Cash Machines in Rural Post Offices (Hansard, 21 March 2002)

§ Baroness Miller of Hendon
asked Her Majesty's Government:
What is their reaction to the reported proposal to impose a charge of £1.25 for the use of cash machines in rural post offices; and whether this proposal was discussed with Ministers at any stage.

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, Post Office Limited is undertaking a programme of cash machine installation with a view to installing 3,000 machines at post offices by the end of 2002. These machines are being provided as an additional service available at some post offices to enable customers to withdraw money from their bank accounts. Wherever possible, the Post Office seeks to arrange for cash machine transactions at post offices to be free of charge. However, in some locations it would not be financially viable to install a machine without a charge being made.
This programme is separate from arrangements for universal banking services, which will enable all those who wish to do so to continue to be able to collect their benefits in cash at post offices. Decisions relating to cash machines at post offices are a commercial matter for Post Office Limited.

§ Baroness Miller of Hendon
My Lords, could the consideration of making charges for the use of cash 1471 machines in some post offices have been part of a transaction to sell off a major part of the Post Office— a transaction which has recently fallen through? Can the Minister tell the House whether or not there have been recent negotiations to sell off a major part of the Post Office to an overseas buyer? A "yes" or "no" answer will suffice.

§ Lord Sainsbury of Turville
My Lords, the supplementary question is rather different from the Question on the Order Paper. I have heard of no such suggestion. If one looks at the financing of the rural postal network, not many people would be in the business of buying it.

§ Baroness Greengross
My Lords, does the Minister agree that some of our poorest citizens live in rural areas and that many of our rural post offices and sub-post offices are disappearing? If you are able to draw out only £10 or £20 at a time, £1.25 in charges is a substantial amount. Elderly and disabled people cannot always get to the nearest supermarket in order to benefit from cash-hack schemes.

§ Lord Sainsbury of Turville
My Lords, I had hoped that I had made the point that this is an additional service. As is common across the whole of the commercial world, where there is a large through-put of people the service is provided free. But where it cannot be justified on that basis, charges are made. In such circumstances, part of the charge will go to the post master or postmistress. It is an additional service which can only add to customer facilities. In that sense, it is a commercial decision for the Post Office to take.

§ Lord Razzall
My Lords, notwithstanding the announcement that he made last year, to a fanfare of musical trumpets, of the subsidy proposals to help rural post offices, does the Minister accept that the deterioration in the rural post office network has continued rapidly since that announcement? Does he further accept that unless the Government's proposals are accelerated there will hardly be a rural postal network left?

§ Lord Sainsbury of Turville
My Lords, the situation is not as the noble Lord suggests. There has been a slowing down of the closure of rural post offices, but we should not be too optimistic about that because special factors are involved. As to the question of subsidies, which arose from the PRU report, it was always made clear that they were to deal with the transitional arrangements until 2003 when ACT is due to come in.

§ Earl Ferrers
My Lords, does not the Minister think it slightly unfair that post offices which have a relatively large through-put will not need to charge anything, and yet post offices in the rural areas, which are more necessary but have fewer people to look after, will nevertheless charge? One would have thought that it is those people who should not be charged.

§ Lord Sainsbury of Turville
My Lords, it is an unfortunate fact of life that in many commercial 1472 transactions where there is a small through-put the charges are higher. This is a commercial facility provided by the Post Office. It is common across the country that where there is a small through-put for cash machines which are provided on, essentially, a convenience basis, charges have to be made. Otherwise, there would be no service at all.

§ Lord Clarke of Hampstead
My Lords—

§ Lord Swinfen
My Lords—

§ Lord Livsey of Talgarth
My Lords—

§ The Lord Privy Seal (Lord Williams of Mostyn)
My Lords, it is the turn of the government Benches.

§ Lord Clarke of Hampstead
My Lords, before I ask my question, I should like to place on record my delight that my noble friend has given an unequivocal answer to the suggestion that a part of the Post Office was going to be sold off to a foreign competitor. It was a rumour that was going around last weekend and I am delighted that he has been able to say that no such negotiations were known to him. I am also pleased that we have not yet heard the dreaded word "Consignia".
In view of the repeated assurances from the Government that people will be able to get their benefits paid in cash through the sub-post offices, especially in rural areas—it has been repeated many times —can my noble friend assure the House that in no way will people be advised when they go into their rural post offices that these machines are the means of getting their cash?

§ Lord Sainsbury of Turville
My Lords, I can give that assurance. We remain fully committed to meeting the Prime Minister's clear pledge that those who wish to do so will be able to continue to get their benefits in cash at post offices, in full and without charge.

§ Lord Swinfen
My Lords, the Post Office operates universal postal charges throughout the whole country. Why can it not do the same with cash machines?

§ Lord Sainsbury of Turville
My Lords, there is a long tradition of the universal postal service which is written into the latest Post Office Act. That states that a service will be provided across the country under a one-payment system. The provision of cash machines is an additional service which does not have to he provided under the universal postal obligation. It is a commercial transaction which will be operated on a commercial basis.

§ Lord Livsey of Talgarth
My Lords, is not the imposition of a charge of £1.25 for the use of cash machines a breach of the principle of providing a universal service to all users of the Post Office? This is 1473 bringing market forces to bear and breaking the fundamental principle of the service that the Post Office should provide to rural people.

§ Lord Sainsbury of Turville
My Lords, the Post Office has a universal service obligation in relation essentially to the mail service. That obligation does not extend to all services. I do not believe that it should. If extra services are provided, they are provided on a commercial basis. That is entirely in keeping with what has gone before.

§ Baroness Blatch
My Lords, the Minister said that the supplementary question of my noble friend on the Front Bench was irrelevant to her Question. But the viability of the Post Office in the future is very relevant, and that is the point made by my noble friend. Can the Minister confirm unequivocally to the House that on which he has been congratulated by the noble Lord, Lord Clarke—that is, that there have been no negotiations whatever with a foreign company—for example, a Dutch company—in recent times that have failed?

§ Lord Sainsbury of Turville
My Lords, as I said, I came to the House prepared to answer a Question about cash machines. I therefore did not ask or inquire about any negotiations which may or may not have taken place. If I am wrong, I shall obviously make it clear in a future communication to the noble Baroness. But, I repeat, I know of no negotiations which are taking place to sell the post office network, which I assume is the point of the question. I have no indication that any negotiations have ever taken place on that.

§ Baroness Miller of Hendon
My Lords, I simply said that this may be part of a transaction to sell off the Post Office—which transaction has failed. That was the point that I made recently. I wanted to know whether the Minister could confirm that negotiations were going on to sell a majority share in the Post Office to a company overseas. That was my question.

§ Lord Sainsbury of Turville
My Lords, I can only repeat what I have said—which I thought was very clear given the extent of my knowledge on this subject. If it is a question of the financial viability of the rural post office network, this particular move can only help, because a part of the fee goes to the post offices themselves.

§ Baroness O'Cathain
My Lords, does not the Minister know that the whole future of the Post Office is a very live issue and one which, I am sure, concerns all of us in this House? We had a debate on the future of Consignia some six weeks ago. At the end of the debate, because we ran out of time, I asked the Minister whether he would answer in writing the questions that had been raised. I then wrote to him, about three weeks ago. I have still not heard from him. 1474 Is it the case that the Minister does not know what is going on in the Post Office, as he has more or less said to my noble friend Lady Miller?

§ Lord Sainsbury of Turville
My Lords, I apologise if answers to those questions have not been received. I shall immediately make certain that they are answered. However, if noble Lords opposite want to know what negotiations have taken place, or are going to take place, on Consignia, the proper approach would be to table a Question on that matter, and not focus on the subject of cash machines, which is a quite separate issue.