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Post Office Card Account

Volume 482: debated on Monday 10 November 2008

Mr. Speaker has selected the amendment in the name of the Prime Minister. In view of the compressed time available for the debate and the number of hon. Members who have indicated their wish to speak, I am reducing the time limit on Back-Bench speeches to 10 minutes with the aim of securing as wide a representation as possible.

I beg to move,

That this House notes with concern the fact that the Department for Work and Pensions has written to Post Office card account holders informing them that the Post Office card account contract ends in 2010; further notes that Post Office card account holders, many of whom have made a conscious decision to support the Post Office by retaining their card account, are being instructed to take out bank accounts in order to receive benefits beyond 2010; expresses its dismay at the fact that the letter does not mention the fact that a replacement for the current card account is currently out to tender, or make any mention of other Post Office products or services; believes that this is a deliberate attempt to encourage people to switch payment to direct debit and remove the role of the Post Office; further notes the additional damage inflicted on the Post Office by the Driver and Vehicle Licensing Agency, which is currently sending out licence renewal reminders as part of a communications campaign which makes no mention of the Post Office; calls on Ministers in the Department for Business, Enterprise and Regulatory Reform to encourage Ministers in the Department for Work and Pensions to consider the impact on communities across the country if the Post Office card account is not renewed; and encourages all Government departments to make their services available through post offices in order to ensure that they have a viable future.

The motion highlights the inconsistency between what the Government have said and what they are doing. One example of that is the fact that the Government amendment describes the title of the motion as “Removal of the Post Office Card Account”. In fact, it is entitled “Renewal of the Post Office Card Account”.

Order. I am sorry to interrupt the hon. Lady, but that is nothing to do with the Government. I am afraid it is a misprint that arose in the preparation of the Order Paper.

Thank you, Mr. Deputy Speaker. It could have been a Freudian slip, but clearly it was not one of the Government’s.

It may amuse the hon. Lady to know that a recent response on the future of the post office network from the Department for Business, Enterprise and Regulatory Reform to the BERR Committee—of which I am a member—was headed “The Failure of the Post Office Network”. The hon. Lady is not the only Member to encounter Freudian slips.

There are clearly a number of ways in which the debate could be classified. However, there are also a number of inconsistencies between the Government’s actions and their words. They said that they would sign new contracts for the replacement of the Post Office card account at the beginning of 2008, but it is now November, and we still do not even know who has won the tender. They said that the managed closure programme would ensure a viable future for the post office network, but Ministers have campaigned against post office closures in their constituencies while voting in favour of closures elsewhere. They said that they believed in the future of Royal Mail Group, while doing all that they could to run down the business. That business made a profit of £577 million in 1997, but, after a decade of what the Government describe as unprecedented economic growth, Royal Mail Group’s profit was just £86 million in 2007-08.

Many Labour Members are very concerned about the future of the Post Office card account, but I shall not be voting for the Liberal Democrat motion. At the time of the local elections in Newcastle-under-Lyme, the Liberal Democrats implied that they could save every post office, irrespective of whether it was uneconomic, whether the postmistress wanted to retire and whether anyone wanted to run it.

May I ask the hon. Lady a question about consistency? Will she confirm that at a Liberal Democrat party conference not too long ago, her party voted in favour of separating Royal Mail delivery from the network, privatising it, and then subsidising the network whatever the cost of doing so?

If the hon. Gentleman reads the motion he will see that it raises specific complaints, and echoes the wording of an early-day motion signed by a number of members of all parties. There is clearly support for the motion across the House.

Has the hon. Lady an estimate of the number of additional post office closures that may result if the Government remove the Post Office card account?

That is a very good question, to which I shall return later.

The reason why post offices and Royal Mail Group have suffered such hits on their profits is that the Government are removing a wide range of services from the Post Office, while also trying to scare away the loyal custom that the Post Office already enjoys. In 2006, they announced that people could no longer pay for their television licences at post offices. In the same year, they told people who received their benefits and pensions through the Post Office card account that it was being withdrawn, and that they would have to open bank accounts to continue to receive their benefits. In 2008, the DVLA sent out reminder notices asking people to pay by direct debit, making no mention of the possibility of paying via the Post Office. Step by step, the Government are taking business away from the Post Office.

This is a track record that dates from the start of the Post Office card account. People had to fight to open a Post Office card account: the Department for Work and Pensions put every possible barrier in their way, including a call centre that they had to telephone where attempts would be made to talk them out of it. People had made a conscious decision to use the Post Office because they wanted a nice simple way of getting their money. The Government tried to put all possible hurdles in their way, but millions of them chose the Post Office despite that, and they should be allowed to do so again.

Opening an account was certainly a difficult option, and the positive response to the Post Office card account shows how important it is to a wide range of people.

Is this not a particular issue in rural areas? The post office really is the only service available to my constituents. The attempt to close post offices such as Abermule constitutes the wholesale removal of not just the Post Office card account but services which, although taken for granted in towns, are simply not available to rural residents who have nowhere to go except their local post offices.

The hon. Gentleman is right. The issue that he has raised has been raised by other Members on both sides of the House, and I shall return to it later, because it is important.

The hon. Lady is being very generous with her time. Does she agree that if the Government made the woeful decision not to grant the new contract to the Post Office, that would be yet another nail in the coffin of the existing post office network? Would not the logical financial reaction of individual householders be not to use a replacement service, but to use cards from other banks in the Post Office—banks such as Alliance and Leicester, Bank of Ireland, Barclays, Cahoot, Clydesdale, Co-op, Nationwide, Lloyds TSB and Smile, some of which will in fact be owned by the Government?

The range of services available at post offices is obviously relevant. It is clearly beneficial for people to be able to take advantage of other services at the post office. Nevertheless, it should be borne in mind that people want Post Office card accounts as well.

The hon. Lady has mentioned difficulties in rural arrears. She will know that one of the companies bidding for the account is PayPoint, which took over the television licence. That has caused huge problems to people in rural areas who wish to renew their licences.

That is true.

Nearly all my speech is being made by other Members, so I shall make some progress now. I shall allow further interventions later.

First, PayPoint may have more outlets, but they are not as well distributed as those of the Post Office. Secondly, the Royal Bank of Scotland and the Bank of Scotland, which are about to become Government-owned, do not allow people to use cash at post offices. If we lose this service in Scotland, it will be a huge disadvantage to most people living in virtually every rural area in the country.

The main problems clearly lie in rural constituencies and communities, although there are also difficulties in deprived urban areas where no choice between financial services is available.

As others have pointed out, when the Post Office card account was established in 2003, despite the difficulties that people encountered in opening accounts, the initial contract was set to run until 2010. However, it was clear to all involved that it was expected to continue well beyond that time. By January 2006, not even halfway through the contract period, the Government had already decided to take the business away from the Post Office. Despite the early stage at which the decision had been made, this further step has been delayed and delayed.

The evidence is in a debate that took place in the House of Lords. There is plenty of evidence to show when the Government decided that the Post Office card account should be removed.

The Government cannot get their act together, and apparently cannot make up their mind about the future of the Post Office card account. Others are doubtful about whether the Government really cannot make up their mind, or have already made the decision and are waiting for an opportune political moment at which to make an announcement.

Does the hon. Lady not think it somewhat ironic that the Government’s only IT success in the past 10 years has been the Post Office card? Is not the fact that we are debating the possible scrapping of the card in its present form slightly surprising?

I hope the hon. Lady accepts that if some of us do not join her in the Lobby tonight, it is not because we are not full of apprehension about the Government’s stance. There may, unfortunately, be another occasion on which we shall have to use our votes.

I certainly agree with the right hon. Gentleman’s first point. As for his second point, I hope that those who support the motion will consider voting with us later to make that clear.

As for the earlier point of the hon. Member for Castle Point (Bob Spink), there are estimates of at least 3,000 branch closures if the Post Office card account is taken away from the Post Office, although some suggest it could be worse, with 6,000 post office branch closures, which is more than half the current network.

I hope Members do not decide that they cannot vote with us tonight, because they will not have another opportunity to express their support for their post offices. My constituency has already lost nine sub-post offices through the last tranche of closures, and sub-postmasters were ringing me throughout the past weekend saying how worried they were that the Government, having dithered for so long, are now coming to a conclusion that will take the contract away from the Post Office, and that that will have a disastrous effect on their businesses.

It is, indeed, the case that the removal of POCA from the Post Office would lead to a chaotic and messy series of closures, and it would also entail a string of personal tragedies, as my hon. Friend highlighted, because the closures would be the result of sub-postmasters facing bankruptcy. They would not be planned. I do not believe that we should be prepared to consider the prospect of sub-postmasters facing bankruptcy as a result of Government decisions. At a time of economic uncertainty, with increasing unemployment and increasing numbers of people needing to access benefits over the next few years, it is extraordinary that the Government would seek to pursue a policy that would actively destroy the livelihoods of at least 3,000 people. Those closures could be far worse for the long-term future of the post office network as a whole, because a chaotic series of closures across the network could leave serious gaps in provision, which would mean post offices would lose critical mass, and that would undermine the Post Office’s ability successfully to bid for future contracts, so this could be the first stage in a very dramatic decline in numbers.

I served on the Work and Pensions Committee in the last Parliament, and six years ago paying benefits by giro was costing the Government £450 million a year. By how much would the Liberal Democrats subsidise the Post Office each year, given that the party leader’s position is to cut overall Government spending by 3 per cent.—not to increase it, but to cut it?

First, that is not factually accurate, and secondly, I shall return to that point later.

On average, POCA payments bring in about 10 per cent. of the net income of sub-postmasters.

No, I will not give way any more at present. However, POCA is worth significantly more than that in some deprived urban areas. On average, POCA payments bring in about £400 a month, which is 12 per cent. of net pay. That contrasts sharply with the proportion of income post offices receive from bill payment—only 5 per cent.—and from banking transactions, which is currently 1 per cent. It is therefore clear that removing POCA would leave a huge gap in the budgets of sub-postmasters.

This is not just about the income from the transactions themselves, because POCA brings people into the post office, and at that point they also spend money on other goods and services there. Each of the 3.8 million POCA customers pays on average seven visits per month to the post office, and in each visit they spend on average £6 on the retail side. Therefore, the loss of business that would follow from the removal of POCA could lose the Post Office much of its annual £2 billion retail income.

My hon. Friend may be aware that in my constituency many of the more popular Lake district towns has a post office. One of them, which I will not name for commercial reasons, has 8,000 people going through it every year because of POCA. Its postmaster reckons he will lose 7,000 of those customers every year, and that could lead to the closure of one of the most popular post offices in the Lake district. Will not losing POCA simply lead to otherwise viable post offices closing down?

The hon. Lady mentioned other transactions. Does she agree that extra business can be generated by local authorities encouraging council tax payers to pay their bills in a local post office, and is she aware that in my constituency, where the Liberal Democrats are part of the council coalition, it is the policy of that council to discourage people from doing so and to encourage them to pay by direct debit because it is easier and more convenient? Is that not an example of the Liberal Democrats saying one thing when in opposition and another when they get into government?

I find it ironic that the hon. Gentleman is criticising a policy that his own Government pursue. It is, indeed, the case that we should encourage local authorities to support the residents in their local areas to access post offices, and that they should broaden the range of services that are available.

The hon. Member for Ynys Môn (Albert Owen) talks about people saying one thing and doing another, but Members should remember that a year ago Ministers said from the Dispatch Box that there would be no more closures. There could, however, be another 3,000 closures, so how hollow are those words Ministers uttered from that Dispatch Box, and how can we trust anything they say today?

If some of the estimates of the number of post offices that could close as a result of POCA being taken away prove to be true, that could be devastating to the post office network, so the Post Office is in a very worrying situation. It is also clear, however, that, as has been made clear from some of this evening’s interventions, Labour party Members are fighting among themselves.

Not at present. Card accounts are the responsibility of the Department for Work and Pensions, whereas post offices are the responsibility of the Department for Business, Enterprise and Regulatory Reform. This POCA episode has been a prime example of how far from the ideal of joined-up government we sometimes stray. DBERR is committed to forcing the Post Office to make a profit, but how can that be possible without the footfall that POCA brings?

Not now. However, the DWP wants to save money, moving all benefit recipients into basic bank accounts no matter what the consequences. It has shown that it will use any means necessary to ensure that vulnerable people are left with the impression that after 2010 they will have no option other than a bank account. My concern is that the DWP is not considering how best to service the needs of its customers. It has to decide whether benefits should be administered in a way that helps the vulnerable customers it is supposed to be supporting or just administered in the easiest way possible for the DWP.

The loss of POCA could have a huge impact on some of the most vulnerable in society. More than a third of all pension credit payments and more than one in four income support payments are paid into POCAs. In total, 23 per cent. of all benefit claims are paid through POCA.

Although the pain will be felt across the whole of the UK, several Members have already highlighted the fact that rural areas will be particularly badly hit. Although 60 per cent. of rural areas have a post office, fewer than 4 per cent. have banks, so this will clearly have a disproportionate effect on those areas. In many villages, the post office is crucial to the survival of other businesses in the village. Pensioners and benefit recipients collect their cash in the post office and spend it in both the post office and other village shops.

Not for the moment. If such people have to travel for miles into a nearby town to access their cash, they are more likely to spend their cash in that town rather than supporting businesses in the area where they live, so this could have much wider implications.

The hon. Lady is rightly making a strong case for a planned and sustainable post office network, but will she tell us this: does she oppose all post office closures? If she does, what resources will she make available to sustain the post office network into the future?

The issue we are discussing today is how the Post Office can make itself viable, and one of the main issues is the fact that the Government are removing provision and services from the Post Office. If POCA remains, it will enable more money to pass through the Post Office without the need for extra subsidy.

I am grateful to the hon. Lady for giving way; she is being very generous with her time. She is making an excellent speech, but she is not dealing with the motion, which clearly states that it wants to

“encourage Ministers in the Department for Work and Pensions to consider the impact on communities across the country if the Post Office card account is not renewed; and encourages all Government departments to make their services available through post offices in order to ensure that they have a viable future.”

Is the hon. Lady in favour of ignoring the tendering process: yes or no?

I have made the position clear and addressed all the issues that the hon. Gentleman has just raised. I have talked about the provision of services through the Post Office and about the impact on customers—a point to which I shall return.

I am not going to give way immediately.

A further issue concerns those who cannot open bank accounts and involves another group of people we should be considering today. Basic bank accounts do not make any money for banks, and it is becoming increasingly difficult for some people—those with poor credit histories, large debts, previous debt problems or no address, and people with certain mental health problems—to open one. In the current climate, banks do not want to take on additional risk, and the number of people in that group is actually increasing. Therefore, when the Government moved giros to direct payment and made people open basic bank accounts or Post Office card accounts, 40 per cent. of the people converting opened the latter—a figure far higher than expected. They could have chosen to open a bank account, but they did not want to or were not able to.

The hon. Lady is explaining the case very clearly. Does she agree that at a time of banking crisis, when many of our constituents are very wary of trusting banks, the one thing that they can trust is the Post Office card account and National Savings? Surely it is perverse that the one very safe area is now under threat.

The hon. Gentleman is absolutely correct, and the issue of trust is an important one. There are lots of reasons why people would choose to have a Post Office card account rather than a bank account, and one is that the post office is often an important community resource. It is a source of advice and information and a place where people meet and socialise, particularly in rural areas. Sub-postmasters play a very important role in many communities. They usually know their customers and they are trusted, as the hon. Gentleman said. I recently spoke to a pensioner in my constituency who relies completely on the postmaster in the post office where she collects her pension. She cannot remember her PIN. He knows it, and he tells her what it is every week—it is the only way that she can access her pension. Clearly, that gives rise to security issues, but it shows just how much postmasters are trusted by members of the community.

I very much agree with what the hon. Lady has been saying. Does she agree with me that the problem really is that the Government have prevented themselves from taking account in the tender process of any of the long list of things that she is rightly adducing as reasons for keeping this account with the Post Office?

The terms of the tender is an important issue and I will deal with it later. The right hon. Gentleman is right to raise those concerns.

I am not going to give way any more at the moment, because I need to make progress. A number of Members want to speak tonight.

The physical accessibility of post offices is another reason why people choose to go to a post office, rather than a bank. Even after the latest round of closures, the Post Office, uniquely, has branches in most rural and in most urban areas, so it has a much wider spread than most other providers. Those using the Post Office card account as their main source of cash are particularly likely to have mobility or health problems and no access to a car, and they are more likely to rely on public transport. It is particularly difficult for that group of people to access a bank or another outlet, particularly in rural areas, where usually there are no banks or ATMs. Help the Aged has produced research highlighting particular concerns among those in this position. They are worried that if they have to travel a long way by public transport to get hold of their money, they will have to take out larger amounts each time they travel, which will lead to security concerns while they bring the money back home on public transport. They are also concerned about having more cash at home.

Access is a question not just of distance but of access to the outlet itself. Most post offices have been physically adapted to allow disabled access. For people in the customer group we are talking about today—it includes incapacity benefit, disability living allowance and pension credit claimants—the compliance of such properties with the Disability Discrimination Act 1995 is absolutely essential so that they can access their money. The Post Office has taken this issue seriously, but what guarantees do we have that any new outlets that people are forced to use would do the same? Have the Government done a DDA impact assessment on the closing of the Post Office card account and taking it away from post offices? Have they looked at people’s access to outlets and within outlets? If, as the rumours suggest, PayPoint takes over, what consideration has been given to the accessibility of PayPoint outlets? What control would the Government have over that, given that PayPoint operates on a franchise basis? How much control would the Government have, in order to ensure that people could access their money in disability-friendly properties?

Several Members have this evening mentioned that the Government’s indecision has already proved extremely damaging to the Post Office, but the decision to give the card account replacement contract to a different operator could be deadly. The Post Office is working toward an unsubsidised post office network by 2016, but that relies on people going through their branches and using banking and benefit services, and on the Post Office card account as a transition. If the Government continue on the destructive path that they are pursuing, the Post Office will not have enough time to recover from the damage caused by the withdrawal of Government business from the Post Office over the past five years and to rebuild itself. We have the perfect opportunity to use an existing network of well-trained, well-informed, trusted staff who are in offices in almost every corner of the country to deliver meaningful improvements in terms of financial inclusion. Post offices actually want and need the custom of the people the banks are turning down, so we should be building on that, rather than destroying it.

The Post Office needs the replacement card account contract as a bridge to enable it to move to a financially viable position. In countries such as Italy and Ireland, there are examples of successful and thriving post office networks that operate as a “postbank”. There is no reason why we cannot have a thriving and successful post office network in the UK, but by pulling the rug out from underneath the Post Office’s feet at this point, the Government are almost guaranteeing that there will be no future for it.

I am very grateful to the hon. Lady for giving way, and she is making a very good case. I was hoping that she would spend a little more time talking about the impact on rural areas. If this card account is not secured, post offices in rural areas and in villages such as Minsterly, in my constituency, will definitely close and the impact on rural communities will be far worse than on urban ones.

The hon. Gentleman is absolutely correct and I hope that I have already made that point, but I am sure that there will be opportunities for others to raise it in this debate.

The hon. Lady is making a very strong case about how deadly it would be for the Post Office if it lost the card account. Does she therefore agree that there were overriding public policy reasons why the European competition regulations should have been set aside on this occasion, and the tendering process should not have proceeded?

The tendering process certainly gives rise to issues that I want to raise myself, and the hon. Lady makes an interesting point. So far as I can see, the tendering process is probably one of the least open such processes that we have had. I, among others, have been trying to get hold of the terms of the tender. I recently asked for a copy of the documentation setting out the criteria used for the basis of making a decision on the contract to be placed in the Library. The Minister replied as follows:

“The tender process for the contract for the Post Office card account successor is still under way and a decision on the outcome is yet to be made.”—[Official Report, 3 November 2008; Vol. 482, c. 9W.]

That may well be true—although some people believe that the decision has been made already. However, true or not, it does not answer my question. I asked for the documentation to be placed in the Library. All Members are aware that the decision is being looked at, but the documentation could still be made public. The Government’s evasiveness on this point raises questions about the criteria that they have laid out in the contract tender, such as how much emphasis they placed on the need for geographical spread, which links to the issue of rural communities.

My hon. Friend is right to talk about geographic spread. She mentioned earlier that PayPoint is one of the bidders. The island of Colonsay has a post office, and if people put the postcode into the PayPoint website, they are told that the nearest outlet is at Bowmore, on the island of Islay, which is 22 miles away. Rural areas will be badly hit; however, islands that have post offices but no banks or PayPoint outlets will be much harder hit if the Government do not take into account the fact that, for all these small islands, they must keep the account with the Post Office.

My hon. Friend gives another example of why we need to ensure that we know what the terms of the tender agreement are. The evasiveness that the Government are displaying in this regard is also increasing concern and suspicion among the Post Office’s customers and sub-postmasters, who are fearful of the future.

A number of questions have been asked about the legality of providing continuing state aid if the Post Office is not delivering social benefits. The processing of social benefits is one of the criteria on which applications for state aid approval are measured. If POCA 2 is delivered by somebody other than the Post Office, will the Government’s £150 million a year social network payment become illegal? If so, it would be even more devastating for the Post Office across the UK.

The Government have said one thing about the Post Office and the POCA replacement, but their actions contradict it. While DBERR says that it is trying to reorganise the network so that it is financially viable, the DWP is doing all it can to undermine a valuable piece of business that the Post Office has. The Government need to start being joined up and to stop undermining themselves. I suggest that POCA should stay in the Post Office, that the Government should make wider services available through Post Office branches and that they should put an end to the uncertainty as soon as possible to stop the rot and ensure that post offices have a viable future.

I beg to move, To leave out from “House” to the end of the Question, and to add instead thereof:

“notes the importance of the services offered by the Post Office to local communities; further notes that the Government has worked with the Post Office to make available services such as its own banking and financial services and access to high street banks’ basic accounts; further notes that the Post Office is now the largest provider of foreign exchange in the UK and amongst the largest suppliers of travel insurance, car insurance and telephone services; further notes the potential for future ID management business for the Post Office for passports, driving licences and ID cards; welcomes the commitment of the Government to provide £1.7 billion of support up to 2011 to maintain a national post office network and access to Post Office products, in contrast to no subsidy before 1997; further notes the importance of the Post Office card account in helping people to access basic banking services; welcomes the decision to offer this type of product beyond 2010; further notes that this product is currently out to tender; and believes that people should be aware of the Post Office card account product alongside other methods of payment.”.

The whole House knows how much a Liberal Democrat MP loves a “Focus” leaflet, and we have a great testament to that here this evening. I was worried at one stage that the hon. Member for Cardiff, Central (Jenny Willott) was never going to finish her speech, because she was being intervened on by so many of her colleagues—it was extraordinary. I have heard of people being mauled by a dead sheep; I was worried that she was about to be mauled by her own very supportive sheep halfway through that contribution.

We heard the typical response from the Lib Dems: the prewriting of that “Focus” leaflet, but with no proposals. We heard nothing on whether they thought that there should have been a tender, on whether they would subsidise it more or on what they thought about whether the Post Office and its future should be guaranteed, and how that should be done. In terms of policy enlightenment, we learnt very little.

If I may first set out my case, I shall then give way.

Let me start by making one central point clear: nobody in this House believes that the Post Office should be run on a purely commercial basis. If we believed that it should be, the network would consist of 4,000 post offices, rather than at least 12,000, even after the current closure programme, as has been mentioned. That figure is higher than the total of all the high street banks put together. We do not believe in a purely commercial network, because the Post Office is not a purely commercial service; it reaches parts of our community that others do not, it is used and understood by people in ways that others are not, and most of all it is a cornerstone of our local communities. George Thomson, the general secretary of the National Federation of SubPostmasters has said that for many of the elderly and disadvantaged people in our society

“the visit to the Post Office is…the highlight of their week, as they interact with the Subpostmaster, his staff and other customers.”

I can see the hon. Gentleman, who chairs the Select Committee on Business and Enterprise, twitching to intervene on me.

The Secretary of State has puzzled me. I am happy to stand corrected on this, but my understanding is that, historically, the post office network has run on a commercial basis and that the aspiration of its current management is that it should once again do so. An interim period has to be got through, but the noble aspiration is for post offices to stand on their own two feet, and I heartily support it.

I said on a purely commercial basis. Indeed, under the hon. Gentleman’s Government there was no subsidy for the Post Office, whereas our Government have spent £2 billion, and we are planning to spend a further £1.7 billion between now and 2011. There is a significant difference between the way in which we have supported the Post Office and the way in which his Government did.

Will my right hon. Friend look again at the situation that we have got ourselves into? People who are using the Post Office card account were told that it would finish in 2010, but they were not told that there would be a POCA 2. Will he put right that wrong and ensure that not only will customers be told that POCA is being replaced, but that we will encourage people to use POCA, rather than give the discouragement that we have seen previously?

I am happy to give my hon. Friend that assurance. Indeed, the hon. Member for Mid-Worcestershire (Peter Luff) wrote to me recently complaining about the POCA not being featured in our cheque conversion literature, and I am glad to tell him that we have now addressed that and that we have a new leaflet. The leaflet does exactly what my hon. Friend requests, stating that

“you might want to consider opening an account”.

It also states:

“The Post Office card account is also an option for those who want a very basic banking product.”

It makes clear in a list of accounts that that is one of the things that will be included. I am also happy to say to my hon. Friend that we will review our marketing of the POCA to ensure that exactly what he set out is achieved. We have not written to people asking them for their bank account details if they have a POCA; there has been a process in respect of cheques, but I shall return to that later.

I welcome that reply, but to back it up, will the Secretary of State look at what services can be brought into post offices for their longer-term viability and sustainability? Will he also look to set up a taskforce to ensure that we can find new services, beyond POCA 2, to ensure that the Post Office remains in its entirety and to secure its long-term viability?

Yes, I am happy to make that commitment to my hon. Friend; the process that he describes would be a helpful one. We cannot guarantee that any particular service will go to the Post Office if it required procurement, but we can say that identity cards and identity services could be a good business opportunity for the Post Office. By contrast, we know that under both the Conservatives and the Liberal Democrats the Post Office would have no ability to secure such services.

Do I correctly understand what the Secretary of State just said as a Government commitment to make up in subsidy any business loss that would come from shifting POCA to another provider? If not, the comments that he is making are simply empty, because they merely presage other post office closures.

I have no idea to which of my remarks the hon. Lady is referring. I am happy to be intervened on again, but I said nothing to imply what she describes. Indeed, I make it very clear that it would not be appropriate for me to make any comment on the procurement process and where it has reached.

As much as the Opposition would like to pretend that we can ignore the way in which the world is changing, we cannot do so. The way in which the Post Office operates and the market in which it does so are different from what happened 10 or 15 years ago; they are even different from the situation two years ago. Some 4 million fewer visits a week are made to a post office and 1 million car tax disc renewals are done online each month. [Interruption.] The Opposition can protest if they want, but these changes are happening in our society. People want to renew their tax disc outside working hours and to do so online. Are the Opposition seriously saying that we should refuse to offer online services? If that is their position, they are even more antediluvian than the hon. Member for Castle Point (Bob Spink).

I am so surprised that the Secretary of State does not appear to be listening to the noises coming from his own Back Benches on this important subject. Does he not realise that there are fewer footfalls in post offices because the Government have been removing public business from the Post Office for many years? When will he adopt a policy to return public business to the post offices?

I do not know whether the hon. Gentleman has heard of the internet, but it is having quite a big impact on retail outlets. For example, he might be aware that Tesco sells some of its products over the internet these days. The Post Office cannot be immune to these services. The question is: how do we maintain the fundamental objectives that we have for this important service, while realising that the world in which post offices operate is changing? How can we help them to modernise, as opposed to putting our head in the sand and pretending that those changes are not happening?

I need to make some progress, because many hon. Members wish to speak. The hon. Gentleman can intervene on me later.

We need to recognise that we are operating in a world where people are getting services online and in other ways, but it is also important that we do not forget that that does not apply to everyone; a large minority—one in three people—still do not have online services at home and 2 million people do not have bank accounts. As the hon. Member for Cardiff, Central said accurately, they are often the most disadvantaged and vulnerable in our society. That is exactly why we have decided to renew the Post Office card account—although at one stage she implied that we were not doing that.

The Secretary of State repeats the tired old excuse that society is changing because of the internet and all that, and so such things were happening anyway. However, they were happening slowly. The Government have hastened the process and given the post offices less time to adjust to the new world that we accept we are moving into. Why have the Government made it more difficult for the post office by speeding up the process of change and pressing people to move over to banking instead?

We are actually doing exactly the opposite. We have put in place access criteria to preserve that spread. The Committee chaired by the hon. Member for Mid-Worcestershire recommended that change. It said that the access criteria

“were a welcome step in safeguarding access to services for groups across the United Kingdom.”

If the criteria are so good—I believe that they probably are—why were they not part of the bid for this contract?

They are reflected in the minimum criteria in the contract. The exact tender document is commercial in confidence, but we have made available the Official Journal of the European Union advert and it has been put in the Library.

I know that Liberal Democrats find this hard to understand, but we have to modernise the service and get more services into the Post Office. We have invested in IT, for example, which has allowed the Post Office to have a very successful IT project, as my right hon. Friend the Member for Birkenhead (Mr. Field) said. We put £500 million into that project precisely so that the Post Office could deliver bank accounts, offer foreign currency services, expand the service that it provides and increase footfall. That strategy has had a significant effect—

The hon. Gentleman might be interested in the facts. The Post Office is now the fifth largest fixed line telephone service provider in the UK. It sells one in 50 of all car insurance policies and insures one in every 200 homes. It is the largest provider of foreign currency in the country. That is all because of the investment that we have put into the Post Office. As a result of those changes, 60 per cent. of bank accounts can be accessed in post offices, including those in both the Scottish banks mentioned by the right hon. Member for Gordon (Malcolm Bruce), who has now left his seat.

May I ask the Secretary of State a specific question about the bidding process? If PayPoint—a private company—was successful, it would not be covered by the provisions of the Welsh Language Act 1993, so would there be no Welsh language provision for those who require it?

The hon. Gentleman can ask, but I shall frustrate him and the House, because there is nothing I can properly say about the tender process. It is important that we take that decision with due process and we will make our announcement in due course.

My right hon. Friend talks about the tendering process. Will he tell the House clearly why we had to put this account out to competitive tender? Does he not accept that there are other countries in the European Union where that has not happened? Those examples might not be direct comparisons to do with the same type of contract, but they have occurred in other areas to do with public service where there is a social motive. Why do we always have to obey every little dot of the European Union and European Community competitive actions when other countries get away with it? We are left with a situation in which the Post Office might end up without the Post Office card account.

I know that my hon. Friend shares with the Opposition a lack of keenness to obey the European Union. There is a tradition of not commenting on legal advice given to the Government, and it is important that we maintain that. The Republic of Ireland is an example of a country that did not go out to tender and was taken to court by the European Commission. The case was not proven in the end, but it is not true that that example was not affected by European regulation. The important point is that we have to complete the process and to do so in good order.

My right hon. Friend has used the phrase “due process” on a number of occasions. Will he take it from me, from those of us on the Government Benches, from the Post Office and from its customers that the sooner he comes to a decision and announces it, the more it will be in his interest and that of everyone else?

I know that this is a difficult thing to say, but due process is important. It is important that we take decisions legally, and I am sure that everyone in the House would agree with that. On the subject of the timing, I can reassure Members that we will take the decision very soon—[Interruption.] The House will find out exactly when that is when we make the decision.

It is not so much that the House needs to find out. All the sub-postmasters and sub-postmistresses who have had the restructuring of their businesses taken on by the Government and who have faced the closure programme now need to know what to do with their businesses. The businesses are being closed as people have to retire. How does the new investor know what kind of business they are taking on if the Government will not make up their mind? It is an issue not just for the House, but for all those hard-pressed sub-postmistresses and sub-postmasters out in the country who want to know how to run their businesses. They need to know how soon the decision will be made. Will they have a decision before Christmas?

They will definitely have a decision way before that. The hon. Gentleman has to bear with me as the decision must be taken in due order. I cannot take a decision before all the necessary options have been completed. Indeed, the worst possible thing would be to take a decision that was then unwound. I do not want to try the patience of the House by using up the time—

The hon. Gentleman, in his normal courteous way, says that I already have, so I shall take that as a further injunction to complete my remarks and will make some progress, if he will allow me.

We renewed the Post Office card account because it provides an important service for our customers and is an important way of helping people who would otherwise be financially excluded. Many people in many communities value it. I want to make it clear that I completely understand the strength of feeling that has been expressed in the House and by the thousands of people who have written to all Members to explain how strongly they feel. I feel that I have already made it clear—at boring length—that I cannot say anything further on that point.

No, I have given way enough.

Let me pick up on the points about cheque conversion. There is a difference between cheques and POCA. As far as POCA is concerned, we have not been writing to our customers instructing them to open bank accounts. There was one mistaken letter, for which we have apologised, and the hon. Member for Mid-Worcestershire has brought another two incidents to my attention; we have corrected the problem and will be providing further training. I can reassure him that that is not the official policy of the Department; we have not written to people to ask them to transfer their POCA accounts to bank accounts. We have with cheques and we have been doing that since 2005. There is nothing new about that at all. Indeed, I have amended the leaflet in the light of the hon. Gentleman’s letter to me.

It would not be true to say that we are not opening new POCAs. We are opening 12,500 POCAs every month, precisely because we inform people about the availability of that service.

Does my right hon. Friend understand from the debate what the Liberal Democrat policy is? I intervened on the hon. Member for Cardiff, Central (Jenny Willott) and gave two figures. The first was the £450 million annual cost of sending out giros, and she said that that was wrong. She then said that it was not her party’s policy to cut Government spending by 3 per cent. The adjective she used was “inaccurate”, but the reference to 3 per cent. is a quote from the leader of her party in a speech made in the City of London on 12 May 2008. Does the Secretary of State understand the Liberal Democrats’ policy or is he as confused as I am—perhaps because they are confused?

My hon. Friend makes an excellent point. The answer will be familiar to my hon. Friends: it is the magical Liberal Democrat money tree, which produces both cuts and increases in public spending without their ever having to be squared in any way at all. He is right to say that the Liberal Democrats want to make cuts of £20 billion. If I were running a post office I would be more worried about their being in power, because they will need to find those cuts. That stands in clear contrast to our policy of increasing spending on the Post Office.

My right hon. Friend said that about 12,000 new customers every month were entering the Post Office card account system, but I am sure that he will also be aware that about 22,000 leave the system every month. Although we all want the Post Office card account contract to be awarded once again to the Post Office, he will recognise—as I hope the rest of the House does—that it is not the complete answer and that it cannot continue ad infinitum.

My hon. Friend is absolutely right. The other services that I mentioned are part of the answer; ID services could be part of the answer, as could other services that the Post Office is developing.

No, I am bringing my remarks to a close.

My hon. Friend the Member for Dumfries and Galloway (Mr. Brown) is right, too, to say that other types of financial service are part of the answer. Sixty per cent. of bank accounts are available from post offices, which in itself increases footfall, as well as increasing people’s ability to find a job because their salary can be paid into a bank account. It increases their ability to make reductions in their energy costs through the use of direct debits. As he says, there is no single solution.

The solution lies in modernising the Post Office, investing in it and having access criteria that preserve the level of service that people expect. That is exactly what Government policy is doing and I commend the amendment to the House.

I listened carefully to the Secretary of State, but my clear view is that the Government should be ashamed of their handling of local post offices. Over the past few years, I have heard time and again how little Ministers have done to find a new role for post offices at a time of change. The big fear today is that Ministers’ lack of judgment on the future of the Post Office card account will ring the death knell for yet another large swathe of the post office network.

No one on either side of the House has ever argued that the post office network should go through no change at all. It has changed under Governments of all persuasions, but for years it has felt as though Ministers have no interest in finding ways of ensuring that the local post office has a future role. The Secretary of State says, “Trust us and what we are doing”, but we have only to remember how the Government and their Ministers handled the launch of the Post Office card account in the first place. They published booklet after booklet. There may have been corrections in one—as we heard today—but over the years booklet after booklet has explained to people how payments can be made directly into their bank account, and has set out other new ways of dealing with the Department for Work and Pensions and its agencies. However, to the fury of local postmasters and postmistresses in my constituency and around the country, the Post Office card account was mentioned only as an afterthought, buried in the small print in leaflets that most reasonable people judged as completely biased against it.

There was real frustration in post offices that customers had to turn page after page to find out whether the card account was even an alternative. At the time, I read the leaflets and promotional material and it certainly looked as though the Government hoped that the Post Office card account would not take off.

The product had an unhappy childhood, but despite all the Government’s efforts large numbers of pensioners now depend on it—far more than expected. More than 4 million people use the accounts, half of them pensioners. Much more could be done with the card accounts to make them of even greater benefit to those who use them.

The Secretary of State said that a decision would be made before Christmas. Will my hon. Friend lobby the Secretary of State to ensure that the decision is not announced on the last sitting day, just before we go off on our long recess, and that it is made way before then so that we can debate it in the House?

My hon. Friend makes an extremely good point. Given the Secretary of State’s undertaking, I invite him to intervene with a commitment that he will not only announce the decision before Christmas but will make time in the House for a debate on the outcome.

It is not up to me to decide whether there should be a debate, as the hon. Gentleman knows, but I can absolutely give him the commitment that it will not be on the last day of the sitting before Christmas.

None the less, I trust that the right hon. Gentleman will use his good offices and his influence to ensure that the House has time to debate the decision.

Frankly, there should be no need for a debate on the decision. The Secretary of State has heard the views of Members on both sides of the House. We think the product is vital, and the fact that we are debating even the possibility of the Post Office losing it is a huge failing on the part of the Government, and represents a huge problem and a huge challenge for our post office network.

I am glad to hear the Secretary of State’s assurances that he is trying to do his best with marketing, but only today I received a letter from a postmaster in Liverpool who asks why the Government are still making things difficult for people who want to take out a Post Office card account. He said,

“listen to the conversation with the DWP as they try to obtain a POCA account and you will witness what I have witnessed, that the choice is simply not offered, in fact it is positively discouraged to the point of coercion.”

That was said not by a politician, but by someone who is dealing with customers in the front line right now. I applaud the Secretary of State for rewriting the brochures, but he has a much bigger problem to address.

I am rather shocked. Yes, the Government have not been enthusiastic about getting people to use POCA, but if a sub-postmaster is worth their salt, especially in my area—I cannot understand why this is not reflected in other areas—they encourage people to sign up to POCA. POCA has been successful because of sub-postmasters. I am a little shocked that that sub-postmaster does not understand the rules that they are using.

It is an issue not of sub-postmasters not understanding the rules, but of the people with whom would-be customers are dealing still not supporting the Post Office card account. That remains a major problem today.

The Secretary of State indicated that these are all isolated occurrences. There have been far too many isolated occurrences, one of which occurred in my constituency last week, when the wife of a sub-postmaster was told on the phone by the Pension Service that POCA would not be renewed after 2010. When she challenged him, because she knew exactly what the situation was, the chap said, “I wish our bosses would tell us to say that, but they don’t.”

My hon. Friend makes an important point. I have no doubt that we will hear from him later if he manages to catch the Deputy Speaker’s eye. He and his Committee have been doing important work in this area.

The long delay in the announcement of the contract makes it look pretty clear—this is one of the things that is unsettling the post office network—that Ministers have decided to move the account elsewhere but have realised that the political consequences of doing so will not be pretty, so the impression left is one of Ministers struggling behind the scenes to soften the blow.

Does the hon. Gentleman agree that we would have the worst of both worlds if the decision allowed the Post Office to run the card account in rural areas but split it with PayPoint in suburban and urban areas?

I absolutely agree. This is a Post Office card account—the Secretary of State continues to use that title—and that, to my mind, means that it should be handled in a post office. It would be a tragedy and a travesty for our post office network if that did not apply in future. It would be a huge blow if it were a hybrid or a total loss. I am certain that thousands more post offices would disappear. Even with the kind of hybrid that has been mentioned, the National Federation of SubPostmasters estimates that some 3,000 post offices will disappear if the decision goes the wrong way.

Does the hon. Gentleman agree that the Government have failed to grasp the depth of anger felt by the public and sub-postmasters about the fact that, after years of post office closures under the urban reinvention and network change proposals, it looks as though there could be a wave of new closures because of the Post Office card account? People are asking, “Where will it all end? What will be left of our post office network?”

The hon. Lady makes an important point, and I hope that Ministers will listen to the comments coming from both sides of the House. The issue does not divide on party political lines; concerns are shared across the House, and most Members do not want change. I hope that that message has reached Ministers loud and clear in the decision that they are taking. They have taken so long to take the decision. If people say that they will take a decision and then delay it month after month, it not only creates a sense of real insecurity and uncertainty in the post office network, but sends a message of a lack of commitment to the product.

Both the hon. Gentleman and I want the Post Office to deliver the card account, and does he agree that there have been some successes? I think that he said in his opening remarks that things have gone downhill. For instance, the foreign currency exchange is good for the Post Office, because it can compete on a level playing field. Does he not also agree that, to sustain the network for the future, it needs a substantial subsidy of some £1.7 billion to 2011? Will the Conservative party match that policy?

If the hon. Gentleman had been listening to my hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Business and Enterprise Committee, he would know that the Post Office’s objective is to return itself to where it was 10 years ago, which is being commercially viable. The tragedy of the way in which the Post Office card account has been handled is that the Government have actively sought to discourage people from signing up. At no point has any hon. Member on either side of the House called for a cut in the support to the Post Office, but we all want the Post Office to be in a position to restore itself to balance. That would give it longer-term security and, frankly, free it from the vagaries of decisions taken by Ministers.

The Hansard record of the debate will show that the Secretary of State said—I quote him—that far too many people still do not have a bank account. Is not the reality that the Government are trying to drive people towards the banks? Is it not the fact that the Government do not care about the Post Office card account—the only successful piece of information technology that they have managed to introduce?

For the record, I hope that the hon. Gentleman will allow me to make a correction; I did not say what the hon. Member for North Thanet (Mr. Gale) said I did. I said that 2 million people do not have bank accounts, which is why POCA is so important. That is the opposite of what he quoted me as saying.

The Secretary of State is absolutely right that the issue that we are debating today is not simply access to the Post Office card account to enable pensioners to get pension payments. The issue is also about social deprivation and the challenges that exist in many of our communities. It is a crucial issue for families in the battle against poverty. It is all very well for us; we have easy access to financial services, banking, credit, cash to pay our bills, and funding for major purchases such as a car to get to work. However, the truth is that one in 25 families still has no bank account of any kind, and 800,000 children are being brought up in households with no bank account. Some 7.8 million people in the UK are unable to access mainstream credit. That puts huge extra financial pressure on families. That is why the debate has deeper significance; it is not simply about the future of the post office network, however important that is. We are dealing with a vehicle that can address some of the biggest social issues in our society.

Some of my most vulnerable constituents have been told that they will no longer be able to receive their giros. They are unable, even with the help of their local postmaster, to access POCA. That leaves those very vulnerable people in an even more difficult position.

It is enormously disturbing that people are finding it difficult to sign up to POCA. It should be as easy as anything to sign up for it. If it is difficult to do so, it is a sign that the system is still not working.

I am in a unique situation; I went to a post office reopening today in my constituency, but we are like that in Stroud. Does the hon. Gentleman agree that one of the sad things about all that has happened to the Post Office is that it is not just central Government who have withdrawn their services from it; local government started the process. Members from across the political parties could encourage local authorities to look again at the services that they could still provide through the Post Office. Is that something that the Conservative party would like to do alongside the Labour party?

I would like Departments and local authorities to look at ways of strengthening our post office network, yes, but the significance of the debate is that it shows that there is no other step in the pipeline that would lead to such an extensive further closure programme in our post office network. That is why the debate is so important.

My hon. Friend has not yet mentioned small businesses, but those in my constituency absolutely rely on local post offices. We have lost more than half our network in the past five years. Does he agree that this is the last time at which we should want to reduce small businesses’ access to post offices?

My hon. Friend makes an important point. We know that small businesses use post offices vastly disproportionately more than any other similar services available to them. The disappearance of the local post office can be a real blow to small local businesses, particularly emerging businesses in areas of society that face significant challenges.

Of course, there is another dimension to the financial pressure on families, apart from the lack of access to banking services. Someone without access to financial services cannot access the cheapest tariffs, because they do not have the basic ability to pay through direct debit. There have been all kinds of estimates of the cost of the poverty premium to people on low incomes—the extra that they pay to access basic financial services and utilities: the figure of £1,000 a year is common. The Financial Services Authority has said that the lack of access to those services pushes family costs up by as much as £700 a year—money that could be better used for other things.

What has the Government’s response been? Instead of looking at how we can build up the Post Office, so that it can offer people extra services, the Government are taking steps that risk emasculating the one institution that has national reach, and that could help to bridge the banking gap left behind as the branch networks of the big banks have retreated in the past 10 years. When the Secretary of State talks about renewing the Post Office card account, what is in doubt is whether, in the end, it will be a “Post Office” card account. If the post office network disappears or goes into another period of great retrenchment, we will condemn entire communities to a life in the financial wilderness, when a degree of planning and thinking could have turned—could still turn—our post office network into a real force for good in many areas, growing, becoming more diverse and offering a route into banking for those who are deprived of it. That is why we have proposed an extension of the functionality of the Post Office card account—initially to help people to access a better deal on their utility bills—and it is why we think that there is enormous potential in expanding the account into other areas.

The concept of cheaper utility bills is simple. Ministers have talked a lot in the past few weeks about the fact that some of our poorest people cannot access the cheapest tariffs from electricity and gas providers. If people were able to use their Post Office card accounts to make direct debit payments for their utility bills, they would be able to access those much cheaper tariffs. It is a simple idea at a time of high energy bills, and I wish that Ministers would seize on it and turn it into a reality. The Post Office card account and the post office network could do so much more to help breach the barriers to financial services in so many of our deprived communities.

The Government have, step by step, brought us to what I think Members from all parts believe to be a sorry position. We know the constraints on the Secretary of State, and he cannot tell us exactly what is happening. It has been a theme of the process: we were not allowed to know what was in the tender documents, and we are not allowed to know who is bidding. There is no reason, however, why we cannot know, from a Government who 18 months ago said that they would bring a new sense of openness to governing, at least some basics about what is going on.

I hope that the Secretary of State will take away a strong message from the House in this debate. Local post offices remain of enormous importance and enormous concern, and the future of the post office network depends significantly on the decisions that he and his colleagues will take in the next few weeks. We have heard from the Secretary of State about all the things that the Government claim to have done for our post office network, but that is not the message that I and others in the House get from people who work in the network. They all say that, step by step, the Government have removed the services that have kept their businesses going, and that, as a result, many post offices have disappeared.

The future of the Post Office card account will determine the future size of the post office network—whether or not there is another wave of closures. I do not think that we can afford to see more post offices disappear, so my message to the Secretary of State is that it is time that the Government did what was actually right.

Order. Before I call the next Member to speak, may I say to the House that a 10-minute limit on Back-Bench speeches will apply from now on? A very large number of hon. Members are seeking to catch my eye, and if they take less than their allotted time more of them will be able to speak.

It is always a great pleasure to follow the hon. Member for Epsom and Ewell (Chris Grayling) in debate. He is always charming, and he is always implausible. He tried to wring Members’ hearts by saying how many people would be forced to obtain their benefits through bank accounts if Post Office card accounts failed, which I hope they will not. I should like to remind him that in his own constituency, 89 per cent. of benefit recipients obtain them through bank accounts, and that only 9 per cent. do so through Post Office card accounts, so he is being very altruistic when he calls for the saving of Post Office card accounts.

Let us be very clear about the issue: Post Office card accounts were created by this Labour Government. The Conservatives and the Liberal Democrats try to portray the accounts as a grand old British tradition, like fox hunting or the Poor Law, but the account was created by the Labour Government in 2003 as the electronic equivalent of the benefits order book, which people used to collect their pensions. The Post Office card account is a hugely valued public service, and it was created by this Labour Government.

Nationally, 4.5 million people have Post Office card accounts, and in my constituency, 8,110 people collect their benefits through them. The accounts offer a valuable service, and I want them to continue; throughout this controversy, my whole objective has been to persuade whomever is necessary that they should continue. Of course, the account costs money. It is quite expensive compared with other services, but so are other initiatives created by the Labour Government: Jobcentre Plus offices, Sure Start and the new deal are all expensive, but who today would disband any of them on the ground that they cost a lot of money? The answer, I suppose, is the Conservatives and Liberal Democrats, as they opposed their creation in the first place. However, the Labour party believes in creating public services for those who most need them, and the Post Office card account is a public service for those who most need it.

Hon. Members for rural constituencies often talk about post offices as community centres, and I respect that. I am sure that those hon. Members are right, but their point applies in the inner city as well.

Is my right hon. Friend aware that some rural post offices carry out as few as 14 transactions a week? That means that each transaction is subsidised to the tune of £18.

I am grateful to my hon. Friend for that information, but nevertheless I respect what is said by hon. Members from both sides with rural constituencies when they point out that rural post offices are community centres. But post offices are also community centres in inner-city areas, such as my constituency of Manchester, Gorton. The Post Office card account keeps small post offices going; it represents £27 billion worth of transactions every year. That is important. The account provides custom for other post office facilities; people go in to collect their benefit and decide to make another transaction. The account also provides custom for local convenience shops. Pensioners and others on benefit in my constituency go to the post office for their benefit and spend some of it in the local shops for their household or personal needs.

As I have made clear to my right hon. Friend the Secretary of State, my constituents believe that it is essential that the Post Office card account should continue. Of course, we recognise that the Government have to conform to the European Union procurement rules; whatever else the hon. Member for Cardiff, Central (Jenny Willott) said, she, a representative of the Eurofanatic party, did not tell the Government to ignore EU procurement rules. The Government are not a totally free agent, so I understand why my right hon. Friend has not been able to announce a decision. However, the Liberal Democrats did not mention the European Union rules because they are totally opportunistic. They probably did not know that there were Post Office card accounts until the National Federation of SubPostmasters started organising postcards that alerted them to the fact that here was a little opportunistic horse on which they could ride. That is what the Liberal Democrats look for, the whole time—“What is the opportunity? What is the grievance? Let’s get on board. It doesn’t matter what we thought before or what we say next time. At the moment, this could be a vote winner.”

No doubt the hon. Member for Manchester, Withington (Mr. Leech) will be circulating “Focus” leaflets in his part of Manchester, so I am interested that he has not even bothered to turn up for this debate. We shall make that clear in Manchester when crocodile tears are wept about the Post Office card account. The Liberal Democrat MP who got his seat on a bogus scare about the closure of the cancer hospital cannot even be bothered to turn up and speak up for his constituents on the Post Office card accounts, as I—a loyal Labour Back Bencher—am doing. [Interruption.] There are all kinds of brands of loyalty. At the end of this debate I will vote with my Government, as I always do, because the last thing in the world that I will ever do is vote with the Liberal Democrats on an opportunistic motion that they do not even believe in themselves.

I am thoroughly enjoying my right hon. Friend’s contribution. I could not agree more that we should not be walking through the Lobby joining opportunistic bandwagon-hoppers like the Liberal Democrats. Does he accept that the Post Office card account is so extremely popular with my constituents, as with his, partly because it is part of the Post Office, not PayPoint or any other organisation?

I agree with my hon. Friend. Twenty-nine per cent. of my constituents who collect benefits collect them through the Post Office card account. It is a very valuable service for the people who send me to Parliament, and I want it to continue for their sake and for the Post Office’s sake.

It is unconscionable that the Post Office card account should go from the Post Office; in a sense, it is like a backstop. Does the right hon. Gentleman agree that in many communities—particularly, speaking as an urban Member, inner-city communities—we should think of these post offices as an outreach: a fantastic resource through which we could find many other ways of getting to people in difficulty instead of seeing them, as the Government do, as a problem because there are too many of them?

I entirely agree with the right hon. Gentleman. What we have is a public resource going right back to Rowland Hill in 1840. These days, there are very few institutions that are greatly respected by ordinary people—obviously the national health service is one of them, but the Post Office is certainly another. The words “Post Office” and “Royal Mail” really mean something to people. That is one of the reasons why it is so essential that it remains a publicly owned service. I hope that the Government will look for other ways of using these centres to provide public services for our constituents—those of the right hon. Gentleman in the area that he represents and mine in the area that I represent.

As I say, no force on earth will get me to walk through a Division Lobby with the Liberal Democrats on a motion tabled by those cynical opportunists. However, the fact that I will not vote with them does not mean that I do not expect something from my Government. What I expect from my Government, recognising that they cannot make the announcement this evening and have to abide by the European rules, is a firm decision, as soon as it is possible for them to make it, to continue with the Post Office card account. I have been in correspondence with my right hon. Friend the Secretary of State and with my right hon. Friend the Prime Minister, who sent me an encouraging, but of course not conclusive letter. I say to my right hon. Friend the Secretary of State: come up with what we want, James, and you will be an even bigger hero than you are now.

I intend to speak primarily as Chairman of the Business and Enterprise Committee, which this morning produced a report on this very subject. We published it because we were so concerned about the extraordinary delay in reaching a decision that was originally trumpeted as coming in early 2008, then hinted at before the summer recess, and now here we are in the middle of November still with no decision. I commend the report to the House. I am grateful to the hon. Member for Chorley (Mr. Hoyle) for waving a copy.

However, I also want to speak as a constituency Member of Parliament, because it is from our constituents that we understand the importance of this issue. An 84-year-old man from Droitwich rang my office this morning to say how worried he was about the future of the Post Office card account. He explained that he and his elderly friends find it increasingly difficult to sort out their affairs because they can no longer speak to anyone to in order do it. He said that they find all these “touch machines”—his words—for statements of accounts and so on very confusing, and that even parking the car and using ticket machines is worrying. He said how important the post office was to him and his friends because, as the National Federation of SubPostmasters pointed out in its submission, they get advice there on how to do these things. That personal touch is what the card account brings to elderly, disabled, worried, confused or deprived people.

I shall speak as a Select Committee Chairman, but I want to make one brief partisan comment first. I thought that the Liberal Democrats’ motion was extremely good, and I discovered that that was because the hon. Member for Chorley drafted it. They have copied his early-day motion word for word and comma for comma, as he said. That explains the excellence of the drafting, which I commend to the House, and I invite the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) to vote for it in view of its origins, which are honourable indeed.

I was a little surprised and disappointed by the Government’s amendment in two respects. First, touching on an issue we have already debated, it trumpets the fact that there was no subsidy before 1997. A word in the Secretary of State’s ear: that is the wrong attack. Royal Mail Group is in trouble because the Conservative Government probably took too much money out of it, denying it the investment it needed, because it was making so much money. It did not need subsidy. I strongly advise the Secretary of State not to repeat the line about no subsidy before 1997. If he wants to attack my party, there is a better way of doing it. Subsidy is not a particularly good thing to trumpet anyhow because the Post Office does not want to be subsidised; it wants to be commercially viable again and it has a plan to work towards that. That is really important.

On an even more partisan note, I would like to deal with this idea that the card account can be replaced with the

“potential for future ID management business for the Post Office”.

So we replace a much-loved card account used every week by pensioners, through which they receive money, with an ID card that they do not want, which they replace perhaps once every 10 years, and for which they have to pay for the privilege. I find bewildering and surprising the idea that ID management in some sense replaces the Post Office card account. I shall vote with pleasure for the Liberal Democrat motion, knowing its origins, and with pleasure against the Government’s amendment because it is so outrageously wrong.

We are talking a lot about the future of the post office network and the potential for up to 3,000 closures. That potential certainly exists, but this debate is all about the 4 million vulnerable people who choose to use the Post Office card account. As we say in paragraph 12 of our report:

“the POCA caters for precisely the people who do not want to, or cannot, use conventional bank accounts: in the very nature of things, they are disproportionately likely to be poor or elderly.”

They actually want the Post Office card account as a separate pot of money. Some of them have bank accounts, but they want that separate pot, too, because it helps them to manage their affairs. I sometimes think that the Department for Work and Pensions has a slightly patronising attitude of, “We know better than you how you should run your financial affairs.” Actually, 4 million people still choose to run them this way, in the face of massive incentives not to have a Post Office card account, and those wishes deserve to be respected. As we say in our report:

“Their needs should be paramount”

as the Government reach their decision.

I would like to highlight the question of state aid, which is a thorny question for the Government. The state aid permission for subsidising the network was given on five specific grounds, and as the hon. Member for Cardiff, Central (Jenny Willott) said, at least two of these depend directly or indirectly on the continuation of the card account:

“the processing of social benefit and tax payments”


“universal access to basic cash and banking facilities and Government savings instruments, especially for rural customers and those on social benefits”.

As we say in our report:

“The Government must consider the implication of the state aid decision”.

If the Post Office does not get the card account, the Government could also lose the ability to subsidise it. That will be necessary until the post office network makes money once again, as I believe it can under its new and very good leadership.

As I said in my intervention on the Secretary of State, the Committee had some reservations about the access criteria, but broadly speaking we endorse them in the current circumstances. What a shame they were not spelt out in the tender documentation in the original advertisement in the Official Journal of the European Union. The journal entry contained an important phrase. It said that the ATMs and personal teller outlets should be “located throughout the UK”. It is an important phrase that the Secretary of State needs to note carefully. I believe that it gives him the opportunity to make the right decision on the future of the card account.

There are two criteria that the Government need to bear in mind relating to that remark about the distribution throughout the UK. In paragraph 13 of our report, we say:

“A tender which offered far more teller outlets than the 10,000 specified,”—

the advert specified 10,000—

“but could do so only in urban or relatively densely populated areas would not, in our view, meet the needs of POCA users.”

It is important to understand that. Paragraph 15 states:

“Moreover, the new service will have to provide reliable access to cash for those using the card account. No tender should be accepted if it cannot demonstrate that it can meet this need, at the branch most convenient for users.”

That is important.

Paragraph 14 makes the point that, under the LINK network, the nearest free ATM, apart from that in a post office, can often be many miles away. If that post office goes, it will be difficult in rural areas to get free access to cash.

I am grateful to the hon. Gentleman—my hon. Friend for these purposes—who is a valuable member of the Committee, even though he was not with us last week; I believe that he had other business in Glenrothes. However, he makes an important point, which I would like to have made, if I had time. Our report is short, but I cannot read it out in 10 minutes, even at the speed at which I normally speak.

Only the Post Office offers guaranteed access to cash. The ATM network cannot be guaranteed, because many of those machines are located in post offices that might close if they do not get the Post Office card account business. Only the Post Office has the cash and transit operation to take the cash to the post offices so that it is there when pensioners, whose most basic financial inclusion right is having access to cash, want it on a Monday morning. There is no guarantee that any other provider could deliver the cash at the moment that it is needed. In our view, that is a crucial criterion.

The problem appears difficult for the Secretary of State to resolve, but I do not believe that it is. I am pleased that he remains in his place—it is typically courteous of him to be here, listening to the debate, rather than leaving after making his contribution, and I greatly appreciate that. There is a solution. The contract has been advertised on the basis of the most economically advantageous tender. That is important, because it is not a simple question of cost. Even if one bidder offers a cheaper option than another, the Secretary of State has the right to choose the one that will give the best overall result. As the report states:

“This allows the Government to take a wide range of criteria into consideration. It must do so, to ensure that easy and reliable access to cash and access to benefits remains possible for those who currently use the Post Office Card Account.”

We had an exchange about access criteria during the Secretary of State’s remarks. Those criteria should underpin his judgment. Anything that falls short of them is, according to the Government’s judgment, inadequate and wrong.

We conclude our report by saying:

“There is very little time for the Secretary of State to come to a decision, but when he does so he must take the needs of POCA users, and of the community as a whole, fully into account.”

It would be strange, when this country is in a recession and many thousands of small businesses face a difficult and challenging time, for the Government, who claim that they support small businesses—they did so in the amendment to the previous motion—to make a decision that directly threatened the future of at least 3,000 businesses.

I do not understand the reason, but the Department for Work and Pensions and its predecessor have never liked the post office network. Those of us who were Members of Parliament between 1992 and 1997 remember that the Conservative Government played with the same idea and speculated about ending payments through post offices. There was a huge outcry from those of us who then sat on the Government Benches and the Government quickly retreated, realising the error of their ways. Clearly, civil servants in the then Department of Social Security kept the idea in the back of a drawer, brought it out and offered it to a new set of Ministers, who willingly and unthinkingly embraced it. They were wrong to do so. The civil servants in the Department have something against the network. It is the job of Ministers to say “No. There is something immensely important and valuable here that we mustn’t allow the country to lose.”

I therefore say to the Secretary of State: fight the prejudice and enable the Post Office, which has fine new leadership, strong commercial ambitions and a genuine prospect of making a go of it again in the harsh new environment in which we live, to succeed. Please help the Post Office do that—do not get the decision wrong.

I welcome the opportunity to speak in this debate. The motion that the Liberal Democrats tabled is a carbon copy of the early-day motion that I tabled on 9 July. I am only sorry that naked opportunists did not have the decency to tell me that they intended to copy my early-day motion. That is the least that should have happened.

Two overriding concerns motivated me to table the early-day motion on 9 July: first, the future viability of the post office network and, secondly, the future of the Post Office card account. Those two issues were at the forefront of my mind. I must tell my right hon. Friend the Secretary of State that there is no way that the majority of hon. Members support any body other than the Post Office delivering POCA 2. I cannot speak strongly enough in favour of POCA 2 coming through the post offices. Indeed, the decision is such a no-brainer that we should not even consider anybody else distributing POCA 2. There is no way we will accept anything other than the Post Office.

I say that to make it clear where we stand now and where we will still stand when the issue comes back to us. I know that my right hon. Friend will get that message and that he has taken it on board. We have all sent letters to the Prime Minister to ensure that our voices are heard as Back Benchers and, more importantly, that our constituents, whom we represent and who are the users of the Post Office, have their voices heard loud and clear. That is the point that I want to make this evening.

This debate is about our concern and using our best efforts. We have to ensure that pensioners and people on benefits have that choice. We have had that reassurance this evening, and I was pleased to hear that from the Secretary of State who is listening. He is willing to ensure that people know that POCA is available and can use it. I am pleased to hear that, because it is very important that we do not strangle the system or turn off the oxygen to POCA.

POCA is important because the Post Office is so dependent on that business. Whether the figure is 2,000, 4,000 or whatever, as many as 80 per cent. of post office counters throughout the UK could close without POCA 2. That is what we are talking about. It is why 2010 is so important, and why I am pleased that my right hon. Friend has said that he will advertise POCA.

It was key to get something from the Secretary of State this evening—he said that he would look to set up a taskforce, and that is important. A taskforce is needed to find the extra work for the Post Office—real work and real alternatives, because however strongly I or the rest of us in the House might feel about POCA, it is short term. POCA is not the future of the Post Office. That is where we are failing.

We are talking about a short stay of execution—death by a thousand cuts eventually in the post office network. The problem is that as more people retire, the older generation that uses POCA is dying off and the new people coming into the system use their bank accounts. They do not go near a post office. We have to find an alternative, so that people will go back into the post offices. We have to find the work and bring it back into the post offices.

I am grateful to the hon. Gentleman for giving way, as he gives me the opportunity to pay tribute to his excellent work on the Committee on which we both serve and which I chair. Does he accept that Post Office Ltd has a plan to do precisely what he describes, but that POCA needs another five years to enable it to work? If Post Office Ltd gets those five years, it can do exactly what he says and move on. That is what we need to work towards.

The hon. Gentleman is the Chair of our Committee, so how could I disagree with him? That is what I am saying: it is important that we introduce POCA 2 now, so that we have another two, three, four or however many years after 2010. However, we cannot rely on that to save the Post Office. That is why we have to come up with alternatives and go through other Departments to see what other work we can bring into the Post Office. That work must be sustainable and long term.

I believe in the network. I believe in Royal Mail and the Post Office. I also believe in it being publicly owned, unlike the Opposition, who on the one hand say, “We want to privatise the Post Office,” and on the other say, “We want to save the post offices.” Surely they cannot indefinitely put so much taxpayers’ money into a private company. There is something wrong with their argument this evening. What we need to do is look for that real alternative.

I believe that there is such an alternative. We have invested and saved Northern Rock. We know that a true community bank operating throughout the country is lacking. That is a system that we could use, by introducing a community bank that would offer all the services to the people who cannot access them unless they go through the internet or are willing to travel to the nearest town. We will replace the banks that have been lost throughout the towns and villages in this country. We now have a great opportunity to do just that. We can sit down, look to the future and find the right formula for introducing a community bank, because that is what is lacking. It is also lacking for businesses. Why should the few remaining milkmen, for example, have to bank their money in the town, when they should be able to bank at the post office? There are many small businesses that could use a Post Office bank, and this proposal is about putting such a bank in place and giving people a real assurance of the future.

I also want to tell the BBC, which is quick to tell us that it wants more money for the TV licence, that I want to get my TV licence from the post office. What right does the BBC have to take that ability away from us? That was an absolute disgrace, and a complete shambles. It is willing to take taxpayers’ money, yet it is not willing to support taxpayers’ business through the Post Office. Those are wrongs that we can put right. They are the things that can really begin to save the post offices. Yes, we can do so much.

Will I be supporting the Liberal Democrats tonight? Will I heck as like! This is the cheek with which they operate. They really have not given us an alternative, and they will never do so, because they are not going to be in government. What they have not told us tonight is that their motion is a copy of my early-day motion, which aimed to ensure that the Government were getting the message. That message was: rethink, look again and deliver. Supporting the Liberal Democrats tonight will not save anything; far from it. I have achieved more by saying this tonight from these Benches than they have done. We have already reached agreement on a taskforce and on the advertisement of POCA. We have made great strides tonight, and that is because we are willing to fight for the future of the Post Office. If people are serious about voting to save the Post Office, they should not follow the Liberals into the Lobby tonight. If they are serious, they should back the Government, who are willing to listen.

I give the House the assurance that I will continue to fight for the Post Office and for the future of Royal Mail, because I believe in them. I believe in the work that we have done on the Business and Enterprise Committee, and I believe that what we did under the Department of Trade and Industry was right. We have got it right, and what we need now is for the Government to listen. I believe that they can do that, and I am with the hon. Member for Mid-Worcestershire (Peter Luff) when he says that there is only one alternative: it is the Post Office and it is Royal Mail. I say to the Government: please listen, and please deliver. Let us back the Government tonight.

It is a pleasure to follow the impassioned plea made by the hon. Member for Chorley (Mr. Hoyle). I enjoyed his speech, as I often do, although I cannot understand his logic, which reflects the Government’s lack of joined-up thinking and their contradictions over this whole issue. It illustrates their inconsistency, accompanied by a real lack of leadership and will. We have seen service after service withdrawn from the post office network over the past few years, and the services that remain—on which the post offices rely absolutely—are not advertised. The hon. Gentleman made that point in his speech.

The Government underestimate the public’s anger and sheer exasperation at the way in which they have handled the post office network in recent years. They also underestimate the exasperation of the people who are running our post offices—the sub-postmasters. My constituency has suffered over the past few years, as has every other area in the country. In 2004, we lost four post offices, and in 2008 we lost another three. None was reprieved, although we have a rather surreal situation at Bramhope in that the Post Office now says it will sit down with the local parish councillors to talk about whether a local consortium might be able to open a post office, even though it has let the closures go ahead. That is another case of an extraordinary lack of consistency and joined-up thinking.

The hon. Gentleman and I support the great game of rugby league, and we also support and believe in the Post Office. Does he not agree that he should not be proposing to privatise the Post Office, because that is not the future? This illustrates his inconsistency. He wants to support Post Office Counters but, at the same time, he wants to privatise Royal Mail. Does he not agree that that will not work?

The hon. Gentleman and I agree on many things, and I am sure that we both felt real hurt over England’s woeful performances in the rugby league world cup. I am sure that we both agree that England will improve hugely in the semi-final at the weekend. However, he does not actually know what Liberal Democrat policy is on this issue—[Interruption.] Let me make it very clear, so that he and others can understand it: our policy is simply to inject a large amount of private capital into Royal Mail and properly support it, and to leave the post offices and let the network continue. [Interruption.] It is what is called the proposal for enabling the network to continue. Nothing has been proposed by the Conservatives, and the Government have eroded the network over recent years. I will take no lectures from Labour Members.

Never mind the voices of politicians chuntering from sedentary positions; let me allow the voice of those who run our post offices to be heard properly in the debate. I was approached by Sandra Jarvis, sub-postmaster of Ireland Wood post office in my constituency. She said that the Post Office card account was very important to her business, adding:

“Withdrawal of the Card Account from the Post Office network, will mean that thousands of people nationwide will have to draw their monies from where? High Street Banks (that’s if they qualify to open bank accounts)? Paypoint outlets, supermarkets?”

She went on to say:

“The Government have chiselled away at products serviced at the Post Office over the years, with the loss of many transactions: TV Licences, DVLA Motor Vehicle Licensing… and savings stamps, to name a few.

Cessation of the Card Account at the Post Office will have the knock on effect of us losing utility payments also… Gas, Electric, Water, Rent and Poll Tax payments. Many Pensioners /Unemployed pay their weekly bills upon receipt of their monies from us, which equates to several thousand pounds per week.”

That will hit them, she says, and

“will hit my business badly.”

She asked:

“Where do the customers go if the Card Account is taken from us? How do they get there?”

Those are questions that the Government simply have not addressed.

Is not the question “Where will people go?” particularly relevant to the most rural and isolated communities in the country? As for access to supermarkets and other shops, for many of those communities the last shop has gone as a result of the recent closure programme. People cannot gain access to benefits through shops because they have all gone, and there is no public transport. What is my hon. Friend’s solution?

I entirely agree, and I pay tribute to what my hon. Friend has done in regard to rural issues in his community. Let me give another example of the lack of joined-up thinking. I think we would all agree that the Sustainable Communities Bill was an excellent idea, but the Government’s action is eroding precisely what it aims to do. Sandra Jarvis also asked:

“Is this the objective of the Government, in order to save on the subsidy it pays out to the Post Office?”

I shall restrict my comments in order to allow others to speak, but let me say a little about the most vulnerable members of society. I refer to older people, disabled people, and people who find it hard to access services: people with learning difficulties and people with mental health issues. Those people were marginalised in the so-called network change programme. The Post Office spin doctors came up with that extraordinary phrase to describe what was, in fact, a closure programme. How very new Labour! Now the same people have been marginalised by the confused process involving the Post Office card account. The issues relating to access have been glossed over again.

Has there been any assessment by the Department of the impact that its action will have on the lives of people who need to obtain the many benefits and services that they may need? There has not, and that is, quite simply, a scandal. Figures from Age Concern reveal that 76 per cent. of older people fear that they will lose essential services if there are more closures, 73 per cent. fear that they will not be able to access similar services in the local area, and 88 per cent. would have to make special travel arrangements to reach alternative services.

A pensioner in my constituency to whom I spoke on Friday, Mr. Wilf McCombe of Bramhope, simply does not understand why the Government will not allow the Post Office to continue its card account. He said that one of the wonderful things about the account—let us concentrate on the positives—was that pensioners could go anywhere in the country to pick up their pensions from the post office. That is very useful when he is away on holiday or visiting relatives. He also not only made the point that people feel that through POCA they can access services in post offices they know and trust, but asked where the machines will be sited if the contract goes elsewhere. They will be sited in places that older and vulnerable people do not necessarily know or feel comfortable accessing, and they will probably simply not want to do so. Awarding POCA outside the Post Office will therefore be a blow from a business point of view—apart from the clear absurdity of doing that when it is supposed to be called the Post Office card account, as several Members have pointed out.

We know there is a particular problem for older people and the most vulnerable. We have heard about the issues for rural areas and deprived urban areas, but there are pockets of people everywhere who will find that the problems of access mean that they might not leave their homes. As Sandra Jarvis said:

“The Card Account holders at my office are Pensioners and the Unemployed, and for many of them it is the Social centre to come to the Post Office (and in the case of Pensioners perhaps the only time in the week that they get to leave their homes and speak to someone)”.

That is not being taken into account.

My hon. Friend has talked about rural areas and about deprived areas. I represent a convergence zone area that receives funding from Europe, because Ceredigion is both rural and deprived. Does my hon. Friend agree that the problems to which he alludes are exacerbated in areas such as my constituency?

That is true but, equally, what about areas such as Otley, north of the river? It is not necessarily a deprived area, yet the wonderful work done by Otley Action for Older People will be undermined by the recent closure of Newall post office. People in that area will simply not be able to access the services they need. The simple fact is that if the Post Office loses this tender, that will leave huge numbers of older people both financially and socially excluded.

The Government have not faced up to the reality that if they do not follow through and ensure that the post office network is the recipient of POCA, that will sound the last post for a genuinely national post office network, as 3,000 more post offices have been predicted to go, which would leave about 8,500. That is simply not a sustainable amount, so the post office network will not be able to continue.

I shall conclude by specifically addressing my friend, the hon. Member for Chorley, by saying that although he does not feel he should vote with our party this evening, the reality is that this is the last opportunity this House has to send a clear message about POCA. Labour Members are all too happy to march in local protests against post office closures, but they have the chance this evening to put their money where their mouth is and to march into the Lobby with Members from across the Opposition Benches to send the clearest possible message we can from this Chamber that POCA must be retained with the Post Office, as the consequences of not doing so are grave.

As chair of the all-party group on post offices, I want to say that there has been considerable all-party support on this issue over a period of time, and it is sad that, although there is a huge amount of agreement on it in all parts of House, we all have to start playing a bit of party politics when it comes to the vote—although I suppose that that is what this place is like.

I say to my hon. Friend the Member for Chorley (Mr. Hoyle) that imitation is the sincerest form of flattery, so he should not be too upset that the wording is precisely what we all signed up to. I also want to say that the report by the Business and Enterprise Committee that came out this morning and the previous reports produced under the chairmanship of the hon. Member for Mid-Worcestershire (Peter Luff) have been very good indeed, not just on this issue, but on all the issues. Of course, my hon. Friend the Member for Chorley is also a member of that Committee, so I am praising him, too, there. The National Federation of SubPostmasters is very concerned about this issue, and tomorrow afternoon it will be contributing at an emergency meeting of the all-party group, so Members might want to come along to that.

No one listening to this debate will understand how we as a Government and a country can have spent the period from March, when the tender process closed, until now with all this uncertainty and lack of transparency regarding the contract tender. That seems amazing in this day and age. I know that there are rules governing the various aspects of tendering, but there must have been a lot more that we collectively could have been told. I still do not understand why we needed to tender the contract, and I will not accept that we needed to.

Does my hon. Friend share my puzzlement at the fact that in 2003, when we introduced POCA, as far as I am aware—I may be wrong and I stand to be corrected—we did not tender it then?

I agree with my hon. Friend, but I expect that somebody somewhere will say that some new European regulation—I am sure that we in this Chamber did not vote for it—came through at some stage saying that we must do this. The Secretary of State mentioned the Republic of Ireland. Yes, its Government were taken to court, but the decision was unproven, so they got away with it, if we want to put it like that; I would say that they stuck up for their citizens, which is what our Government should be doing. It is time that we stood up to some of the ludicrous rulings and directives that come from the European Union. Instead of making people feel that the Union is helping them, such measures make them feel that all the Union cares about is a bureaucracy at Brussels that is telling people in this country how to run their lives. However, I do not want to get diverted into that.

My hon. Friend is of course aware that the Government recently set aside the competition regulations in relation to HBOS and Lloyds TSB. Given the importance of the post office network to the whole country, does she agree that this is a matter of overwhelming social significance and an overriding public policy reason why the competition regulations should be set aside, and that we should not have entered into this tendering process?

I absolutely agree with my hon. Friend, and I still have not had a proper answer to that question; perhaps the Minister will return to it in summing up.

I may be wrong, but I suspect that discussions are going on between Departments about this issue. Clearly, there has not been a unified view. We will obviously get a unified view at the end of the process, but it should come very quickly indeed, and I hope that it will be in line with what the vast majority of Members have said tonight that they want to see happen. As everyone has said, winning the POCA contract will not be a solution to the many future challenges that the post office network will face. However, it is absolutely crucial because it will provide the extra breathing space that will allow all the extra work that needs to be done to bring in extra services, including the various new services. Some are ready, but a lot more work needs to be done on others.

We will therefore need time, and if the POCA 2 contract does not go to the Post Office, we all know that that will be the end of at least 3,000 post offices, not just in rural areas but in areas such as mine. I and my local community worked very hard to save a sub-post office in Lambeth walk from closure under the recent changes. It was such a vital thing to save that everybody put in a huge amount of work to make sure that that happened. There is absolutely no doubt: if that post office does not have the card account, it will close. I cannot understand how any common-sense Government or politician could not want to do everything that they could to keep the contract with the Post Office.

I remind those who go on about bank accounts that although some of our older people perhaps now have bank accounts, they still want their Post Office card account. Many pensioners in my constituency would not dream of having a bank account. The POCA and the cash that they get out is very much part of their budgeting process—they know that they are getting the money at a particular time on a particular day, they know how they are going to spend it and they know that they will get it again the following week. No bank account will give them that feeling that they have their albeit limited cash; they want to have access to that cash on their terms.

I know that many hon. Members from all parts of the House want to speak, so I shall merely add that the Government should not go around saying that the only way in which we will save the post offices—this is almost being used as a blackmail—is through identity cards. I am determined to do everything I can to prevent ID cards from being introduced in this country. Even if they were the only way to save the Post Office, I would not support them. It is a pity that reference is made to them in the Government amendment.

The Government should not have tendered in the first place, but when they did so, they should have ensured that all the parts associated with the tendering showed that this was a public service, that it had a social benefit and that it did all the things that my hon. Friends have mentioned tonight. Let us hope that tonight’s debate will be the last time that we have to debate this and that the Government see the sense of what we are saying—I do not care how they do it. The country—not just politicians—will not forgive any Government who allow this service of value to the Post Office to be taken away from it. We have to keep the POCA with the Post Office.

Perhaps I should declare an interest, because my sister runs a sub-post office in the village of Eglwysbach, where she also has a small shop.

I pay tribute to my hon. Friend the Member for Angus (Mr. Weir), who has done a lot of hard work on the Select Committee on Business and Enterprise. I fully endorse everything that the Committee said in the report that it published today and also what the hon. Member for Vauxhall (Kate Hoey) had to say. It just goes to show that there is all-party support on this matter. I speak for Plaid Cymru and the Scottish National party, and for members of the Labour, Conservative and Liberal parties—we are all agreed on this matter. There is a huge amount of feeling on it, and for good reason: the Post Office is a brand that we have all trusted and that we all know to be honest and forthright, and we need to maintain it at all costs.

As has been said, hon. Members have bank accounts and can make choices, but others cannot do so. For example, there are 4,480 Post Office card accounts in my constituency, 8,000 in Clwyd, South—in north Wales—7,500 in Caernarfon and 8,140 in Ynys Môn. Those are big figures for small rural constituencies. It has been pointed out that losing the POCA would be a disaster for rural areas. My home village of Llanuwchllyn near Bala—the name will be a challenge for some—has one shop, which is a sub-post office. It will be lost and we will lose the only outlet in our village. There is a social side to this. Some of us have cars, but others do not and they will have to rely on relatively expensive public transport to travel five miles to the nearest town just to get the basics of life. That is unfair and we can reverse that situation. The Post Office needs some breathing space to enable it to do this work—we need this card account to remain where it is. I, for one, cannot understand what possible benefit will ensue if it is sent to a private concern.

Does the hon. Gentleman agree that, in a sense, we are trying to save the Government from themselves? The access criteria will guarantee only 7,500 post offices, but on 24 January 2007, when the then Secretary of State for Trade and Industry, now the Chancellor of the Exchequer, came before our Committee, he said that

“if you do not have about 12,000-odd post offices you will not get the national network that we need”.

We are trying to save the Government and ensure that they get what they say they want.

That is absolutely right. The Chairman of the Select Committee knows everything about this subject—perhaps not everything, but he knows a lot about it, and more than I do.

The other point that was made earlier related to the effect on other local businesses, and we need to consider that telling fact. We have bandied a lot of figures around this evening, but it is crucial that we maintain and develop this network for the future. We have seen double standards on this issue—Cabinet Ministers are voting for the closure programme but are then protesting vocally in their own constituencies. I will not call that anything stronger than double standards—there are other words, but I would probably be ruled out of order if I used them. If POCA 2 is not awarded to the Post Office, I believe that the situation will get quite near to being hypocritical. I hope that we will not see that act of betrayal towards those hard-working men and women who run the sub-post offices—often for long hours and little return. Yes, they are economic enterprises, but they also offer an important social service.

I asked the Secretary of State earlier about the access criteria and the tendering process. The point that I made about the Welsh Language Act 1993 was simply that the Act would cover the public delivery of a public service. If a private concern were to deliver the service, it would not be covered. The tens of thousands of people in Wales who would wish to access services in the medium of Welsh, as they do currently, will undoubtedly be denied. There will be no legitimate expectation that the organisation running POCA 2 should deliver that service. That is extremely important. If the Welsh language is undermined, there will be huge repercussions, not just in this place but in the National Assembly and elsewhere. Acts of Parliament in this place have been made to secure the future of the Welsh Language Act. This move will undermine it, and it is wrong.

There has been a huge amount of agreement on both sides of the Chamber this evening. I hope that Ministers will listen, as we have all put aside our political badges. We are all concerned about the future of our network. In those circumstances, I hope that we can have a positive announcement shortly to put many people out of what appears to be their misery as they worry about the future.

There is a glint of light in this debate, through the smoke and mirrors, from those on the Government Front Bench. They seem to have moved from hostility to uncertainty, and surely that is good as far as the card account is concerned. The right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), with his customary disingenuousness, suggested that the card account had been introduced by Labour along the lines of the national health service—as a miracle cure. May I remind the House that Labour brought the account forward with the greatest reluctance, because it was compelled to do so by the pressure in this House and in the country?

As soon as the account was introduced, a series of bullying and inaccurate letters were sent to anyone who dared to apply for one, telling them to do something else. Of course, if that did not work, that letter would be followed up with a telephone call. I know that, because I have the letters and because my wife received the telephone calls. However, there was still massive take-up. Some 4 million took out the card accounts. Even this year—it might have been a clerical error, but it was an extraordinarily consistent clerical error—another letter went out, once again telling people that the card account was going to stop and that they should make alternative arrangements.

Despite all that, in the borough of Stockport, 18,000 people are on the card account—5,000 in my constituency. I want to tell the Minister and the Secretary of State that the nine post offices that they have left me with get, between them, about £30,000 a year of income from their handling of those accounts. That is equivalent to 50 per cent. of their business rate. If the Secretary of State takes that away from them, he will be putting a 50 per cent. hike on their business rate. They will go down. Whatever might be said about a move from hostility to uncertainty, that uncertainty is itself no help.

The Secretary of State quoted from a letter that he had received from Mr. Thomson of the National Federation of SubPostmasters. However, he did not quote some of the other parts of that letter, including the phrase

“uncertainty over the POCA is destroying subpostmasters’ confidence.”

The Government face a doubled-edged problem.

Since the card was introduced in 2003, my constituents who have card accounts have resisted every threat and blandishment to switch to private sector retail banking. During most of that time, banks were the UK’s totemic success story, yet still my constituents did not want to switch. Some could not switch because they did not have the necessary credit rating. Many are unable to switch, because of mobility or disability problems, and for some of the other reasons that have been given already. Now that banks have never been more distrusted or reviled or more in disgrace, along come the Government, telling my constituents, “Leave the safe haven of a simple public sector system based on your local post office and put your trust in a nice big bright shiny bank where you can make a small contribution to a fat cat’s big bonus”.

The other edge of the problem is the banks themselves. I shall briefly mention two cases. The first concerns a constituent who has recently had a stroke and can no longer write his signature with his right hand. He wants to cancel his account but the bank will not accept the cancellation because his signature is wrong. What sort of bank will not cancel a card because a signature is wrong? My constituent was told that he could get power of attorney. Brilliant. It is not his mind that has gone, but his handwriting.

The second story is about an elderly lady who moved to live with her family and tried to switch money from her savings account to her current account in the bank she has used for 45 years. She was refused because she has a new address, is not on the electoral roll and has no utility bills, so the bank thought she might be a money launderer.

I have to tell Ministers and the Secretary of State that it is not just that my constituents do not want the retail banking sector—the retail banking sector does not want them. It is ironic that while UK banks went broke lending billions, perhaps trillions, of pounds to sub-prime citizens of the United States of America, a United States bank—Citibank—will be moving in to pick up the sub-prime accounts of my constituents via POCA 2.

In 1999, a revolt in the House forced the Government to set up POCA. In 2006, when the Government said the account would be cancelled, a second revolt forced them to continue it. We need a third revolt to make POCA permanent. The quality of life and convenience of POCA users must be maintained. The quality of our communities must be maintained. Retaining POCA is the way to do it.

I am grateful for this short opportunity to speak in an important debate on an issue that is so long-running that a positive outcome for the postal service and postal workers seems more distant by the day. The sooner we have a conclusion to this fiasco, the better.

The context and backdrop for the debate is the Government’s long overdue decision on the Post Office card account. In 1999, there were 25 post offices in Crewe and Nantwich; we now have 11. A large swathe of the south of Crewe has no post office at all. The town of Nantwich, with a population of 12,000, now has only one post office. We need to remember that backdrop when we look at the future of the Post Office card account.

Why have the Government decided that the postal system is so unfit for purpose that they are considering trying to clip its wings even more? They claim support for the Post Office card account in their amendment, yet all the while they are encouraging customers to bank elsewhere. They seem either unwilling or unable to tell us who will run the second phase of the Post Office card account. I suspect that when they had the opportunity to make that decision in May they decided to put it off for other reasons.

The card account is only the tip of the iceberg; other services are being stealthily withdrawn from the sub-postmaster’s realm. We have heard about tax discs, and that renewal reminders do not even point out that the service is available at the post office.

In my discussions with members of the Communication Workers Union in Crewe, I have been told that confusion still remains about the Government’s policy on the Royal Mail, so this evening provides an opportunity for the Minister to clarify exactly what the Government see as the future role of the Post Office and whether the Post Office card account will be there to safeguard the future of those people. On behalf of my constituents, I therefore urge the Government to take a step back, to halt the post office closure scheme and the sorting office closure schemes, of which Crewe is a victim, and to sit down with the CWU to discuss a manageable and national strategy for the Royal Mail, rather than trying to dismantle it piecemeal. We need to review what services community hubs could offer people, rather than just taking them away, and to renew the Post Office card account to ensure that the Post Office has a safeguarded future. At the moment in Crewe and Nantwich, it really does seem that the Government are only there to take things away.

This has been a good and timely debate, and I hope it has served to make clear to the Government the strength of feeling on both sides of the House and how much all hon. Members value their post offices and the part that the Post Office card account plays in maintaining their post offices and their footfall. Indeed, even the Secretary of State made that point.

My hon. Friend the Member for Cardiff, Central (Jenny Willott) made an eloquent case in opening the debate. She was generous in taking interventions, which allowed many hon. Members who were not able to take part in the debate to make a point. She went straight to the heart of the matter: whether the Government should be allowed to kill the Post Office by slow stages or whether the Post Office should be helped to transform into a 21st century service—a point that the Secretary of State failed to address. Indeed, the highlight of his contribution appeared to be to tell us that a purely commercial post office network would consist of only 4,000 post offices. I wonder whether that is actually the DWP’s target. However, I welcome the fact that he has promised us a statement, and I hope that it will be the statement that we would all like to hear. I also hope that he will take away from the debate the strength of feeling in the House.

The hon. Member for Chorley (Mr. Hoyle) made the point in a customarily passionate and excellent intervention that we all want the card account. There is no hon. Member on either side of the House who does not want the card account and who does not want it to go to the Post Office. He made the valid, absolutely telling point that that is not because we particularly like the card account, but because our constituents tell us it is what they want and need. He and the hon. Member for Mid-Worcestershire (Peter Luff) have produced an excellent report—succinct and to the point, with very good, albeit not bold, points—that goes to the heart of the matter.

I was glad that the hon. Member for Mid-Worcestershire referred in his report to the work done by the Treasury Committee. Indeed, he quoted extensively from it. When I was serving on the Treasury Committee, we went into this in considerable depth. One of the interesting points was a question that I asked of an official on the comparison of cost between the Post Office card account and other services, and the answer was that it is an apples and pears comparison: the two costs are quite different. We should take that point on board.

The right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), whom I like to think of as a friend if not a right hon. Friend, was his usual self. He made two charges of me. First, he accused me of sending him reams of Focuses, to which I plead not guilty. I think that he knows me well enough to know that that is not my style. Secondly, he accused me of being an opportunist, and I plead guilty. I take every opportunity I can to support my constituents. I took the opportunity before POCA was announced to ask the Government to change their mind about the evisceration of post offices. I took the opportunity to support POCA when the Government did not want to introduce it, and I take the opportunity now to ask the Government to give us POCA 2.

I certainly regard the hon. Gentleman as a friend for giving way. I was accusing not him of distributing Focuses—they would get lost in his vast constituency—but the hon. Member for Manchester, Withington (Mr. Leech), who remains absent from this debate, as he has from the entire debate, as we shall make clear in Manchester.

I shall remain as free with my remarks as the right hon. Gentleman is with his.

We heard two excellent Liberal Democrat Back-Bench contributions from my hon. Friends the Members for Leeds, North-West (Greg Mulholland) and for Hazel Grove (Andrew Stunell). They made it clear why hon. Members on both sides of the House feel so passionately that Post Office card accounts should be allowed to continue for a second generation.

We want post offices not simply because we want post offices, but because they are economically valuable and provide a social good. As many Members have said, in rural parts of the world, post offices are the only place where many services are available. I will not bore the House with a recitation of the small villages in north-west Sutherland or the middle of Caithness that would have no opportunities if POCA 2 were not given to the Post Office.

There is an opportunity here for the Post Office. In all my discussions with representatives of the post offices—the sub-postmasters—they say that they want post offices to transform. They want to provide a 21st century post office that can be profitable. However, they need the breathing space to get from here to there. That is what is absolutely critical about the award of POCA 2. Indeed, sub-postmasters have very good plans to make the post office a post bank—plans that I think many Members present would support.

There is another point that we should take on board. The Department for Work and Pensions has been closing offices left, right and centre, including in my constituency. People now have to travel for three hours, in places where there is no public transport, to attend a face-to-face interview. They have grave difficulties, and I could tell many stories about that. Post offices and sub-post offices are operated by literate, numerate, intelligent people. Why not use them as the front line for the delivery of services to the citizen? Why not give allow them to help fill in forms and explain matters? For a very modest cost to the Department, there would be a massive increase in the quality of service. People would not be forced to spend many hours on the telephone to Clydebank, and would not end up with the wrong answer at the end of it all.

At the heart of this debate are the needs and desires of some of the most vulnerable in our society, including pensioners, the unbanked—financial inclusion is an important point that has been brought up—the disabled and all those on benefit. They trust their local post office to help them. “Trust” is a word that has come out in many contributions this evening. The Post Office, postmasters and postmistresses are trusted. It is that human contact that is missing, but that is so important to many people. Our constituents do not want to spend hours on a telephone, only to be given the wrong answer, or put on to another department when they finally get through.

Our constituents value and want to maintain their post offices. They do not trust banks, and they have proved to be absolutely right in that. However, they do trust the Post Office. The replacement card account contract is wanted by the customers, our constituents. It is vital to the future of the network and supported by the vast majority of Members on both sides of the House. The Government have been overseeing the systematic removal of business from the post offices, and it is time to stop. It is time to support the Post Office and allow it to adapt to the 21st century. For that, Post Office card account 2 is needed, and needed by the Post Office.

This has been a passionate debate about an extremely important issue that affects all right hon. and hon. Members, wherever we are from and whatever party or constituency we represent.

As many right hon. and hon. Members said in the debate, the post office is a treasured and essential cornerstone of local communities throughout the United Kingdom, it is trusted and understood in ways that other services are not and it is not to be treated as a purely commercial service. I assure the House that decisions about the Post Office will be taken respecting that unique situation and focusing on the importance of our post offices to the lives of the many millions of our constituents who use them every day.

Many Members have spoken this evening, and I shall endeavour to respond to their contributions as time allows, but I begin by explaining why the Government disagree with the Liberal Democrats and why I urge the House to support the Government’s amendment. First, the Liberal Democrats state that the Department for Work and Pensions has written to all Post Office card account holders informing them that the contract will end. That is not the case. We have not written to POCA holders saying that.

Secondly, the Liberals contend that we have instructed people to switch out of their Post Office card accounts. That is not the case. On the contrary, we are opening 12,500 accounts every month. We have written to customers who are paid by cheque and encouraged them to move to payment into an account, including those that can be used at a post office, for the simple reasons that it is more secure for the customer, it reduces fraud and it is more efficient. We will provide a successor to cheques—a better and safer product that will be easier for people to operate; but, there will be no compulsion on people using cheques, and there are certainly no instructions as the Liberal Democrats have suggested. As my right hon. Friend the Secretary of State made clear earlier, however, we have changed the leaflet referred to, listing the Post Office card account alongside other bank accounts that are available at Post Office branches.

The Minister says that that aspect of the Liberal Democrat motion is not true, but what is it about some staff who, whatever is said on paper, seem in telephone calls and in other ways to make it clear that they do not want people to have a Post Office card account?

My hon. Friend makes an important point—that it is right that our communications are clear, particularly from staff. Obviously, we need to take that into account.

The hon. Members for Cardiff, Central (Jenny Willott) and for Caithness, Sutherland and Easter Ross (John Thurso) made several points setting out their case, many of which my right hon. Friend the Secretary of State addressed. However, I want to take this opportunity to clarify that it was the BBC, not the Government, that decided that the contract for the licence fee should not go the Post Office.

I welcome that comment about the BBC. We all know that the BBC was wrong and that it has got to put the situation right, but is my right hon. Friend aware that we need training to ensure that people who answer the phone get across the message that the Post Office card account is open for business and that the Post Office wants to do business? We may need some extra training to ensure that people understand the message that they give out on the phone.

My hon. Friend is right to say that training is an important aspect of getting communication right.

The hon. Member for Epsom and Ewell (Chris Grayling) asked what more could be done in terms of services provided. My right hon. Friend the Secretary of State assured my hon. Friend the Member for Chorley (Mr. Hoyle) that he will set up a task group of MPs to work with the Government to identify new business opportunities for the Post Office, and continue to work with the Department for Business, Enterprise and Regulatory Reform.

My right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman), in his usual thoughtful and witty way, set out his support for the Post Office card account and sent out a search party for one of Manchester’s other Members. My right hon. Friend emphasised the account’s public service element, reminded us that a Labour Government established the account in the first place and pointed to the cynical opportunism of the Liberal Democrats.

In a speech that reflected the depth of his understanding of the issue, particularly following his Committee’s report, the hon. Member for Mid-Worcestershire (Peter Luff) made intriguing comments about better ways of attacking the Conservative party. Frankly, we have enough to go on at the moment, but we certainly look forward to more advice from the hon. Gentleman in that regard. At least he said that it was necessary to subsidise the Post Office; his party’s Front Benchers refuse to commit to that.

My hon. Friend the Member for Vauxhall (Kate Hoey) spoke of the work of the all-party group on sub-post offices and the role of sub-postmasters. The hon. Members for Hazel Grove (Andrew Stunell) and for Crewe and Nantwich (Mr. Timpson) spoke of their constituents’ concerns about access, and the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) talked about the Welsh language.

My hon. Friend the Member for Chorley spoke powerfully about the opportunism of the Liberal Democrats. He referred to the task group that the Secretary of State has agreed to set up and thanked the Secretary of State for the assurance that we will do all we can to ensure that we advertise the Post Office card account effectively. I reiterate that assurance.

The hon. Member for Leeds, North-West (Greg Mulholland) said that Labour Members did not understand Liberal Democrat policy on the matter being discussed—but who on earth does? The only thing that the Liberal Democrats have managed tonight is to make off with the early-day motion tabled by my hon. Friend the Member for Chorley, without even asking his permission.

The Post Office has been transformed since 1997 and offers far more than it ever did when the Conservatives were in power. As the Government amendment states, the Post Office is the largest provider of foreign exchange and one of the largest providers of travel insurance in the UK. It also provides car insurance, telephone services, driving licence processing and passport application services. The current Post Office card account has played a key role in helping people make the move from having their payments made by order book to using a simple electronic account. About a fifth of Department for Work and Pensions customers use the account. Every week, nearly 4 million people use the Post Office card to collect their pensions, benefits or tax credit in cash at post offices.

As the Secretary of State made clear at the start of the debate, we will make an announcement about the Post Office card account at the earliest opportunity. Our objective is clear: to maintain the Post Office’s role while facing up to change. That is the responsible thing to do.

I come back to the fundamental point made clear by the Secretary of State. The Post Office is essential as far more than a purely commercial service; it touches the lives of millions across the UK. That is why we have subsidised the Post Office by more than £2 billion since 1997 and why we have announced that we will spend another £1.7 billion until 2011. We have made the investment because the Post Office plays a valuable role in our society. This Labour Government will ensure that the Post Office continues to pay its unique role in British—

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.


That this House notes the importance of the services offered by the Post Office to local communities; further notes that the Government has worked with the Post Office to make available services such as its own banking and financial services and access to high street banks’ basic accounts; further notes that the Post Office is now the largest provider of foreign exchange in the UK and amongst the largest suppliers of travel insurance, car insurance and telephone services; further notes the potential for future ID management business for the Post Office for passports, driving licences and ID cards; welcomes the commitment of the Government to provide £1.7 billion of support up to 2011 to maintain a national post office network and access to Post Office products, in contrast to no subsidy before 1997; further notes the importance of the Post Office card account in helping people to access basic banking services; welcomes the decision to offer this type of product beyond 2010; further notes that this product is currently out to tender; and believes that people should be aware of the Post Office card account product alongside other methods of payment.