Post Offices

HC Deb 13 July 2000 vol 353 cc1047-9

3. Mr. Geraint Davies (Croydon, Central)

What support he will give to post offices to provide banking facilities with particular reference to locations where other banking facilities have been withdrawn. [128942]

The Minister for Competitiveness (Mr. Alan Johnson)

The Government strongly support the work being undertaken by the Post Office and the high street banks to develop a universal bank, which it is intended should cater for as wide a range of customers as possible and who would have access to their accounts at post offices. It will bring those people currently without bank accounts into the financial mainstream. The universal bank will complement the existing arrangements whereby post offices provide banking services on an agency basis for customers of several banks. The Horizon automation platform offers the potential to extend these arrangements more widely.

Mr. Davies

The news of the universal bank will be warmly and widely welcomed throughout Croydon, especially in New Addington and Fieldway, which have seen the steady withdrawal of banking facilities, not least from Barclays and Woolwich. The welcome arrival of new services in the post office at New Addington will be much greeted. When might we expect to see the arrival of new online services through universal bank in Croydon and elsewhere?

Mr. Johnson

I am pleased that Croydon has joined the list of places that is welcoming the PIU report. The PIU asked the Post Office to work up a business plan to be submitted to the Government by September. It is hoped that online facilities will be available shortly after the entire network is computerised, which is an essential pre-condition, in the spring of 2001.

Mr. David Ruffley (Bury St. Edmunds)

How much revenue will a typical rural sub-post office receive on average per year as a result of banking transactions?

Mr. Johnson

The PIU report identifies enormous opportunities for the rural network as well.

Mr. Ruffley

How much?

Mr. Johnson

It does not quantify amounts. The important point is that we are dealing with several ideas to give work back to rural post offices, which have been losing work continuously over the past 20 years. In addition, we have said that we shall ring fence 10,000 rural post offices and ensure that there are no preventable closures—[Interruption.] If Conservative Members have any suggestions that the PIU has not considered and analysed, they have not forwarded them to the Government.

Mr. David Drew (Stroud)

We warmly welcome the PIU report and the Government's commitment to fund it—unlike Tory guarantees. Does my hon. Friend accept that the only way in which we can take matters forward is by fully exploiting the Horizon software? I am sure that the people of Stroud will welcome the opportunity to take part in a pilot project.

Mr. Johnson

My hon. Friend is right; the computerisation project is essential. We have reached the stage where 9,050 post offices are online. That is a tremendous achievement. The score stands as follows: number of post offices computerised by the Opposition, nil; number of post offices computerised by the Government, 9,050.

Mrs. Angela Browning (Tiverton and Honiton)

Where will the banking and administrative costs of running the universal bank fall? Will it be on account holders, on the associated clearing banks, on the Post Office or on the taxpayer?

Mr. Johnson

Those are matters for commercial negotiation between the Post Office and the high street banks. We have identified a solution to three problems. First, the problem of financial exclusion, which is a cause and effect of social exclusion. Secondly, we have identified a way in which people can access the full range of their bank accounts across a post office counter, and computerisation is essential to that. Thirdly, we have provided the means by which people can access their benefits and pensions in cash across a post office counter without bank charges, if they so wish.

Incidentally, we have removed the constant tension that has existed since the previous Government introduced automated credit transfer in 1980—the post office network and Benefits Agency were in constant tension about the whole issue. Now, sub-postmasters can market the universal bank idea and encourage people who do not currently draw their pensions and benefits in cash to do so, so it is an enormous development.

Mrs. Browning

The Minister must know that there is no such thing as free banking. This is about the fifth time that we have asked for that information. I am quite happy to wait while he phones a friend or asks the audience, but we want specific answers. Regardless of the point-of-use costs, the Prime Minister has promised account holders that the costs will not fall on them and the Minister seemed to indicate in his answer that they will not fall on the taxpayer. The Post Office has asked me, "Where do we send the invoice?" Can we deduce that the clearing banks have agreed to pick up the tab to give free banking to 3.5 million account holders?

Mr. Johnson

If I were going to phone a friend on the issue, it would not be anyone on the Conservative Benches

Mrs. Browning

The Minister has no friends.

Mr. Johnson

Little does the hon. Lady know.

The hon. Lady knows that we cannot give precise answers to questions that involve a commercial negotiation. PAT 14, working closely with colleagues in the Treasury, identified a social and financial obligation on the banks to produce systems to bring the financially excluded into the banking system. We are sending a clear message: the universal bank is the way to do that. The Prime Minister has announced that financial support will be available, but we obviously want the Post Office to continue its fruitful negotiations to bring the matter to a conclusion and to present a business plan by 1 September. Obviously, we can debate all those issues of detail, but it is a shame that Conservative Members—with the honourable exception of the hon. Member for West Dorset (Mr. Letwin), who knows a thing or two about the situation and welcomed the statement—cannot bring themselves to recognise that the PIU report is the most comprehensive, thorough review of the network ever made. As was said when the statement was made, it is a shame that the review was not carried out 20 years ago.

Mr. Dennis Skinner (Bolsover)

Is my hon. Friend aware that, when I was discussing the new bank with members of the WI—before we burst out singing "Jerusalem" from the beginning right to the very end—one of them happened to say to me, "Whatever happens to that bank, Dennis, don't put Norman Lamont in charge"?

Mr. Johnson

I am aware that my hon. Friend is a secret member of the Women's Institute—I do not know how he sneaked in. I also know that the Women's Institute comprises an extremely intelligent bunch of people. Therefore, that remark does not surprise me at all.