HC Deb 13 July 2000 vol 353 cc1043-5
1. Ms Sally Keeble (Northampton, North)

If he will make a statement about development of services at post offices. [128940]

The Minister for Competitiveness (Mr. Alan Johnson)

In the statement on the post office network on 28 June, my right hon. Friend the Secretary of State for Trade and Industry announced a range of proposals and measures drawn from the performance and innovation unit's report and designed to modernise and sustain the post office network. Among them were proposals to develop new areas of business and services, utilising the modern online computer system that is being installed in every post office throughout the country and to which the Government are contributing almost £500 million.

Ms Keeble

I am grateful to my hon. Friend for that response. I am particularly interested in the universal bank. Could he tell us more about the way in which that will be taken forward? In particular, given that most of the people who take up that type of banking service are unbanked because they have not been able to get bank accounts, would it be possible for the universal bank to be given mutual status? That may be appropriate as the conventional banking sector has, by and large, failed those people.

Mr. Johnson

My hon. Friend is right. The universal bank is central to the recommendations in the performance and innovation unit's report, which contains a helpful chart setting out what should be available through a universal bank. That includes getting cash out of the post office and cashing cheques at the post office. Perhaps more importantly, people will not be allowed to go into debt. Discussions are taking place between the Post Office and the high street banks. We have given a clear message that the Government fully support the concept of a universal bank. It is consistent with the banks' obligations under the financial exclusions set out by policy action team 14. The idea of involving mutuals and perhaps credit unions is for the Post Office to take forward in those discussions.

Mr. Peter Lilley (Hitchin and Harpenden)

Will the Minister quantify the universal bank's contribution towards making good the loss of one third of revenues that sub-post offices will experience as a result of the cancellation of the Department of Social Security contract? Will he confirm that a bank—the Girobank—already operates through post offices? Will the universal bank compete with that bank? What contribution does the existing bank make to post office services? Can he confirm the figure in the PIU report that the maximum contribution that banking services will make to the revenues of post offices is just £50 million?

Mr. Johnson

I am surprised—the right hon. Member usually asks about the private finance initiative that was previously established, so he is changing his tack. [HON. MEMBERS: "Answer the question."] I shall answer the question. The PIU expects a combination of the universal bank and the other aspects in the report in large measure to make up for the loss of income from the move to automated credit transfer.

More important, the universal bank is not being established as a re-run of the national Girobank. It will facilitate access to existing bank accounts. It will be both a substitute distribution system and a social bank. The two together mean that, in answer to the right hon. Gentleman's question, people will be able to present a smart card at the post office, instead of a benefit payment book, to access their pensions and benefits free of charge across a post office counter. That is similar to the position that everyone hoped we would be in had the benefit payment card, of which the right hon. Gentleman was the architect, succeeded and moved on to the second generation. We expect the universal bank to make an enormous contribution and to make up any loss of funds that may emerge from the move to ACT.

Mr. Martin O'Neill (Ochil)

Is my hon. Friend aware that the National Federation of Sub-Postmasters yesterday gave evidence to the Select Committee on Trade and Industry? During the session, it changed it tack from being one of the most scathing critics of the post-Horizon situation to being satisfied, encouraged and excited by the prospect of the implementation of the PIU report. Will my hon. Friend accept the congratulations of many of his hon. Friends on the fact that postmasters and postmistresses are now with us in trying to improve the service to all our people?

Mr. Johnson

My hon. Friend makes an important point. Many of the ideas in the PIU report emerged from sub-postmasters and sub-postmistresses themselves. The NFSP has always taken a constructive approach to this issue. It warmly welcomed the report when it was published, as the post office-based universal bank solution that I described was one of its major desires. The Post Office Users National Council, which represents the consumer, said: This report will put an end to the uncertainty that has been facing many subpostmasters. The Women's Institute and the Village Retail Service Association also warmly welcomed the report, and there was a warm welcome from anyone with an interest in the Post Office and a commitment to its future. Unfortunately, that did not include the Conservative party.