I hope that the hon. Gentleman will not be embarrassed if I congratulate him on securing this debate, which will give the House a chance to reassure all the people who are frightened that they will be unable to collect their benefits at a post office in future and all the sub-postmasters and mistresses who are worried about their future income.

Mr. Dewar

I also take that point seriously. This is an important debate. The only scaremongering is the scare that has been put into the Government by the public campaign and the campaign in the House, which will force the Government to abandon their clear strategy and underhand tactics. I repeat the words of the hon. Member for Rochford on Thursday night: The forms are designed to discover how effectively the wool can be pulled over the eyes of those who receive pensions and benefits."—[Official Report, 13 May 1993; Vol. 1034, c. 224.] In the same debate, the hon. Member for St. Ives made it clear that he does not believe it was a fair example of market testing, when people were not told the options open to them.

Mr. Richard Tracey (Surbiton)

Will the hon. Gentleman unequivocally deny that the words Ask at your local post office are on each of the forms?

Mr. Dewar

No. What I am saying is that the forms are totally misleading and totally weighted. If any reasonable people had read form B or form C, they would, in my view, have come to the conclusion that they were expected to go for automated credit transfer and that that option was being forced upon them; of that there can be no doubt at all. That is the view of sub-postmasters, Conservative Back Benchers, the media and Post Office Counters. Frankly, that would have been the view of any sensible person who, as a potential customer, had read the forms.

The Minister may be reduced to making the charge that we are scaremongering, but let me remind him that a third of the business of Post Office Counters comes from the Department of Social Security. Let us not forget that all the talk of broadening the base to replace the custom that would have been lost by post offices boils down to the suggestion that, at some future point, post offices may be allowed to sell national lottery tickets. That may be a good idea. I do not object to it. However, it would have been highly speculative compensation for the loss of business that would have resulted from the artificial restriction of choice that was invited and planned for in the forms to which I referred.

The importance of rural post offices—their place in the community as a point of contact and as an information exchange—will not be challenged in this House. I do not pretend that each of them is a place of romance and mystery that would find its place conveniently in a Hovis advertisement, but I know from personal experience and from the many people to whom I have spoken that post offices are valued and are regarded as integral and important parts of the community.

Rural communities are fragile, in some cases because of the actions of this Government. I am thinking of the way in which small pharmacies have been treated and of the way that rural bus services have been treated. There is now the potential, as a result of this strategy, to undermine local post offices.

The hon. Member for Gainsborough and Horncastle (Mr. Leigh), the Under-Secretary of State for Technology, claimed in his letter of 19 April fully to understand the importance of DSS transactions to post offices, but he went on to argue that the DSS is required to deliver its benefits as economically as possible. Of course I understand the importance of economy. As the Minister knows, in the past few months there has been a devastating series of reports—from Select Committees, the National Audit Office, and the ombudsman—pointing to the inefficiency with which his Department operates and delivers its services.

I certainly want to see increased efficiency, but wider considerations ought to be borne in mind in a policy area such as this. I do not believe that we should try to trick —I believe that is a fair way of putting it—people into taking one option at the expense of another by excluding information when its exclusion would do so much damage to the structure of our communities.

Mr. Dafydd Wigley (Caernarfon:)

We have heard a great deal about extension of choice as the rationale for this survey, but does the hon. Gentleman accept that some people will lose choice altogether if the result of small rural post offices losing business is that they close down and people have to travel many miles to find alternative facilities? Is it not more important to ensure that that basic choice remains, and that if there is to be a loss of revenue to post offices as a result of ACT, the making up of that revenue must be guaranteed to allow post offices to stay in business?

Mr. Dewar

I certainly agree with that. It was the reason for the anger, discontent and unease that was so evident on the Conservative Benches until the whippers-in got to work for the purposes of this afternoon's debate.

I do not believe that efficiency must equate with a demolition job on the traditional role of sub-post offices. That, I believe, was the point of the intervention by the hon. Member for Caernarfon (Mr. Wigley). The Minister set out his stall on many occasions, arguing for ACT. The Federation of Sub-Postmasters is entitled to put forward its points about the convenience and friendly services offered by post offices.

Perhaps I could be allowed the luxury of saying that it is not just a question of rural post offices. My constituency, which borders the marches of western Glasgow, is a housing scheme constituency. There is great distress there and a genuine feeling of social loss when a post office closes. If we take the classic peripheral housing schemes in my city of Glasgow—I am thinking of Drumchapel, Castlemilk and Easterhouse—in which between 70,000 and 80,000 people live, there is only one bank in each scheme and there is not a single building society in any of them. Therefore, sub-post offices have an important role. Even after the substantial closures—more than 2,500 since 1979—there are still more sub-post office outlets than are provided by the four big banks in England and Wales and the six top building societies put together.

There are many reasons why we should be careful to preserve the local post office system, including the potential for bank charges. Lord Henley, the Minister in the House of Lords for the Department of Social Security, said in a recent letter, which I have read: The banks have not yet introduced charges and indeed some of them have recently said they do not intend to do so. The news that some have not yet and that some may not introduce charges hardly has the ring of confidence as to what may happen if we lose our national network.

Another problem is that of weekly payments. If one believes that an electronic notebook is an essential sign of civilisation, one may not have much sympathy with the idea that people budget on a weekly basis. However, many of my constituents do not want to be paid four weeks in arrears or once in 13 weeks. They want to ensure that the ACT scheme does not go ahead.

Mr. Giles Radice (Durham, North)

Will my hon. Friend give way?

Mr. Dewar

I hope that my hon. Friend will forgive me if I do not give way; I have already spoken for longer than I intended.

Conservative Members may talk about scaremongering, but when they see that the Government are in trouble or as soon as they see that a Minister is low in the water, the immediate cry is, "It is scaremongering" or, "He must be an innocent victim." However, I have never seen a less innocent victim than the Secretary of State for Social Security. He planned a little job by stealth, he has been found out, and he should pay the price.

It is not only Labour which is suggesting that the situation is serious. Hon. Members will be aware of the views of Mr. Bill Cockburn, the chief executive of the Post Office, who suggested that, if the wrong forms emerged from the test—why were they being tested if not for possible use?—as many as 5,000 post offices could be forced to close. He said: If such a thing were to happen, the entire network of post offices would be on the line. That is not an irresponsible scare story concocted by Labour. We are taking up a cause that is well documented and an anxiety that is very real.

I know that ACT is growing. My objection is that the Government should not try to encourage it artificially by withholding information. The right to choose is important. The Minister should support that idea, but he cannot if the choice is not properly explained. In the rush for economy, he has been prepared to manipulate and mislead, and that is a serious matter which the House should consider.

Are the Conservatives who are protesting today happy that £3.5 million will be spent in 1993–94 on encouraging the growth of ACT? Certainly one can buy a lot of persuasion for £3.5 million, but one should not do so in the underhand way in which this operation was mounted and launched.

The Minister tells us that there is nothing to fear. He may be right. He may favour the view of the hon. Member for Corby, who, during the spring Adjournment motion debate on 18 May, said: Frankly, it is incredible that the Government have got themselves into this absurd position. The heads of those who were responsible for drafting the extremely maladroit letters —to put the matter mildly—should be presented on a plate. It is one of the most serious political misjudgments, and a matter that my right hon. Friends must do much more to correct at once. These things did not happen when my right hon. Friend the Leader of the House was responsible for the Department which seems to be at fault in this case."—[Official Report, 18 May 1993; Vol. 225, c. 178.] That is another ringing vote of confidence for the Secretary of State for Social Security! If that is the explanation—that it is bungling, maladroit, incompetent and stupid—perhaps the right hon. Gentleman would prefer to plead guilty to the underhand dealings which I suspect are the truth of the matter.

The Prime Minister is now offering assurances of his commitment to retain a national network of post offices. The hon. Member for Bedfordshire, South-West (Mr. Madel) is reported in The Times today as saying: that clear statement … will dispel all anxiety". I must tell the Secretary of State that all anxiety will not be dispelled—[Interruption.] Let me finish my sentence. All anxiety will not be dispelled by a generalised statement of that kind—of the kind that we have so often heard. I want the anxiety to be dispelled and the fears laid to rest. It was in order to give the Government a chance to do that that we initiated the debate.

I understand that the hon. Member for Bedfordshire, South-West—again, I have to rely on The Times for my information—was called in by the Secretary of State to hear of his revised proposals. That implies that the Secretary of State has now, late in the day, admitted that his proposals need revision. If there are revised proposals, it is appropriate that the House should hear them now.

I want the Secretary of State unashamedly to save his skin by backing down and doing another U-turn—the Government have had plenty of practice at that. It is in the public interest that the right hon. Gentleman should now recant. I do not want another generalised statement; I want him to tell us why he launched the test and to give an absolute commitment that he will now abandon it, and will shred and scrap any document that does not give a fair range of options to the public. I want him to say that he will ensure that in future the one guiding principle will be that people should be informed of their rights and the decision on what to do should be theirs alone. We want not generalised commitment but specific action to undo the damage and to lay the fears to rest. I commend the motion to the House.

4.15 pm

The Secretary of State for Social Security (Mr. Peter Lilley)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: endorses Her Majesty's Government's clear commitment to freedom of choice in the means by which social security benefits are paid, while reducing fraud and unnecessary costs by extending the availability of Automated Credit Transfer to all benefits and encouraging people with bank accounts to choose to have benefits paid into their accounts, to the continuation of a national network of post offices and sub-post offices and to securing the efficient and effective delivery of the vital service which the Post Office provides.". Before responding to the extraordinary speech by the hon. Member for Glasgow, Garscadden (Mr. Dewar), may I refer briefly to the two-hour paving debate on the same subject that, rather unusually, preceded the debate last Thursday? That debate was exceptional both in length and in quality. Every contribution was more balanced, less partisan, and better than the one that we have heard from the hon. Member for Garscadden.

Every hon. Member who spoke on Thursday expressed concern about the future of sub-post offices. Of course, I shall respond to that concern. But every hon. Member tried to avoid making party political points, and every hon. Member from every party tried to avoid scaremongering, unlike the hon. Member for Garscadden, whose whole approach is based on scaring the poor, the sick and the needy. Indeed, since he has been shadow social security spokesman his principal stock-in-trade has been scaremongering.

Last autumn, full of foreboding, he warned the media that I would be unable to fulfil our pledge to uprate pensions. He was wrong. Before the Budget he said that the Chancellor would introduce taxation on invalidity benefit then and there. He was wrong. Now he forecasts that we are about to close rural post offices. I have news for the hon. Gentleman, which will be no surprise to my hon. Friends. He is wrong again. I challenge him to name one scare story that he has told about my Department since he has had that job, which has come true. [Interruption.]— The hon. Gentleman's silence condemns him.

Mr. Barry Jones (Alyn and Deeside)

rose—

Mr. D. N. Campbell-Savours (Workington)

rose—

Mr. Dewar

rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. It might be advantageous for the debate if the House were to settle down, quieten down, and listen to the debate.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. Mr. Secretary Lilley.

Mr. Lilley

It may be helpful if I set out the order in which I shall deal with the issues before us. First, I shall spell out the Government's commitment to sub-post offices and to choice. Secondly, I shall explain why we are encouraging payment into bank accounts and building societies.

Mr. Peter Hain (Neath)

rose—

Mr. Lilley

In a moment.

Thirdly, I shall explain how we are encouraging automated credit transfer, and I shall deal in particular with the trial forms.

I shall largely leave the issue of privatisation to my hon. Friend the Parliamentary Under-Secretary of State for Technology—or rather, the postmaster-general, as I imagine he is now called—who hopes to catch your eye at the end of the debate, Mr. Deputy Speaker.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

The Secretary of State has explained how he intends to deal with the questions raised, but when will he deal with the question raised by the hon. Member for Caernarfon (Mr. Wigley), which applies, for example, to the post office in Dalmellington in my constituency, which is just surviving at the moment? If the Secretary of State is successful and persuades just a small number of people to take ACT, that post office will close and all the people in Dalmellington will have no choice at all. Will he answer that key question now before he gets on to the other points?

Mr. Lilley

I will answer that question in the second part of my remarks. This is the pledge that we made in our manifesto—[Interruption.]

Mr. Deputy Speaker

Order. I have already appealed for the Secretary of State to be given a fair hearing. [Interruption.]Order. I intend that that should be the case.

Mr. Lilley

The pledge in our manifesto said: We are committed to maintaining … a nation-wide network of post offices. The words are unambiguous—

Several hon. Members

rose—

Mr. Deputy Speaker

Order. The Secretary of State has made it clear that he is not giving way.

Mr. Lilley

Our commitment is unequivocal, and I can reaffirm it emphatically today.

Mr. David Winnick (Walsall, North)

On a point of order, Mr. Deputy Speaker. Before you came to the Chair, my right hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) gave way virtually every two minutes—

Mr. Deputy Speaker

Order. The hon. Gentleman knows full well that that is not a point of order for the Chair.

Mr. Lilley

No other party made such a pledge—indeed, neither the Labour party nor the Liberal party even mentioned sub-post offices in their manifestos, but now they are happy to hijack any campaign that comes along.

Mr. Kevin Hughes (Doncaster, North)

I am grateful to the Secretary of State for giving way, especially on his party's manifesto. While he is reading that part out, will he read out the commitments on tax and particularly on VAT?

Mr. Lilley

There was no such pledge. [Laughter.] We made our pledge because we recognised the focal role that sub-post offices play in many communities, especially in rural areas. That role was spelt out eloquently by my hon. Friend the Member for Rochford (Dr. Clark) last Thursday and by many other right hon. and hon. Friends.

Mr. David Alton (Liverpool, Mossley Hill)

Does the Secretary of State accept that the problem affects not only rural communities but urban areas? Many people are concerned because they see choice being razed. The post offices will suffer a decline in their trade and go out of business if ACT is introduced. That is the core of the question and that is the fear that the right hon. Gentleman's pilot scheme has raised. Is it not worth saying that, although it may have been a useful exercise, the whole idea should now be abandoned?

Mr. Lilley

I entirely accept that sub-post offices in urban areas are also valuable and play an important role. I shall come on to that. I recognise the fears that have been aroused by the leaflet from the Sub Postmasters' Federation and I shall deal with that systematically if I am allowed to by the mob on the Opposition Benches.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. I intend that we should have an orderly debate. It is for the Secretary of State to decide whether to give way and if he decides not to, hon. Members should resume their seats.

Mr. Lilley

I have spelt out our manifesto commitment. However, the maintenance of a network of post offices is not only a manifesto commitment; it is also in the direct self-interest of my Department. We need the post office network to deliver our benefits, especially—but not only —in rural areas. We will continue to need it for the foreseeable future.

Mr. Thomas Graham (Renfrew, West and Inverclyde)

Will the right hon. Gentleman give way?

Mr. Lilley

The hon. Gentleman may find that what I am saying will satisfy his constituents, if not himself.

Mr. Campbell-Savours

Will the Secretary of State give way?

Mr. Lilley

If the hon. Gentleman will allow me to complete my point, I will happily give way to him if he still has a query.

However successful we are in encouraging people to choose payment into bank accounts, there will still be many who prefer the present system, including millions who have no suitable account. Indeed, as the hon. Member for Western Isles (Mr. Macdonald) said—I congratulate him on securing the debate the other night—if sub-post offices did not exist, we would need to invent them.

At the end of the day, that means that we must pay to help keep in being a viable network of sub-post offices and to make it profitable for postmasters and postmistresses to remain in business and deliver our benefits. We have always accepted that.

Mr. Campbell-Savours

The Secretary of State will know that the Minister for the Environment and Countryside, who is sitting beside him, and I share most of the Lake district where there are many small hamlets, many of which have post offices. Will the Secretary of State give the Minister sitting beside him and me an assurance that the further introduction and promotion of ACT' will not in any way prejudice the future of those small post offices in the Minister's constituency and in my constituency? May I have a clear assurance on that now from the Dispatch Box?

Mr. Lilley

I have already given our assurance and I have reaffirmed our pledge to maintain a national network of sub-post offices and I am now explaining the mechanism by which that is achieved.

Mr. Graham

Will the Secretary of State give way?

Mr. Lilley

Perhaps the hon. Gentleman would allow me to explain that mechanism at greater length.

We have always accepted that we must make it profitable for postmasters to deliver our benefits. We do that via our contract with Post Office Counters Ltd and the terms are adjusted to reflect changing volumes of transactions, the switch from order books to ACT and all the other factors that affect viability.

As it so happens, the contract between the Benefits Agency and Post Office Counters Ltd. is currently being renegotiated. It is perhaps no coincidence that bloodcurdling warnings about the collapse of the branch network are circulating at this time. It is often the way when a contract is being negotiated that rather extreme statements are made.

I do not want to pursue the negotiations in public. Suffice it to say that I am confident that we will agree a sensible contract which reflects the common interest of both Post Office Counters Ltd. and the Benefits Agency in maintaining a viable network.

Mr. Dewar

I want to be clear about what the Secretary of State is saying. I took the implication of those remarks to be that he thinks that the present campaign has been deliberately promoted, as a means of putting pressure on his Department, by the Post Office in its negotiations and that it is therefore dishonest and totally self-interested. Is that the Secretary of State's position?

Mr. Lilley

I merely mentioned the common coincidence between blood-curdling warnings and negotiations.

Hon. Members have from us a triple assurance that we will maintain a viable network of post offices: we are pledged to do so, we need that network to deliver our benefits and we are prepared to pay to help sustain that network through our contract with the Post Office.

Mr. Calum Macdonald (Western Isles)

The nub of the issue is choice. For choice to be real, Department of Social Security customers must have free and equal information about all the options available to them. Will the Secretary of State accept that as a fundamental principle which he will implement? Does he also accept that the forms that were sent out fell way short of that principle?

Mr. Lilley

As I have said, I will come to the issue of the forms in due course and deal frankly with the hon. Gentleman's point.

On top of the assurances that we have given, we believe in encouraging sub-post offices to diversify into new businesses. My hon. Friend the Member for Ribble Valley (Mr. Evans) was right to emphasise that point in the debate the other night. The Government have already made it clear that they are more than willing for post offices to be a selling point for the national lottery, should the successful contractor choose to sell tickets in that way. The possibility of allowing Post Office Counters Ltd. wider powers to take on new products and offer other services is being actively considered as part of the Post Office review.

Mr. Alex Salmond (Banff and Buchan)

Will the Secretary of State remind the House of the exact nature of the assurance that he has just given? Is he assuring the House that no small post office or sub-post office will close as a result of a lack of business or loss of business caused by his campaign to switch to ACT? Is he going to arrange the contract with post offices in such a way that no small post office will close as a result of his campaign? Yes or no?

Mr. Lilley

No Minister and no Government can guarantee that every post office will remain in operation. As the hon. Gentleman knows, each year 700 postmasters and postmistresses resign. Some are replaced, and sometimes the location is moved. But I have given an assurance that we will maintain the viability of the national network and will do that through our contract. We have shown our commitment to do so.

Several hon. Members

rose—

Mr. Lilley

Perhaps hon. Members will allow me to make a little more progress.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. About six hon. Members on each side of the Chamber are attempting to intervene. The Secretary of State has indicated that he will not give way, so will hon. Members please remain in their seats?

Mr. Lilley

At the same time as supporting the post office network, we have always believed in choice. We reaffirmed that in the citizens charter, and I reaffirm it now.

Mr. Mark Robinson (Somerton and Frome)

Has not my right hon. Friend given the many pensioners in my constituency precisely the assurance that they need—that their sub-post office will remain open?

Mr. Lilley

Absolutely. I believe that pensioners will respond with satisfaction to the points that we have made and that they will despise Opposition Members who continue to try to keep a scare going even when the very assurances which they seek have been given.

At the same time as supporting the post office network, we have always believed in choice. We have reaffirmed that in the citizens charter and I reaffirm it now. By contrast, the Labour party has never been the party of choice in this or any other matter. It opposed giving people the option of ACT, and the hon. Member for Glasgow, Garscadden (Mr. Dewar) today failed to welcome our plans to extend that option to all benefits.

Dr. Robert Spink (Castle Point)

Before my right hon. Friend talks about new products, will he confirm that giro accounts are available for post office customers to collect their benefits and pensions from both Crown post offices and sub-post offices?

Mr. Lilley

That is absolutely right. It is one way that we could all have the best of both worlds—a cheaper, more effective means of delivery which none the less helps to sustain the sub-post office network, brings people into shops, and brings business with it. Although I am not allowed to advertise any private system of distribution, I hope that people in the privacy of the Chamber have heard my point and will transmit it onwards.

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

Will my right hon. Friend give way?

Mr. Lilley

May I make a little progress and then give way to my hon. Friend?

Let me refer to why we are encouraging people to choose automated credit transfer on a voluntary basis.

Mr. Macdonald

Will the right hon. Gentleman give way?

Mr. Lilley

I have already given way once to the hon. Gentleman.

Colleagues will recall that I announced that we would be continuing to encourage more use of ACT at the end of a very difficult public expenditure survey round. Prior to my uprating statement, there had been widespread fears, fanned by scaremongering from the hon. Member for Garscadden, that I would be unable to keep our pledges to pensioners and families, that I would be unable to uprate benefits for the least well-off, and that I would have to curtail help to victims of the recession. He simply did not understand my priorities. My objective throughout was to maintain existing benefits and secure resources to fulfil modest but very important pledges such as that to introduce our new independent living fund, which has been going through the House of Lords this week.

In my Department, money goes on benefits, on fraud or on operating costs. So savings had to come from fraud and operating costs. I was able to promise my right hon. Friend the Chief Secretary and colleagues on the expenditure committee some substantial reductions and savings as a result of reduction in fraud elsewhere, but it could not escape their notice that the biggest single item in my operating costs is the cost of delivering benefits—£650 million a year. Of that, over £100 million is accounted for by order books and giro cheques which are stolen and fraudulently encashed.

Moreover, the cost of paying out of order books is 14 times as great as the cost of payment by ACT. Each payment by order book costs 44p; the same payment into a bank account costs just 3p. In those circumstances, we were bound to continue encouraging people to choose payment into their bank accounts.

If I had passed up the prospect of even modest savings here, could I realistically have asked for more resources for the independent living fund or the social fund, let alone the massive resources that we secured to uprate all benefits? That is why I told the House last November: I … propose to encourage more customers to accept payment of benefits directly into their bank or building society accounts."—[Official Report, 12 November 1992; Vol. 213, c. 1015.] The hon. Member for Garscadden raised no objection then—but of course no scare campaign was being run at the time.

The option to receive payment into bank accounts was introduced for certain payments in 1982. Since then, the proportion of people receiving payment has built up gradually to around 15 per cent. The main source of growth is new claimants, especially new pensioners.

Mr. Dickens

Will my right hon. Friend clarify an issue on which, with respect, I believe we will come unstuck if he does not explain it more clearly? He was asked whether any sub-post office was likely to close. He could not give an assurance about that, because he did not know about bad management, people falling ill or changing their jobs and so on; but he did imply—I think this ought to be clarified—that no sub-post office would close as a result of ACT, meaning that this would be reflected in new contracts. Is that right or wrong?

Mr. Lilley

That is, of course, our intention. All small post offices are currently paid a fixed sum regardless of volume, so people switching to ACT will make no difference to the amount of remuneration that they receive.

People are increasingly accustomed to receiving payment into their bank accounts: 70 per cent. of claimants have bank accounts, and many find payment into their accounts more convenient and safer. It enables them to carry less cash and possibly to earn a bit of interest. Some 35 per cent. of new claimants who have the option of ACT choose it. As new claimants gradually replace existing claimants, the proportion using ACT increases by a little over 1 per cent. a year.

Mr. Michael Shersby (Uxbridge)

Will my right hon. Friend give way?

Mr. Lilley

I will give way to my hon. Friend, but then I must make considerable progress before giving way again.

Mr. Shersby

Is my right hon. Friend aware that last week the Public Accounts Committee criticised the substantial fraud arising from organised criminal activity that has resulted in the substantial losses to which he referred? Would it be possible for ACT payments to be paid into post office savings accounts, which cost the holders nothing but would still enable them to draw their pensions at the post office?

Mr. Lilley

My hon. Friend makes two good points. First, the Public Accounts Committee has looked at the matter. In 1985, the all-party public accounts committee urged the DSS to encourage people to take their payments of benefits in their accounts, rather than use order books. People can have payments made into their Giro accounts in the Post Office through electronic banking systems. The National Savings bank does not provide that facility. If it did, we would be happy to make use of it.

Mr. Dewar

rose—

Mr. Lilley

I said that I would make some progress. The hon. Gentleman has intervened once and has spoken for half an hour. If he forgot to make the points that he intended at the time, that is his fault. If he listens, he might learn.

When the option for ACT was introduced, dire warnings were sounded. They have proved unfounded. It may give some comfort to the hon. Member far the Western Isles (Mr. Macdonald), who did not pursue an alarmist tack, to recall how alarmist his predecessor's fears turned out to be. In 1980, when the proposals for ACT were made to the House, the then hon. Member for Western Isles, Donald Stewart, predicted: The Government's proposals would inevitably close down rural post offices. They would be "disastrous" and another nail in the coffin of the rural areas".—[Official Report, 19 February 1980; Vol. 979, c. 294–297.] Yet since then, the system has not collapsed.

Although the proportion of people using ACT has been steadily rising, this has not led to a decline in the volume or value of DSS business handled by post offices. On the contrary, the number of DSS payments made through post offices has risen in each of the past three years.

All retailers have faced a tough time during the recession, and sub-post offices are no exception. But the number of closures over the past five years has been less than it was between 1974 and 1979—to pick a period at random.

Mr. Dewar

I do not wish to raise a point that I forgot to make in my speech—I simply want to understand what the Secretary of State has just told the House, because it is of some interest. He seemed to say that, if local sub-post offices lost business because customers shifted to ACT, the system was so constructed that they would not lose any revenue from the DSS. Is that the position?

Mr. Lilley

Small post offices—from memory, there are 2,700— receive a fixed payment, regardless of the number of transactions made through them.

Mr. Dewar

rose—

Mr. Lilley

If the hon. Gentleman cannot understand that, he should resume his seat. I answered the question perfectly clearly and everybody understood the answer.

It is a mistake to suppose that the savings that are made when people switch from order books to ACT arise primarily as a result of the reduced payments to sub-post offices. Sub-post offices are generally lean, efficient family-run businesses. Payments to sub-post offices account for only one quarter of the extra costs. A large part of the extra costs of order books arise within the Benefits Agency itself. Preparing, printing and distributing order books and girocheques costs £200 million. By contract, ACT simply involves our computer transmitting information to the bank's computer at the press of a button.

Fraud and theft are also a significant cost factor—£100 million a year—as well as the contribution that we make to post office counters, overheads, warehousing costs, Crown offices and other overheads. In principle, therefore, we can encourage a shift to ACT, agree to sustain sub-post office incomes despite the reduction in volume and still make substantial savings for the taxpayer.

The major step that we are taking to encourage the use of ACT is simply extending that option to most benefits where it is not yet available. At present, the main benefits for which it is available are pensions and child benefit and disability allowances. This month, we are starting to phase in availability of ACT for unemployment, income support for the unemployed, sickness and invalidity benefit and severe disability allowance. Many people are asking for ACT to be extended. Disabled people in particular often find that it is a convenient way to receive all their benefits. Would Labour Members wish to deny people that?

As many hon. Members have said, we are preparing to redesign the claim forms.

Mr. Graham

rose—

Mr. Nigel Griffiths (Edinburgh, South)

rose—

Mr. Deputy Speaker

Order. It is obvious that the Minister is not giving way.

Mr. Graham

On a point of order, Mr. Deputy Speaker. How can Labour Back Bench Members quiz the Secretary of State when he will not allow us to intervene?

Mr. Deputy Speaker

The hon. Gentleman knows full well that it is a matter for the Minister to decide whether to give way.

Mr. Lilley

I have given way to a great number of hon. Members—rather more than did the Opposition spokesman. There is a demand from my colleagues that we make progress.

As colleagues will know, the Benefits Agency ran trials of three variants of a pension claim form that was sent to those approaching pension age. The trials ran for the first 10 days of March. Let me make four things clear. These were trials. As such, their purpose was to enable the Benefits Agency to design a new form in the light of the response to all three specimens. All the forms were clearly headed, How you want to be paid?—You can choose". The new form will mention the Post Office option. In this respect, the new Benefits Agency forms will contrast sharply with the leaflets given to potential claimants by many post offices, which make no mention of any alternative to payment by order books. Indeed, the post office leaflets assert that there is no alternative way of receiving benefits in cash. The child benefit leaflet given to expectant mothers says: The only place where you can collect it in cash is your local post office". Everyone knows that one can get cash from a bank. Perhaps the Sub Postmasters Federation—and, indeed, the hon. Member for Garscadden—should cast a critical eye at these leaflets, which have been distributed by thousands of post offices to thousands of benefit claimants over many months, before getting too concerned about 8,000 copies of a trial leaflet issued over 10 days.

As well as revising our forms, we are also looking at ways of making order books more fraud proof. A new type of order book will be introduced this summer which, through improved design and some new technical features, will, I hope, stop some of the cheats in their tracks.

The clear assurances that I have given to postmasters and pensioners could not be more robust. They are in line with our long-standing policy and reflect our sound Conservative principles. I have shown that the shameless scaremongering over the past few weeks has been without foundation. It is monstrous to exploit the vulnerability of sick, needy and elderly people by whipping up groundless fears. It is time for the mischief to stop. The federation should withdraw its misleading leaflet forthwith and the Labour party should withdraw its scaremongering motion at once.

4.48 pm

Mr. Martin Redmond (Don Valley)

The debate is not about choice. The rent-a-mob that we heard earlier made it plain where they stood. The same rent-a-mob shouted down Opposition Members on the privatisation of water, the poll tax, education and law and order. Everything that Labour Members said, the rent-a-mob condemned. The debate is not about choices; it is about money. The Secretary of State could be accused of being economical with the truth. It was clear from his speech that the proposals are not about choice, but about money that his Department hopes to save and then squander.

It is not about choice, but about the Secretary of State getting his sticky fingers caught in the till. If he wants to do something to give people choice, why does he not give choice to people in receipt of benefits who want the benefits to be dealt with at source, so that some of them can go to housing departments as payment for rent and council tax?

Ms Kate Hoey (Vauxhall)

We all agree that choice is paramount in this matter. Does my hon. Friend agree that there can be real choice only if information is available? If the information about bank charges and the possibility that there will be fewer banks and post offices throughout the country is not made available to people, ACT offers no real choice.

Mr. Redmond

My hon. Friend makes a valid point. Perhaps she should spend an hour or two explaining her views in a little more detail to the Secretary of State. I am not sure whether she would make any impression.

The stubborn and greedy way in which the Government have behaved since 1979 has meant that people do not trust what they say and, because of that, they are rightly sceptical about what is proposed. It is not about choice, but about money.

I come from a mixed urban and rural constituency in which the village post office plays an important role. I have received hundreds of letters about the proposals to stop payments at post offices. The Secretary of State may shake his head all he likes, but he has not convinced the Opposition about his intentions. I am sure that my hon. Friends the Members for Doncaster, Central (Sir H. Walker) and for Doncaster, North (Mr. Hughes) have also received many hundreds of letters.

If the Secretary of State wants to keep village post offices open and viable, he should withdraw the proposals. The village post office is a vital part of the community. The Secretary of State is not giving people choice. Public transport has been taken away from the people of rural villages, so if the post office closes the local people will not be able to hop on a bus into Doncaster. They will suffer as a consequence. The Government should give people the choice of using public transport, if the post offices are to close. It is clear that the proposal is not about choice, but about money.

The message from the people who live in my patch to the Secretary of State is that he should get his sticky fingers out of the post offices and let people continue to draw their benefits. OAPs are the most vulnerable people in our society. The Opposition are not scaremongering. The Government want to close village post offices and they are not giving people the right information.

In view of Madam Speaker's request, I will close on that point. I hope that the Secretry of State will take note of the many hundreds of letters sent from my constituency and others across the country.

4.33 pm

Mr. Derek Conway (Shrewsbury and Atcham)

I usually listen to the speeches of the hon. Member for Glasgow, Garscadden (Mr. Dewar) with great care and interest. I believe him to be an intelligent man who makes interesting speeches. However, he has done his reputation no good by the way in which he moved this motion. He was not prepared to address many of the sensible points made by my hon. Friends in their interventions.

If people who live in rural areas such as Shrewsbury and Atcham, where there are 120 villages and a county town, and who care for and use their sub-post offices had listened to the hon. Gentleman's speech, they might have been inclined to think that he was genuine in his concern for the future of sub-post offices. They would no doubt contrast that with the fact that, when in government, the Labour party closed more sub-post offices than can be imagined. The Labour party was so concerned about sub-post offices that they were not mentioned once in the party's election manifesto. The tears shed by the Opposition this afternoon were plainly crocodile tears.

Mr. Hain

Is the hon. Gentleman aware that the sub-post office in Great Stukeley closed recently? If the Prime Minister cannot even keep his local post office open, what prospect is there for the other 10,000 rural post offices that the Government are threatening?

Mr. Conway

I am staggered that the hon. Gentleman should even think that the Prime Minister would act in a gerrymandering way in his constituency. That may be the practice of the Labour party when in government in awarding contracts, but it is not the way in which Conservative Prime Ministers behave.

The debate has been termed a "scaremongering" one. My right hon. Friend the Secretary of State made an effective speech this afternoon, despite a clearly well-organised barracking tactic on the Opposition Benches. It did not put him off because he has a strong case to put to the House. That is why so many Opposition Members tried to stop him delivering it.

We accept that politics and life in this Chamber are not for the squeamish. None of us should be in this place unless we are prepared to take a bit of knockabout. My right hon. Friend the Secretary of State can more than cope with it. However, the scaremongering among pensioners displeases me immensely and is to the shame of those involved in politics.

Mr. Michael Connarty (Falkirk, East)

Our case has been given a great deal of force by the National Federation of Sub-Postmasters, which is not known to be a natural ally of the working class and the Labour party. Does the hon. Gentleman realise that he is insulting sub-postmasters? Is he saying that their anxieties are not genuine and that they are merely scaremongering? I do not understand how the hon. Gentleman can draw that conclusion.

Mr. Conway

I can explain to the hon. Gentleman exactly what happened. There are two reasons why the campaign came about. First, as my right hon. Friend said, the contract has been renegotiated. People rightly put pressure on the Government when they are negotiating a contract. All is fair in that. Secondly, in the recent county council election campaign, some sub-postmasters, including those in my constituency, were conned into believing that politicians interested in their own future were expressing a genuine interest rather than seeking to use sub-postmasters as part of a party political campaign.

Yesterday I had a word with the hon. Member for Gordon (Mr. Bruce), who is an honourable and decent man. He promised yesterday something which I know that he will deliver.

Mr. Malcolm Bruce (Gordon)

It is on the Board.

Mr. Conway

I am assured that it is on the Board. I am grateful for that. It is a petition of 3,000 names gathered at sub-post office counters in the Rea valley in my constituency. I have spoken to the sub-postmasters involved. They had no idea that they were being used as part of a Liberal campaigning tactic. They thought that the petition was a genuine expression of interest in their concern.

When it was pointed out that the petitions were being distributed in the middle of a county council election campaign and that they should perhaps encourage people to write to their Member of Parliament rather than be conned by the Liberal party, the sub-postmasters said that they would have nothing to do with the petition. They stopped putting the petition on their counters. They are honourable and decent men trying to make a sensible living. They do not want to be used by political parties in a scaremongering campaign to garner a few cheap votes out of frightened pensioners during the county council elections.

Mr. Ian Davidson (Glasgow, Govan)

Will the hon. Gentleman give way?

Mr. Conway

No. I wish to make progress because many hon. Members wish to speak.

Was the campaign genuine? Having looked at the leaflet, I thought that it could have been clearer. My right hon. Friend the Secretary of State explained to the House the point of the 8,000 trial leaflets. They were issued over a period of 10 days. The trial did not go on for months. It was precisely that—a trial to find out how the public responded. My right hon. Friend has had a clear response.

Mr. Dewar

rose—

Mr. Conway

I give way to the hon. Member for Garscadden, although he was not prepared to give way to me on the several occasions when I tried to intervene in his speech.

Mr. Dewar

I gave way rather generously to a wide variety of life on the Conservative Benches. Will the hon. Gentleman consider one point? We had a great deal of argument of mixed value from the Secretary of State, but we did not receive an assurance that if and when a redesigned form is produced, it will refer specifically in the part dealing with choice to all the options available. Does he join me in hoping that we shall receive such an assurance and that we shall rule out the possibility that the choice of the post office will not be specifically referred to on the form? He seemed to hint that that would be unsatisfactory.

Mr. Conway

I cannot speak for my right hon. Friend, but my understanding is that, when the new forms are sent out, the public will be left in no doubt that choice is to continue. We shall see in tomorrow's Official Report whether that is the case. On the question of choice, there has never been any doubt in the minds of the Government or of other Conservative Members. The campaign that was mounted by Labour and Liberal candidates in the local elections was intended to frighten pensioners by making them believe that they would cease to have a choice.

Mr. Davidson

Will the hon. Gentleman give way?

Mr. Conway

If all the interventions are not to be counted against my time, I shall happily give way. In this regard, I seek the protection of the Chair.

Mr. Davidson

There have been no recent local government elections in Scotland, yet in that part of the world there has been a sustained campaign against the Government's proposals for sub-post offices. The thrust of the campaign was not concerned solely with the local elections. The hon. Gentleman does great injustice to the many people who have signed petitions and written letters if he assumes that they are allowing themselves to be used by the Labour party or by the Liberals.

Mr. Conway

The hon. Gentleman has misconstrued my remarks. The hundreds of pensioners who have written to me are not party political dupes. I am talking about people who have sent letters in their own hand, not about people who have been prompted by a campaign involving photocopies and pro formas, which count for nothing among hon. Members. People have been falsely scared into thinking that the Government intend to take action which, in fact, has never been in their minds.

It has been made clear by my right hon. Friend, as it has been made clear in interviews and press releases, that the Government never intended to remove the option to use post offices, rather then banks and building societies, for the purpose of obtaining cash. As so many rural constituencies are represented by Conservative Members, no Conservative Government would be daft enough to take such action.

Indeed, the scaremongering campaign will blow up in the faces of the Labour and Liberal parties. As we found in the "Jennifer's ear" incident during the general election campaign, one can run a scare campaign but one must ensure that there is an element of truth in it. This debate will make it clear to the people who have written to me and to those who follow the proceedings of the House that there is not a kernel of truth in the scare campaigns that the Labour and Liberal parties have been running. The general public will turn on the members of those parties for that abuse.

My right hon. Friend gave the House three pledges today. He said that the Conservative Government are pledged to maintain sub-post offices. That pledge was given in our manifesto, but it was not mentioned by the Labour party or in the speech of its principal spokesman today. My right hon. Friend's second pledge concerned the need to maintain sub-post offices. The Government accept that it is necessary to continue services that are provided so efficiently. My right hon. Friend's third pledge was that the Government would continue to pay for retention and that they would ensure that the block payment was provided regardless of the volume of credit transfers.

It is most important to ensure that choice is maintained. This is a matter of which the Government have at no stage in their consideration lost sight. The Opposition spokesman's opening speech today will have served my right hon. Friend and other Conservative Members very well. We should be able to demonstrate to our constituents that they have been conned by the Opposition. When people are made aware of the facts, what the Opposition parties are doing will backfire on them, as they deserve.

5.3 Pm

Mr. David Rendel (Newbury)

Thank you, Mr. Deputy Speaker, for giving me this early opportunity to do what the Prime Minister would no doubt describe as "breaking my duck".

As is traditional, I should like to begin by recalling the sad circumstances of my election to the House. In February of this year, my predecessor, Judith Chaplin, tragically and very suddenly died after what had appeared to be a routine and successful minor operation. Her death was a great loss not only to the House, and particularly to her many close friends here, but also to all of us in west Berkshire. I do not think that anyone doubted that she was a woman of immense ability. Indeed, she was believed on all sides to be destined for high office. For her parliamentary career to be cut short after only 10 months was indeed a tragedy.

Sadly, just one week after he had given the oration at Judith's memorial service, her predecessor, Sir Michael McNair-Wilson, also died. He too will be long remembered with great affection by many in this House, as well as by all of us who knew him in west Berkshire. He had many friends and, so far as I know, not a single enemy, even among those who, like myself, were his political opponents. But, above all, we shall remember him for his immense courage after his health failed him. He not only remained a Member of the House while on kidney dialysis, but fought and won in a further general election. It is a great sadness that he enjoyed less than a year of retirement before he too died.

Both my predecessors were admired greatly as first-class, hard-working constituency MPs. As I said in my acceptance speech, they will be a very hard double act to follow. The constituency that they have passed on to me covers almost half of the area of Berkshire. Although it is dominated by the two largest towns—Newbury and Thatcham—nearly half the population live in the town of Hungerford, in the larger villages such as Lambourn, Compton, Mortimer and Burghfield Common, or in the smaller villages and outlying settlements spread across the rural area. With the M4 cutting across the constituency from west to east, we lie in the now somewhat tarnished silicon valley, with high-tech industries providing a large share of local employment. We are also, of course, famous for our racing stables, particularly in Lambourn and West Ilsley.

Many hon. Members will, for one reason or another, have had cause to visit our beautiful constituency during the past few weeks. Indeed, there was a time when we saw so much of the hon. Member for Winchester (Mr. Malone) that I began to wonder whether he was looking for a home in the area. It is, of course, no surprise to me that people should wish to visit west Berkshire, a very large proportion of which is designated as an area of outstanding natural beauty, but I suppose that it is only fair to say that, of the two principal tourists who visited us from Somerset recently, one—the right hon. Member for Yeovil (Mr. Ashdown), who often sits in the seat that I have temporarily occupied today—got a rather better reception than the other.

It is because so large a proportion of our population live in the rural area that I particularly wished to speak in this debate. Over the past few weeks, hon. Members on both sides of the House have found their mail bags full —as I have done—of letters pleading for the retention of rural sub-post offices. Indeed, if the Secretary of State has done anything for post offices recently, it is perhaps that many extra stamps have been sold to pensioners who have written to their Members of Parliament on this subject.

But it is not just a matter of letters. As I went round my constituency during the recent by-election, I was struck by how often this issue was raised on the doorstep. As we all know, rural sub-post offices are often housed in the village shop, and thousands upon thousands of our village shops are dependent on their post office income for survival.

Let me illustrate briefly how important these village shops are for life in rural areas by telling the House about what one village postmistress said to me only a week or two ago. She told me about the lady who comes into her shop almost every day, takes just one or two items off the shelves, and then waits to pay. After a while, the attendant at the till motions to the lady, to indicate that it is her turn to pay, but, in reply, the lady stands back and motions others to go ahead of her.

At first the postmistress could not understand why the lady should act in this way, but eventually it dawned on her that the lady comes into the shop not merely to buy her daily rations but also because the shop is her sole meeting point for contact with her fellow human beings. She lives on her own—a lonely existence, without relatives around her—and her contact with humanity consists of her daily visit to her village shop-cum-post office, where she always waits at the end, of the queue, listening to the village gossip.

For all too many people, the village shop is now the only escape from their well of loneliness. If we lose such shops, we shall lose a vital ingredient of the quality of life in rural areas.

Let there be no doubt that the sub-post office system is vital to the survival of village shops. I have long since lost count of the number of letters that I have received, mainly from elderly people, but also from those in receipt of various other benefits as well. They have all stated that their local post office is now the only remaining place in the village where they can obtain cash. The banks have mostly long since closed their village branches.

If the post offices close as well, the only option will be a trip into town. It may sound easy, but it is not when people have to rely on public transport because they are too old or too disabled to have a car of their own. Public transport has more or less disappeared from most rural villages. Even when a bus is available, many people have written of how a trip into town to draw their pension will cost them more in bus fares than the total increase in their pensions this year.

Of course I understand that the Secretary of State intends to leave it to the individual to choose between payment through a bank and payment through a post office, but that is not the choice that people want—a real choice for them means choosing between paying through a bank in the town or paying through the post office in their local village. That choice is under threat today.

I understand that the Secretary of State wishes to reduce the taxpayers' subsidy to rural post offices, but surely hon. Members should take a wider view. Yes, we can save the taxpayer money by reducing the subsidy to rural post offices, but what about the far greater cost to the taxpayer of the extra traffic on the roads as more and more people have to drive their cars into towns? What about the cost of car parks, petrol and environmental pollution?

The overall cost to the community caused by the loss of the sub-post office system will be far greater than any possible savings. Let all hon. Members join to save village sub-post offices, not by merely giving a vague pledge—such as the Secretary of State gave about some national network—but by giving a specific pledge that the number of sub-post offices will not be further reduced. A small, but important, aspect of our country is in danger. It is our duty to save it before it is gone for ever. I therefore urge hon. Members to vote for the motion, not for the Government's amendment.

5.12 pm

Mr. Michael Brown (Brigg and Cleethorpes)

It is a great pleasure for me to follow the hon. Member for Newbury (Mr. Rendel). He was generous in his warm tribute to the late Judith Chaplin and Sir Michael McNair-Wilson. If he is half as good a Member as they were, as I am sure he will be, he will be a worthy successor to them. On behalf of my hon. Friends, I thank him for his kind words in memory of our two colleagues.

It is hard to believe that the hon. Member for Newbury has been here but two weeks, as he spoke with the fluency of an experienced Member of Parliament. His description of Newbury, to which I have yet to make a visit, makes it sound almost as beautiful as Brigg and Cleethorpes. I should advise the hon. Gentleman that I had the dubious privilege of visiting Eastbourne three years ago, but following that visit, Ministers thought it wise for me to stay well away from Newbury—although it did not seem to make any difference.

I do not know for how long the hon. Gentleman will be a Member of the House. It may be three years, perhaps it will be four—who knows? If there has to be a Liberal Member for Newbury, there is no doubt that the hon. Gentleman, with his local knowledge and experience as a councillor, will ensure that the constituency could not be better served. I wish him a happy and enjoyable time as a Member of Parliament.

The hon. Gentleman rightly drew attention to the issue of sub-post offices in his constituency. I understand and empathise with many of his comments, as my constituency of Brigg and Cleethorpes has a large number of sub-post offices, both in the town of Cleethorpes and in rural areas. However, my right hon. Friend the Secretary of State this afternoon gave the reassurance that the hon. Gentleman's constituents were seeking when he campaigned during the by-election.

The robust speech this afternoon of my right hon. Friend the Secretary of State has laid the ghost. The Labour party raised the fears for party political purposes, as did the National Federation of Sub-Postmasters to some extent. I understand—as my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) said —that negotiations are taking place between sub-postmasters and the Government. It is inevitable—I make no particular complaint about it—that exaggeration sometimes occurs in such negotiations, and there has been some exaggeration in the current negotiations. We must bear in mind the fact that the first duty of my right hon. Friend the Secretary of State for Social Security when dispersing the huge Government budget over which he presides is to ensure that that budget is distributed directly to the claimants.

I am concerned to learn that the total cost of transferring from the taxpayer to my mother and father —who are both old-age pensioners—and all the other pensioners and claimants on various benefits paid by the Department, is £475 million a year. I believe that every penny that my right hon. Friend the Secretary of State raises should go to the claimants for whom it is intended.

We can have a separate debate in the House under the umbrella of the Department of Trade and Industry on whether the Government and Parliament, for reasons of social and rural policy, want to assist in ensuring that the structure of the sub-post office service is maintained. That is a matter on which Parliament, the House of Commons and the Government can rightly hold a view.

In the Budget debate earlier this year, I called for cuts in public expenditure—or if not cuts, for the necessary funds to meet that public expenditure. I want all the money —or as near as possible all the money—in the massive budget over which my right hon. Friend the Secretary of State presides, to go to my mother and father and all the other claimants. I am worried when I see that £475 million of the money available for distribution to pensioners has to be spent on transferring the funds from the Government to the claimant.

I made a calculation earlier today—

Mr. Connarty

Will the hon. Gentleman give way?

Mr. Brown

No, I shall make my point and then give way.

My mother and father are 65 and 67 respectively, and are both pensioners. They both receive their pensions directly into their bank accounts, in arrears, every 13 weeks. That means that there are eight transactions per year for my mother and father—four for my father and four for my mother. To make the transfer payments from the state for my parents' old age pensions costs the state 24p for all the transactions.

My mother and father could, instead, each walk the two and a half miles from the village of Crossbush in West Sussex where they live to the town of Arundel. Everyone says that sub-post offices are right on the doorstep of every claimant. That is largely true, but a great number of people have to walk a long way to their local post offices.

According to my calculations, if my mother and father were to elect to take their pension books and walk the two and a half miles each way 52 weeks of the year, on the basis of the figures that the Department has given me of 44p per transaction, it would cost 44p, times 52, times two—to account for my mother and father—a total of, I think, £45.76. If the Secretary of State went to my mother and told her that she could have an additional £45.76 over and above the Christmas bonus in return for having her pension paid directly into her bank, I am sure that she, like many other pensioners, would consider that good value for money.

I have made it clear that it is certainly right that sub-post offices should be part of our social and rural policy. I am satisfied from what my right hon. Friend said this afternoon that this is an extension of choice. The hon. Member for Glasgow, Garscadden (Mr. Dewar) says that he agrees with choice, so let us not forget that, until 12 May of this year, there was no choice for the payment of certain benefits—invalidity benefit, severe disablement allowance, sickness benefit, income support and unemployment benefit. None of those could be paid into bank accounts, so there was no choice. Now there is. The new regulations, in short, introduced more choice.

Mr. Connarty

I am glad that the hon. Gentleman has been able to secure his parents' future to the extent that they can go without their pensions for 13 weeks at a time, as they are paid in arrears. Will he ponder the fact that it is not possible to transmit money around the country at no cost? He might care to consider the massive cost of the disability living allowance shambles that the Government instigated by trying to put the system on one computer.

Where does the hon. Gentleman get the idea that any Opposition Member has suggested any element of compulsion? The worries began when people saw that the forms did not list post offices as an option, and thought that they would be compelled to use the banking method.

Mr. Brown

I readily acknowledge that many pensioners want a weekly benefit in cash. There is no problem for them. We do not seek to change that, as my right hon. Friend made clear this afternoon. Let the message go out to pensioners who want to receive their pensions in weekly cash from post offices that they will be able to do so, just as they have done in the past.

The hon. Gentleman says that the Opposition do not want to restrict choice, and the Opposition drew attention to the leaflets that the Post Office is putting out in which it appears to deny choice. I have with me a post office leaflet, issued by Post Office Counters, relating to child benefit. I also have a leaflet about pensions. Both leaflets make it clear that drawing the money could be done only through post offices—there was no other choice.

Because of the sheer quantity of cash sloshing around the country, £100 million is lost to fraud. I support anything that we can do to ensure that that money finds its way into the hands of genuine claimants.

Pensioners can relax. They should realise that the Government simply want to ensure that as much as possible of the £475 million now used for administration and transfer costs gets to the claimant. Reducing the public expenditure deficit must be our first priority, as I said during the debate on the Budget.

The hon. Member for Garscadden has some questions to answer. Perhaps one of his colleagues will answer them at the end of this debate. The Opposition have a duty to tell the House whether they would prefer cuts in benefits or cuts in costs. My right hon. Friend seeks cuts in administration costs so that there is no question of cuts in benefits. We are talking only of increases in benefits.

As recently as 23 April, the hon. Member for Garscadden said that he wanted to root out fraud. He claimed that he was anxious to get rid of any fraud in the system. My right hon. Friend and his colleagues in the Department are merely anxious to draw attention to the benefits of ACT so as to get rid of fraud—

Several hon. Members

rose—

Mr. Brown

I am conscious of having gone on longer than I had intended. Hon. Members know that I give way generously, but I think that I really ought to conclude.

To quote the Foreign Secretary, there has been a great deal of froth and bubble about this subject. In Lincolnshire, we would say that there has been a lot of candy floss; indeed, in north Lincolnshire we call this sort of event a great stitheram. That is what we have had from the Opposition today. The Secretary of State clearly said that claimants who want to claim cash from local post offices will be able to continue to do so. I ask the House to bear in mind the massive cost of transferring limited resources from the state to claimants, and to compare that with the savings that can be made through the ACT system.

5.26 pm

Mr. Terry Lewis (Worsley)

On behalf of the Opposition and in particular of the alternative Bench on which I sit, I too congratulate the hon. Member for Newbury (Mr. Rendel) on his speech.

I am amazed by the attitude of the Secretary of State. The first time this matter was raised was 8 March, when I tabled an early-day motion 1539 about it. I did that before the campaign began, and before Newbury and the county council elections. It was even before the postmasters themselves had begun their campaign.

I raised the matter in the first place because constituents had complained to me about the possible closure not of rural post offices but of post offices in my urban area, where 11 sub-postmasters and mistresses administer pensions for the Secretary of State. This followed the pilot scheme in which 24,000 new pensioners in the north-west were sent certain forms. Those forms were loaded so as not to offer the post office system as an option. No wonder then that there was a problem or that people were suspicious. Given the Secretary of State's record—

Mr. Kevin Hughes

Surely, if there has been any scaremongering, it was started by the forms sent out by the Government. They offered no choice, so people thought that they would have no choice. That is why we have had hundreds of personal, handwritten letters from people who are worried about losing their post offices.

Mr. Lewis

My hon. Friend is right, of course. [Interruption.] I see that the hon. Member for Ribble Valley (Mr. Evans) is waving a leaflet: he is wide of the mark. My hon. Friend correctly states that the complaints started to roll in because of the wording of the Secretary of State's leaflet, not because of the subsequent campaign.

The Secretary of State should think for a moment not about pensioners who take their pensions three months in arrears but about those who go to post offices to collect their pensions with their groceries. He should think about those pensioners who are watched over by the sub-postmaster. In my area, if someone has not called for his pension by about 4 o'clock, the sub-postmaster sends somebody round to find out what is wrong and whether the old gentleman or lady is ill and needs to be looked after. Sub-post offices offer such social services.

I know that it is trite and that it has been said more times than "level playing field", but the trouble with Conservative Members is that they understand the cost of everything and the value of nothing. Nothing was ever truer. I would accept as a reasonable argument the possible saving of £500 million if the Ministers who advance it were not putting out glossy leaflets every five minutes. Hon. Members have all received from Departments glossy excuses for Government policy. More money is spent on publicity by Departments than on administration. The Secretary of State smiles. I must have touched a nerve. Most of the publications are sent out to excuse mistakes and to try to brainwash people into believing that the Government know what they are doing.

Miss Joan Lestor (Eccles)

My hon. Friend and I are neighbours in the north-west and were at the receiving end of the concern over the form that did not make it clear that the post office was an option. Judging from the petitions that I have received, hundreds of people have been panicked into opting for ACT because they thought that they had to. Does my hon. Friend agree that the Secretary of State should give those people the facility to switch back to post offices?

Mr. Lewis

I was coming to that, because it is the nub of the argument. It is said that there will be choice and that some pensioners will accept ACT as a reasonable way to do business. However, the heat that has been generated on the issue will drive people into expense that will arise from collecting their dues. That is because many people cannot afford to have bank accounts. My hon. Friend the Member for Eccles (Miss Lestor) is right. There will he a haemorrhage of customers who would not normally choose to leave the post office.

Mr. David Sumberg (Bury, South)

The hon. Gentleman is right to say that the matter affects urban areas. In my constituency it affects Ainsworth, Whitefield, Prestwich and Radcliffe. Whatever has happened in the past, does the hon. Gentleman accept that the Secretary of State has made it as clear as crystal that all our constituents, including the old and the disabled, will now have the ability to take benefits in cash if that is what they want?

Mr. Lewis

That is hardly the point. Before the debate closes at 7 o'clock, the Secretary of State should say that sub-post offices will remain intact and that the current negotiations will ensure that any diminution in pensions business will not result in any reduction in the income of sub-post offices, thereby forcing closures. The Secretary of State skirted around that question. He was challenged several times and did not see fit to answer in the way that I and my hon. Friends want.

The Secretary of State should speak to his colleagues at the Department of Trade and Industry about another threat. In my area the privatised electricity company, Norweb, is now ending a trial of cards that can be used on meters. One sub-post office that I know will lose £5,000 in revenue when that trial ends. The problems are caused by regulation and by Secretaries of State not understanding what is happening on the ground. It would be useful if that threat to sub-post offices were included in ministerial discussions.

Mr. Eddie Loyden (Liverpool, Garston)

My hon. Friend speaks about cards for slot meters. Such devices undermine post offices and show the Government's dogmatic intention to destroy some sacred cows. The debate clearly shows that, whatever the short-term effects, long term, post office services will be undermined at that level and that will creep through to every level.

Mr. Lewis

My hon. Friend is right. That issue has been adequately covered by me and in some interventions.

I remind Conservative Members of what the Prime Minister said when he was selling the objectives of his citizens charter. He said that services to suit the customer would always be provided. I want to see services provided for the customers who need to use post offices not just to collect their pensions but for the social reasons that I have outlined. My hon. Friends agree on that. Sub-post offices provide a vital public service, and the Government should make it clear that they will discontinue any threat to undermine that service.

5.36 pm

Mrs. Jacqui Lait (Hastings and Rye)

I do not want to rehearse the need for sub-post offices because the arguments have been eloquently put, especially by the new hon. Member for Newbury (Mr. Rendel), whom I welcome to the House. I am sure that we have all had experience similar to the lady's case that he outlined because, as good constituency Members, we are aware of the fundamental role played by rural and urban sub-post offices in the social milieu of our constituencies.

The Labour party and the Liberal Democrat party have been vociferous in their support for sub-post offices and I look forward to the promises that they will no doubt put in their next manifestos. It will be interesting to see what weasel words are used. I am glad that my right hon. Friend the Secretary of State has expressed his continuing commitment to the sub-posts offices and their continued financing.

Mr. David Hanson (Delyn)

Will the hon. Lady give way?

Mrs. Lait

No, because I should like to come to the meat of my speech and many hon. Members wish to take part in the debate.

We are debating post offices that reflect our current society, but we should be examining how they will reflect our future society. That is part of the argument for ACT. More and more retired people will be used to bank accounts and will wish to take their pensions through ACT. That will apply especially to those with occupational pensions. That means that there is likely to be a change anyway in the service that sub-post offices will be required to provide.

We have all received much mail from the elderly and those who are on benefits and wish to retain sub-post offices. I received a letter from two frail elderly ladies whose even more frail elderly brother is in a residential home. They said that they would like to cease visiting the post office to collect income support for their brother. They were frightened about carrying large sums and they were becoming too frail to go to the post office. They asked whether the money could go through their bank account.

It was therefore with enormous pleasure that I was able to reply saying that on 12 May, which was the date of their letter, new regulations had come into force which would allow them to use their bank. That is a measure of the need to change the functions of the post office.

Mr. Nick Ainger (Pembroke)

How many letters did the hon. Lady have in her postbag asking for the cash to be paid directly to a bank account and how many from those asking for the continuation of the right to collect cash from the local post office? The hon. Lady makes one point, but I think that she ignores the far larger case that I am sure has been made in her postbag.

Mrs. Lait

The point that I am making is that there is still a demand for changes in the services that sub-post offices deliver. They should be providing private sector operations. They do not belong to the post office: they are not branches of the post office: they are franchises of the post office. Those post offices should have the opportunity to deliver a much wider range of services.

I suspect that one reason many postmasters and postmistresses reacted so nervously to what happened is that over the past few years they have had a bad time, as have many other businesses. We need to widen the functions and services that they can offer. That is our responsibility, because what happens in post offices is, in many cases, constrained not just by custom but by statute. We need to consider what services post offices can deliver.

I think that all would agree that post offices are providers of cash. They could also be providers of cash from the banks. They could be providers of building society money in villages. They could be providers of tickets for road, rail and entertainment. They could act as reservation centres for such things. It has already been mentioned that they could provide and sell tickets for the national lottery.

The sub-post offices should consider offering—we have a responsibility to ensure that it is possible—the wider range of services that so many people want in order to live the sort of lives that they will expect to live in future. Perhaps we should also think of allowing the post offices a computer link so that money can be transferred with the minimum difficulty and they can offer the speedy and cheap service we are used to in other financial aspects of our lives.

I hope that when my hon. Friend the Minister replies he will be able to offer the assurances that we want so that the rural and sub-post offices can respond to the changing demands of society and can deliver a yet better service to those who wish to use them.

5.42 pm

Mr. Eddie Loyden (Liverpool, Garston)

The debate, and certainly the Secretary of State's speech, clearly suggest that the Government's intention is to undermine post office services. The misinformation or lack of information shows the Government's insensitivity to pensioners.

We have heard of a number of instances of people, particularly pensioners and those on benefit, who depend on being able to go to their post offices to receive the money that they require to sustain their life, and in some cases, their families as well.

I was somewhat surprised to hear about 13-week pension arrears. That is not common in the real world where people wait for their pensions to meet the cost week by week of rent, food and so on. Again, that is a measure of how remote the Government are from reality.

It was once said by one of the more reactionary elements on the Conservative Benches that the Government were destroying all of what they refer to as sacred cows, which in their view impeded the progress of private enterprise wherever it might occur. In the process of doing that, there has been no understanding of the value of certain things. As my hon. Friend the Member for Worsley (Mr. Lewis) said a few moments ago, the Government appear to know the cost of everything and the value of nothing. They have given no thought to the social consequences of the proposal.

I hope that further thought will be given to this matter. I have already received not letters but petitions signed by concerned pensioners. Whether their concerns are grounded is of no consequence. They are concerned, and they have been made concerned by the Government, who failed to inform them properly about their choice, trying to push pensioners into a system that is more complicated than going to a post office. Whether one likes it or not, people of a certain age become less capable in dealing with certain aspects of banking and so on; that should be taken into account by the Government when they make proposals of this kind.

We all know that banks constantly review their charges, and we shall certainly see in the future not a reduction but an increase in those charges. Once pensioners are trapped by the banks, they will have to find additional money for such charges, which will reduce the value of their pensions. That is another factor that the Government should take into account.

Mr. Ainger

I do not know whether my hon. Friend has had an experience similar to one that I had recently in my surgery, when two constituents found that their mortgage interest payments, paid direct from the Department of Social Security into their bank account, had, for various reasons, been delayed. Because they had a series of standing orders, their account went into the red and, as a direct result of mistakes made by the Department of Social Security, they now have to pay substantial bank charges which they cannot afford. Many pensioners are afraid that, if their money is paid directly to the bank, something similar will happen to them.

Mr. Loyden

I too am concerned about that. Experience will show that that will happen. Banks are not perfect organisations. Instead of, as I used to do, paying my landlord or the collector every week when he came to the door, my rent is now paid through the bank, and I have found myself with arrears of £565 because of the time that the transactions have taken. People, particularly the elderly, are worried about problems that might arise from accountancy procedures, and that is something that they can well do without.

Ms Glenda Jackson (Hampstead and Highgate)

Conservative Members spoke about the enormous amounts that are lost to the Treasury through social security fraud, but they made no mention of the even larger amounts that are being lost by the commercial and high street banks through a different kind of fraud at cash tills and via bank cards.

Mr. Loyden

My hon. Friend makes an important point. As I said, banks are not perfect institutions, and that is a good example.

The Government have pursued policies without paying any regard to those who will be affected by them. The House will he well advised to vote against the Government, who should then re-examine the rundown of post offices, not only in the past 10 or 15 years but longer than that. Crown post offices have been closed and substituted by smaller offices, resulting in queues of pensioners. Those queues can be eradicated by reinstating Crown offices, so that people can transact their business in comfort and enjoy the efficiency of which the Post Office is capable. The Post Office code of practice clearly states how business should be conducted.

I hope that the Government will recognise that the post office services should be maintained. This latest development is another step towards undermining the whole post office service.

5.50 pm

Rev. Ian Paisley (Antrim, North)

I am the only Ulsterman who is able to be present because Ulster is in the middle of council elections, but I am glad that at least one Ulster voice will be raised on the side of old-age pensioners and others who are deeply concerned.

The remark of the hon. Member for Brigg and Cleethorpes (Mr. Brown) that the majority of pensioners could wait 13 weeks in arrears for their pension was unreal. In another apparition, the hon. Gentleman is parliamentary private secretary to the Secretary of State for Northern Ireland. He ought to visit Northern Ireland to hear what senior citizens there have to say about the Government's proposal. I do not believe that the parents of whom the hon. Gentleman spoke would have walked to the post office; they probably had a car and could have driven there. If they had to visit the post office, they would have visited the bank also. The hon. Gentleman spent a ludicrous amount of time trying to persuade the House that a large number of pensioners would prefer to be paid by ACT.

In Northern Ireland, the sub-post office is part of the cement of the community. It is vital in keeping the community together. We have lost village schools, smaller churches, and the other cement of society. Today, the village and rural sub-post office provides a focus, a place where people can meet and talk and where the needs of pensioners are well known by the sub-postmistress or sub-postmaster. When a pensioner does not arrive to collect his or her pension, the sub-post office staff know that something is wrong and will make inquiries; there is no doubt about that. Many relatives have paid tribute to the staff for the care that the elderly have received as a consequence of their contact with the local sub-post office.

I would have been happy if the Secretary of State had given an unequivocal assurance that things would carry on as in the past, but he did not. He spoke of a viable national network of sub-post offices. I have heard about viable national networks of public transport or railways, but when big finance came to bear, both were axed. I was amazed to hear the Secretary of State say that the best way to save money was by using ACT. He argued with such strength that perhaps overshadowing this debate is an axe over sub-post offices. Anyone who hears this debate will agree.

One hon. Member said that he backed the Government but admitted that the original form could have been clearer. That is where it started—not as a political way of getting at the Government, but with a form which was unclear. After 22 years' membership of the House, I have some experience of large postbags, but no constituency issue has ever brought a bigger one than this issue. I have also been on doorsteps for the council elections. I am glad to see that the hon. Member for Upper Bann (Mr. Trimble) is now in his place; he mentioned this point in the local press. At the door, every pensioner has raised the issue and spoken of his or her concern. Their fears should be acknowledged.

It is a question not of scaremongering but of fear. If Members of Parliament and sub-post office officials want to raise the issue, they are entitled to do so. That is not scaremongering against the Government. The Government can put the matter to rest tonight by saying that they will maintain a sub-post office in every community.

The Secretary of State said that, even if trade is taken away from sub-post offices, they will be paid the same grant. Does any right hon. or hon. Member believe that? We are asked to make fools of ourselves and to accept that, as post office business declines, sub-postmasters and mistresses will still be paid the same.

This debate has given the House a valuable opportunity to express the feelings of senior citizens. I am glad that the Government have at least done part of a U-turn. To begin with, they would do nothing, but now they are under pressure. They should face up to it and give an undertaking that they will maintain post offices for the sake of the communities that they serve.

Some hon. Members have argued that pensioners should not carry large sums of money home. A weekly pension is not a large sum of money. I wonder how many of the people who make that argument have ever spent any time with pensioners, who budget not for 13 weeks but for one week. They have the money in their hands to deal only with the needs of the week. It is ridiculous to say that pensioners can budget 13 weeks in arrears.

We should heed the cries of a valuable group of people who have served their day and generation well. The House owes them a copper-fastened assurance so that their fears can be laid to rest.

5.59 pm

Mr. Bill Michie (Sheffield, Heeley)

It is no surprise that on this occasion I fully agree with the hon. Member for Antrim, North (Rev. Ian Paisley). The hon. Gentleman put his finger on our real worry. Also, it may come as no surprise that I am suspicious when I hear a Conservative Secretary of State assure the House that everything will be all right at the end of the day and that there is no real threat to our sub-post offices because the Government will find ways of helping them out. Over the years, this Government have said, "Don't worry about factories closing down; we'll build others to manufacture different products." I wonder, therefore, why more than 4.5 million people are still unemployed. The Government's assurances appear to have no credibility whatsoever.

The Secretary of State and other Ministers have said on more than one occasion that the purpose of the exercise is to save money. They wrap up that argument with the protection of old-age pensioners from being mugged. I do not know what to say about that argument. As the hon. Member for Antrim, North said, if we gave pensioners more money, mugging might be an attraction, but it is not a sufficient attraction at the moment. The Government shoot themselves in the foot on some occasions. They are something of head bangers, anyway.

If the Government want, for example, to save £50 million, a large percentage of the sum saved will be lost by local post offices, many of which are struggling to keep open. The Secretary of State assured the House that new contracts are being negotiated. He said that post offices will obtain new business from selling national lottery tickets, but everybody else will be selling them too, it seems.

People view their post office with great respect. They believe that it provides a good service in a variety of ways. They do not regard their post office as a glorified betting shop, or as a bookie's runner. If the only option left to post offices is to become glorified betting shops, the Government will have lost the argument. That is not the kind of service that people want, particularly the old, the sick, the disabled and the vulnerable.

Ms Ann Coffey (Stockport)

Does my hon. Friend agree that we want to preserve choice for the elderly about the way that they collect their pensions? If the Minister is serious about providing choice, does my hon. Friend agree that the forms that the civil service designs should be simple, straightforward and easy to understand? My constituents often complain that civil service forms are complicated and incomprehensible.

Mr. Michie

My hon. Friend is absolutely right. She made that point far better than I could have done. It has been referred to more than once during the debate.

The Secretary of State admits that millions of people do not have bank accounts. Most of them are poor. People with a reasonable job and income usually acquire a bank account, but the poorest and most vulnerable—those who rely absolutely on benefits—do not have bank accounts. There is no reason for them to have bank accounts, for they live each week from hand to mouth.

Mr. Nigel Evans (Ribble Valley)

The very poor and vulnerable are exactly the people who have been targeted during the campaign. It is shameful that the fear has been piled on that their post offices will be closed. Opposition Members have a great opportunity this afternoon to discuss the future of our post offices, but they have not put forward one credible alternative. They have said nothing about the way in which post offices may be able to build up their business. Will the hon. Gentleman draw attention to those services that post offices may be able to provide in the future?

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. Before the hon. Gentleman does so, I remind hon. Members that many of them are hoping to catch my eye and that long interventions do not help.

Mr. Michie

That was a very interesting, if too long, intervention. The hon. Gentleman invites us to enter into negotiations on the closure and the death of some sub-post offices. That is not the role of the Opposition. The hon. Gentleman referred to the future. According to the Government, the future of sub-post offices is safe. But people are worried. We are not scaremongering. This is what ordinary people say. I have never believed that the Government's attempts to save money benefit people such as those who use post office services.

Hon. Members have received thousands of letters from people from all walks of life who are worried about this issue. Many of those who come to our surgeries are worried about it, too. I have had a letter from a constituent who says that since bus deregulation there are no local bus services. She says that she can walk to the post office, which is not far away, but that if she had to go anywhere else for her pension she would be faced with a problem. Her husband is totally disabled and she has difficulty in walking.

In another letter an 86-year-old says: I am 86 years old, housebound with arthritis and poor sight. At present I rely on a friend to collect my pension weekly from the local PO down the road. The friend may be able to fetch that person's pension from the bank, if it were possible to get clearance from the bank to do so, but this is all hassle which, frankly, that 86-year-old does not want.

Another letter makes a very good point. The writer is disabled; so is her husband. They rely on a home help service, a service that is already stretched. The home help goes to the post office to collect their pension. It is a local post office and a local home help service. The home help would be unable to travel out of that area to the bank —if, again, it was possible to obtain permission from the bank to collect their pension. That is a service that will disappear if local post offices close.

Some people go to the other extreme. I have a letter from a constituent who believes that this is some form of Conservative plot. He calls it old-age cleansing. It appears to be a humorous letter but it contains a serious point. It says: As the older generation are now living longer, do you think in order to save money on pensions the Government are embarking on a subtle policy of ethnic cleansing of O.A.P.s. First they put V.A.T. on fuel in order that many may die of hypothermia, then they propose to close local post offices so that we shall have to go further to collect pensions from banks etc and succumb to traffic accidents in the process. Thirdly I hear that they also propose to withdraw the prescription service from local chemist shops so that we may pass on before we can get our tablets. All the Government's actions over the past decade or so have affected the most vulnerable people in our society; there is no argument about that.

The Government may believe that saving money is much more important than providing services. They may believe that it is not important that the most vulnerable people in our society have the services and care that they require, providing the economics are acceptable. However, we care. However humorous Conservative Members may find it, we shall continue to fight and raise the issue of injustice to the poor whenever the opportunity arises.

6.9 pm

Mrs. Angela Knight (Erewash)

I do not represent a rural constituency, but I too have received many letters from pensioners who are worried about the future of local post offices. I believe that the people who have expressed such concern to me can take genuine comfort from the Secretary of State's statement this afternoon in which he pledged himself to ensure that we continue to have a viable network of sub-post offices. He also underlined the fact that pensioners will be able to continue to draw their pensions from the local post office if they wish.

I take issue with some of the remarks made by the hon. Member for Sheffield, Heeley (Mr. Michie), who rather dismissed the notion of "cost saving". We should examine the issue closely because the delivery of Department of Social Security benefits costs about £650 million, of which just over half goes to the Post Office and a fraction to sub-post offices. The rest—about £300 million—goes in administration and fraud.

I cannot justify a system which costs that much to administer and loses that much in fraud. Every £1 that is spent on administration or lost in fraud means £1 less available for benefits. I can fight for an efficient system which ensures that social security money goes to those who should receive it, but I cannot fight for a system which costs too much to administer. Therefore, I do not take administration costs and fraud as lightly as the hon. Member for Heeley.

Mr. Ainger

I am grateful to the hon. Lady for giving way, especially on the issue of administration costs. Does not she accept that many of the administration costs are paid direct to the sub-post offices for the work that they carry out? It does not square with the Secretary of State's assurance that he will continue to support sub-post offices while at the same time making massive cuts in the administration. One cannot have one without the other.

Mrs. Knight

The sum of money that goes to sub-post offices is fairly small, as I am sure the Minister will emphasise later.

The Post Office is treated with great respect. Costs should be kept to a minimum, but there is a need to ensure that we have a network of post offices, not only because some 35 per cent. of pensioners still wish to draw their money in cash but because post offices are the huh of so many local communities.

However, one must recognise that a change is taking place. More people have bank accounts and building society accounts and pay for goods by cheque. We must ensure that there is a choice. Increasingly, pensioners, choosing not to collect their pensions in cash but to collect them from the bank. Therefore, the amount of money going through local post offices is declining, as it the frequency with which people visit them. We need to examine the issue, therefore from a wider viewpoint to discover whether the role of post offices can be enhanced.

The letters that I receive mention various services that constituents want to receive from their local post offices. That applies not only to rural post offices but to those in the suburbs of towns such as those in my constituency. Post offices must be allowed to conduct more and different types of business.

I have three suggestions. First, only some post offices are allowed to issue vehicle licences. That task is essentially limited to Crown post offices and a few others. Ilkeston in my constituency has about 35,000 inhabitants but only two post offices that will issue motor vehicle tax discs. One is the old Crown post office, near which it is impossible to park, and the other is a small office tucked away on one side of the town and very difficult to find.

Local people organised a petition, which I supported, asking for another post office to become a motor vehicle licensing office. The regional manager said that he could allow only a certain number of vehicle licensing offices in the area, and only two were allowed for Ilkeston. I took the matter up with the Department of Transport, which could not help me. I urge my right hon. and hon. Friends to consider allowing more post offices to offer such a valuable service, because it is one that people want. and it would bring more business to post offices.

My second suggestion has already been made by my hon. Friend the Member for Hastings and Rye (Mrs. Lait). We should enable post offices to offer additional financial services. My local sub-post masters certainly wish to be able to do so. An estate agency can be an outlet for a building society, and I believe that sub-post offices should also be allowed to provide that service.

I understand that there is some confusion about what they can and cannot offer in the way of financial services. One of my local post offices has a contract which states that it cannot offer any financial service which could be deemed to compete with its Post Office duties. That regulation should be examined, because post offices want to increase their financial services, which would bring in more people and increase their viability.

I also make a plea for post offices to be able to sell tickets for buses, the railway, theatres and the national lottery. I do not knock the national lottery as Opposition members have done because it will be popular. Allowing post offices to sell such tickets will enhance the range of services which they offer.

Mr. Nigel Evans

Is it not clear from what my hon. Friend and my hon. Friend the Member for Hastings and Rye (Mrs. Lait) have said that we are talking about a sustainable future for all post offices—opening them up to allow them to provide more services for the elderly and others in our villages and towns? The Labour party wants to fossilise the Post Office and make its running costs burdensome to the very people we want to help.

Mrs. Knight

My hon. Friend makes the point well. We seek to provide even more valuable services for the community, so that more people will go to the post offices, thus allowing a diversification of business so that they can meet the changing requirements of the people whom they serve.

Mr. Hain

I welcome the hon. Lady's contribution, but the person responsible for blocking the ability of local post offices to provide that additional range of services is the Under-Secretary of State for Technology. The Government should change their policy. In some local village post offices, such as that in my home village of Resolven, about 50 per cent. to 60 per cent. of business —if not more—comes from benefits. If that were taken away, or even a slice of it, they would be forced to close.

Mrs. Knight

I am trying to make it clear that I seek to enhance the role of post offices, not limit it to the traditional duties which they have undertaken. I am sure that the Minister will deal admirably with that topic when he winds up the debate.

Mr. Connarty

Does the hon. Lady not accept that those are the policies in the Labour party manifesto, which Conservative Ministers have refused for years to adopt? They refused to adopt those policies when my hon. Friend the Member for Neath (Mr. Hain) suggested them in a recent Adjournment debate.

Mrs. Knight

The Labour party made no mention whatever in its manifesto of maintaining the viability of the sub-post office network. In this debate, too, the Labour par.), has missed all its opportunities to support post offices and to say how they should develop and provide more services to their local communities. I am sorry that the Labour party has missed those opportunities.

My third suggestion is the result of a conversation with the excellent manager of the sub-post office at Ockbrook, in my constituency, who told me about the various charges that are made when people pay water, gas and electricity bills. Apparently people can pay their water bill at the post office in cash or by cheque at a cost of 15p—less than the cost of a stamp to send a cheque to the company.

However, anyone who wishes to pay his gas or electricity bill at the post office can do so only in cash, at a cost of 80p. The water authority has provided an excellent service for people who wish to pay their bills in that way, and I am urging my local gas and electricity companies to do a similar deal, so that their bills can be paid in the same way through the local post office. I am sure that my hon. Friends, too, will urge their local electricity, gas and water companies to make the same arrangments as the water company in my constituency.

I understand that some of the matters that I have raised are not within the jurisdiction either of the Secretary of State for Social Security or of the Under-Secretary of State for Technology, but I hope that they will consider carefully the matters for which they are responsible, so that we can maintain the valuable service to the local community, and our post offices can be fostered and allowed to develop in a way that benefits the changing society in which we all live.

6.21 pm

Mr. William McKelvey (Kilmarnock and Loudon)

I am glad that the debate is taking place and I congratulate Opposition Front-Bench Members on selecting the subject. Whatever our views are, whatever we may say, and whatever the Government may say about the rights and wrongs and the motives involved—whether the forms were badly designed either deliberately or carelessly, whether there was any intention of hoodwinking old-age pensioners, or whether the Government attempted to protect them—pensioners and those who look after their interests will ensure that what is said in the debate is dispatched to the post offices and sub-post offices so that people can chat among themselves and make up their own minds. That is the essence of a democratic structure.

When that has happened it will be interesting to find our whether we receive another load of letters from pensioners expressing their views about whether the debate was necessary and about what we may have unmasked or uncovered. Like most hon. Members, I have received letters and petitions directly from old-age pensioners in my constituency—280 of them, in fact. They are not mass-printed petitions that people can easily sign; most of them are handwritten letters from people who are not terrified but who are genuinely and honestly concerned.

They are articulate, too. We do our pensioners a disservice if we think that they cannot articulate their own case or make up their own minds, or assess whether there is threat to their sub-post offices.

Ms Janet Anderson (Rossendale and Darwen)

May I draw my hon. Friend's attention to a survey done in my constituency by the Blackburn and district branch of Age Concern? It was initiated by Councillor Kevin Durkin and was published today in the Lancashire Evening Telegraph. Of the 150 pensioners interviewed, 93 per cent. received their pensions in cash at their post office and none of them said that he or she wanted to change to a different method of payment. Does my hon. Friend agree with one of the pensioners interviewed, who said that the Government's plan was the daftest idea since the poll tax?

Mr. McKelvey

I totally and unequivocally agree with those sentiments.

There are 19 sub-post offices in my constituency. That may not sound a lot, in view of the fact that my hon. Friend the Member for Pembroke (Mr. Ainger) has more than 80 in his constituency. The scale of the problem of closure will vary from one constituency to another. Perhaps I can best illustrate the problem by describing the village in which live, outside Kilmarnock.

As one comes into the village there is a church, a small supermarket, a newsagent, a fish and chip shop, a Chinese carry-out shop, a masonic lodge and social club and a bowling club with a social club. We also have three pubs, another newsagent, a garage, a garage showroom and a resident Member of Parliament. What more could anybody want? That may not be the idyllic village scene depicted in the Hovis advertisement, but it is a viable village and at the moment we can sustain that viability and variety.

By the way, I missed out the bookie, but that was because his establishment is next door to a vacant shop which used to be the bank. When the banks in Kilmarnock started to close what they called their satellite stations in the villages, every village got up a petition and tried to persuade them to change their minds. But the banks said that because of economies of scale, because of the difficulties of the recession, and because robberies were taking place in the village banks, they had to withdraw the facilities.

The withdrawal of banking facilities created difficulties for those who used bank accounts, even if their pensions were paid into the bank. 13ecause people could no longer go into the banks to withdraw their money—or to deposit money, for that matter—they had to travel to Kilmarnock to do their banking if they did not have a post office account. That often meant that they then spent their money in Kilmarnock. The economy of Kilmarnock is not suffering because of that, but the viability of the village is and the whole community is beginning to suffer because of the lack of a bank. Even the bookmaker complained to me about that.

Mr. David Hanson (Delyn)

I wonder whether, when the Minister replies to the debate, he will define viability. I should like to know where my hon. Friend's post office and the 33 post offices in my constituency fit into the viable national network that has been mentioned. So far as I can see, it will not include the vast majority of the post offices in my constituency and probably not the post office in my hon. Friend's constituency, either.

Mr. McKelvey

The total income of the sub-post office in my village is derived from payments of benefits and from selling stamps and perhaps the odd birthday card. It has not diversified into haberdashery or anything else of that nature, nor is it licensed to sell spirits and cigarettes. All those facilities are already available in the village. The post office does not have to put a petrol pump outside and diversify into selling petrol, as post offices in some rural villages may do. I do not see how my post office can diversify into any areas, other than the sale of lottery tickets, without taking trade away from existing outlets in the village.

Mr. Connarty

Will my hon. Friend give way?

Mr. McKelvey

I am sorry, but I running out of time and I know that the Front-Bench spokesmen want to start winding up as soon as possible. If any hon. Member who has sat here throughout the debate has not yet had the opportunity to intervene, I would gladly let him or her in, but I shall not give way to anyone who has already spoken.

As I have said, I have received 280 personal letters from elderly people. I have chosen one of those letters to read to the House, not because it is terrifically articulate, but because it is typical of the representations that I have received and expresses an attitude that I completely understand. It was not written in panic, either. My constituent writes: As a pensioner I say 'Hands off the Sub Post Office.' We cannot afford bank charges or the inconvenience of banks. Also we cannot take our pensions in arrears or once a month because we simply could not afford to live. This is another nail in the coffin of freedom. Freedom of choice is the important thing. The letter concludes: I and thousands of others demand the right as to how our pension is paid. If Ministers tell us that the right of all pensioners and claimants to draw benefit at the post office will be protected, the debate will have done a tremendous service. We shall have gone some way at least to allaying the fears of pensioners about the threat that they face and the fears of those who work in sub-post offices about their future. I look forward to hearing from the Minister that he will safeguard the incomes of the sub-post offices and, more important, that pensioners will be able to continue, as of right, to draw their pensions as they wish to draw them.

6.30 pm

Mr. Jim Cousins (Newcastle upon Tyne, Central)

I congratulate the hon. Member for Newbury (Mr. Rendel) on his gracious and thoughtful references to his two predecessors. I am sure that their friends and the whole House will appreciate the content and the tone of his remarks. We look forward to hearing further from him in future.

I congratulate my hon. Friend the Member for Western Isles (Mr. Macdonald) on the debate that he initiated the other night and thank all the hon. Members who spoke in that debate, during which we heard some telling rebukes to the Government from the hon. Member for Rochford (Dr. Clark) about the quality of the forms about which we have heard so much today. On that occasion, the House was treated to the remarkable spectacle of the Parliamentary Under-Secretary of State for Corporate Affairs presenting himself in this context as the latest in a long line of caring liberals. I fear that the transformation is not complete, but we live in hope.

I congratulate my hon. Friends the Members for Don Valley (Mr. Redmond), for Worsley (Mr. Lewis), for Liverpool, Garston (Mr. Loyden) and for Sheffield, Heeley (Mr. Michie). I also congratulate my hon. Friend the Member for Kilmarnock and Loudon (Mr. McKelvey). I am concerned lest my hon. Friend should decide to take up residence at the bookie's or in the masonic lodge, although I recognise that some of these matters are ordered differently north of the border.

The Government's wish to switch payments of pensions and benefits to banks and building societies has been made crystal clear in today's debate. It is part of their planned intention and has been set out in the Secretary of State's speech today and in the Department's report to the House in the public expenditure statement last autumn.

I fear that it is also clear that the full facts of the matter have not been heard. Much has been made of a comparison of transaction costs—3p through banks and building societies and 44p through post offices. Will the Minister confirm, however, that half the pensions processed by post offices in Britain bear a direct handling charge to those post offices of less than 12p and that the comparisons that have been drawn tonight are wholly inaccurate?

May I also draw the attention of the House to the fact that, in addition to the transaction costs to the Government which have been made the subject of the comparisons, there are transaction costs to the people receiving pensions and benefits? It is crystal clear that, if payments are transferred to banks and building societies, hidden transaction costs will be borne by those who use those banks and building societies to process their pensions and benefit claims. That significant factor has not been brought into the equation.

My hon. Friend the Member for Kilmarnock and Loudoun and the hon. Member for Antrim, North (Rev. Ian Paisley) made the point clearly: what the Secretary of State said did not amount to a clear statement that a fairly and equally weighted choice will be given to future pension and benefits claimants. We have heard only that the existing, thoroughly rigged, choice may be withdrawn. The Government must give the assurance that pensioners will have a full and fair choice of payment methods and a guarantee that the advantages and disadvantages of each payment method will be fairly spelt out. It is simply not right that future pensioners—many of whom will not have bank accounts—should be confronted by forms telling them that banks have interest-bearing accounts without similarly pointing out that bank accounts can incur charges. The present comparison is not fair and it is not right to put it before pensioners and benefit claimants.

The Secretary of State says that he believes that the issue is not of great significance, because sub-post offices are paid a fiat rate fee. His remarks were published, although not in quotation marks, in today's edition of The Times and he made the point again during the debate.

Does the right hon. Gentleman recognise that that is a wholly misleading and untrue statement? It is simply not the case that sub-post offices are paid on a flat-rate basis. They are paid on the basis of transaction unit payments which vary according to the number of transactions that take place. It is true that, to secure the viability of some of the very small sub-post offices, a minimum payment is made, but that is entirely different from the flat-rate payment that the Secretary of State clearly stated was the basis of payment to sub-post offices. It is not.

I should be grateful to be informed, if the facts can be presented, what Ministers think that minimum payment is. I shall cheerfully give way so that they can inform the House what order of advantage is given to the barely 10 per cent. of post offices that receive it. I repeat that it is not a flat-rate payment but a minimum payment. I should be delighted to hear what the Government think that payment actually is. We look forward to enlightenment on that point, on which for the moment there is total silence. The Secretary of State should recognise that he has totally misled the House about the method of payment to post offices. He may regard that as a matter of no great significance, but the sub-post offices, which will be informed about the debate and which anxiously await its outcome, will certainly bear it in mind.

The Post Office operates an internal cross-subsidy arrangement that is weighted in favour of the smaller post offices. That has been a feature of cross-subsidy within the Post Office's accounts since the Liberal Government of 1908. The future of the smallest 7,500 sub-post offices, which do only 6 per cent. of the total volume of the Post Office's pensions and benefits business, depends vitally upon that system of weighted payments.

It would be a tremendous advantage to those involved, many of whose businesses are in great difficulty because of the current difficult economic circumstances, to be given a clear statement from the Government tonight to the effect that that system of cross-subsidy, on which they and their predecessors have depended since 1908, will continue to be a feature of the Government's policy towards sub-post offices. If the Government cannot guarantee the continuation of that transaction unit cross-subsidy, they cannot secure the future of the network and all their assurances and manifesto promises about their guarantee of a universal service and network of post offices are unreal and worthless.

The 20,000 sub-post offices know that, and they are looking to the Government to clarify the point tonight. Without that cross-subsidy and system of weighted payments, the whole viability of the post office network will be brought into doubt.

It might suit the Government if the 5,000 small post officers referred to by the chief executive of the Post Office went out of existence. If the network was truncated in that way, it is possible that the Post Office Counters Ltd. network would be easier to sell off. However, the Government must recognise that an enormous amount of political good will, economic good will and social good will would be lost if that were to happen.

What does the universal service network, which the Government say that they have in their manifesto, promise? What does it mean? At the moment, 60 per cent. of urban and rural parishes contain a post office. Does the commitment to a universal service network mean that 60 per cent. of urban and rural parishes will continue to have the benefit of a sub-post office?

Ms Jean Corston (Bristol, East)

Does my hon. Friend agree that people believe that the threat is serious? That is evidenced by the fact that, in Bristol, 1,141 signatures were appended to a petition in three days last week in Redcliffe post office. Is not it significant that, while the majority of the people who signed that petition and who use that post office reside in my constituency, the post office itself is in the constituency of the Chancellor of the Duchy of Lancaster. the right hon. Member for Bristol, West (Mr. Waldegrave)? There may be implications for the citizens charter in relation to the element of the freedom of choice.

Mr. Cousins

I confirm what my hon. Friend said and that experience is repeated around the country. However, I regret to say that, with longer experience of the House, my hon. Friend will find that turkeys do vote for Christmas and the Chancellor of the Duchy of Lancaster may be one of them.

Forty-one per cent. of the business of the sub-post office network is accounted for by pension and benefits payments. The undermining of that financial commitment undermines the viability of the whole network.

The hon. Member for Antrim, North was right to be concerned about the position in Northern Ireland because half the business of sub-post offices in Northern Ireland comprises pension and benefits payments. That is the highest proportion in the United Kingdom. I hope that hon. Members from Northern Ireland will take these matters fully into account when they consider how to vote tonight and how to vote in the future when such matters are considered.

Much has been made of opening up the sub-post office network for other kinds of business. This is a Government of deregulation. The hon. Member for Ribble Valley (Mr. Evans) can rest assured in the knowledge that none of us would have doubts about opening up the sub-post office network to wider commercial business and allocating it that task. However, we are waiting for the conclusion of the Government's review of the Post Office which has taken far too long and no proceedings of which have been reported back to the House or the other place.

Furthermore, the Department of Trade and Industry is capable of misunderstanding popular feeling. It misjudged the reaction to the closure of 31 pits and the sacking of 30,000 miners. I have bad news for the DTI tonight. Post office surveys indicate that the smallest 5,000 post offices employ 25,000 people. We have an issue before us—the viability of the smaller sub-post offices—which is as dramatic in its employment consequences as the closure of the coal mines.

The post offices have been rocked by the recession, but their business has held up better than that of the banks and building societies to which the Government want to send the business. The reduction in the number of bank and building society branches has been proceeding far faster than the reduction in the number of sub-post offices. The post office network is larger, more robust and more resilient than the network of bank and building society branches. It would be wrong for the Government, through their decision about the method of pension and benefits payments, to rig the market in favour of the banks and building societies and against the interests of the post offices.

The Government do not appreciate the fact that when we talk about sub-post offices, we are talking about self-employed people. We are talking about people who run small businesses. The Government talk about privatising the Post Office. The fact is that the bulk of the counters network is privatised already. One thing that could be said with great advantage tonight is that the Government will withdraw their proposals to privatise the counters network. The Government could justify their U-turn readily by saying that it is already privatised. That is a wonderful get-out for the Government. The door is open and we would all welcome them going through it.

However, the Government have already today chosen to make war on the sub-post offices—[HON. MEMBERS: "Nonsense."] The remarks of Conservative Members carry a clear message. References have been made to Timex and to picket lines and the sub-post offices have been brought into that setting. That message will go out to the sub-post offices.

Like many of the people they serve, sub-post offices live from week to week. They are small businesses that provide a community service and they are trying to continue in the face of difficult economic circumstances. They will be looking to the results of this debate. From the reaction of the people they serve, they know that the people of this country value them and wish them to be protected. If the Government take any other course, they will rue the day that they set out on it.

6.47 pm

The Parliamentary Under-Secretary of State for Technology (Mr. Edward Leigh)

If I may, I would like to begin by referring to the excellent maiden speech of the hon. Member for Newbury (Mr. Rendel). The whole House enjoyed his speech, which was a classic of its type in its lyrical description of a constituency which the hon. Gentleman loves and where he lives. We on the Conservative Benches were very grateful for his very kind comments about Judith Chaplin and Sir Michael McNair-Wilson, who were obviously very valued colleagues of ours.

We welcome the hon. Member for Newbury to the House. As my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) said, we do not know whether it will be for three or four years, but we welcome the hon. Gentleman to the House and we welcome his comments today.

I am glad to have the opportunity to reinforce the message that we are absolutely committed to maintaining a nationwide network of post offices.

Mr. Ainger

Will the Minister give way?

Mr. Leigh

I have hardly started, so I can hardly give way. I will explain what I mean in a moment.

The Conservative party is the only party with an election manifesto commitment to maintaining such a network, and we have made it clear on many occasions in the House and subsequently that we will stick by it. That point was made by my hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway), the first Conservative Back Bencher to speak in the debate, and it was repeated by every Conservative Back Bencher to speak after him.

Mr. Ainger

The Minister, the Secretary of State and the Parliamentary Under-Secretary of State for Corporate Affairs are all current or past members of the No Turning Back group. Page 14 of the group's document, "Choice and Responsibility—the Enabling State", states: The post office monopoly can no longer be justified. Does the Minister still hold that view?

Mr. Leigh

Actually, members of the No Turning Back group are in the majority on the Government Front Bench. We are never bound by pamphlets that we wrote in our youth, I assure the hon. Gentleman.

I say to the hon. Member for Don Valley (Mr. Redmond) that I and my colleagues in the Government are well aware of the vital importance of post offices in our rural and urban local communities. I point out to the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) that I have 78 post offices within my constituency, although sadly not one in my own village. There are no pubs or clubs, but, as the hon. Gentleman said, there is a Member of Parliament, and that is probably good enough.

My hon. Friend the Member for Hastings and Rye (Mrs. Lait) made it clear that sub-post offices are an integral part of rural and urban life, and we will keep them. I reassure the hon. Member for Worsley (Mr. Lewis) that the Government remain absolutely committed to maintaining the nationwide network of post offices.

The hon. Member for Antrim, North (Rev. Ian Paisley) asked us what we mean by that commitment. I mean a service that is readily accessible by everyone and to everyone in town and country alike. That does not and cannot mean that no post office will ever close—that would be absurd. People move to different areas; they change their shopping patterns. The network has to be kept sufficiently flexible to adapt to those changes. As my right hon. Friend the President of the Board of Trade made clear when in July he announced his review of the Post Office, that commitment is non-negotiable; it is in our manifests, and ours is the only party with such a commitment in its manifesto.

Mr. Hain

Will the Minister give way?

Mr. Leigh

No; I have insufficient time.

We have been debating the important issue of the payment of pensions and other benefits by automated credit transfer. My right hon. Friend the Secretary of State has already explained why our policy is to encourage—I underline that word—more beneficiaries to have their benefits paid by ACT on a voluntary basis. I do not propose to repeat what he has said. However, I emphasise to my hon. Friend the Member for Erewash (Mrs. Knight) that my colleagues and I well understand the importance of social security work to sub-post offices. It represents, as the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) said, at least 30 per cent. of all Post Office Counters' turnover, rising to as much as 50 per cent. in some smaller rural offices.

What has not been fully understood this afternoon is that the option of direct payment into bank accounts has been available for at least 10 years. Therefore, as my hon. Friend the Member for Brigg and Cleethorpes said in his north Lincolnshire dialect, this has really been a great stitheram about nothing, because that option has existed for 10 years.

Mr. Dewar

I want to be helpful and I hope that I shall get a clear answer from the Minister. Will he guarantee that in any future forms that are issued. on which people will nominate how they will get payment of their pensions, there will be a clear commitment to equal treatment of all options—in other words, that there will be no question of the Post Office disappearing into an addendum or disappearing off the main part of the form?

Mr. Leigh

I give a commitment that their right to take up their pensions with the Post Office will be clearly stated, as indeed it was stated in the forms that we are talking about.

ACT is an option that has gradually been taken up by pensioners and others, yet total Government business transacted through post offices has in fact increased during each of the past three years, in spite of increased use of ACT. We do not now expect any sudden increase in the numbers making use of ACT. I say to the hon. Member for Kilmarnock and Loudoun that experience over the past decade simply does not bear out fears about the future of post offices of the kind that have been expressed today by the Opposition.

As my right hon. Friend the Prime Minister made clear only yesterday, pensioners will continue to be able to receive pensions from most post offices. It is not Government policy to remove the right of pensioners to receive their pensions from the Post Office. I hope that that is an unequivocal statement: it is clear, the Prime Minister made it yesterday, and I have repeated it today. We are encouraging people, as my right hon. Friend the Secretary of State has said—we have been encouraging them for many years—to receive their benefits through their bank accounts, but only on a voluntary basis. I will take no lessons from Opposition Members about the importance of choice. We have always been the party of choice, and, as the party of the citizens charter, we will remain so. We are extending a choice of payment method—

Mr. Connarty

Will the Minister give way?

Mr. Leigh

No, I will not give way.

We are extending a choice of payment method to those receiving all types of DSS benefit; we are not restricting that choice. To suggest otherwise is misleading scaremongering, and we have had plenty of scaremongering today and in the weeks leading up to this debate.

Mr. George Walden (Buckingham)

Will my hon. Friend give way?

Mr. Leigh

I had better not, if my hon. Friend will allow me, as I have only six minutes left. I must reply to the points that have been made.

Concern has been expressed today and during recent weeks about the trial that was recently undertaken to test —I emphasise that word—three different forms on 24,000 new pensioners. My right hon. Friend has already spoken in some detail about the trial. The trial—I stress that it is only a trial—is merely to test the impact of the different methods of presentation. The aim is to provide information about the advantages to customers of the ACT option, which are not yet widely understood, and to encourage take-up of that method on a voluntary basis.

Some hon. Members have today expressed their concern about the way in which the payment options have been presented in some of the trial forms. Let me therefore add a word of reassurance that the Benefits Agency, which is responsible for the administration of benefits, will take full account of hon. Members' comments on that point.

First, our commitment to a nationwide network is not negotiable, whether the Post Office's future lies in the public or private sector. Secondly, there is no link whatever between the encouragement of ACT and our review of the structure and organisation of the Post Office. Thirdly, our policy is to encourage ACT. That policy will not endanger the nationwide network, including the rural network. I say to the hon. Members for Antrim, North and for Sheffield, Heeley (Mr. Michie) that we will continue to give pensioners a choice in how their pensions are paid.

The hon. Member for Newcastle- upon Tyne, Central raised questions about the Post Office review. I can assure hon. Members that the review is being undertaken with no preconceptions as to its outcome and it is looking at both private and public sector options. It is Labour Members who are frightened of ideas. All new ideas in their hands have turned out to be vote losers.

The Opposition have suggested today that there is a link between privatisation of the Post Office, encouragement of ACT, and post office closures. I find it hard to follow their argument. lf, as they claim, we are trying to fatten up the Post Office for privatisation, why should we wish to encourage ACT at all? Surely, if fattening up the Post Office was our intention, we would be trying to minimise ACT payments so that the Post Office would get more and more of that work. If we were seeking only to maximise the Post Office's profits in preparation for privatisation, why should we be making repeated assurances about maintaining the nationwide network, including the rural offices which are the least profitable?

I say to the hon. Member for Liverpool, Garston (Mr. Loyden) that we have an open mind on privatisation. Opposition Members have a closed mind. We look at private and public sector options. Opposition Members consider only public sector options. Of course, the Labour party predicted disaster for customer services before every privatisation. "No privatised company would ever bother looking after the customer," the Labour party said. "All that it would be interested in would be profits." Labour got it wrong in every privatisation. We have only to look at British Telecom and the investment that has gone into the network to know that.

The Labour party's refusal even to consider the benefits that privatisation might bring the Post Office is an indication of a deeper malaise in the Labour party. Labour Members have a dinosaur-like conservatism which would allow the Post Office to ossify—shackled by unavoidable public sector constraints, unable to compete effectively in a changing world. They would condemn the Post Office to a slow decline, as they would have condemned all the other nationalised industries. Of course, they have opposed every nationalisation.

We have heard a lot of nonsense today about ACT. It was a Labour Minister, the right hon. Member for Salford, East (Mr. Orme), who, about 15 years ago—perhaps he will listen to this—said: I am expecting a report by the end of the month … I am in favour of the principle"— of payment direct into pensioners' bank accounts— and the introduction of such an arrangement would cover child benefit as well as retirement pensions … I hope to make some progress in the near future."—[Official Report, 6 March 1979; Vol. 963, c. 1078]

Mr. Michael Lord (Suffolk, Central)

Will my hon. Friend give way?

Mr. Leigh

No, I must finish my remarks.

That was a Labour Minister about 15 years ago, saying that he would welcome progress to ACT.

I say to the hon. Member for Newcastle upon Tyne, Central that I am surprised that he has not protested that his constituents are charged by the Labour council when they pay their council tax at their post offices. In central Newcastle, the council expects—it even demands of—people to pay the council tax at the local housing office, and if it is paid at a post office a charge is made. What kind of choice is that in Labour's heartland?

Mr. Cousins

Will the Minister give way?

Mr. Leigh

No; the hon. Gentleman has had his chance.

Labour's scaremongering about the Post Office was as wrong 10 years ago as it is today. It was wrong at the time of the privatisation of British Telecom, and wrong on every other privatisation. Labour was wrong yesterday, is wrong today and no doubt will be wrong tomorrow. Labour says that it is opposed to closures, but it has closed more post offices than we ever did. Labour says that it favours a national network of post offices, yet ours is the only party that is committed to it. Labour says that it favours investment, yet it has opposed any discussion of the options that would result in private investment to improve the service.

Labour says that it cares about pensioners. Why does it indulge in scaremongering? Labour says that it favours choice. Why does it deride our commitment to choice? We will give new opportunities to our small post offices. They will be allowed to compete for national lottery work and we will consider giving them further opportunities in financial services, bill payments and ticket sales. Other interesting ideas have been raised and considered in the course of our review, all of which Labour has opposed.

We have raised the standard for choice, investment and free enterprise. The existence of all 19,000 privately run sub-post offices is a tribute to the spirit of entrepreneurship which we wish to foster and which the Opposition despise. We want those businesses to grow and expand—to be providers of valued services in villages and towns—and we will continue to offer them that opportunity. We will continue to offer all our pensioners the right to choose between the bank and the post office for payment of their pensions.

That is our commitment—to choice, to investment and to the Post Office. I urge my hon. Friends to reject this absurd motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 275, Noes 311.

Division No. 275]	[7.00 pm
AYES
Abbott, Ms Diane	Callaghan, Jim
Adams, Mrs Irene	Campbell, Mrs Anne (C'bridge)
Ainger, Nick	Campbell, Menzies (Fife NE)
Ainsworth, Robert (Cov'try NE)	Campbell, Ronnie (Blyth V)
Allen, Graham	Campbell-Savours, D. N.
Alton, David	Canavan, Dennis
Anderson, Ms Janet (Ros'dale)	Cann, Jamie
Armstrong, Hilary	Carlile, Alexander (Montgomry)
Ashdown, Rt Hon Paddy	Chisholm, Malcolm
Ashton, Joe	Clapham, Michael
Austin-Walker, John	Clark, Dr David (South Shields)
Banks, Tony (Newham NW)	Clarke, Eric (Midlothian)
Barnes, Harry	Clarke, Tom (Monklands W)
Barron, Kevin	Clelland, David
Battle, John	Clwyd, Mrs Ann
Bayley, Hugh	Coffey, Ann
Beckett, Rt Hon Margaret	Cohen, Harry
Benn, Rt Hon Tony	Connarty, Michael
Bennett, Andrew F.	Cook, Frank (Stockton N)
Benton, Joe	Cook, Robin (Livingston)
Bermingham, Gerald	Corbett, Robin
Berry, Dr. Roger	Corbyn, Jeremy
Berts, Clive	Corston, Ms Jean
Blair, Tony	Cousins, Jim
Blunkett, David	Cryer, Bob
Boyce, Jimmy	Cummings, John
Boyes, Roland	Cunliffe,. Lawrence
Bradley, Keith	Cunningham, Jim (Covy SE)
Bray, Dr Jeremy	Cunningham, Rt Hon Dr John
Brown, Gordon (Dunfermline E)	Dafis, Cynog
Brown, N. (N'c'tle upon Tyne E)	Darling, Alistair
Bruce, Malcolm (Gordon)	Davidson, Ian
Burden, Richard	Davies, Bryan (Oldham C'tral)
Byers, Stephen	Davies, Rt Hon Denzil (Llanelli)
Caborn, Richard	Davies, Ron (Caerphilly)

Davis, Terry (B'ham, H'dge H'l)	Kennedy, Jane (Lpool Brdgn)
Denham, John	Khabra, Piara S.
Dewar, Donald	Kinnock, Rt Hon Neil (Islwyn)
Dixon, Don	Kirkwood, Archy
Dobson, Frank	Leighton, Ron
Donohoe, Brian H.	Lestor, Joan (Eccles)
Dowd, Jim	Lewis, Terry
Dunnachie, Jimmy	Litherland, Robert
Dunwoody, Mrs Gwyneth	Livingstone, Ken
Eagle, Ms Angela	Lloyd, Tony (Stretford)
Eastham, Ken	Llwyd, Elfyn
Enright, Derek	Loyden, Eddie
Etherington, Bill	Lynne, Ms Liz
Evans, John (St Helens N)	McAllion, John
Ewing, Mrs Margaret	McAvoy, Thomas
Fatchett, Derek	McCartney, Ian
Faulds, Andrew	Macdonald, Calum
Field, Frank (Birkenhead)	McFall, John
Fisher, Mark	McKelvey, William
Flynn, Paul	McLeish, Henry
Foster, Rt Hon Derek	McWilliam, John
Foster, Don (Bath)	Madden, Max
Foulkes, George	Mahon, Alice
Fraser, John	Maitland, Lady Olga
Fyfe, Maria	Mandelson, Peter
Gapes, Mike	Marek, Dr John
Garrett, John	Marshall, David (Shettleston)
George, Bruce	Marshall, Jim (Leicester, S)
Gerrard, Neil	Martin, Michael J. (Springburn)
Gilbert, Rt Hon Dr John	Martlew, Eric
Godman, Dr Norman A.	Maxton, John
Godsiff, Roger	Meacher, Michael
Golding, Mrs Llin	Meale, Alan
Gordon, Mildred	Michael, Alun
Gould, Bryan	Michie, Bill (Sheffield Heeley)
Graham, Thomas	Michie, Mrs Ray (Argyll Bute)
Grant, Bernie (Tottenham)	Milburn, Alan
Griffiths, Nigel (Edinburgh S)	Miller, Andrew
Griffiths, Win (Bridgend)	Moonie, Dr Lewis
Grocott, Bruce	Morgan, Rhodri
Gunnell, John	Morley, Elliot
Hain, Peter	Morris, Rt Hon A. (Wy'nshawe)
Hall. Mike	Morris, Estelle (B'ham Yardley)
Hanson, David	Morris, Rt Hon J. (Aberavon)
Hardy, Peter	Mowlam, Marjorie
Harman, Ms Harriet	Mudie, George
Harvey, Nick	Murphy, Paul
Hattersley, Rt Hon Roy	Oakes, Rt Hon Gordon
Henderson, Doug	O'Brien, William (Normanton)
Heppell, John	O'Hara, Edward
Hill, Keith (Streatham)	Olner, William
Hinchliffe, David	O'Neill, Martin
Hoey, Kate	Orme, Rt Hon Stanley
Hogg, Norman (Cumbernauld)	Paisley, Rev Ian
Home Robertson, John	Parry, Robert
Hood, Jimmy	Patchett, Terry
Hoon, Geoffrey	Pendry, Tom
Howarth, George (Knowsley N)	Pickthall, Colin
Howells, Dr. Kim (Pontypridd)	Pike, Peter L.
Hoyle, Doug	Pope, Greg
Hughes, Kevin (Doncaster N)	Powell, Ray (Ogmore)
Hughes, Robert (Aberdeen N)	Prentice, Ms Bridget (Lew'm E)
Hughes, Roy (Newport E)	Prentice, Gordon (Pendle)
Hughes, Simon (Southwark)	Prescott, John
Hutton, John	Primarolo, Dawn
Illsley, Eric	Purchase, Ken
Ingram, Adam	Quin, Ms Joyce
Jackson, Glenda (H'stead)	Radice, Giles
Jackson, Helen (Shef'ld, H)	Randall, Stuart
Jamieson, David	Raynsford, Nick
Janner, Greville	Redmond, Martin
Jones, Barry (Alyn and D'side)	Reid, Dr John
Jones, Ieuan Wyn (Ynys Môn)	Rendel, David
Jones, Jon Owen (Cardiff C)	Richardson, Jo
Jones, Lynne (B'ham S O)	Robertson, George (Hamilton)
Jones, Martyn (Clwyd, SW)	Robinson, Geoffrey (Co'try NW)
Jones, Nigel (Cheltenham)	Rogers, Allan
Jowell, Tessa	Rooker, Jeff
Kaufman, Rt Hon Gerald	Rooney, Terry
Keen, Alan	Ross, Ernie (Dundee W)

Rowlands, Ted	Taylor, Matthew (Truro)
Ruddock, Joan	Tipping, Paddy
Salmond, Alex	Trimble, David
Sedgemore, Brian	Turner, Dennis
Sheerman, Barry	Tyler, Paul
Sheldon, Rt Hon Robert	Vaz, Keith
Shore, Rt Hon Peter	Walker, Rt Hon Sir Harold
Short, Clare	Wardell, Gareth (Gower)
Simpson, Alan	Wareing, Robert N
Skinner, Dennis	Watson, Mike
Smith, Andrew (Oxford E)	Wicks, Malcolm
Smith, C. (Isl'ton S & F'sbury)	Wigley, Dafydd
Smith, Rt Hon John (M'kl'ds E)	Williams, Rt Hon Alan (Sw'n W)
Smith, Llew (Blaenau Gwent)	Williams, Alan W (Carmarthen)
Snape, Peter	Wilson, Brian
Soley, Clive	Winnick, David
Spearing, Nigel	Wise, Audrey
Spellar, John	Worthington, Tony
Steel, Rt Hon Sir David	Wray, Jimmy
Steinberg, Gerry	Wright, Dr Tony
Stevenson, George	Young, David (Bolton SE)
Stott, Roger
Strang, Dr. Gavin	Tellers for the Ayes:
Straw, Jack	Mr. Peter Kilfoyle and
Taylor, Mrs Ann (Dewsbury)	Mr. Gordon McMaster.

NOES
Ainsworth, Peter (East Surrey)	Channon, Rt Hon Paul
Aitken, Jonathan	Churchill, Mr
Alexander, Richard	Clappison, James
Alison, Rt Hon Michael (Selby)	Clarke, Rt Hon Kenneth (Ruclif)
Allason, Rupert (Torbay)	Clifton-Brown, Geoffrey.
Amess, David	Coe, Sebastian
Ancram, Michael	Colvin, Michael
Arbuthnot, James	Congdon, David
Arnold. Jacques (Gravesham)	Conway, Derek
Arnold, Sir Thomas (Hazel Grv)	Coombs, Simon (Swindon)
Ashby, David	Cope, Rt Hon Sir John
Aspinwall, Jack	Cormack, Patrick
Atkinson, David (Bour'mouth E)	Couchman, James
Atkinson, Peter (Hexham)	Cran, James
Baker, Rt Hon K. (Mole Valley)	Currie, Mrs Edwina (S D'by'ire)
Baker, Nicholas (Dorset North)	Curry, David (Skipton & Ripon)
Baldry, Tony	Davies, Quentin (Stamford)
Banks, Matthew (Southport)	Davis, David (Boothferry)
Banks, Robert (Harrogate)	Day, Stephen
Bates, Michael	Deva, Nirj Joseph
Batiste, Spencer	Devlin, Tim
Bellingham, Henry	Dickens, Geoffrey
Bendall, Vivian	Dicks, Terry
Beresford, Sir Paul	Dorrell, Stephen
Biffen, Rt Hon John	Douglas-Hamilton, Lord James
Blackburn, Dr John G.	Dover, Den
Body, Sir Richard	Duncan, Alan
Bonsor, Sir Nicholas	Duncan-Smith, Iain
Booth, Hartley	Dunn, Bob
Boswell, Tim	Durant, Sir Anthony
Bottomley, Peter (Eltham)	Dykes, Hugh
Bottomley, Rt Hon Virginia	Eggar, Tim
Bowden, Andrew	Elletson, Harold
Bowis, John	Emery, Rt Hon Sir Peter
Boyson, Rt Hon Sir Rhodes	Evans, David (Welwyn Hatfield)
Brandreth, Gyles	Evans, Jonathan (Brecon)
Brazier, Julian	Evans, Nigel (Ribble Valley)
Bright, Graham	Evans, Roger (Monmouth)
Brooke, Rt Hon Peter	Evennett, David
Brown, M. (Brigg & Cl'thorpes)	Faber, David
Browning, Mrs. Angela	Fabricant, Michael
Bruce, Ian (S Dorset)	Fenner, Dame Peggy
Budgen, Nicholas	Field, Barry (Isle of Wight)
Burns, Simon	Fishburn, Dudley
Burt, Alistair	Forman, Nigel
Butcher, John	Forsyth, Michael (Stirling)
Butler, Peter	Fowler, Rt Hon Sir Norman
Butterfill, John	Fox, Dr Liam (Woodspring)
Carlisle, John (Luton North)	Fox, Sir Marcus (Shipley)
Carlisle, Kenneth (Lincoln)	Freeman, Roger
Carrington, Matthew	French, Douglas
Carttiss, Michael	Fry, Peter
Cash, William	Gale, Roger

Gallie, Phil	Lamont, Rt Hon Norman
Gardiner, Sir George	Lang, Rt Hon Ian
Garel-Jones, Rt Hon Tristan	Legg, Barry
Garnier, Edward	Leigh, Edward
Gill, Christopher	Lennox-Boyd, Mark
Gillan, Cheryl	Lester, Jim (Broxtowe)
Goodlad, Rt Hon Alastair	Lidington, David
Goodson-Wickes, Dr Charles	Lilley, Rt Hon Peter
Gorman, Mrs Teresa	Lloyd, Peter (Fareham)
Gorst, John	Lord, Michael
Grant, Sir Anthony (Cambs SW)	Luff, Peter
Greenway, Harry (Ealing N)	Lyell, Rt Hon Sir Nicholas
Griffiths, Peter (Portsmouth, N)	MacGregor, Rt Hon John
Grylls, Sir Michael	MacKay, Andrew
Gummer, Rt Hon John Selwyn	Maclean, David
Hague, William	McLoughlin, Patrick
Hamilton, Rt Hon Archie (Epsom)	McNair-Wilson, Sir Patrick
Hamilton, Neil (Tatton)	Madel, David
Hampson, Dr Keith	Maitland, Lady Olga
Hanley, Jeremy	Major, Rt Hon John
Hannam, Sir John	Malone, Gerald
Hargreaves, Andrew	Mans, Keith
Harris, David	Marland, Paul
Haselhurst, Alan	Marlow, Tony
Hawkins, Nick	Marshall, John (Hendon S)
Hawksley, Warren	Martin, David (Portsmouth S)
Hayes, Jerry	Mates, Michael
Heald, Oliver	Mawhinney, Dr Brian
Heathcoat-Amory, David	Mayhew, Rt Hon Sir Patrick
Hendry, Charles	Mellor, Rt Hon David
Heseltine, Rt Hon Michael	Merchant, Piers
Hicks, Robert	Milligan, Stephen
Higgins, Rt Hon Sir Terence L.	Mills, Iain
Hill, James (Southampton Test)	Mitchell, Andrew (Gedling)
Horam, John	Mitchell, Sir David (Hants NW)
Hordern, Rt Hon Sir Peter	Moate, Sir Roger
Howard, Rt Hon Michael	Monro, Sir Hector
Howarth, Alan (Strat'rd-on-A)	Montgomery, Sir Fergus
Howell, Rt Hon David (G'dford)	Moss, Malcolm
Howell, Ralph (North Norfolk)	Needham, Richard
Hughes Robert G. (Harrow W)	Nelson, Anthony
Hunt, Rt Hon David (Wirral W)	Neubert, Sir Michael
Hunt, Sir John (Ravensbourne)	Newton, Rt Hon Tony
Hunter, Andrew	Nicholls, Patrick
Jack, Michael	Nicholson, David (Taunton)
Jackson, Robert (Wantage)	Nicholson, Emma (Devon West)
Jenkin, Bernard	Norris, Steve
Jessel, Toby	Onslow, Rt Hon Sir Cranley
Johnson Smith, Sir Geoffrey	Oppenheim, Phillip
Jones, Gwilym (Cardiff N)	Ottaway, Richard
Jones, Robert B. (W Hertfdshr)	Page, Richard
Jopling, Rt Hon Michael	Paice, James
Kellett-Bowman, Dame Elaine	Patnick, Irvine
Key, Robert	Patten, Rt Hon John
King, Rt Hon Torn	Pattie, Rt Hon Sir Geoffrey
Kirkhope, Timothy	Pawsey, James
Knapman, Roger	Peacock, Mrs Elizabeth
Knight, Mrs Angela (Erewash)	Pickles, Eric
Knight, Greg (Derby N)	Porter, Barry (Wirral S)
Knox, David	Porter, David (Waveney)
Kynoch, George (Kincardine)	Portillo, Rt Hon Michael
Lait, Mrs Jacqui	Powell, William (Corby)

Redwood, John	Taylor, Ian (Esher)
Renton, Rt Hon Tim	Taylor, John M. (Solihull)
Richards, Rod	Taylor, Sir Teddy (Southend, E)
Riddick, Graham	Temple-Morris, Peter
Robathan, Andrew	Thomason, Roy
Roberts, Rt Hon Sir Wyn	Thompson, Sir Donald (C'er V)
Robertson, Raymond (Ab'd'n S)	Thompson, Patrick (Norwich N)
Robinson, Mark (Somerton)	Thornton, Sir Malcolm
Roe, Mrs Marion (Broxbourne)	Thurnham, Peter
Rowe, Andrew (Mid Kent)	Townend, John (Bridlington)
Rumbold, Rt Hon Dame Angela	Townsend, Cyril D. (Bexl'yh'th)
Ryder, Rt Hon Richard	Tracey, Richard
Sackville, Tom	Tredinnick, David
Sainsbury, Rt Hon Tim	Trend, Michael
Scott, Rt Hon Nicholas	Trotter, Neville
Shaw, David (Dover)	Twinn, Dr Ian
Shaw, Sir Giles (Pudsey)	Vaughan, Sir Gerard
Shephard, Rt Hon Gillian	Viggers, Peter
Shepherd, Colin (Hereford)	Waldegrave, Rt Hon William
Shepherd, Richard (Aldridge)	Walden, George
Shersby, Michael	Walker, Bill (N Tayside)
Sims, Roger	Waller, Gary
Skeet, Sir Trevor	Wardle, Charles (Bexhill)
Smith, Sir Dudley (Warwick)	Waterson, Nigel
Smith, Tim (Beaconsfield)	Watts, John
Soames, Nicholas	Wells, Bowen
Spencer, Sir Derek	Wheeler, Rt Hon Sir John
Spicer, Sir James (W Dorset)	Whitney, Ray
Spicer, Michael (S Worcs)	Whittingdale, John
Spink, Dr Robert	Widdecombe, Ann
Spring, Richard	Wiggin, Sir Jerry
Sproat, Iain	Wilkinson, John
Squire, Robin (Hornchurch)	Willetts, David
Stanley, Rt Hon Sir John	Winterton, Mrs Ann (Congleton)
Steen, Anthony	Winterton, Nicholas (Macc'f'ld)
Stephen, Michael	Wolfson, Mark
Stern, Michael	Wood, Timothy
Stewart, Allan	Yeo, Tim
Streeter, Gary	Young, Sir George (Acton)
Sumberg, David
Sweeney, Walter	Tellers for the Noes:
Sykes, John	Mr. David Lightbown and
Tapsell, Sir Peter	Mr. Sydney Chapman.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

Mr. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House endorses Her Majesty's Government's clear commitment to freedom of choice in the means by which social security benefits are paid, while reducing fraud and unnecessary costs by extending the availability of Automated Credit Transfer to all benefits and encouraging people with bank accounts to choose to have benefits paid into their accounts, to the continuation of a national network of post offices and sub-post offices and to securing the efficient and effective delivery of the vital service which the Post Office provides.