HC Deb 18 July 2002 vol 389 cc438-9W
John Barrett

To ask the Secretary of State for Trade and Industry what steps the Government will take to replace the loss of revenue in urban post offices arising from moves towards automated credit transfer in pensions and benefits. [68828]

Mr. Timms

The Government are committed to the future of the post office network. As agreed following the Performance and Innovation Unit report "Counter Revolution: Modernising the Post Office Network", the Government are supporting an urban restructuring programme intended to provide improved facilities which meet customers' needs and expectations and are in the right location for the local community.

Banking will be a central part of post offices' strategy to move forward. Universal banking services, together with Post Office Limited's plans for an expansion of network banking—the provision of counter services for ordinary current accounts—should lead to substantial increases in the range and volume of banking at post offices, tapping into a very much larger customer base than benefit recipients alone. This should benefit subpostmasters both directly and through increased footfall, providing a major income stream offsetting the loss over time of the benefit book related revenue.

John Barrett

To ask the Secretary of State for Trade and Industry if she will make a statement on the impact the Universal Bank will have on the number of post offices in urban areas. [68829]

Mr. Timms

Banking services should help ensure a viable future for many urban post offices which might otherwise struggle to keep and attract customers as banking will be a central part of post offices' strategy to move forward. Universal banking services, together with Post Office Limited's plans for an expansion of network banking—the provision of counter services for ordinary current accounts—should lead to substantial increases in the range and volume of banking at post offices, tapping into a very much larger customer base than benefit recipients alone. This should benefit subpostmasters both directly and through increased footfall, providing a major income stream offsetting the loss over time of the benefit book related revenue.

The current value to Consignia of business from the Department of Work and Pensions is some £400 million a year. The migration of benefit payment to ACT is scheduled to begin in 2003. How that migration affects the revenue of subpostmasters will depend on a number of factors, not least how benefit recipients and other post office customers respond to change.

Universal banking services are due to be introduced in 2003 when migration of benefit payments by ACT is scheduled to begin. When that happens and whatever account people chose to have their benefits paid into, the Government are committed to ensuring that those who wish to do so will be able to continue to get their benefits in cash at post offices in full without charge.

In many urban areas, there are too many post offices in very close proximity to each other for them all to be viable, regardless of the migration to ACT. That is why the Performance and Innovation Unit recommended a programme of modernisation and restructuring designed to ensure that urban sub post offices can operate as viable businesses for their owners and offer improved services from the right locations to serve their communities. The Government are providing up to £210 million of financial support for Post Office Limited's urban reinvention programme.