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Sub-Post Offices

Volume 348: debated on Wednesday 12 April 2000

The text on this page has been created from Hansard archive content, it may contain typographical errors.

10.58 am

I am grateful for the opportunity to raise this important issue on this particular day. This is my third speech in defence of the sub-post office network in just a few months, and it will not be the last. The issue will not go away, and nor will I. More important, public concern expressed in one of the largest-ever petitions to be presented to No. 10—it was signed by 3 million people—will not go away. The fears of sub-postmasters and sub-postmistresses who are lobbying Parliament today will not go away and the growing rebellion among Labour Members who are afraid for their marginal seats will not go away unless the Government drop their plans to force pensioners, disabled people, young mothers and other vulnerable groups to have their benefits paid into a bank account.

Since we last debated this issue, such concerns and fears have grown enormously. The Government have been unlucky, because no sooner had they announced that benefits would be paid automatically into banks—putting rural post offices at risk—than the banks announced massive closures in their rural branch networks. However, the Government's main problem has been self-inflicted. It is increasingly apparent that the initial decision was the opposite of an example of joined-up government. The Treasury, the Department of Trade and Industry and the Department of Social Security had not reconciled their conflicting interests or thought through how ordinary people would be affected, and they had not recognised how the knock-on effects would cancel out any benefits.

I have had the advantage—some would say the disadvantage—of being a Minister at the Treasury, the DTI and the DSS, which may make it easier for me to examine the issue from all sides. However, I have always approached the matter first and foremost as a constituency Member, aware of the invaluable role that sub-post offices play in our constituencies. They are important in towns and suburbs, as well as in rural areas, and they are central to the vitality of rural areas and local communities. They provide essential services to the most vulnerable members of society.

At the DTI, I was responsible for the Post Office. I recognised the national importance of post offices, so I committed my party to maintaining a comprehensive national network. At the DSS. I realised even more clearly how essential the network of sub-post offices is—to distribute social security payments to millions of pensioners, young mothers, disabled people and others who cannot be expected to travel far to obtain cash. If the network did not exist, we would have to invent it.

I was a Treasury Minister before that, so I yield to no one in my enthusiasm for saving taxpayers' money—but I wanted only to make genuine savings. I was at the Treasury for long enough as a Parliamentary Private Secretary and then a Minister—seven years man and boy. I observed that the Treasury had a tendency to make savings in one Department's budget even though that resulted only in offsetting cost increases in another Department. That rather perverse practice is enshrined in a doctrine enunciated by the Treasury mandarin, Nick Monk, who said:
Take any cut wherever you can get it.
That rather myopic doctrine has brought about the current actions by the DSS.

The Treasury has always considered the £400 million annual cost of distributing benefits via post offices to be a tempting target. When I was Secretary of State for Social Security, I was advised that trying to save that money by requiring the payment of benefits into bank accounts would lead to the collapse of the sub-post office network. The only way to prevent that would be for the DTI to subsidise the network, and that would eat up the bulk of the savings. Therefore, the action would bankrupt many sub-post offices, undermine communities, inconvenience the most vulnerable people in our society, and yet produce little or no overall saving. Twice I have asked Ministers whether they have received similar advice from their officials, and twice I have received no reply. We shall see whether the Minister replies today.

The Government's policy is even more perverse than that analysis suggests. They claim that delivering benefits costs far less via banks than via post offices. They say that automated credit transfer costs the DSS only 1p per transaction, whereas payments by order books cost an average of 49p. It is true that the banks charge the Benefits Agency only 1p per transaction. However, that is the cost only of transferring money from the agency to each bank account; it does not include the cost of operating a bank account or the cost of withdrawing money from accounts.

By happy chance, the Government have just published "Competition in UK Banking" by Don Cruickshank. Hon. Members who have reached annexe D4—I am sure that they all have—will have discovered that the average cost of withdrawing cash from a bank by cheque is more than £1 per transaction. The average cost of withdrawing cash from a hole in the wall—an automatic teller machine—is about 30p per transaction. Of course, those costs will not be borne by the Benefits Agency, but nor will they be borne by banks. They get their money from customers, so the costs will ultimately be borne by them, through one charge or another.

Those customers will include the claimants who are forced to have bank accounts. By forcing people to receive benefits via banks, the Government are transferring from taxpayers to bank customers—including claimants themselves—the costs of getting money into claimants' pockets. That is why Ministers are not giving any guarantee that pensioners and others who are forced to receive payments through a bank account will not pay charges or face costs every time that they withdraw cash from a hole in the wall.

Does my right hon. Friend agree that Ministers have sometimes mentioned at least the possibility of their subsidising the banks?

Yes, that is a wonderfully perverse prospect. The Government have announced an inquiry, saying that banks are a force of evil incarnate, but simultaneously raise the prospect of their subsidising them, at taxpayers' expense, to undertake a task that will, in some ways, be more expensive than the original order book system.

Ministers have not given an assurance that the charges and costs will not fall ultimately on claimants. They have used words such as "we intend" that pensioners will not incur bank charges—but the road to hell is paved with good intentions. They have said "we do not want" banks to take money out of the pensions of people who are a bit overdrawn—but wanting is a long way from guaranteeing.

The second, hidden consequence of the Government's policy is the loss of trade, which they call "footfall", for post offices—additional to the loss of contract revenues from the Benefits Agency. At present, pensioners and others who pick up their money in post offices spend some of it in the shop. If they receive the money via their bank accounts or a hole in the wall, they probably will not spend it in the sub-post office. Even if the DTI returned to post offices all the savings made by the DSS as a result of not paying out benefits via post offices, the post office network would still suffer a net loss through loss of trade. Many sub-post offices would still have to close.

The Government's proposed remedy is that pensioners and others be given the right to draw their money at sub-post offices, so benefits will be channelled via a bank account to the post office. Clearly, fewer pensioners will do that than currently have their money paid through the post office. Moreover, if they do so, their bank will have to pay the post office for the service to the banks' customers. It may have escaped Ministers' notice, but banks are not philanthropic organisations. They will want to recoup their costs from customers. If banks are unable or forbidden to do so, they will be reluctant to accept benefit claimants as customers.

Ministers hold out a vision of post offices undertaking banking services, not only for benefit claimants, but for the whole local community, particularly in rural areas where banks have withdrawn. I hope that sub-post offices will undertake that role, and I wish them well. I hope that they can make a profit where Barclays, Lloyds, HSBC and others have retired hurt—but that is just a hope. As yet, the Horizon project has no software to handle banking.

I do not disagree with the right hon. Gentleman, but he is being slightly historical. Surely the answer is the smartcard. My understanding is that smartcard technology is up and running—although not fully—and available. How should that be funded?

I am certainly happy to get on to that subject because I attempted to introduce such a solution but the Government aborted it. It is important to recognise that the truncated Horizon project handles only the internal accounting and management services of post offices. As yet, it does not function sufficiently to take on additional business. Post Office Counters Ltd. intends to seek tenders later this year from companies that are willing to write the software to make such additional business possible. In short, having amputated from the original Horizon project the ability to transmit money from the Benefits Agency direct to post offices, the Govt now propose an ambitious new scheme to graft on to the Horizon project the ability to transmit money between post offices and every bank in the country.

When I was at the DSS, I concluded that compulsory ACT—forcing people to have their benefits paid into bank accounts—was a non-runner. It would either destroy the post office network or make hardly any overall saving if the network had to be subsidised by other means. However, I recognised that the process of distributing benefits by order books was one of the most costly, inefficient and fraud-prone ways of delivering money.

Then I discovered that half the £400 million annual cost of Post Office Counters' contract with the Benefits Agency—I believe that that was the amount, but I am open to correction—did not end up in the hands of sub-postmasters, but was absorbed by the cost of printing, warehousing and storing order books and other central costs of Post Office Counters Ltd.

We concluded that, by automating the process of transmitting money from the Benefits Agency to sub-post offices and introducing a benefits payment, we could achieve substantial savings, eliminate fraud and still leave sub-post office revenues largely intact—and that, as a by-product, the computer programme would enable post offices to expand into other areas of business. I still believe that that is the only realistic route. I urge the Govt to introduce it under a different name. They can pretend that they are not doing it; I shall not expose them. I urge them to bring the process back.

Sadly, when the scheme allegedly ran into problems, as all large computer projects across the world do at some stage, the Treasury scuppered the scheme and imposed its pet idea—a compulsory ACT that forced payment to be made by the banking system. All I will say about that now is that, for almost two years, Ministers repeatedly assured the House that the Horizon project would be complete by the end of 2001. They have subsequently claimed that that it was three years behind schedule when they took over.

The Minister for Competitiveness, who will reply to today's debate and who has considerably more integrity than many of his colleagues, was obliged to retract that allegation and admit that the delay had built up only by the time that they cancelled it, two years later. The Govt refused to tell us why the contract did not work and whether there was anything wrong with it, other than to say that there were no technical problems and that it was some managerial quagmire.

I remind the House that the project was based on the up-and-running Irish system for delivering benefits. The new Labour Government have failed where the Irish succeeded. I shall let that be their epitaph. I imagine that in Ireland they will be getting their own back for generations of jokes about the alleged incompetence of the Irish by telling Alistair Darling jokes about the Government's inability to run a system that runs perfectly well in Ireland.

The Government defend the problems that they have got themselves into by using four main arguments. First, they say that sub-post offices have been closing anyway. Over the previous Parliament, they closed at an average of fewer than 100 a year. Under this Government, they have closed at double that rate. Indeed, over the past year, the rate of closures has been five times higher—more than 500 have closed in the past 12 months. That is simply the effect of announcing the prospect of moving to ACT. If the proposal is implemented, closures will run into thousands. To pretend otherwise is simply dishonest.

Secondly, the Government argue that an increasing proportion of claimants opt voluntarily for payment via their bank account, which in the long run is bound to undermine the post office network. That is scarcely justification for compelling people to move to payments via ACT, thereby destroying the network in the short run. Given time, post offices would be able to develop other revenue sources, but the Government will deprive them of that time and put the whole network at risk.

Thirdly, the Government argue that extra revenue sources will arise from the truncated Horizon project, which will make good the loss of the DSS contract. That would require DSS revenues to grow at about 17 per cent. a year compound between now and the end of the contract. At present, the project has no functionality for additional business. It may get it in due course—I hope that it does—but it will be quite a long time before it can handle new revenue streams. Those other revenue streams were originally intended to be a by-product of the development of the benefits card system; now they are the only feature. Therefore, the revenues that this £800 million project will generate will have to repay that £800 million before there is a single extra penny to compensate for the loss of the contract between the Benefits Agency and Post Office Counters Ltd. Can the Minister seriously suggest that that is realistic?

Surely it is not even 2003 and beyond that should concern us. Owing to concern about what will happen to sub-post offices, sub-postmasters are pulling out now—and finding it impossible to find someone else to take on the business.

My right hon. Friend is absolutely right. That is why the rate of closures has accelerated. Ministers say that it is just because some elderly sub-postmasters and mistresses cannot cope with the new computers. That might explain why a few elderly people retire, but it does not explain why post offices close and are not filled by young, computer-literate sub-postmasters and mistresses. Sub-postmasters and mistresses are leaving the business because they fear that it is not a viable enterprise.

Does my right hon. Friend agree that closures affect not simply the post office but the whole pattern of shopping in small villages? Fifty people turned up to my surgery in Watton-at-Stone this week concerned about this issue. They say that, if benefits are not paid at the post office, other little shops will die too, because people will no longer go into the post office, collect their money, buy a few things there and then move round the town. They will all go to Hertford or Stevenage.

My hon. Friend is absolutely right. I have a neighbouring constituency to his, and exactly the same is being said by my constituents—both those who receive benefits and those who run related businesses. They see the sub-post office as performing a vital role in keeping the community going.

The Government's fourth argument is to say, "We are installing 3,000 ATMs"—hole-in-the-wall machines. Of course, they are not installing them; that will be carried out on a commercial basis and in the most commercial locations between Post Office Counters Ltd. and the banks. It will still leave 15,000 sub-post offices without a hole-in-the-wall machine. Costs are highest where usage is lowest, so very few machines will be in rural areas. Even if they are installed there, they will reduce the footfall through the shops, as people withdraw money out of hours.

There is also a practical implication relating to cashpoint machines, in that many sub-post offices are too small to house them. For security reasons, a large area is needed at the back of the machine: 9 sq m is required to house them. Physically, therefore, many sub-post offices will be unable to accommodate them.

That is a very good point. I was unaware of that fact, and I am grateful to my hon. Friend for pointing it out. The more one examines the Government's arguments, the more flaws one finds.

Following the Government's announcement that they are to make the payment of benefits into bank accounts compulsory, the important issue is not the administrative consequences for the Department of Social Security, the Benefits Agency and Post Office Counters Ltd., but the impact that the proposal will have on pensioners, young mothers, disabled people and other vulnerable groups in our constituencies. However, far from being the first people to be considered, they are the last and, 10 months later, the Government have still not explained how they intend to cope with the problems that those people will face.

Will the Minister set those people's minds at rest by answering the following questions? Will the shift to compulsory payments through the banks mean that pensioners will receive their pensions four weeks in arrears instead of weekly and on time? That would represent a huge one-off saving for the Treasury, but it would be an enormous blow to pensioners, who would have a four-week gap in their finances. Their heirs could pick up the outstanding pension four weeks after they had died, but I hope that the Minister will not use that argument to justify such a move.

How will the Government cope with people who do not have bank accounts, or who do not want bank accounts? Will they compel banks to accept such people as customers? How will the question of those who are legally forbidden to have a bank account be handled? How will the Government cope with the 1 million emergency payments made every year, mostly to people who have no bank account and who would probably be unable to obtain one in normal circumstances? Those people will need that money urgently, and they obtain it at present by cashing a giro in the local post office.

What will happen to young mothers who have always had the option of receiving their money from a post office and spending it on their children? That is why the money was given in the form of child benefit—as a result of a campaign originally waged, I believe, by the right hon. Member for Birkenhead (Mr. Field). In future, that money will be paid into the family bank account, unless, presumably, they open a second account and pay all the charges that may be incurred as a result.

Is there any guarantee that no bank charges will be levied on those who take out bank accounts for such purposes? What will be the interaction between an overdraft and any money paid into the account? Will there be withdrawal charges levied on people withdrawing money from ATMs?

If the Minister has no answers to those questions after 10 months of thinking, it is because there are no satisfactory answers. Only one answer will be acceptable to the 3 million signatories to the petition handed in at Downing street today, to the 18,000 sub-postmasters and mistresses lobbying Parliament today, and to the increasingly worried Members of Parliament, including Labour Members. That answer is that the Government will think again, and reconsider the proposed system of automating the delivery of benefits direct from the BA into post office accounts so that we can preserve a viable network of sub-post offices in order to serve the most vulnerable people in the community.

11.24 am

I congratulate my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) on surviving in this place, and I hope that he continues to survive for much longer. He stretched himself by trying to bring to the debate a degree of partisanship that is not necessarily present, and which is not in the long-term interests of our constituents, including those who operate sub-post offices. I am proud to represent an urban constituency, and sub-post offices are as important to inner-city areas as they are to the countryside. To ensure that Parliament and the Government think carefully about this subject, an all-party group of Members of Parliament has been formed, of which I am pleased to be chairman. Although it properly raises people's concerns, it does not unnecessarily scare people about events that may not happen. It also keeps its eye on the long term.

My right hon. Friend the Member for Hitchin and Harpenden—as I shall refer to him in today's debate—did not seem to address the long-term future of our sub-post offices. At the end of his speech, he hinted that, if we were to return to his proposed scheme, all would somehow be well. I wish that it were as easy as that. He has a great deal more ministerial experience than me—my responsibility for the benefits card, like for so many aspects of the Department of Social Security, lasted only 14 weeks.

However, I have a tale to tell about the state of the project that I inherited. I did not merely talk to colleagues and read the papers; I visited the project partners. Had it been my responsibility to do so, I would have sacked the members of the Post Office board, who were appalling people. They were short-sighted and partisan. They were genuinely unwilling to enter into a discussion that I was trying to have on how to secure the long-term future of sub-post offices. They thought themselves smart; they thought themselves clever. They doubtless accepted their fine salaries, but I doubt whether they served post offices or sub-post offices well, and I am disappointed that many of them are still in post today. Perhaps someone else will deal with them.

I also visited the project in west London, in part to see how matters were progressing, but also to meet the benefits staff. I was appalled at the state of play. For some reason, they thought that I wanted to be told that, when someone goes into a Birkenhead sub-post office to post a small parcel to, say, Hong Kong, the postage for that transaction will immediately appear on-screen. Instead, I asked, "How will benefits be paid through this system? Given that only a minuscule number of post offices deal with two of the simplest benefits, why has there been no roll-out?" Answers were not forthcoming. My right hon. Friend looks favourably on the development of the project in retrospect, but I would not invest my own money in it. Nor should taxpayers' money continue to be invested in it.

In the knowledge that my right hon. Friend does not want the necessary and proper campaign to degenerate into scare tactics and speculation, I consulted the Labour party resource centre, which I have never used before. I gather that, if one has a bleeper, one is informed when the resource centre has a message waiting. I received one message automatically, even though I did not ask for it and do not own a bleeper. I was jolly pleased that I did receive it, and I shall read it for the record because that is what the Government want. They will want to be judged by it.

The message states that the
government has made it clear that benefit recipients will continue to have a choice: they will be able to draw their full benefits in cash, without charge, over a post office counter after 2005. No one will be forced to open an account with a bank and for those who do not in the end wish to, we will set up a simple electronic money transfer system to help them.
There will be no compulsion. The operative phrase is that recipients will receive their benefits over a post office counter. We are not talking about a machine from which people might draw their benefits; we are assuming that, if the transaction takes place over a counter, there will be a human being on the other side who will hand over the money.

I am listening to the right hon. Gentleman with fascination, but I wonder why the Minister seems to have omitted in his note to all Members of Parliament, dated yesterday, that there would be no deduction of any charge from the benefit being paid.

As I confessed, I do not have a pager—so no new message is coming through to explain that. One great advantage of this debate is that hon. Members do not have to rely on frail human beings such as me because the Minister will reply. If the hon. Member for South-West Hertfordshire (Mr. Page) catches your eye, Mr. Deputy Speaker, I hope that he will make good use of the letter. I do not want to spend too much time on it, but many important statements in it will reassure people.

The guarantee that the right hon. Gentleman has just read out that people will receive their pensions in full without reduction is reassuring, but if no income accrues to sub-post offices, there will be no counters left. Is he equally confident that the Post Office network will survive to deliver money?

I am grateful for the hon. Gentleman's intervention. The world is divided roughly into two groups. One consists of those who, when they see an idea, want to know whether it can fly. The other consists of slightly miserable people who, if they can find some fault, however small, will try to magnify it beyond all recognition. When I suggest ideas, it is, sadly, usually the Opposition who are supportive and want to know if the ideas can fly, but there has just been a reversal of roles.

I turn to the longer term, which is what we should be debating. I am immensely pleased about today's big and important lobby. For many Labour Members, it will be the first one to begin to frighten the Government about such things as tomorrow and an election in the not too distant future at which we shall be accountable to our electorate. I hope that the campaign will not be negative and that it will look to the future and how we may best serve our constituents, protect the communities that make up our constituencies—whether urban or rural—and provide the best future for sub-post offices.

The letter to which the hon. Member for South-West Hertfordshire referred—I know that he will make good use of it-refers to Government investment, but there is no such thing; there is only taxpayers' investment. The letter draws attention to the fact that taxpayers are supporting the information technology programme in sub-post offices to the tune of £480 million. Whether that is the correct level, whether it should be changed, whether it will deliver and whether 300 sub-post offices a week will be able to deal with the programme takes us into the realm of trust and hope. I hope that the programme will roll out on that timetable. The sub-post offices in Birkenhead certainly deal with the age group that could benefit from that, but one wonders whether all post offices will fall into such a category.

As has already been hinted in the debate, there is a real possibility that, as our banking system changes beyond recognition, the system that most of us want will be operated through our post offices and sub-post offices, which would be most welcome. One of our concerns about the future must be whether the Government are doing all that they can with support, knowledge and taxpayers' money to ensure a viable future for sub-post offices.

I hope that, from this day forward, we shall think in the longer term about the extent to which other functions undertaken by post offices and sub-post offices in Europe and beyond could be offered as services through our sub-post office network. I shall make one or two suggestions on that at the rally later today. We must look forward rather than back to find a range of services that we can introduce locally.

I hope that, as a party in government, we will seriously consider putting social inclusion at the top of the agenda. There is no point in doing so if the sub-post office system collapses. Although there is necessarily talk about rural sub-post offices, the proposed changes are more likely to affect sub-post offices in towns, because a larger proportion of their revenue comes from benefits work. Therefore, it is an issue for town and country alike. While we are developing the business strategy that we want sub-post offices to adopt, and in order to give them the ability and the chance to do so, we might consider in the longer run giving them a more open, but time-limited, subsidy because of their role in social inclusion. We do not want another handout that people can rest on, without making changes; we want to use subsidies in a way that ensures a prosperous, long-term future for the network.

Turning the clock back is not an option for the survival of our sub-post offices. I wish it were as simple as that; I wish that I could say that and believe it. The future is more difficult than that, and is fraught with dangers. I hope that I have hinted at some of the things that, if there is to be a thriving sub-post office system, rather than one which, as now, is dying on the vine, we hope that the Government, post offices and their leadership—both the unions and the Post Office board—will encourage.

Today, we must take note of the feeling outside the House. I hope that it scares a lot of people. It is the first time that the Government will be on the receiving end of a serious lobby. We must not let that feeling dissipate; we must channel it into a positive, long-term future for our sub-post offices. Putting the clock back is not a viable option.

It may be for the benefit of the Chamber if I recall that hitherto it has been a convention to call the Front-Bench spokespeople 30 minutes before the end of a 90-minute Adjournment debate. There are only 21 minutes left. I shall do my utmost to fit everyone in, but in order to do that I appeal to all hon. Members to be as brief, concise and pertinent as possible.

11.39 am

I shall indeed be brief.

I want to ensure that we get on the record today a response from the Minister to the issue of payment in arrears when payment is made by automated credit transfer, raised by the right hon. Member for Hitchin and Harpenden (Mr. Lilley) in his very effective speech.

When we recently moved an amendment to the Child Support, Pensions and Social Security Bill, the Minister made a passing reference to four weeks in arrears being something of a red herring, and said that, if all pensions were paid by ACT, they would not be four weeks in arrears.

I hope that the Minister can reassure us on the matter, because many pensioners need to budget. They may be able to cope with payments a week in arrears, but for them suddenly to be four weeks in arrears would be untenable. It might ease the transition to ACT if the Govt said that anyone using ACT would receive payments two weeks in advance, or two weeks in arrears, and so on. I hope that the Minister will give clear answers to my questions.

People are not choosing to use ACT on the scale that the Govt suggest. It is true that new pensioners are slightly more likely to opt for ACT, but the Minister forgets that, at the age of 65, nipping to the bank in the car might be viable, but at the age of 80 or 85, perhaps disabled and no longer able to drive, that would not be the preferred option. Older pensioners will suffer if the Minister assumes that they will want to receive benefits on the basis of an option that they chose when they were fit and healthy. They will also suffer if they are not allowed to return to the system of collecting benefits at a post office, or if the post office is undermined. Pensioners should not have to suffer the cash-flow problems of four-weekly payments in arrears.

I received a note through my letterbox on Saturday morning from someone living in a neighbouring village who had decided to switch her benefit payment from the bank to the post office because she valued its service. I hope that many more people will do the same as a result of today's lobby.

11.41 am

I am pleased to be called to speak in this short debate. The right hon. Member for Hitchin and Harpenden (Mr. Lilley) emphasised that he, and the issue, would not go away. I dreaded that being true, as his speech continued for some time. However, we must accept that automated payments in one form or another are going to come; King Canute is regarded as a fool but historical analysis shows that he was a wise man, as one cannot resist the inevitable. None the less, steps must be taken to ensure that what is inevitable is not devastating.

I discussed the problems connected with the increase in automated payments on two occasions with my hon. Friend the Minister for Competitiveness and was reassured by his reply to my crucial question about cash. I was also greatly reassured by my right hon. Friend the Member for Birkenhead (Mr. Field) in citing the new authority in our proceedings, the parliamentary Labour party resource centre. That was more reassuring to me than some of the quotations from Hansard, which are less clear cut.

The right hon. Member for Hitchin and Harpenden expressed concern for those in receipt of benefit. Banks will not permit everyone who applies to open a bank account; some people are too poor to have bank accounts, which are expensive to run, except for those who are wealthy in the first place. Some elderly people will never be in the electronic age; the notion of e-commerce, whatever that might mean even to us, is beyond their comprehension. They would probably find a course in Mandarin Chinese easier to understand. Hole-in-the-wall machines, for example, require the use of a PIN—personal identification number. Many people in our society will not acquire PINs and will not fiddle around looking at holes in the wall as though they were followers of some eastern religion. It is something that they just will not do.

Cash machines pay only in units of £10, and that will cause problems if the benefit to be paid is £44.44. Then, of course, there is the matter of the overdraft. It has been well said that banks are not benevolent institutions, and they are certainly not mutual institutions. They would ensure that an overdraft was paid back before any payment was made to the recipient of benefit, thus increasing the spiral of debt.

Finally, there is the point about joint accounts. As the right hon. Member for Hitchin and Harpenden pointed out, the payment may be intended for the mother, but the father may think that there are better things on which he should spend that money. It is easy to say that that can be resolved by separate accounts, but that in itself might produce domestic disharmony, which might not be good for the children of the family.

The other question relates to post offices themselves. The point has already been made that the follow-on trade is important. People need to go through the doors to spend their money, not just on direct post office facilities, but on all the other items that the post office sells. It might be asked why a post office does not reestablish itself as a village or suburban shop, but another great monopoly makes that difficult: supermarkets. It is difficult for post offices to compete on merchandise and groceries with such large corporations.

There should be great caution about the strength of communities. The local post office performs the functions of the lost marketplace. People come and go and talk to each other. They may not have that social intercourse on other occasions, particularly with the closure of banks in rural areas and small towns. It was unwise for the right hon. Member for Hitchin and Harpenden to say that the "banks retired hurt". Few of us have seen a bank either retired or hurt. They hurt small businesses and customers from whom they so often choose to take every ounce of profit. At present, 65 per cent. of rural parishes have a post office and 5 per cent. a bank—"and falling fast", as the song goes.

I know that there are regulators. There is to be a bank regulator and a post office regulator. If it were not for shortness of time, I would quote my hon. Friend the Minister for Competitiveness on the purpose of the post office regulator, who will monitor and investigate. I am a great believer in monitoring and investigating, but sometimes we also want some doing. There may be a case—I merely float it at this stage—before a bank is permitted to close a village branch, for asking whether it has made arrangements to transfer its business to the local post office. The regulator should have powers to stop the closure until it has done so.

My hon. Friend the Minister said that one issue that the Postal Services Commission and the regulator will consider is the social question. Nothing could be more relevant to the social question than the consequences of the closures of sub-post offices

11.48 am

I want to say a small number of things very briefly. Almost the entire terrain has been covered by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) and the right hon. Member for Birkenhead (Mr. Field), who chairs the all-party group of which I am a member.

There has been much discussion about money this morning, and there will doubtless be more during the rest of the day, but the single commodity that we most need at present is not money but time. When I say "we", I include the Government. Over the past few months, it has become evident that a phenomenon well known to any Whitehall-watcher has set in. There has been a series of scrambled attempts to deal with a problem that is slowly beginning to be recognised. There is no coherent approach to solving it because of lack of time. If the Government committed themselves to delaying the introduction of automated credit transfer until they had come up with a workable alternative—under whatever name—to the system that my right hon. Friend the Member for Hitchin and Harpenden was in the course of introducing, there would be a realistic prospect of achieving what we all want to achieve, which is to save the post office network, to serve communities and to deliver, in cash and only a week in arrears, benefits and pensions to millions of the most vulnerable people in our society.

Time is the commodity that we most need and the Government should be willing to give it. A delay by two years will, as hon. Members pointed out, save an uncertain quantity. It could be a negative saving, but even if the saving were considerable it would not have a great effect on a Chancellor who has sufficient cash to be going on with.

As the right hon. Member for Birkenhead said, the present lobby is probably the first mass lobby that the Government have encountered. Behind it stand 3 million people who have signed the petition; and behind those 3 million stand an incalculable number of millions of others who agree with them. They come from all parts of the kingdom and from all political persuasions and none. It is a genuinely felt lobby. It is not just an effort by a small group of people to peddle a vested interest. It represents a genuine mood in the country. If parliamentary democracy is about anything, it is about responding to such moods.

I hope that Ministers will take away from these proceedings the knowledge that they must do something, but that they should not do anything too radical too fast. They need only to withdraw and reconsider. That would answer the loud complaints and allay the great fears of many millions.

It is remarkable that, thus far, every argument made in defence of going ahead with the present programme turns out, on inspection, to be either intellectually or practically deficient, or both. Not a single argument in favour can be seen to work. That suggests not a deficiency of intellect on the part of Ministers, but that vast armies of bureaucrats in various conflicting Departments around Whitehall are producing to order pieces of paper to defend propositions that are increasingly implausible, which is an inappropriate way to make public policy.

Quite apart from the lobby, Ministers should recognise that something is wrong with the policy process. The Minister for Competitiveness understands, perhaps more than any other, the subject that he has unfortunately been landed with defending. He should be persuaded of the case against the policy process. There is no need to admit that he and his colleagues are capitulating to the lobby. He needs only to stand up and say a few words, which could lead to the erection of statues in his name across the length and breadth of the kingdom. It would be the first time that a politician from any party had stood up and said, "This is the most frightful Whitehall farce, and we are not going to make public policy on this basis any more. We are going to withdraw, reconsider and produce a proper scheme on which we can all agree". If the Minister were to do so, I would personally erect a statue to his memory in west Dorset.

11.53 am

I offer my congratulations to my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) on securing the debate on a topical day on such an important subject. It is close to my heart because Shoreham houses the headquarters of the National Federation of Sub-Postmasters, which organised today's lobby. It has existed since 1897 and has been based in my constituency since 1947. I am proud to welcome the double-decker bus bringing people here today along with a petition of more than 3 million signatures. When I visited a shopping centre recently with some of my local councillors, I never found it easier to gain signatures. Within an hour and a half, more than 1,000 people literally fell over themselves in the queue to sign that petition—a refreshingly odd experience for me.

We must recognise that post offices are not just shops; they are the hearts of communities, on which many other shops rely. For pensioners in particular, they are a lifeline. They are convenient. Many sub-postmasters and mistresses know pensioners by their first names. They help them with form filling and so forth. They watch out for them if they do not appear on pension day. They are an effective early warning system. Post offices also perform a vital service in reducing benefit fraud. Out of about £9.3 billion of fraud detected, only 0.65 per cent. went through post offices. That is in no small part due to the vigilance of sub-postmasters, who participate in a scheme through which they can claim a £10 award for spotting a fraudulent claim.

When I went on a routine visit to a post office in my constituency recently, I was greeted by 80 pensioners who were standing outside. We had an impromptu rally on the pavement. They were there passionately to support their local post office. It was a great community and the sub-postmistress was on first-name terms with them.

This is not solely a rural issue. Worthing, which forms part of my constituency, has 100,000 people and is a town made up of village communities. Let us not confuse this as a rural matter. Many sub-post offices in towns and urban areas will be affected. Worthing has the highest number of pensioners in the country, so it will be particularly affected. Many pensioners do not use cashpoints. If they are forced to go to banks, they will not receive the sort of personal service to which they are accustomed. They will not have people looking out for them. Cashpoints are not terribly good early warning systems if pensioners fail to collect their pensions. Similarly, the people who sit behind bank counters are not especially good at eyeballing potentially fraudulent benefit claimants.

If the stories are true, there will be serious household budgeting problems as well as security implications for pensioners, who will be forced to take their pensions monthly in arrears rather than weekly in advance, as now. We are already seeing the effect of monthly child benefit payments that are made through banks. About 1.2 million people are not allowed bank accounts. My right hon. Friend the Member for Hitchin and Harpenden asked whether, under the system, banks will be compelled to offer loss-making accounts to people. If a person with an overdraft is claiming benefit that is paid through the bank, the benefit will be swallowed up in the overdraft, so people in the most desperate circumstances will have no cash on which to live. The Benefits Agency will not offer to pay bank charges if they are imposed.

We were told—this was not included in the note that the right hon. Member for Birkenhead (Mr. Field) received—that if pensioners retain the right to have their pensions paid through post offices, the credit going back to the post offices will fall from 12p per pension transaction to 1p. However, the overheads of sub-post offices are not falling at the same time. That offers no basis on which they can survive, as my hon. Friend the Member for Rutland and Melton (Mr. Duncan) said. Post offices will cease to exist even though people may not be compelled to use banks.

Post offices are losing a great deal of revenue. Soon they will lose the revenue from television licences for people aged over 75—they are paid 17p a licence for providing the service. They are losing work to Paypoint, which the Post Office will not allow them to operate. I mentioned the physical problems of cashpoints in smaller post offices, where they are simply not an option.

Many post offices are in a bad way. The Post Office nationally expects to go into the red this year, largely because of the scrapping of the Pathway scheme. Sub-post offices are private businesses, many of which are just scraping along. It is estimated that 8,000 of the 19,000 post offices could go out of business if the changes go ahead. Many rely on benefit payments for at least 40 per cent. of their income. I got together all the sub-postmasters in my constituency recently, and more than 85 per cent. claimed that they would not be able to carry on if the proposals went ahead. I do not believe that that is untypical of other constituencies.

These are tragic real-life stories. One of my sub-postmasters wrote to the Prime Minister, saying:
I … am a senior postmaster of 12 years standing. I have survived the last 9 years of recession, and general boat rocking from the governments of the day, through my own endeavours. From the laws and the media publicity in the last few years, my business has become, from a very viable concern, a now worthless millstone, that no-one would be interested to buy from me at anytime, due to your plans and my hopes for a reasonable retirement has now been lost…I am 55 years old and I have worked hard for my family for 30 years and the country for 39 years in total. I do not fiddle the state, I keep my VAT payments up to date and correct each quarter and now I am assessed for future Income Tax, even before I have earned it. There is no logic in what you are doing. Why should I be loyal to any Government, which does not support an essential Community Business like mine? What incentive do I have now to continue? … If you carry out your plans, then what I have tried to achieve for later life is for nothing. If that is so, you are reading a letter of a future dole queue member. Due to no fault of my own, a Senior Post Master will be unemployed … You may have the power, but you do not have the right.
That attitude is typical of many postmasters, who now feel threatened.

To add insult to injury, the loss of business tax relief will mean that businesses will diminish greatly in value for people who are retiring. Alas, sub-post offices have become a disaster. From being a community asset that we all cherished, they have become a "millstone" as my constituent says in his letter. They are a diminishing asset with falling turnover and they suffer from rising business rates on the latest rate revaluation.

My right hon. Friend the Member for Hitchin and Harpenden was right to say that there has been a distinct silence as regards practical answers from the Government. I have received hundreds of letters from constituents on this matter. In particular, there is genuine fear among pensioners and disabled people. There is fear for the future viability of shops and communities that rely on sub-post offices. Three million signatures cannot be wrong. As my hon. Friend the Member for West Dorset (Mr. Letwin) said, it would be sheer arrogance if the Government did not simply withdraw and reconsider. They should respond to today's lobby to show that democracy listens. We need a Post-Office-based solution of the type that my right hon. Friend the Member for Hitchin and Harpenden tried to introduce under the previous Government. That is not on offer and I hope that the Minister will reconsider.

12.2 pm

First, I endorse what was said about the Minister. If he comes up with the right answer today, I will be the first in line to contribute towards a statue—I have a fiver in my pocket and I might, indeed, go to 10 quid. However, I await the answers—as the hon. Member for East Worthing and Shoreham (Mr. Loughton) rightly said, we must have answers.

I congratulate the right hon. Member for Hitchin and Harpenden (Mr. Lilley) on securing the debate, although I am reminded of people who say, slightly light-heartedly, "I did not get where I am today by doing nothing." The previous Government had many years to deal with the Post Office, but they hummed and hawed and changed their minds.

I am short of time and I should get on.

We are talking about community and those who have spoken have clearly highlighted it in all its aspects. Community—in towns and villages—is what this country is all about. The closure of sub-post offices and, more recently, of bank branches and the need for transport, when those post offices and bank branches close and people have to go elsewhere, are the issues. We are looking for linked-up government on transport and the other issues that need to be tackled. More important, we need answers from the Government about sub-post offices.

The automation of the system is important. As has been said, automation is a good thing in terms of saving money, but a problem in terms of social exclusion and people being unable to cope with personal identification numbers. Those problems must be tackled. The Minister must explain what will happen in 2003 and how people who cannot or do not wish to have bank accounts will be able to obtain cash.

The National Federation of Sub-Postmasters has stated that benefits that go into a bank account could go to the husband although that might not be appropriate. That issue has been raised before. Today, I received a letter from the federation dated 5 April, which stated that it has not yet been shown how sub-post offices will continue to be allowed to administer benefit payments under the Government's reforms. Its vision is of post offices being at the centre of community life in countryside and towns alike, not of a network shutting down. It states that many will close even before 2003 if the outlook remains so bleak. Hon. Members mentioned that earlier.

It is a matter of great concern that sub-postmasters and mistresses have invested £1 billion of their own money in sub-post offices. The Govt could be guilty of misrepresentation, in that one, two or three years ago, people went into sub-post offices in good faith, but they will suddenly find the ground being taken from under them. That is serious. Many who were encouraged to invest money in post offices are now extremely worried.

Of course, post offices in urban areas also face difficulties. A parcel was not delivered to John, a constituent of mine, because he was not at home. The postman went to the sub-post office in the town and was told that John walks his dog and would be passing by in five minutes. As he walked past, the sub-postmaster nipped out and gave John his parcel. That is a fantastic example of people knowing what happens in a community. The sub-post office service is uniquely a community service in that respect, and it is uniquely respected for it.

Along with other hon. Members, I expect a number of people from my part of the country to come to the House. The Western Daily Press, along with many other newspapers, has notably conducted a fantastic campaign to represent community interests and concerns. We need an answer from the Minister because we are looking for something entirely new from sub-post offices that will embrace all sorts of services.

The internet has been mentioned. We are disappointed not to have had the report from the Cabinet Office performance and innovation unit by today because it would at least have given us something to go on. The Government promised us a wonderful utopia, but we are now struggling to come up with it ourselves. I am waiting for a great idea, because ideas there must be. We must be told soon what the Government have in mind.

I was told at a meeting of Post Office directors last week that the Post Office is having discussions with 12 banks. It hopes to make arrangements with them for a banking service in sub-post offices. As we have heard, however, the Horizon project will not in itself cover the scheme. Extra software will be required to conduct a full banking service. The Minister will deal with that. We are concerned that the details have not so far been worked out. Even if the banking system transfers to sub-post offices in places where banks have been closed, I am told that that will account for only half the revenue that sub-post offices expect to lose. I hope that the Minister will say something about that.

Small businesses are anxious because they use sub-post offices a great deal. If there is nowhere for people in a village or community to lodge money overnight, it will put them at risk. The absence of banks is another topical issue. Sub-post offices provide a secure area for placing money—without them, small businesses might suffer.

So much else could be said, but I will say no more for now. We have debated the issues well and we should provide the Minister with a long time to answer our questions. I might even put in £20 for the Minister's statue. I want really good answers today; if I get them, up will come the money. I now look forward to hearing tangible, clear answers from the Minister.

12.10 pm

The suggestion of the hon. Member for Weston-super-Mare (Mr. Cotter) is a clear case of statues for answers. We look forward to the results.

My right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) could not have been better qualified to initiate the debate today. With his experience in the Treasury, the Department of Trade and Industry and the Department of Social Security, he probably knows more about this issue than anyone else in the House. Far from doing nothing, as the hon. Member for Weston-super-Mare implied, my right hon. Friend chose to spend more money than many of his previous colleagues in the Treasury might have wished in order to preserve the post office network.

The heart of the matter is simple. A post office network has to be paid for somehow, and my right hon. Friend brilliantly dissected the way in which the Government are avoiding that question. The Government refuse to accept that one cannot remove the income of sub-post offices and protect the current network. That is why today's lobby is here en masse: 2,000 or more people carrying a petition of 3 million signatures. Those people, like us, appreciate the value of the post office network to the community in rural areas and, as the right hon. Member for Birkenhead (Mr. Field) said earlier, in urban areas too. The value of the network is especially appreciated by those in greatest need—people with no bank account, people who cannot get a bank account, the least bankable people with little money and people who need emergency payments but cannot afford charges.

The right hon. Member for Birkenhead expressed little confidence in Post Office managers. Does he believe that the commercial freedom that will supposedly be conferred by the Postal Services Bill will solve that problem? He read out a guarantee of full payment without deduction. That is important, but it represents only one side of the equation. Although the recipient might receive his money in full, the post office network also needs an income flow in order to survive as the agent for delivery.

The hon. Member for Braintree (Mr. Hurst) made the important point that automated telling machines give out money only in units of £10. The people who are reliant on such machines may want and need every penny to which they are entitled, down to the last single one. Units of £10 can cruelly alter the way in which such people have to manage their household budget from week to week or day to day.

My hon. Friend the Member for West Dorset (Mr. Letwin) made a telling point when he said that we should delay until a workable alternative is available. Similarly, my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) defined the social and practical value of the sub-post office network and read out a powerful letter from one of his constituents.

In my remaining two or three minutes, I should like to deal with the Minister's letter, which he has circulated to all Members of the House of Commons. Unfortunately, it is less than clear about the Government's intentions and it covers more than it explains. I have little sympathy with the first paragraph, where the Minister states that recent coverage has been less than balanced. The Prime Minister was most guilty in that regard, when he told the House that he inherited the ACT switch, which is not true because it was announced only last May by the very Government of which he is Prime Minister. He may wish to return to the House and correct that. Some hope!

The hon. Member for Weston-super-Mare mentioned the performance and innovation unit. The Minister's letter states that the PIU was instructed in October but still we have heard nothing. The Postal Services Bill has completed its Committee stage, and it is high time that the PIU stopped resting in the long grass and made its views clear. The proposal has sat on the Prime Minister's desk for some time. If the Prime Minister is concerned about the matter, he should pay some attention to it, tick the relevant box and let us know what the PIU recommends.

The Minister's letter raised a red herring about the installation of 3,000 cash machines. That will not help the people who are most in need—the cash machines will probably be installed in areas that have the most use and where there is therefore the least need. We should protect the post office network. The proposal is a red herring, and the Prime Minister and the Minister are wrong to argue that it will solve many of the problems that we have discussed this morning.

The Minister's letter states that:
benefits … recipients are already opting for ACT.
They may have opted for it because their arm was being severely twisted behind their back. Many people are being pushed into using ACT against their better instincts and wishes. The hon. Member for Northavon (Mr. Webb) said that some of his constituents were reverting to the old system and had said that they did not want to receive payment by ACT. They resent the way in which they were forced to use it. Opted? My elbow!

The Minister's letter goes on to say that:
pension or benefit in cash at a Post Office will—
continue to be available in cash. As we said earlier, if money is coming one's way, one can of course get it in cash somewhere, but at what cost to oneself? The Minister says that he wants to protect the network, but what loss of income will it suffer? This matter involves the availability of cash and the source of the income or charges flow for the recipient or the agent who gives the money. In his letter, the Minister did not mention the income flow that will accrue to the post office network. He said:
The amount that sub-postmasters will receive will depend on the contracts that the Post Office Groups strike with banks … These are commercial matters and it would not be appropriate for the Government to become involved.
The Minister washed his hands of the key issue that could serve to protect rural and urban post offices. Will they enjoy much of an income for doing the Government's bidding?

The Minister condemned himself in the conclusion of his letter. He stated:
it is sheer irresponsibility to write off the network, thus devaluing the properties of sub-postmasters who have invested—
billions in their business. That is exactly what he and the Government are doing. People cannot pass on their business as a going concern because its value has collapsed—they have to put up the shutters and close down. The Minister must respond to the problems that his letter contains.

12.18 pm

The future of sub-post offices will be debated in the House this afternoon. We might say that the Chamber is the sub-office and that the House is the Crown Office, and that I am making the first delivery and that another delivery will follow this afternoon. Someone suggested to me that this debate was the hors d'oeuvres before the main course, but I believe that it is the main course and that this afternoon's debate is the dessert.

The hon. Members for Rutland and Melton (Mr. Duncan) and for East Worthing and Shoreham (Mr. Loughton) tried to turn this debate into a Punch and Judy show, but the right note was struck by my right hon. Friend the Member for Birkenhead (Mr. Field) and by the hon. Members for Northavon (Mr. Webb) and for West Dorset (Mr. Letwin).

I congratulate the right hon. Member for Hitchin and Harpenden (Mr. Lilley) on initiating the debate. He is a talented and able politician, which means that he is no longer qualified to sit on the Conservative Front Bench. He brought to this debate a knowledge of the history of ACT and the Post Office. I am pleased that many friends from the National Federation of Sub-Postmasters are coming to London today. I worked alongside the NFSP on the Post Office Users National Council, and still do not see myself as sitting on the opposite side of the table from it. Its members have real problems and are giving voice to the difficulties in their communities. We must resolve those problems in a more effective way than mere point scoring across the Chamber. The whole point of debates in Westminster Hall is that they should be less confrontational, and I shall try to approach the debate in that spirit—although I cannot promise to keep it up throughout the afternoon.

As my right hon. Friend the Member for Birkenhead said, this is the first time many Members of Parliament have encountered a rally by the NFSP. They take place about once every 10 years, and are formidable events. There was one in the early 1980s and one in the early 1990s. On both occasions, the Conservative party was in government. Like today's rally, the previous rallies concerned automated credit transfer.

In the early 1980s, the Conservative Government commissioned the Rayner report. I am not criticising them for that; it was the right thing to do. The report recommended that, for the first time, pensions should be paid through ACT. It also recommended that pensions should be paid fortnightly and that child benefit should be paid monthly. An enormous rally took place in the early 1980s, in which I took part as an official of the Union of Post Office Workers, as it then was. The letters that were sent then were just as heartfelt as those to which the hon. Member for East Worthing and Shoreham referred. The aim of the rally was to stop all payments through ACT. The then Government—rightly—backed down in respect of fortnightly pension payments, but retained monthly child benefit payments and introduced ACT.

In the early 1990s, the then Government extended ACT to cover unemployment benefit, income support for the unemployed, sickness and invalidity benefit and severe disability allowance. Another enormous rally took place because, as the right hon. Member for Hitchin and Harpenden knows, the Government had taken a decision—which was later rescinded—to encourage people to move into ACT.

The NFSP has been forced into a position in which every pensioner who opts for a bank account—perhaps because he or she is progressing from social exclusion to social inclusion—is seen as a threat to its members' livelihoods. This is the third time that we have had this debate about ACT. The issue will not be resolved until we find a consensus that meets the needs of Government, the Post Office and communities. As my hon. Friend the Member for Braintree (Mr. Hurst) said, there is no going back on the decision.

The right hon. Member for Hitchin and Harpenden introduced a well-intentioned benefit payments card, which, as general secretary of the Communication Workers Union, I applauded. I saw him go to Eastbourne to speak to delegates at the NFSP conference. If they had intended to build a statue while they were there, it would have been of the right hon. Gentleman. However, as he knows, the card was only an interim measure based on an eight-year contract. It was a swipe card, although the view of the Post Office was that we should ultimately opt for smartcard technology, and it ran into difficulties. The right hon. Gentleman asked what was wrong with the PFI benefit payments scheme. It would be quicker for me to say what was right with it. I could compare it with ANPOST in Ireland.

The best thing that we can do to inform the debate is to look at the Trade and Industry Committee report. As my right hon. Friend the Member for Birkenhead knows, we tried to make the private finance initiative project work. I am not blaming the previous Government. The PFI was horrendously complicated—the developer was also the financier. The Public Accounts Committee will soon receive a report from the National Audit Office, which we will study with great interest. The Trade and Industry Committee said:
We appreciate that in such issues, involving large sums of money—
it was talking about whether the Government had been open in 1997 and 1998 about the progress of the scheme—
some discretion was necessary. Ministers were indeed intent over many months—perhaps too many months—on rescuing the project, until their cumulative loss of confidence at the turn of 1998–1999.
Unfortunately, the benefits payment card failed. The Government had to find a way forward that did not involve the complexity of the Benefits Agency and Post Office Counters Ltd. I should say to my right hon. Friend the Member for Birkenhead, who has escaped the regime of the pager, that it is unfair to blame Post Office management alone for what happened. Blame has been cast more widely than that. It is clear that the Government had to pull the fat from the fire. In terms of a private finance initiative, this well-intentioned scheme was a turkey. Computerisation had to progress in the most difficult of circumstances, and we had to think through how to crack the problem of ACT.

The right hon. Member for Hitchin and Harpenden is undoubtedly an able politician. Had he been in government at that time, he would have taken the same route. The Horizon project—involving the conversion of 300 offices a week, and the creation of 40,000 serving positions in 18,500 offices—is an enormous task, but it is progressing well. Clearly, we must ensure that the project does not go belly-up in the manner of the benefits payment card. Nearly 5,000 offices have already been converted, and there is every prospect that the project will be completed by spring 2001.

As a result, we will be able to focus on the inevitable move towards ACT in 2003–05. People such as the hon. Members for Northavon and for West Dorset have qualms about the timing, but in 32 years of association with the Post Office it has been argued that the network is under-used and under-promoted. In this financial year, 383 post offices will have closed, but that is not the record. The record was set in 1986, when 393 post offices closed. Since 1990, 10 per cent. of the network has disappeared. In a 20-year period, 25 per cent. of the network has disappeared. We had to argue for the sale of fishing licences across post office counters, and the previous Government eventually conceded the point. People are waking up to the existence of this under-used, under-promoted network. As the poem has it:
But at my back I always hear
Time's winged chariot hurrying near.
Similarly, the move to ACT is concentrating people's minds wonderfully.

I agree that some post office managers are not the sharpest knives in the drawer. As the NFSP knows, some sub-postmasters close for lunch and take half-days off, and they should perhaps consider a different approach to promoting the network. In the past, some Ministers and hon. Members did not appreciate the role of the network, but they will certainly appreciate it now.

In the time remaining, I shall deal with the points raised by the hon. Member for Northavon. The shift to ACT and the payment of pensions four weeks in arrears are crucial issues for pensioners, but I cannot give an answer on that. We must work with the Department of Social Security to put in place by 2003–05 a system that will meet the needs of benefit recipients. It is almost inconceivable that the final decision will make matters more difficult for pensioners who, by and large, budget from week to week. Indeed, the point that was made by the hon. Member for Northavon and others is well taken.

We were asked whether the 1 million emergency payments will continue to be made across post office counters. The answer, as my right hon. Friend the Secretary of State has pointed out, is yes. We were asked whether pensions and benefits will be paid in full, and whether they will be paid across post office counters. The answer to both questions is yes. Either we will find a Post Office solution involving smartcards and existing technology—thereby solving a number of issues, not least, social exclusion—or we will die in the attempt.

The debate this morning has been about reaching consensus; this afternoon's may be different. However, we can move forward together, for we all appreciate the value of the network and the need to preserve it. We do not need statues—I shall be happy with a pillar box outside every post office.