HC Deb 03 December 1998 vol 321 cc1023-4
1. Mr. Steve Webb (Northavon)

What assessment he has made of the contribution to Post Office revenues derived from handling over-the-counter payments of social security benefits. [61292]

The Minister of State, Department of Trade and Industry (Mr. Ian McCartney)

Details of the contractual relationship between the Benefits Agency and Post Office Counters Ltd. are commercially confidential. However, work carried out by Post Office Counters Ltd. on behalf of the Benefits Agency represents very broadly one third of all transactions carried out by the business, and a roughly similar proportion of its income.

Mr. Webb

I am grateful to the Minister for that answer, which demonstrates how important benefits payments are to the Post Office's business, yet the Government are pressing more and more people to receive their benefits through bank accounts. The working families tax credit will be paid through pay packets, not over the post office counter. What assurance can the Minister give to the postmistresses and postmasters in rural villages in my constituency that that key element of their business will not be steadily eroded through Government policy?

Mr. McCartney

The Government are committed to a national network of post offices. As the hon. Gentleman knows, because I have said many times from the Dispatch Box, we are also committed to promoting the development of those small businesses, alongside the capacity of the Post Office to deliver services on behalf of the Government. We want the network of post offices to be maintained on the basis of their increased capacity to do other types of work, in addition to delivering traditional services. The Government's review of the Post Office is critical because it will underpin that commitment.

Mr. Alan Johnson (Hull, West and Hessle)

Although I support the work of my right hon. and hon. Friends in their review of the Post Office, and appreciate why the option of share sales must be included in a comprehensive review, is my hon. Friend aware of the deep disquiet felt on these Benches and in other parts of the House about share sales, and our concern that we do not go down that railtrack? Will he confirm that there is no earthly reason why a publicly owned Post Office cannot compete successfully against European postal administrations that have enjoyed the same commercial and financial freedoms for many years?

Mr. McCartney

First, the Government are totally committed to the Post Office remaining in the public sector. Privatisation went out the door when the previous Government were kicked out by the British people. Secondly, for the Post Office to develop on an international and global basis, it needs commercial freedom, commercial discipline and resources to do that job. That is the purpose of the review. It will ensure a sound financial and commercial framework, so that the Post Office can move forward to become a major player in the global postal and telecommunications markets.

Mr. Edward Garnier (Harborough)

The Minister may not know that I wrote to his right hon. Friend the Secretary of State about 10 days ago to ask what progress was being made in the Department with regard to the decision to introduce or not to introduce computerised swipe cards for the transaction of Benefits Agency business through sub-post offices and post offices. Can the Minister tell me whether his Department has made a decision on the matter?

Mr. McCartney

Since the election, the Department and the Government as a whole have been developing a strategy to eliminate financial and social exclusion. We are trying to ensure that we get the resources which, over time, will allow us to provide social banking and a cost-effective and fraud-resistant means of paying benefits. We will ensure that information technology systems are put in place in the post office network to do that job for customers of the Post Office. We have cleared up the mess left by the previous Government in relation to those matters.