§ 5. Mr. Mark Simmonds (Boston and Skegness)If she will make a statement on the take-up of the Post Office card account and its effects on the post office network. [130819]
§ The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)I understand from the Department for Work and Pensions that by 5 September just over 1 million customers had requested a Post Office card account, and, from the Post Office, that 566,000 card accounts had been opened by that date. I expect the accounts, and the expansion of banking at post offices, to have a positive effect.
§ Mr. SimmondsThe House and the country will be relieved that postal workers have defied their left-wing leadership, but the Minister should be aware of the great concern that exists about the Post Office card account, in Lincolnshire and across the UK. What justification can the Minister assemble for the fact that it has been made virtually impossible for elderly and vulnerable people to remove money from rural post offices? Many of those offices have been rendered unsustainable, and that could rip the heart out of many rural communities.
§ Mr. TimmsThe hon. Gentleman is quite wrong. The Government have invested £500 million in the technology for universal banking. Contrary to the predictions of Opposition Members, that was a successful IT project: it started up on time and is working extremely well. It gives the Post Office an opportunity to serve millions of bank current accounts, which was not possible in the past. That is a fantastic opportunity for post offices, and they are moving to take advantage of it.
I can tell the hon. Gentleman that well over 50 per cent. of pensioners—55 per cent. at the last count—who have received letters from the Department for Work and Pensions have requested card accounts. It is completely wrong to say that it is impossible for them to do so. Indeed, Postwatch has carried out surveys of those who have used the helpline. The results show that 88 per cent. of pensioners said that the advice was given to them in a clear and unbiased manner, and that 95 per cent. said that their questions were answered satisfactorily. There is a fantastic opportunity for the post office network arising from the Government's investment of £500 million. I hope that the hon. Gentleman and other hon. Members will encourage local sub-postmasters to make the most of it.
§ Mr. Bill Tynan (Hamilton, South)Does my hon. Friend agree that a major problem with Post Office accounts is that many elderly and housebound pensioners are unwilling to give their PIN to social workers who collect their pensions for them? What measures will he put in place to ensure that their accounts are secure?
§ Mr. TimmsMy hon. Friend raises an important point. We have been careful about the security of accounts. It has been arranged that a second card with a separate PIN will be available for use at a pensioner's 1058 local post office by a nominated person, such as a social worker. We hope that that will be a secure arrangement for the collection of money.
§ Mr. Peter Duncan (Galloway and Upper Nithsdale)The Minister will be aware that take-up of the Post Office card account in Scotland is severely constrained by the continued failure to secure agreement between post offices and clearing banks in Scotland. May I give an assurance that he will intervene to resolve that situation, which is creating ongoing problems for many of my constituents and for many people in rural Scotland?
§ Mr. TimmsAll the major banks in the UK, including those in Scotland, have basic bank accounts that can be accessed at the local post office, so I do not think there will be a problem along the lines the hon. Gentleman set out. Of course, it would certainly be helpful if other clearing banks followed the example set by Lloyds TSB, Barclays and Alliance & Leicester in opening up all their current accounts to post office access. That would be most welcome. The fact remains, however, that every bank has a basic bank account that can be operated at a local post office.
§ Mr. Harry Barnes (North-East Derbyshire)How many people are pushed into using bank accounts instead of Post Office card accounts because the closure of their local post office makes things difficult for them? At present, that is a problem at Coal Aston in my constituency. It would be a bad thing if people were put off the scheme and its provisions because they no longer had a proper post office.
§ Mr. TimmsIt is important to bear in mind that people wanting to use their local post office can do so with a basic bank account and with several ordinary bank accounts, as well as with a Post Office card account. However, I have some good news for my hon. Friend about migration. The urban reinvention programme was built on the assumption that 80 per cent. of the business from a closing office would transfer to another local post office. The first evidence, from the 200 post offices that closed in March and April, is that the proportion migrating to another post office was even higher; the figure was 85 per cent. in March and 87 per cent. in April. A good and high proportion of people are going to another post office in their local area.
§ Dr. Vincent Cable (Twickenham)Further to that answer, can the Minister confirm that if bank customers are to be able to draw cash across the counter at the post office, their bank needs to have a banking services agreement with the Post Office, and that four of the leading banks—Halifax, Bank of Scotland, Royal Bank of Scotland, Abbey National and HSBC—are refusing to enter into such agreements? [HON. MEMBERS: "That's. five."] Well, two of them have merged.
What are the Minister's ideas for persuading those banks to join the system, as, if they do not, all their millions of customers will, in effect, be lost to the Post Office?
§ Mr. TimmsAs I mentioned a moment ago, all the banks to which the hon. Gentleman referred have basic bank accounts that can be accessed at local post offices. It is the case, however, that their other ordinary current accounts cannot currently be accessed at the post office, unlike the 20 million current accounts with Lloyds TSB, Barclays and Alliance & Leicester that can be fully accessed. The Post Office is in discussion with the other banks about signing such agreements with them, too, and I wish them well in that work. Increasingly, those banks' customers will want to be able to access their accounts at their local post office just like customers of Lloyds TSB, Barclays and Alliance and Leicester. That may prove to be the most effective lever.
§ Mr. Tim Yeo (South Suffolk)Will the Minister join me in congratulating members of the Communication Workers Union on exercising rights given by Conservative employment laws to turn down the call from their union leaders for a strike that would have been extremely damaging?
On the post office network, is it not the case that post offices are likely to close more quickly if the Post Office cannot reach agreement with the banks to enable benefit claimants and pensioners to receive cash across the counter? Coupled with the obstacles that the Government have put in the way of pensioners who want to open Post Office card accounts, does not that mean that vulnerable people are suffering and that the post office network is likely to contract even more quickly because of the Government's policy?
§ Mr. SpeakerOrder. The Minister will not answer questions about the postal dispute, which has nothing to do with the matter before us.
§ Mr. TimmsI am grateful for your guidance, Mr. Speaker.
On the point about pensioners using post offices, I have already told the House that 55 per cent. of pensioners who were asked have already chosen a Post Office card account, compared to 28 per cent. of benefit recipients altogether. What that shows is that the Post Office card account is very attractive to pensioners and they are getting their Post Office card accounts as a result, but what is really important for the Post Office, particularly in the long term, is not to miss the much bigger opportunity of ensuring that customers who are familiar with using bank accounts can use their accounts at their local post office if they want to do so. The Post Office needs to make the most of that big opportunity.
§ 6. Mr. Andrew Robathan (Blaby)If she will make a statement on recent progress with the urban network reinvention programme for the Post Office. [130820]
§ The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)By the end of August, 492 post offices had closed under the programme. In response to observations by hon. Members and others, Post Office Ltd. intends to complete the programme now on an area-by-area basis. The areas will comprise groups of parliamentary constituencies; the Post Office will consult on a single plan comprising all the proposals 1060 in each area; and public consultation on each proposal will last for six weeks. The Post Office has also announced an acceleration of the programme: it now aims to complete the consultations on all its proposals in every area by December next year.
§ Mr. RobathanIt is the acceleration that I am concerned about. Following a parliamentary question that I tabled in April, I corresponded with David Mills, the chief executive of the Post Office, about paying bonuses to managers for closing down post offices as quickly as possible. Will the Minister confirm that the Post Office is indeed paying managers bonuses to close post offices? Is this the first time that taxpayers' money has been paid in bonuses to close down part of a highly valued public service in the teeth of strong opposition from those same taxpayers?
§ Mr. TimmsNo, Mr. Speaker, that is not the case. There is no financial incentive for managers to close post offices. The hon. Gentleman has made that point on a number of occasions, but it is simply incorrect. Each closure involves a very careful process. There is thorough consultation, and we have given substantial funding to Postwatch to carry it out very carefully. Quite a number of the proposals have been varied as a result of that process. What is important, of course, is that it is I think widely accepted that the number of urban offices needs to be reduced to ensure a sustainable future for the whole network. That needs to be carefully managed, which is the aim of the programme, and I believe that it is succeeding.
§ Richard Burden (Birmingham, Northfield)I welcome the change to an area-based approach to the reinvention programme because one of the problems has been that branch closures were often considered in isolation from one another, but will my hon. Friend speak to the Post Office to ensure that proper consultation takes place on the strategy? Local communities have to be involved because the benefits offered by the plan will be lost if local communities—rather than the usual suspects—are involved only in proposals to close branches, rather than in building confidence in the overall strategy.
§ Mr. TimmsI very much agree with my hon. Friend both about the benefits of the changed arrangements and about the importance of thorough and careful consultation throughout, particularly involving local communities, on the plans for an area. I will certainly ensure that the points that he makes are passed on to Post Office Ltd.
§ Mrs. Louise Ellman (Liverpool, Riverside)Will my hon. Friend ensure that the needs of vulnerable people in deprived urban areas remain paramount under the programme? Will he consider extending the support available to post offices and sub-post offices to enable them to increase the range of work that they undertake, to permit them to remain open in a viable way?
§ Mr. TimmsI very much agree with my hon. Friend that the impact on vulnerable people and people who are not very mobile is an essential element in reaching all these decisions. I think that she would agree, however, that a properly managed programme of this kind is 1061 much better than the alternative—disorderly decline—because there has been a reduction in business and it is therefore important that we have a programme that ensures that network coverage continues to be effective throughout all areas. At the end of the programme, 95 per cent. of the urban population will still be within a mile of their local post office, but I agree with my hon. Friend about the importance of ensuring that the needs of vulnerable people in each area are properly taken into account. Funding is available to improve offices, and I want to ensure that we make a success of that part of the programme, as well as the closures.
§ Mr. Nick Gibb (Bognor Regis and Littlehampton)Will the Minister take this opportunity to apologise to the people of Pagham for the closure on 18 August this year of the Pagham post office, and for the enormous inconvenience and expense that that is causing to many hundreds of elderly and in many cases infirm people, who have had to go to enormous lengths to find alternative post offices from which to collect their pension?
§ Mr. TimmsI can only say to the hon. Gentleman that I know well that this closure has caused a good deal of concern, and he has frequently been in correspondence with me about it. I have looked at the procedure that was followed, and found that there was a thorough consultation process, on the basis of which the Post Office reached the decision that led to the closure. Of course, every community will regret the closure of a local post office, but the reality is that as we were in a position in which over 1,000 urban post offices had 10 or more other branches within a mile, a process of rationalisation was necessary.