Tuesday 2 November 2010
[Martin Caton in the Chair]
Welsh Grand Committee (Scrutiny)
Motion made, and Question proposed, That the sitting be now adjourned.—(Bill Wiggin.)
On a point of order, Mr Caton, I believe that this morning we are seeing a further example of the Government’s contempt for Welsh Members and the procedures of the House. When I first sought the debate, with the support of a large number of Welsh Members, I was advised by both the Speaker’s Office and the Table Office that the subject should be dealt with by the Leader of the House. Indeed, the debate was delayed by a week specifically so that it would fall in a week when he would be responding to debates in Westminster Hall. I have not been notified that he has declined to respond to the debate and has instead put up the junior Minister at the Wales Office to reply. The Leader of the House is clearly unwilling to appear here today to defend the Secretary of State’s behaviour, even though it falls within his responsibility to do so. On a more important constitutional point, the opportunity that the Welsh Grand Committee provides for Welsh Members to debate properly major issues affecting Wales is a matter for the whole House, not just for Ministers in the Wales Office. May we please know who decided that the proper procedure should not be followed when making arrangements for the debate, and why?
I am grateful for the opportunity to open the debate, and to the large number of Welsh Members, particularly Labour Members, for attending. They include colleagues from across the geography of Wales and from every level, from the oldest Members to the newest. Perhaps in one sense we should be grateful to the Secretary of State for her steadfast refusal to agree to hold a meeting of the Welsh Grand Committee to discuss the implications of the most serious constitutional change to threaten Wales for generations, because it has made us all the more conscious of the mechanisms that allow us to defend the interests of Wales and of the Welsh people in the House of Commons.
The subject of the debate is the Welsh Grand Committee and the scrutiny of Government policy as it applies to Wales. There is clearly a deficiency in how current legislation is debated. The failure to meet to discuss the current legislation goes beyond that individual topic and touches on how Welsh issues are dealt with generally in the House. Welsh Members have fought for proper representation over many years, and as the shadow Minister said in an excellent article in The Western Mail, the balancing of the interests of minorities with a national constitution is regarded as not just important, but essential in a number of other countries, such as Germany. There ought to be a balance that is not just about simple, crude arithmetic.
Representation of constituencies in Wales will be damaged by the provisions of the Parliamentary Voting System and Constituencies Bill. It is about not only the reduction in numbers, but the fact that the reduction can be achieved only by tearing up the principle of representing communities of interest in each part of Wales and the principle of respecting the links with local authority boundaries and, above all, by tearing apart the constituencies that are currently represented by both a Member of Parliament and a Member of the National Assembly for Wales. That cannot be right.
Even worse is the lack of proper debate as the Conservatives steamroller over the interests of the people of Wales and principles of democracy. The matter should have been debated in the Welsh Grand Committee before the Bill was debated on the Floor of the House, and I remind Members on both sides of the Chamber of the battles that took place to establish the Welsh Grand Committee in the first place as a venue for debates.
I am not arguing that at all. When the National Assembly for Wales was being proposed in opposition, I actually recommended a different structure, one that would have given two Members for each Westminster constituency, elected according to the alternative vote system. That would have given 60 Members on a coterminous basis, even with the considerable reductions that the Conservatives propose, but it is only one of the principles that need to be looked at. I have already mentioned the importance of representing combinations of constituencies.
My right hon. Friend will recall that it has been some time since the Welsh Grand Committee met in Wales. Would it not have been more appropriate, because of the impact on the Assembly and the House, for those discussions to have taken place in Wales so that constituents, Assembly Members and those interested in the Assembly could have lobbied their MPs in the Welsh Grand Committee in the Principality itself?
My right hon. Friend is absolutely right. We have seen a development of such institutions in recent times. For instance, the Welsh Affairs Select Committee, under the distinguished chairmanship of my hon. Friend the Member for Aberavon (Dr Francis), has developed a way of interchanging with the Assembly. It would be right for the Welsh Grand Committee also to develop its way of representing the people of Wales and engaging with the Welsh Assembly as an excellent new institution.
I am grateful to the right hon. Gentleman for the opportunity to develop my earlier point. He says that he is not arguing that we retain the exact structure and keep the Assembly seats, as he had proposed in the past that there should be 60 Members, two for each constituency. Hence, it would seem that he argued for 30 constituencies.
No; I am afraid that the hon. Gentleman is not very good at arithmetic, even though he depends upon it as a basic principle for his argument. The National Assembly for Wales has 60 Members. Under my proposed provision, it would have had 80 Members from the start, which, because of its greater legislative powers, would have made sense. My point is that the coterminosity of boundaries for Westminster and Assembly constituencies is one of the building blocks that should be part of the way constituencies are decided upon now and in future. For example, Sully was brought into the constituency of Cardiff South and Penarth, which I represent at Westminster, for the last Assembly elections, and the same boundary change was then made for the parliamentary elections. It is not rocket science; it is quite simple to deal with that. What is important is that we have those principles of coterminosity of boundaries with the Welsh Assembly constituencies, a respect for local authority boundaries—I say that as someone whose constituency crosses those boundaries—as the ward principle is an important one, and the representation of communities.
We all represent communities of interest. I can say confidently that my Labour colleagues all feel passionate about the communities that they represent. It is a basic parliamentary principle that we refer to each other by constituency, as we are here as representatives of our constituencies. It is that connection that the current legislation is likely to destroy, and that is why it is so important that the issue be debated properly by Welsh MPs and why it should have been debated properly in the Welsh Grand Committee.
Does the right hon. Gentleman agree with me that the Welsh Grand Committee’s ability to scrutinise legislation that is made in Westminster and affects Wales will be further enhanced by the ability to call for expert evidence? An example would be evidence from the Centre for Welsh Legal Affairs, which is based in Aberystwyth. By way of declaration, I studied at Aberystwyth university and had a great time there.
I know that the hon. Gentleman, having got his degree at Aberystwyth, has an affection for Wales. I welcome his intervention in this debate, because his suggestion about the Welsh Grand Committee expanding its role to take evidence is one that should be considered—many colleagues may agree with that. The point is that the Committee, in order to consider whether it expands its functions, has to meet in the first place, but, with the current Secretary of State for Wales, there is no such inclination. Perhaps when we do get to meet, we can take on board the hon. Gentleman’s suggestion, which is a constructive one, and suggestions that others might make.
How can we be clearly represented by a Welsh Grand Committee that can be called only at the whim of a Secretary of State who does not enjoy a single Welsh vote, and a Welsh Affairs Committee that is grotesquely unrepresentative of the expressed views of the people of Wales in the last election, for which only a Conservative could be elected as Chair? Is it not right that we go back to the origins of the Welsh Grand Committee and many of the fine institutions in Wales that had their genesis in the Welsh parliamentary party, which includes every Member from Wales and will meet tomorrow? Such a system would genuinely reflect the democratic views of the people of Wales.
My hon. Friend, who is the distinguished secretary of the Welsh parliamentary committee—that shows a capacity for survival, if nothing else—makes a powerful point, and I believe that tomorrow’s debate will be an excellent one. It will involve Welsh MPs debating matters that affect Wales.
The issue of how the Welsh Grand Committee should be called would not be an issue had the Secretary of State for Wales shown respect for the wishes of Welsh MPs to have such a debate. I agree with my hon. Friend that her intransigence has called into question the current arrangements for calling the Committee. That did not need to happen—mutual respect would have been better. It was not there on this occasion, and I regret that.
I congratulate the right hon. Gentleman on securing this debate. He will be aware of the excellent report that the Welsh Affairs Committee produced, to which I was proud to be a signatory. One of the reasons why we moved with such speed was that we wanted the outcome of our report to contribute to a broader discussion, but that discussion has been denied to us. Some of us have waited during proceedings on the Floor of the House for issues such as coterminosity and the break between list and parliamentary seats to be discussed. Plaid Cymru tabled a good amendment that has never been discussed. The crux of the issue is that we have not had an opportunity for a debate. The Select Committee certainly would have welcomed such an opportunity.
I hope very much that the hon. Gentleman will have an opportunity to contribute to the debate today. He is absolutely right, and I congratulate him on putting representation of his constituents above his location on the Government Benches in those comments.
I had planned to refer to the Select Committee report, so perhaps I could just do so briefly now. It points out that the Parliamentary Voting System and Constituencies Bill that is being debated on the Floor of the House will have a greater impact on Wales than on any other nation of the UK, with a projection that Wales will lose 10 of its 40 seats—a reduction of 25%. A Committee that, as my hon. Friend the Member for Newport West (Paul Flynn) indicated, is totally unrepresentative of Wales has, nevertheless, come out with a powerful criticism of how the Government are dealing with these issues, I congratulate members of that Committee on having the independence of mind to do so.
Last night, 12 Labour Members did not have a chance to speak in the debate on the Bill, an important piece of rushed legislation. Does my right hon. Friend agree that having a Welsh Grand Committee would have enabled all Members to speak on this important issue? It is an important issue for Wales because the Vale of Glamorgan has a registration rate of only 76%, a ward in the constituency of the hon. Member for Ceredigion (Mr Williams) has the worst registration rate—56%—in Wales, and my constituency, the Vale of Clwyd, went from 49,000 registered voters to 56,000. We have lessons to learn in Wales for all of Wales and the UK.
My hon. Friend makes a powerful point. [Interruption.] Government Members would do well to listen to the points that are being made, rather than heckling from a sedentary position.
Let me deal with the point that my hon. Friend made. He referred to the failures of registration over a number of years, and I share his concerns that the Electoral Commission has failed to regulate how such things are done. As he rightly said, the Bill is based on under-registration, and it will have an effect on the representation of people in Wales.
I congratulate my right hon. Friend on securing this debate. On the point made by the hon. Member for Ceredigion (Mr Williams) about the excellent cross-party report by the Welsh Affairs Committee, is my right hon. Friend as disappointed as I am by two things? First, the report was totally ignored by the Secretary of State for Wales, and, secondly, many of the hon. Members who were on that Committee voted to curtail debate last night through the programme motion.
If the right hon. Gentleman wants to talk about embarrassment, let me tell him that I am embarrassed by the opportunistic approach of Opposition Members. I come back to the point about voter registration: if voter registration was such a priority, why did 13 years go by in which nothing happened in that respect?
It was not that nothing happened. The Electoral Commission was meant to deal with some of these issues. I was a member of the Committee on Standards in Public Life which looked at how such matters were dealt with, and which said that the commission needed to improve its act in terms of voter registration. Labour Members proudly debated the issue and pressed the Labour Government to recognise its importance, so I see no reason why we should not press the present Government on it.
Is not this part of a much wider habit that the Government are developing in respect of Wales? Some of us have been asking for a meeting with the Secretary of State to discuss the important issue of jobs at the Defence Technical College in south Wales, in the constituency of the hon. Member for Vale of Glamorgan (Alun Cairns). The Secretary of State said in June that she would be happy to meet a cross-party group of MPs but still has not met any group of people. Is it not a bit embarrassing to find that the hon. Gentleman has not bothered to speak up for jobs even in his own constituency?
In a moment. The hon. Gentleman must contain himself and let me finish at least one sentence before he seeks to intervene again. He should be fighting for the jobs in his constituency which were promised as part of the defence academy, and which would enhance the performance of our armed services and save money as well as helping the economy of south Wales. Perhaps he would like to discuss that point rather than just raising spurious points and trying to embarrass the Opposition.
Thank you, Mr Caton. Discussions that I have had with the Prime Minister, the Secretary of State for Defence and other Ministers have been reported widely in the press, but the hon. Member for Rhondda conveniently chooses to ignore that fact. I am delighted that St Athan remains the preferred option for the defence training solution, and I am shocked and saddened by the approach taken by Opposition Members in favour of a private company and cost to the taxpayer—
I shall give way in a moment. The Conservatives this morning are over-excited. I think that they are embarrassed—[Interruption.] They want to talk now, but they must listen. If the hon. Member for Vale of Glamorgan has any success in his discussions we will welcome anything that improves the situation in south Wales. However, I suspect that the Prime Minister might not be listening to the hon. Gentleman.
A moment ago, the right hon. Gentleman appeared to accept the point made by the hon. Member for Ynys Môn (Albert Owen) that my right hon. Friend the Secretary of State for Wales had ignored the report of the Welsh Affairs Committee. Having served with the right hon. Gentleman on that Committee, I know that he is a fair man. Will he accept that there is adequate time for a response to that report by my right hon. Friend, and will he also accept from me that such a response will be made?
I shall try to respond to that question fairly: my answer is no. The Select Committee has come out with a report that underlines the blindingly obvious, which is that this is all being rushed. I suggest that the hon. Gentleman look at the decisions. The summary states:
“The decision to hold a referendum on a change to the UK voting system on the same day as elections to the National Assembly of Wales might result in a number of problems for electoral administrators.”
It then goes to the heart of the matter:
“More generally, we are disappointed at the pace at which the whole package of constitutional reforms is being legislated and implemented. The provisions of the Bill will have profound consequences for the UK Parliament and for Wales in particular. We are equally disappointed that the Government has decided to timetable the Bill through the House of Commons without adequate opportunity for fuller scrutiny. We regret very much that the Secretary of State for Wales did not make allowance for a meeting of the Welsh Grand Committee so that Welsh interests in the Bill could be considered in depth.”
That consideration should have taken place before the debates on the Floor of the House, and I underline “before”.
Can my right hon. Friend help me to understand why the Secretary of State is not here this morning to respond on these issues? We are speaking a lot about her, but she is not here to say for herself why the Government are doing, or rather not doing, what they propose.
I do not think that I can. The Government are clearly embarrassed by all of this, which is why the Leader of the House has refused to be here, even though it should have been him responding to the debate today. I suspect that the Secretary of State, having taken over the subject, if you like, preferred to send her junior Minister as the fall guy. I have a great deal of sympathy for the hon. Gentleman because of the onerous burden that has been placed on his shoulders but, as I understand it, it is only the Secretary of State who decides whether there will be a Welsh Grand Committee in response, in respect for the Members in Wales. I see that my right hon. Friend the Member for Torfaen (Paul Murphy)who, like me, has held that office, is of the same view. The Secretary of State should really have been here to answer for her own decisions.
If the Secretary of State is indeed in the Cabinet meeting, will she be raising the cancellation of the Severn barrage? Will she be raising the cancellation of the Defence Aviation Repair Agency project, the cancellation of the north Wales prison, the loss of jobs in Newport or the cancellation of the electrification of the south Wales railway line?
I suspect that she will be sitting silently in the corner.
I want to make reference to a former Member of this House who argued powerfully for the establishment of a Welsh Grand Committee. There were debates over many years, going back into the 19th century, about the establishment of such a committee, and in his early days in Parliament Cledwyn Hughes, a former Secretary of State for Wales, argued powerfully in favour. Indeed, when a Welsh Grand Committee was initially established, he argued that it ought to be more powerful and not just a tepid opportunity for debate. Regarding the lack of adequate facilities for the proper discussion of Welsh affairs in the House, he said:
“Since I became a Member of this House some eight years ago, this has been one of my most frustrating experiences—and that is saying something.”—[Official Report, 13 July 1959; Vol. 609, c. 120.]
He went on to point out how the reports that the Government published would not be debated. Cledwyn Hughes represented Ynys Môn—the county where I was born—and it is ironic that the effect of the Bill will be to force Anglesey into some sort of combination with part of the mainland. That is disrespect to Môn mam Cymru.
I am grateful to my right hon. Friend for mentioning my predecessor Cledwyn Hughes, who fought in this House for not only Welsh rights, but for the fourth Welsh channel. Last week, not only were we denied a debate on the comprehensive spending review—Cledwyn would have been turning in his grave—but we had the Government just announcing that the channel was going to the BBC. Cledwyn Hughes worked with Conservative Members of Parliament over those years, and he worked in consensus. That consensus has been broken.
My hon. Friend makes a very powerful point. Cledwyn Hughes was loyal to his party and passionately loyal to Ynys Môn, but he was a man to seek to build consensus where consensus was possible. Had the Secretary of State agreed to the requests from Labour Members for a meeting of the Welsh Grand Committee to debate these issues, she would have been treated with respect. But she has not treated us with respect.
On that point, my right hon. Friend will recall that in the only Welsh Grand Committee that we have had in this Session further contempt was shown when the Government had the Chief Secretary to the Treasury there without actually going through the usual channels to advise us. That shows the total contempt that this Government have.
I congratulate the right hon. Gentleman on leading the debate into a calmer, cooler and, may I say, more constructive stream. But does he not agree that Cledwyn Hughes would not be content with just seeing the Welsh Grand Committee as it is but would wish it to evolve to meet the needs of Welsh Back Benchers? Surely the purpose of this debate is not to look at specific legislation but to consider the role of the Welsh Grand Committee and how it can be improved.
I agree with the hon. Gentleman. He makes a constructive point. I think that the passion and anger that he sees on the faces of many people in this Chamber is due to the constructive debate that he and I would wish being denied us. It has been denied us in the Welsh Grand Committee, and it has also pretty much been denied us on the Floor of the House in the rush to legislate. In the past few years, we have seen very welcome strides forward in how Wales is represented through democratic institutions. The National Assembly for Wales is a success; it will continue to develop and grow, and I am certain that it will be even more effective and successful in the future. But it is at its best when representatives in Parliament and representatives in the Assembly are working together.
I have seen the benefit of that in my constituency, and in the teamwork between Welsh Labour AMs and Welsh Labour MPs that has developed very positively over the past few years. Through the way in which we have made sense of the delegation of powers to the National Assembly for Wales—through the system of legislative competence orders and debates in the Select Committee on Welsh Affairs, as well as in the House, over the past 13 years—Parliament has remained relevant to democracy in Wales and should remain so.
In response to the hon. Member for Brecon and Radnorshire (Roger Williams), the Welsh Grand Committee should develop and take on new ways of doing things, and, perhaps, take on the suggestion about taking evidence on appropriate occasions. After all, Standing Committees now do that at the start of their proceedings. We should be developing our democratic institutions, not sidelining them.
The power in the relationship that my right hon. Friend describes between Cardiff and London and the institutions has, in part, come from the fact that it has been developing pre-legislative scrutiny—not post-hoc scrutiny. We have a Government with a questionable mandate for doing something that was not in a manifesto—a good example of why pre-legislative scrutiny is even more, not less, important.
My hon. Friend makes a powerful point with which I entirely agree. During the previous Session, Parliament looked at ways in which it could enhance its work, improve its democratic credentials and reconnect with the people. The Welsh Grand Committee is one way in which we could do so properly, if we develop it.
Should not the Secretary of State learn the lesson, which she has ignored either in pig-headedness or naivety, that the Government can, ultimately, have their way because, as Disraeli said, a majority is its own repartee, but the Opposition should be able to have their say? By denying the Welsh Grand Committee the opportunity to meet, she has undermined that fundamental principle of our constitution.
My hon. Friend is right about the fundamental point: a Government—the majority—have to show respect for the minority, even when they know that they have the numbers to win a vote on their legislation. At the end of the day, the Government will get their Bill, but they will have done so in bad temper, with ill grace and without proper respect for the minority.
I thank my right hon. Friend for giving way. The signal difference between the approach that he and his predecessors in the Wales Office took and the current one is that when controversial decisions had to be made he took them to be debated and to face challenge, and heaven knows he had enough controversial decisions on his plate. That is a signal of good government. The Secretary of State for Wales does not speak for Wales; the only people who speak for Wales now are those on the Opposition Benches.
It is our responsibility as Members of Parliament to enhance democracy, and those in power can help to do that only by listening and debating. That is the essential point. I am concerned about that, not only on this topic, although it is the burning topic before us, but on the grounds that for the next five years we need topics that affect Wales to be debated properly in regular meetings of the Welsh Grand Committee—
No, I will not give way.
We need the Committee’s performance and activity enhanced rather then diminished. That can be achieved only if the Secretary of State shows proper respect for the people of Wales and their interests, uses the mechanism of the Welsh Grand Committee to listen to the views of those who represent the people of Wales—Welsh MPs—and shows proper sensitivity to the fact that she does not represent any of the people of Wales.
I congratulate the right hon. Member for Cardiff South and Penarth (Alun Michael) on securing the debate. From its title, which related to the scrutiny of Government policy as it applies to Wales, I hoped that we would be looking at the role of the Welsh Grand Committee, and indeed at other ways that Back Benchers can express their views on Wales. We came to that topic a little later in the right hon. Gentleman’s contribution than may have been best for the debate.
I signed the early-day motion calling for a Welsh Grand Committee on the Parliamentary Voting System and Constituencies Bill. It would have been a good idea, because it would have allowed Members to express their views and engage a little more with the people of Wales. I have not been inundated with representations from constituents on this matter; I may be atypical, but that reflects my experience. In previous Parliaments we had regular Welsh Grand Committees—
That was a complicated set of statistics. The hon. Gentleman will have to allow me to accept that but not to comment on it. As far as I remember, we had regular Welsh Grand Committees in previous Parliaments, but I was never consulted on the subjects of them. I was dealt with courteously by Government Whips, who would tell me, “The Welsh Grand Committee will be on 23 May and the subject is this. Will that be all right?” On most occasions it was all right, but we were never engaged, or encouraged to put forward subjects for the Committee. I would like the support system for the Welsh Grand Committee to become more like the Backbench Business Committee. We could then have meetings of Back Benchers of all parties to put forward suggestions for subjects for the Welsh Grand Committee.
The hon. Gentleman is making an important point about the development of the Welsh Grand. Does he accept that there was some development in the previous Parliament? We had a question session at the beginning when we could speak on a wide range of topics; Back Benchers could submit questions and ask follow-up questions.
I absolutely accept what the hon. Gentleman says. I am all for developing the system if it makes it more productive and gives Back Benchers a greater role, but the fact that we have had some development does not preclude or prevent other developments in future.
I have said on the record that I was a signatory to the early-day motion, so we will leave that subject for a moment.
When the Minister sums up, will he address my suggestion that we look at how the Welsh Grand Committee system operates and encourage Back Benchers to have a greater say, not only on the frequency of Welsh Grand Committee meetings, but on the subjects? I include in that an assessment of how the question and answer sessions work, whether we need Ministers appearing at the Committee to answer questions on specific areas of Government policy and whether we call expert witnesses to help with our deliberations. Cledwyn put a very successful system in place, but it is time for it to evolve and develop to ensure that Welsh Back Benchers have real input in Government policy as it affects Wales.
This debate was called because we have come to a point of crisis for the Welsh Grand Committee. I have always found the Secretary of State to be a reasonable and courteous person, but I have no idea what has entered her head, because on this matter she has betrayed a stubbornness that I find most uncharacteristic and unwelcome. The debate is about how the Welsh Grand Committee runs itself and is organised. My experience over five years as Secretary of State for Wales on two separate occasions was that the decision to hold a Welsh Grand Committee was wholly in the hands of the Secretary of State. Therefore, the decision not to hold such a Committee lies entirely in the hands of the current Secretary of State.
There was never any question but that if there was consensus among Welsh Members of Parliament, a Welsh Grand Committee would be held. The hon. Member for Brecon and Radnorshire (Roger Williams) will remember that when I was Secretary of State, we consulted him on the subject, date and number of Welsh Grand Committees. Never once in my experience did I refuse a request or an understanding of consensus to have a Welsh Grand Committee. To my knowledge, this is the first time in its history that a Secretary of State has stubbornly refused to hold a Welsh Grand Committee to discuss important matters.
My right hon. Friend is right. I checked with one of his predecessors, the right hon. Member for Wokingham (Mr Redwood), who was happy to confirm that he would never have turned down a request for a meeting of the Welsh Grand Committee. There is now nostalgia in Wales for the right hon. Member for Wokingham. [Laughter.]
Not on my part. However, my hon. Friend makes a powerful point. Whatever the political persuasion of the Secretary of State, there was no refusal to hold a Grand Committee on an important issue. When I held office, 21 meetings of the Welsh Grand Committee were called to deal with a large number of issues, including major constitutional matters. I cannot understand for one second what entered the head of the Secretary of State when she decided not to hold a meeting of the Committee.
But there were discussions on the legislative programme—on the Queen’s Speech and its impact on the people of Wales. That would be part of the process. This decision is a grave constitutional error, which, in my view, could mean the end of the Welsh Grand Committee. If the Secretary of State continues to refuse to hold meetings requested by the majority of Welsh Members of Parliament, the institution will become moribund.
My other point concerns the reasons why the Secretary of State should hold a Welsh Grand Committee to consider the impact of the Parliamentary Voting System and Constituencies Bill on the people of Wales. First, there has been no adequate scrutiny on the Floor of the House. The Select Committee recommended that a Welsh Grand Committee be held, but when I wrote to the Secretary of State to ask her to hold such a Committee, she replied that there would be ample opportunity for discussion, particularly on clause 11. That has not happened. The Welsh Grand Committee would have provided an opportunity for all Welsh Members of Parliament to debate important issues such as the referendum, the devolution settlement, the representation of Members of Parliament in this place and the relationship with the Welsh Assembly Government and the Welsh Assembly. Those are huge and important issues that will have an impact on the people of Wales, but the Secretary of State is stubbornly refusing to call a meeting of the Committee to discuss them.
I concur entirely with my right hon. Friend. What is happening in Wales and the UK is a tectonic, momentous movement on a range of issues that particularly affect Wales, which probably has some of the highest levels of deprivation in the UK. Wales has the highest number of public sector workers in the UK, and the constitutional changes that are about to be foisted on Wales are the biggest in the UK. There will be the biggest decrease—25%—in the number of MPs. Those are momentous, tectonic movements, yet we cannot even talk about them.
Is not the biggest problem the fact that if the people of Wales see the Westminster Government treat Welsh MPs with disrespect, and if the Government believe that in the future there should be lower representation from Wales, the argument for nationalism in Wales will increase? The way that the Government are progressing gives a fillip to nationalism rather than to the Union cause.
Yes, of course. Reducing the number of Members of Parliament goes against the settlement that the people of Wales voted on in 1997. Many of us argued that devolution strengthens the Union. However, in this case Wales is being treated separately in terms of its constitutional position as a smaller country in the UK. In my view, that goes against the Unionist principle in which the Conservative party is supposed to believe. The refusal to hold a Grand Committee means that our opportunities as Members of Parliament are gravely limited when discussing a Bill that affects us all. There has been no pre-legislative scrutiny. There has been inadequate discussion on the Floor of the House, and the legislation has been rushed through. Frankly, the Bill is not about proper scrutiny but about ensuring that the Labour party does not have sufficient seats in the House of Commons.
Does my right hon. Friend agree that one of the most depressing aspects of the consideration of the Bill in the House has been the complete failure of the hon. Members for Somerton and Frome (Mr Heath) and for Forest of Dean (Mr Harper) to have any comprehension of the constitutional settlement in Wales? There has been complete silence from Welsh Front-Bench MPs in the Government. They have said nothing about the unique position of Wales in the United Kingdom and the way that the legislation threatens that link.
I was particularly unimpressed by the hon. Member for Somerton and Frome (Mr Heath) when he spoke about Wales yesterday in the House. The oddity is that had those debates taken place a year ago, the Liberal Democrats would have been the first to complain about the lack of scrutiny in the Bill and the business of having no boundary inquiries. The Liberal Democrats have long since ceased to be a party of civil liberties that deals with the rights and duties of the citizens of our country.
Yesterday evening, the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) described the Bill, and the abolition of public inquiries in particular, as a negation of democracy. That former leader of the Liberal Democrats has some principles. I am sorry that other Liberal Democrats do not.
Some of us think that the right hon. Member for Ross, Skye and Lochaber should still be the leader of the Liberal Democrats, but that is another issue.
In conclusion—this is an important debate, and others want to speak—this is a sad occasion. I hope that the Secretary of State will reflect on the wishes of the majority of Members who represent Welsh constituencies, think again, and give us an opportunity to discuss these important issues.
I wanted to contribute to the debate primarily because when I was listening to the parliamentary stages of the Bill, I heard the hon. Member for Rhondda (Chris Bryant), whom I am pleased to see in the Chamber, offer the observation that all Members of Parliament from Wales shared concerns about the legislation. I would like to put on the record that I am an enthusiastic supporter of the legislation.
We heard enough from the hon. Gentleman during the parliamentary stages of the legislation.
In Wales, we have a distorted voting system and a situation in which the Labour party, with 36% of the vote, has 65% of the seats. Anything that is done to change that voting system threatens the position of the Labour party.
I hope that the hon. Gentleman is sincere in his belief that we can reduce the number of parliamentary seats in Wales and that he will still be able to keep his seat by carving up the Liberal Democrats. Nevertheless, does he agree that it would have been good to have the opportunity to discuss the points that he raises at a meeting of the Welsh Grand Committee?
I intend to make only a brief speech and I will come to that matter, but I first wanted to put on the record my views about the legislation. The hon. Gentleman invites me to say what the impact would be on my constituency. The Electoral Reform Society has produced a report in which it speculates on what the outcome might be, and it suggests that my seat would revert to the Labour party. However, that makes no difference to my enthusiasm for the legislation. Why? Because I am a democrat. I see a situation in which my opponent, who was a very well regarded Member of the House, and over whom I had the smallest majority, had the second largest Labour vote in Wales, yet is not a Member of the House. Why? Because 25 of the 26 Labour seats in Wales have significantly smaller electorates than our electorate. We need to deal with that.
On the Welsh Grand Committee’s inability to have the opportunity to express the views of Welsh Members, one of the points I would have made in the Committee is that the concoction in the Bill means that any subsequent Government of a different political colour could take all the mechanisms in the Bill and—by the simple arithmetical change of saying that instead of 76,000 electors, we shall go to 80,000 or 100,000—gerrymander directly to their benefit under exactly the same arguments of democracy: one person, one vote, and equal votes. Does the hon. Gentleman not understand that the failure to give us the opportunity in the Welsh Grand to articulate not just the parochial dangers to our own seats but the dangers to democracy in the Bill is a signal failure of the Government?
The basis on which I look at our system in Wales is that we have a gerrymandered system. The reality is that the Boundary Commission is invited to look at the historical basis of our constituencies. That is why all those constituencies are so small and why I am an enthusiastic supporter of the change.
No, because I want to move to my second point, which is the contribution from my hon. Friend the Member for Brecon and Radnorshire (Roger Williams), who brought us back to what the debate is about. What should the Welsh Grand Committee be discussing? Here we are, having got on to discussing the legislation—[Interruption.] I shall come to that in a minute. The right hon. Member for Cardiff South and Penarth (Alun Michael) has been complaining about Government Members getting excited; Members should allow me to develop my point before we run out of time.
I certainly believe that there should be an opportunity for discussion, and there was an opportunity initially for discussion on the Floor of the House. I look across at the hon. Member for Rhondda, who was certainly not sparing in his contributions in the course of that debate. He has indicated to me, “Oh well, the Minister spoke for a long time as well,” but the reality is that those subjects were talked out. [Interruption.] Sorry, that is the reality. Therefore—[Interruption.] No, I will not give way because time is running out. [Interruption.] I have already given way three times; I am developing my argument.
I believe that there should be an opportunity for these points to be put. I am not making any criticism of my right hon. Friend the Secretary of State over the fact that she decided initially that there was an opportunity for us to discuss the matter on the Floor of the House. As things stand, however, that opportunity, for whatever reason, has been denied to us. I therefore hope that my hon. Friend the Minister will convey to the Secretary of State the fact that we are now in a changed circumstance. When she took her decision, it was on the basis that she thought that there would be an opportunity for discussion. That opportunity has been denied. [Interruption.] I think the word spoken from a sedentary position may have been unparliamentary—but there we are; we shall pass on that one.
I hope my hon. Friend the Minister will bear in mind the points I have made. I now want to draw my remarks to a conclusion.
Does the hon. Gentleman agree that the Welsh Grand Committee could have discussed not only the constitutional issues affecting Wales, but the economic issues? In his seat, 48% of workers work in the public sector. In my seat, the number is 46%. In Clwyd West, it is 45%. The Welsh Grand Committee could have discussed the impact of the sacking of 25% of those workers by the Government the hon. Gentleman supports.
There is a need for us to develop mechanisms, as my hon. Friend the Member for Brecon and Radnorshire—[Interruption.] Let me please respond to the first point. My hon. Friend has outlined that there must be mechanisms. The Government are now looking to improve our political governance, and my hon. Friend proposed an agenda that could be helpful in that regard. I say to Opposition Members that people in Wales were not impressed by the first meeting of the Welsh Grand Committee. That is the reality. If there is to be a respect agenda, it is important that although the Labour party may have 65% of the seats in Wales, it should reflect on the fact that more than a quarter of people in Wales voted for the Conservative party and more than a fifth of the people in Wales voted for the Liberal Democrat party. The claim that Members on the Opposition Benches speak for the people of Wales is flawed.
I am glad to speak under your chairmanship, Mr Caton. I congratulate my right hon. Friend the Member for Cardiff South and Penarth (Alun Michael) on securing this Adjournment debate. It was secured because, as many hon. Members have said, there was no possibility of a Welsh Grand Committee. I find that amazing, given the importance of the Government’s plans for the people we represent. It will be looked on as a great slight to the people of Wales that the Secretary of State for Wales, despite all the pleas made to her, has refused to have a sitting of the Welsh Grand Committee.
There is some kind of alternative. As some of my hon. Friends have mentioned, we are to have a meeting tomorrow of the Welsh parliamentary party. A meeting of the Welsh parliamentary party can be called when no other forum exists to discuss issues of importance to Wales. I have invited all Welsh MPs—hon. Members of all parties who hold Welsh constituencies. I understand that all the Conservatives—there are not many of them—have turned down the invitation, which I find extremely disappointing.
I am very pleased to hear that. Does anyone else want to express their intention to attend? They will be very welcome, because we shall have a proper debate on issues of Government policy as they particularly affect our constituents.
The debate on the Floor of the House last night was very truncated because of the guillotine that fell at various points, but it was obvious from the passions that were shown and expressed during that very short debate that people who represent Welsh constituents feel that they are being sold short because they have not been able to have the full discussion that we all wanted on important constitutional reforms that affect our constituencies.
Does my right hon. Friend agree that in the main Chamber, with MPs from all over the United Kingdom, the focus has to be on the principles in the Bill? There is no opportunity to cover in detail the issues that we want to discuss, which we in Wales can understand and would like to have a deeper discussion on, but with which we do not like to burden all our colleagues.
I thank my hon. Friend. She reinforces the point that I am making: people feel frustrated and sold short because they cannot express their views. Tomorrow is an opportunity for MPs of all parties to come together and express their views in the Welsh parliamentary party.
Looking around the room, we can see that 29 Welsh MPs are present. It looks as though the Lib Dems are in favour of a sitting of the Welsh Grand Committee, and although it was only implied, it looked as though the hon. Member for Cardiff North (Jonathan Evans) was in favour of a sitting of the Welsh Grand Committee. Does my right hon. Friend agree that the Secretary of State should listen to the people and representatives of Wales?
Yes, I agree. It is deplorable that the Secretary of State is not here this morning. As I remember it, Cabinet meetings usually last for about an hour, so she still has time to come to this debate. She may be listening, but I am sure that we would find time to hear her even if it was only for a very short time. If she is not able to come today, perhaps she could come tomorrow. She would receive a very warm welcome—except, of course, that she is not a Member with a Welsh constituency, so the rules of the Welsh parliamentary party, unfortunately, on this occasion will exclude her. However, I am sure that if she wants her views to be made known, she will make them known through other hon. Members, such as the hon. Member for Cardiff North (Jonathan Evans), who has shown his enthusiasm, even if he is alone, about being present at the meeting of the Welsh parliamentary party tomorrow.
It will be obvious to the people of Wales who represents their interests in this place. It will be clear at the next Welsh Assembly elections that the people of Wales will be voting for the party that most reflects their interests in this place. The Welsh Assembly feels particularly short-changed by how it has been treated by the Government, so that too will be reflected in the results of the next Welsh Assembly elections.
May I thank my right hon. Friend on her initiative on the Welsh parliamentary party meeting tomorrow? Does she agree that one of the difficulties with such a body is that it does not benefit from the services of the House? For example, I understand that there will not be a Hansard record or any of the attendant publicity that comes from a proper discussion in this place.
It is rather disappointing that the press of the country do not seem interested in this discussion. My right hon. Friend talks about what is happening—the power grab in Westminster—being clear to the people of Wales. However, it will not be clear to them, because the press are not taking an interest in educating the civic society of Wales about what is happening—a constitutional change on which it was never given the opportunity to express an opinion.
I thank my hon. Friend, who is one of my neighbours. At one time we shared a constituency, when it was Merthyr Tydfil and Aberdare in the time of Keir Hardie. However, Keir Hardie, who fought for so many rights for the people of Wales over the years, would be very aggrieved today if he saw what was happening in the House of Commons.
I draw attention to one or two things in the press today. The Archbishop of Wales has thought it necessary to make various points, criticising how benefit claimants are being portrayed by the UK Government. We all feel the same way. He said that the mark of a civilised society was the way that it cared for its worst-off members and that the UK Government
“talks about benefit frauds, as if the country is full of people who are out to milk the system.”
Some people are out to milk the system, but it is not the benefit frauds—it is the bankers and the people the Conservative party represents in this place.
The Conservatives have failed to penalise the people who put us in this financial situation. It was not the people we represent, the people of Wales who will now be affected by the cuts that the Government will put in place and the thousands of people who will lose their jobs in the public sector and, we are now told, in the private sector as well. Because of the VAT increase to 20% in January, tens of thousands of people will lose their jobs in the private sector.
Dr Morgan went on to say:
“One of the great characteristics of the mining communities was that they did care for the less fortunate—they made sure that widows and orphans had enough to eat and coal to heat their homes. They knew what it meant to be members of one society. The Big Society concept would not have been strange to them—they implemented it long before this Government thought of it.”
Archbishop Barry said all those things at St Andrew’s church in Tonypandy on Sunday evening. He was commemorating the 100th anniversary of the Tonypandy riots, which falls at the end of this week.
My right hon. Friend is absolutely right to point to the many other issues on which we should also be having Welsh Grand Committees, in particular the effect of the comprehensive spending review. Is she worried that we might have no debate in the next few months on how that affects Wales? We might have no St David’s day debate next year and, because it is a two-year Session, no debate on the effects on Wales of another Queen’s Speech or legislative reform. All that is making the voice of Wales more marginalised in the House.
I entirely agree. The fact that we are not able to debate issues of great importance to the people we represent is outrageous. That outrage was clearly expressed on the Floor of the House of Commons last night. There were many passionate speeches, in particular because people feel that a constitutional change of the kind proposed by the Government is of such momentous importance to Wales, where 25% of Members of Parliament will disappear. That is of great importance.
I do not want to anticipate what the Welsh parliamentary party will decide tomorrow, but I suspect that if the Welsh Grand Committee is not able to meet because the Secretary of State says no, the Welsh parliamentary party might decide to assume some of the Grand Committee’s functions. It might decide, as my hon. Friend the Member for Aberavon (Dr Francis) suggested to me earlier, to go on a tour of Wales, to bring to the people of Wales the very issues that we cannot discuss in this place.
There will be momentous changes in how the vast majority of the elected MPs for Wales in this place decide to take matters into their own hands. We cannot rely on the Government. We have never been able to rely on a Tory Government. The people of Wales will see once again the kind of 18-year Tory Government that they have had before. We warned them at the last election of what might happen, but we did not, unfortunately, at that point think about the Lib Dems joining the Tories, because nothing in the Lib Dem election manifesto suggested that they would ever dream of joining the Tory party. They may want to think again; they would be very welcome to join us, in particular on issues that they feel strongly about and about which their former leader again spoke so passionately last night.
The people of Wales will see this Parliament and this Government for what they are—an insult to the people of Wales. We have a Government the people of Wales have never wanted. They have never wanted that Government in the past, they do not want them in the present and they definitely do not want them in the future.
Thank you, Mr Caton, for the truncated opportunity to speak. I had a much longer speech with which I would have been happy to regale the Chamber, but perhaps I will have the opportunity tomorrow.
Evelyn Waugh asked what the point of a Conservative Government was if they did not turn the clock back. The Conservative and Liberal Democrat Government have so far shown a distinctly non-Waugh-like tendency to change everything, and as soon as possible. Since the election we have had a slew of legislation, some of it eye-catching, some humdrum. Inevitably, some of it has not been thought out properly.
Has the Welsh Grand Committee been able to debate the changes as they apply to Wales? Obviously not. The changes to the funding and status of S4C are an obvious example. They are being rushed through without consultation and without the principal parties involved being consulted properly.
For example, I received an instructive parliamentary answer on 28 October from the Department for Culture, Media and Sport. I had asked when the Welsh Assembly Government, the Welsh Minister for Heritage, S4C, the Secretary of State for Wales and the BBC had been informed of the S4C decision. The answer was that they had been informed
“in the days leading up to, or at the time of, the spending review and licence fee settlement announcements.”—[Official Report, 28 October 2010; Vol. 517, c. 413W.]
Hon. Members can decide for themselves if that is a respectful, or even effective, way of deciding the future of a key Welsh institution. The plain truth, of course, is that the S4C decision was rushed through to achieve a cost saving for the DCMS.
I will dispense with the rest of my speech, but will make a point about last night’s debate, when the hon. Member for Clwyd South (Susan Elan Jones) referred to the Encyclopaedia Britannica and its famous entry for Wales: “See England”. That quote usually draws gasps of amazement, from some quarters at least, but what is less often mentioned is that when one looks Wales up under England, there is scarcely anything there. Wales under England just disappears. Without a proper forum for debate, without a specifically Welsh means of holding the Government to account in the House on behalf of the people of Wales and without proper powers for the Welsh Assembly, Wales under England just disappears. As far as I can see, that suits the Government just fine. No wonder they are so loth to hold Welsh Grand Committee debates.
It is a delight to serve under your chairmanship, Mr Caton. We are particularly lucky that a Welsh Member and a Welshman is in the Chair. That is particularly appropriate.
I offer my warmest congratulations to my right hon. Friend the Member for Cardiff South and Penarth (Alun Michael) on securing the debate and on highlighting the twin critical issues at its heart. The debate is about balancing the rights of the minority in the House, or the Opposition party, against those of the majority, or the Government party, in scrutinising legislation as it relates to Wales. There is also the larger, far more important issue of balancing the rights of the minority country, Wales, against those of its dominant partner, England, in their peculiar and, for the moment, stable union within the UK.
Too many Members to list have spoken with enormous passion about both those critical issues. Their eloquence and passion bears great testimony to just how deep the feeling is among Opposition Members that Wales—our country—is being ill served by the coalition Government. We feel that we are being disrespected, disregarded and, today, disfranchised.
No, I would not. Throughout the debate, one of the most disconcerting things about the Government’s Front Benchers, and particularly the silence of their Welsh Front Benchers, has been the absolute failure to acknowledge that there are any legitimate questions to be asked about balancing the interests of Wales against those of England. The continued refrain has been that we are talking about balancing one seat and the votes in it against another seat and the votes in it. There is a legitimate issue there, and we have acknowledged throughout that the issue of equalisation is legitimate, but it is just as legitimate to address the issue of balancing the aggregate weight of Wales and Welsh seats against that of English seats—our Dai of 40 seats against the English Goliath of 533 seats. That is a legitimate question, and the Welsh Grand Committee should have met to consider it. The Secretary of State’s decision repeatedly to deny Welsh Members our right to discuss these critical issues is yet another example of the disrespect agenda that is the hallmark of this Government’s approach to Wales.
Under the previous Government, the then Secretary of State for Wales, my right hon. Friend the Member for Neath (Mr Hain), was anxious to hold an early meeting of the Welsh Grand Committee to discuss the Welsh Affairs Committee report on the National Assembly for Wales (Legislative Competence) (Welsh Language) Order 2009. However, as a result of the Select Committee’s intervention while I was its Chair, the Secretary of State graciously acceded to delaying the meeting. Is that not the way the present Secretary of State should behave? She should listen, as another former Secretary of State, my right hon. Friend the Member for Torfaen (Paul Murphy), said.
My hon. Friend makes an excellent point. One thing that is clear from the debate and from the history of the Welsh Grand Committee is that Labour Secretaries of State and, indeed, previous Conservative Secretaries of State have a starkly different attitude from the present Government to listening to those who represent Welsh constituencies and to calling the Welsh Grand Committee when we need to discuss matters of importance for Wales. The Committee met 21 times at the discretion of my right hon. Friend the Member for Torfaen (Paul Murphy), but it has met once in the past six months. We still do not know whether it will meet to consider the CSR, but it must.
I want to start my substantive remarks with a challenge to the Minister. I want him to defy my assertion that the Parliamentary Voting System and Constituencies Bill is having a far greater impact on Wales than on any other area of the United Kingdom. Wales is losing 25% of its constituencies versus just 6 or 7% in the rest of the UK. That impact is out of proportion. The Minister will argue that that is happening because Wales has historically smaller constituencies, but can he, unlike his hon. Friends on the Front Bench, not accept that a specific case can be made for Wales? We are not the west midlands, but a separate, distinct nation with a different set of priorities. That is what needs to be considered alongside the legitimate questions about equalisation.
Had the hon. Member for Cardiff North (Jonathan Evans), who claimed to be a democrat, given way, I would have asked him whether it was not more democratic that there was a referendum in Wales as part of the devolution settlement. That settlement said that we would retain the same number of Welsh representatives in Parliament. We are now having another referendum. Would it not have been sensible to wait until after the people of Wales had spoken in that referendum and we had seen the outcome before gerrymandering seats in Wales?
Again, I completely agree. It is an absolutely telling indictment of the Government that they did not even think about the implications of the referendum because they are hellbent on railroading the proposed changes through in an attempt to rig not only the next election, but successive elections. This is about trying to secure Tory power in perpetuity, and we need to defend against that.
As various Members have said, the Welsh Affairs Committee is a Tory-chaired Committee with a Tory majority. It concluded unanimously that the proposed changes would have an impact on not only Wales, but the UK—on our constitution and the union between Wales and England.
This is the second or third time that I have heard the point about the make-up of the Welsh Affairs Committee, but it is made up in just the same way as every other Select Committee. Will the hon. Gentleman tell me when this Administration introduced the process and structure that led to the imbalance that he talks about?
To be honest, given the way they have been behaving recently, yes, I can imagine that. That is precisely the sort of thing they might consider doing, no matter how outrageous it is. [Interruption.] No, I will not give way any more. I want to ask the Minister a further question. If he cannot deny that Wales will be affected more than other parts of the UK, is he telling his constituents that? Is he explaining to them that he is sitting idly by watching Wales burn and his constituents’ representation in Parliament be diminished? I would be intrigued to know what his constituents in Clwyd West think about that.
I would also be intrigued to know whether the Minister has told his constituents, as we have heard so often from Conservative Front Benchers, that people’s local identities and local communities, as reflected in their political representation, no longer matter. Apparently, none of that matters, and the only thing that counts is a crazy arithmetical formula for determining in a Bill how our constituencies should be organised henceforth. Is the Minister telling his constituents that that is all that matters these days and that their identities do not?
I thank the hon. Gentleman for giving way, but I just leave him with this thought. MPs have to deal with important issues, such as education and health, and we in Wales have democratic representation in the Assembly for that. There is nothing equivalent for the regions of England, so the democratic deficit will lie more in England than in Wales.
I do not accept that at all. The critical point is that in 1997 Wales voted for devolution—[Interruption.] Perhaps hon. Members will listen. It voted for devolution and not marginalisation within the affairs of the United Kingdom. Marginalisation by the back door is happening under the Bill. I am pro-devolution and in favour of further devolution for Wales, as I know many Opposition Members are; but I am not in favour of having as a corollary a reduction without reference to the Welsh people of their voice in Westminster. We did not vote for a lessening of our say here, and we still want a proper say as part of the UK. We are not getting that under the present Government.
It is a disgrace that we have not had a Welsh Grand Committee. We face a crisis of constitutional issues, but also, as The Western Mail noted this morning, a crisis because of the unfair cuts’ impact on Wales. I challenge the Minister to tell us today whether, if we cannot have a Welsh Grand Committee on the constitution, we will get one to discuss the economy and its impact on Wales.
It is a pleasure to serve under your chairmanship, Mr Caton. I commend the right hon. Member for Cardiff South and Penarth (Alun Michael) for securing this debate on the Welsh Grand Committee and its scrutiny of Government—although it has ranged considerably beyond those matters. I want to reiterate that the Government regard the scrutiny of the Executive by Parliament as a matter of paramount importance, and, furthermore, that the Welsh Grand Committee has a significant role to play in that respect. Since its foundation in 1960 it has proved itself to be an invaluable body for scrutinising issues relevant to Wales. I commend the right hon. Member for Torfaen (Paul Murphy) who did much to enhance its role.
The principal focus of the Committee is the scrutiny of the Welsh elements of Government policy—elements for which there might not otherwise be sufficient time for debate on the Floor of the House—most notably of course the Queen’s Speech and the Budget. However, the Parliamentary Voting System and Constituencies Bill has been different. Despite the myth of Welsh political martyrdom that Opposition Members have concocted today, the timetabling of the Bill has given adequate time for debate, and the Floor of the House of Commons is surely the right forum.
I have listened for the past hour and a half to histrionic rubbish from Members on the Opposition Benches and it is about time that that was redressed.
It is accepted that there is considerable political interest in the Bill throughout Wales. The focus of interest was clause 11, which deals with the number of seats, and which was debated last night—the right hon. Member for Torfaen made an important contribution—and clause 13, which decouples Assembly constituencies and parliamentary constituencies in Wales. That was not reached last night, although I waited all evening to debate it.
From the start, the Government were careful to make adequate time available for the Bill. My role, as the Wales Office Minister responsible for taking through the Wales-specific elements of the Bill, working closely with the Bill Minister—the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), who has responsibility for political and constitutional reform—is to ensure that Welsh issues are centre stage during the Bill’s passage through the House.
The Government allowed adequate time for debate on the Floor of the House. The original programme motion approved by the House on Second Reading provided for five days of debate in Committee. Subsequently an additional six hours of debate were granted to make sure that on days when there might be statements, there would be adequate time for debate.
The five days that were allowed in Committee compare more than favourably with the three days in Committee that were allowed for the Government of Wales Act 2006, which was forced through by the right hon. Member for Neath (Mr Hain). I reiterate the point that I made to the right hon. Member for Torfaen—that neither for the Government of Wales Act 1998 nor for the 2006 Act was a Welsh Grand Committee convened, because of the simple fact that the right forum for debate was the Floor of the House of Commons. There have been five days in Committee and two days on Report—36 hours of debate. [Interruption.] No, I will not give way. That has given more than adequate time. Have Opposition Members taken advantage of that time? No, with the honourable exception of the hon. Member for Rhondda (Chris Bryant), from whom we have heard at length. They have done nothing but agonise and posture over process, and the complaints about the non-convening of the Welsh Grand Committee are symptomatic of that.
The matter is nothing to do with concern about constitutional arrangements. It has everything to do with Opposition Members’ concerns about their own partisan position as Members of Parliament, because they know, as the hon. Member for Pontypridd (Owen Smith) has indicated, that there will be a reduction of 25% in the number of Welsh constituencies, because Wales is grossly over-represented in the House of Commons. The debate has everything to do with the vested interests of the Labour party, which seeks to preserve political advantage over the concerns of the nation as a whole. I see nothing wrong with a Bill that will ensure that a vote in Arfon, Ceredigion or Clwyd West is worth the same as a vote in any other part of the country. That is fairness, and the people of Wales are nothing if not a fair people. If the hon. Member for Pontypridd does not understand that, he has made a very poor start to his parliamentary career.
To reiterate, this morning there has been nothing but posturing over process, and histrionics from the Labour party, which did not want to debate the issues on the Floor of the House. Had its members wanted to debate them, and not to push to the limit the bounds of what might be, but clearly is not, regarded as filibustering, we should have had adequate time for debate. We have heard a ludicrous set of objections from the Opposition.
There will be, in due course, further Welsh Grand Committees, and they will be called for matters that are appropriate for such Committees. Issues that are appropriate for the Floor of the House will be debated there. Issues that are appropriate for Grand Committees will be debated there. The next time Opposition Members have the opportunity to debate in Grand Committee, I hope they will contain themselves and listen with more respect to speakers on the Government side. Their synthetic outrage will not resonate in Wales at all. The Bill that is going through the House will ensure fairness for people in every part of the United Kingdom. Had the Opposition sought to do so they could have debated the issues on the Floor of the House, rather than avoiding doing so.
I am grateful to be allowed to speak briefly. That was a hugely disappointing speech from an hon. Gentleman whom I previously held in high regard. In particular he several times suggested that Opposition Members had not tried to take advantage of proceedings in the Chamber. That is completely untrue. I spent a great deal of time taking part in those debates, including speaking in them.
Indeed. The Minister should be speaking for Wales, and he has become the lapdog of a Government who are a disgrace to the United Kingdom and are pursuing the Bill for entirely party political, partisan motives. We will have our say and be heard. We will speak for Wales, because we have a Government who do not.
Post Office Network
It is a pleasure to serve under your chairmanship, Mr Caton, and I thank you and Mr Speaker for giving the House the opportunity to debate this important subject. Although it may not be quite as lively as the previous debate, it nevertheless affects constituents throughout the United Kingdom. I therefore hope that many Members will be able to take part. I welcome the Minister to his seat. He is extremely welcome, and I am sure that he will consider my proposals with great sympathy.
This subject was more broadly debated in the main Chamber during the Second Reading of the Postal Services Bill last Wednesday. I start by offering my overwhelming support for the proposals put forward by the Government in their effort to protect the future of Royal Mail and the post office network. Unlike the previous Administration, which for more than 13 years chose to manage its decline, the Government have taken decisive action within their first few months.
The Secretary of State noted on Second Reading:
“The previous Government’s closure programme shut 5,000 post offices.”—[Official Report, 27 October 2010; Vol. 517, c. 352.]
Once and for all, the Bill reverses the decline of Royal Mail by tackling the £8 billion pension deficit; in terms of today’s debate, it provides a new vision for the future of the Post Office and guarantees the universal service obligation to the 28 million addresses in the UK. It is an assurance that the days of wholesale closure are over. I wholly support the Business Secretary.
I welcome the fact that the hon. Gentleman has managed to secure this debate. He is precise in what he said about the previous Government, but would he care to tell the House how many post office closures took place in the five years prior to Labour taking power in 1997?
One problem is that the Post Office has to be so heavily subsidised that it classifies as state aid, and there are difficulties with the state aid rules. If we start to lever more private finance into Royal Mail and the Post Office, those difficulties will, I hope, not pertain. That will give the Post Office greater freedom to run post offices wherever it wants.
I am grateful to my hon. Friend and constituency neighbour for that intervention. The Minister will need to use all his ingenuity to make the European rules flexible. My hon. Friend and I have taken part in many Post Office debates, and we urged the previous Government and then Post Office managers to allow greater flexibility in running post offices and to allow more private finance to allow a greater range of services—in short, to run post offices a little more as if Tesco were running them given its branch network.
I did not support my Government’s change in the closure programme, but the hon. Gentleman is right to point out that many post offices closed under both Conservative and Labour Governments. He is a reasonable man and will acknowledge that one reason for the speedy run-down of business in many post offices was the internet and new technology. Does he accept that we now have the opportunity to upgrade the post office network so that it can provide 21st-century services, something that was denied it during the previous two decades?
That is precisely the reason for today’s debate. We need a little innovative thinking and a forward-looking vision for the Post Office to ensure that the maximum amount of the network remains profitable and open to serve the communities in which post offices are placed. That is what I hope to hear from the Minister. I shall now make some progress.
The most important thing that the Secretary of State said last Wednesday was that
“the Post Office plays an essential social and economic role in our communities.”—[Official Report, 27 October 2010; Vol. 517, c. 351.]
All Members know that only too well. Probably the first person to hear about a problem in the community is the postmaster or postmistress. This is precisely why I fought so vehemently against the announced closure of 12 post offices in my constituency in 2008. The closure of the local post office can have a huge effect on the community, but none more so than those in rural parts of the country, which often have no public transport and have already witnessed a decline in such services as pubs, schools, local shops and other amenities.
I agree with the hon. Gentleman about the effect of closures on rural areas. He talks of reducing hours, but does he share my alarm that Post Office management seems to be retiring sub-postmasters in order to reduce the opening hours in rural areas of the sort that he and I represent? That is a worrying trend.
Yes. That was part of the dogma used to support the 5,000 post office closures that took place under the previous Government. We need to tailor post office services to meet the demand of the local population. That might mean more flexible hours, but not necessarily a reduction.
The post office is truly at the heart of the community, and I warmly welcome the steps that the Government are taking to keep it there and to diversify the services that it can offer. It was clear at the time of the closures two years ago that the Labour Government were insistent on pushing through their target of closing 5,000 post offices, irrespective of the viability of the individual branch. At times that meant that the will of the political masters was imposed against the better judgment of the Post Office, which knew that in certain circumstances, profitable branches were being closed. So badly thought out were some of the closures that a third of the last Prime Minister’s Cabinet actively campaigned against them.
I know that many Members will want to debate broader questions about the future of the post office network that they may believe were left unresolved after last Wednesday’s debate, but my comments are far more locally based. They centre on the prospects of a bright future for two branches that suffered during the 2008 cull. I quote the Business Secretary again. During last week’s debate he declared:
“I can today announce £1.34 billion of new funding for the Post Office over the spending review period.”
That is extremely welcome. He went on to state:
“The funding will be used to reform the current network, to change the underlying economics, and so reverse the years of decline and secure its long-term future.”—[Official Report, 27 October 2010; Vol. 517, c. 353.]
That is exactly the positive thinking that my hon. Friend the Minister and the coalition Government want to see.
That upbeat and optimistic statement will bring hope to many, including me. With that in mind, I present a ready-made solution to the Minister that I believe will fulfil all those goals. The best part about it is that it will barely cost a penny and will offer a high return. I hope that it will be music to the Minister’s ears, and will leave him singing like a postman. I come from Norfolk, Mr Caton, which has a song about singing postmen; but you will be glad to hear that I shall not sing it, even with a Norfolk accent, which I am perfectly capable of doing.
The two branches in question are in Stratton and the Beeches, both on the outskirts of the market town of Cirencester in my constituency. Both were closed in 2008, with no option for outreach. I vigorously campaigned against that decision because it was patently wrong. Although we are looking to the future this morning, I must go back to the past once more to highlight the ludicrous nature of those decisions.
I turn first to Stratton. There was a deep conviction in the community that the decision to close the branch was taken not on a financial basis, but simply because of its proximity to the Crown post office in Cirencester. The sub-postmaster, Mr John Lafford, reported that in January of that year the branch had a turnover of over £468,000, a point that I raised in this Chamber at the time. Such was the strength of Mr Lafford’s business case for that branch that he was willing to turn down a possible payment of £100,000 to keep the post office serving the community.
At the time of the closure, the branch also provided a far greater range of services than those that met purely postal needs. No other post office, including the Crown post office in Cirencester, had a lottery terminal, and Stratton was the only place where lottery cheques could be issued. That is the sort of innovative thinking and services that all post offices should be offering. By being placed in the local convenience store, the post office was truly at the heart of the community, as it is in so many towns and villages up and down the country.
The closure of the branch in the Beeches demonstrated a similar lack of forethought, given that there is a development in the vicinity that will see the building of approximately 650 new homes. That development would have provided even more trade for the current branch, if it had been kept open. However, it is when taken together that the closures become even more ridiculous, because of the collective number of people affected. Those two branches, being on the outskirts of Cirencester, took in trade from the outlying villages. When they closed, not only were 5,400 residents of Stratton and 12,000 people within a mile of the Beeches forced to use the one already unsuitable branch in Cirencester, so too were the residents of 19 villages covering 100 square miles.
The Cirencester branch was already blighted by long queues. It did not have suitable parking facilities, making it extremely difficult for people with large parcels to use the service. That is an important service for businesses, in particular in light of the growth of online marketplaces, of which there are many such businesses in Cirencester. It was also inaccessible to elderly and disabled people. The Post Office’s own figures show that over a fifth of those residents within a mile of the Stratton branch and nearly a third of those within a mile of the Beeches were retired. For many elderly people who wrote to me at the time, the concept of a walk to a bus stop—if it indeed existed—a bus ride, a walk to the post office, then a long queue before being served, in no way met the Post Office’s accessibility criteria.
Although it is true that the closure of the two branches was compliant with the accessibility criteria, it was no way in the spirit of them. It gives me no pleasure to report that my concerns, raised at the time, have been proved absolutely correct, particularly about the lack of suitability of the Cirencester Crown branch to cope with the influx of new customers. Indeed, research from Consumer Focus notes that since the 5,000 post office closures, average queue times have got significantly longer. The local impact is reflected in a letter from my constituent Valerie King, who wrote to me on 2 July this year with regard to the Cirencester Crown branch, where she noted:
“On many occasions I have been in a long queue, sometimes stretching outside....the elderly are particularly affected as there is nowhere for them to sit and the wait can be quite long. Invariably there are never more than three windows open which at busy times can be infuriating.”
The hon. Gentleman clearly sets out some of the problems that have arisen from closures. I was pleased that in my constituency we were able to get the reprieve of two post offices, one in Brecon and one in Llandrindod Wells. Some of the others have to make do with the services of a mobile facility. I do not know if it is the experience of the hon. Gentleman but, for us, it is a very second-rate service, compared with the previous service, or even when a post office is situated in a local shop, pub or other facility.
I am grateful to the hon. Gentleman for that intervention. I believe an outreach service can work very well, and I am going to go on to suggest a solution on those lines. It is variable; I have a lot of outreaches in my constituency, relating to the 12 post offices that were closed. Some work well, some not so well. It is up to all of us to try to see how we can rejig the services and the hours, working with the Post Office—I hope the Minister might be able to say something about that today—and, with a little bit more flexibility from the Post Office, to see how in the individual localities they can be made to work a little better.
The building of new houses in the Beeches has begun and, secondly, the Cirencester branch has been moved. Far from easing the problem, that has added to the car parking difficulty, forcing the parcel and other business into the hands of the courier operation and, as has already been said by the hon. Member for Ynys Môn (Albert Owen), into the internet business and so on as well.
I would like to offer my brief vision of the future to the Minister. I use “my” very loosely, as credit for this must go to Gary Kirkman, the postmaster of Bourton-on-the-Water and John Lafford, the former postmaster for Stratton, for framing the technical realities of the approach, to Councillors John Burgess and Peter Braidwood in Cirencester for their on-the-ground know-how, and to Lee Cox, the former postmaster of the Beeches. At the time of the closures, I suggested in my response to the consultation that at the very least an outreach service should be provided at Stratton and the Beeches, but that was not heeded. I have been monitoring the progress of outreach services elsewhere in the Cotswolds, as I have said. Although it is not always the full-time postal service that customers were previously used to, people work around the outreach hours, albeit sometimes reluctantly, and the postmasters are committed to an excellent service delivery.
It was in an approach to me by Gary Kirkman, the postmaster at Bourton-on-the-Water, who also provides outreach services in my constituency to the villages of Longborough, Guiting Power, Sherborne, Aldsworth, Temple Guiting and Stanway—so he has a track record of managing these outreach services—that I discovered that not only were his outreach services functioning well, but he has the capacity and will to take on more branches, such as the Beeches and Stratton. Discussions with the former postmasters John Lafford and Lee Cox in Stratton and the Beeches have proved that they continue to recognise the importance of the post office both to the community and to their businesses, and they both see a future for this proposal.
The Minister will no doubt be aware of my letter to Mr David Smith, the managing director of the Post Office, of which he received a copy, outlining these proposals. They bear repeating. It would be a hosted outreach branch with a location within Stratton and the Beeches, with the core post office in Bourton-on-the-Water acting as the service provider. Customers would be able to drop off parcels during these hours, and these would be taken to Bourton or Cirencester at the end of the day. I can report that since that letter was sent, I have received a letter dated 28 October from Mr Mark Wright, the network change development manager at the Post Office, stating:
“The post offices nationwide network is kept under constant review so that we continue to meet the changing needs of our customers whilst at the same time working to protect the financial stability of our network.”
That is beginning to show the sort of flexibility that I would expect from the Post Office. Mr Wright goes on to say that, as a consequence of my letter, he will be conducting a review of the proposals and has offered to meet me to discuss this further. Of course, I will take up that offer and use the opportunity to highlight the benefits of these proposals, and I will take the time I have left to remind the Minister of them.
The outreach services will provide a welcome alternative to the overworked, inaccessible Cirencester post office, without significantly affecting its profitability. Indeed, with the current difficulties of accessing this Crown branch people are choosing not to use it at all. As reported by Consumer Focus, Crown branches across the UK continue to lose approximately £60 million a year, almost one third of the Government’s subsidy of £180 million committed in 2011-12. Rather than taking business from the Cirencester branch, these proposals would provide scope for recovering business lost since the closure of the branches in Stratton and the Beeches. The really good news is that the proposal only has minimal variable costs which can be more than covered or reduced through alteration to the opening hours to match demand, and requires the purchase of very limited new equipment—limited to just a computer and a security box, I am informed. At a time when localism is high on the agenda, when carbon footprints and green issues are at the forefront of Government policy, this is a clear opportunity to return services to the locality where they are needed, thus saving unnecessary car journeys and reducing congestion in the town of Cirencester.
Finally, and perhaps most significantly, I believe the proposal, if seen through, would send a clear message that the post office network under this Government is not just about closure, but is about providing a service in the location and at times that people really want to use it. That in turn will help profitability, underlining the fact that outreaches could in part be the saviour of the post office network. The Secretary of State for Business, Innovation and Skills made clear last Wednesday:
“There will be no programme of closures under this Government.”—[Official Report, 27 October 2010; Vol. 517, c. 353.]
Although there may be no programme of closures, the Secretary of State and the Minister today will be aware that changes to the business environment still mean that sub-post offices are continually being closed due to non-profitability and retirement of postmasters. Although I have chosen to present the case for Stratton and the Beeches, I believe that this idea could be implemented nationwide, first, by seeing if outreach could be provided by a nearby branch when a full-time post office becomes unviable and closes. That would maintain postal services by replacing an unprofitable branch with a profitable outreach service, which in turn would strengthen the business case of the core provider.
Tackling the problem of branch closures while trying to maintain the number of post offices, through replacing a closed branch with a new business model of outreaches that would have a variable cost to meet demand, avoids the need to maintain the existing model, which has a high fixed-cost base and an uncertain viability in certain locations. Although an outreach is not a full-time post service, as I said to my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) when he intervened, it can provide all those services offered by a Crown post office, such as the purchase of bonds, foreign currency, insurance and so on, which sub-branches cannot always offer.
As the Government look to extend the range of services offered by post offices, each outreach provider could do the same. That may be of even greater importance as proposals for the Royal Mail are moved forward. With many postmasters deriving some of their income from running a sorting office for Royal Mail, if they were to lose that part of their business they would need to find a way to make up the difference. Taking on additional outreach is a simple and beneficial solution all round. I am confident that the proposals that I have for Stratton and the Beeches, by meeting demand, will be profitable for both the outreach provider and the Post Office. In addition, they would set a precedent nationwide if those conditions can be met.
Although I am sure that many right hon. and hon. Members will talk about the wider picture of the post office network today—an issue that the Minister will also want to address—I ask the Minister for his reassurance that he will use his political influence to work with the Post Office to see these innovative proposals through. Previous Ministers used their political influence incorrectly on the Post Office in 2008. He has the opportunity to use his ministerial responsibility to help to correct that wrong and to demonstrate this Government’s commitment to protecting and growing the post office network nationwide. The message that the Government need to give to the Post Office is not “closure, closure, closure” but “opportunity, opportunity, opportunity”.
I congratulate the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) on securing this important debate.
I have been debating the issue of post offices in all the time I have been in the House, and throughout that time there has been a continual decline in their number. Just before the general election of 2001, there were 1,933 post offices in Scotland. By March of this year, the figure had declined to just 1,446. In many areas of Scotland, the decline has been worse than in others.
In my own constituency of Angus, we have lost a number of post offices despite vigorous opposition to their closure. I am pleased to say that, in the last closure programme, we managed to save three post offices through local campaigns in the constituency. However, there remains a problem with many post offices, as alluded to by the hon. Member for The Cotswolds. Some are now in insufficient premises. Three of the large towns in my constituency—Forfar, Kirriemuir and Montrose—are now down to one post office that serves the entire town. Often, there are large queues at those post offices, which causes great frustration for customers.
I note that the Government have said that there will be no more closure programmes, but as the hon. Gentleman rightly said, that does not necessarily mean that there will be no more closures, because many sub-post offices are still facing financial challenges, particularly in these difficult times. I suspect that there will continue to be closures for other reasons.
I do not want to get involved in a sterile argument about who is to blame for the most post office closures—whether it was the last Government or the Tory Government before that. The truth is that post offices have been closing for a number of years, and we should look at how we move post offices forward and prevent closures in the future.
It should be borne in mind that many of the remaining sub-post offices are not stand-alone post offices but are coupled with a shop, which is often the only shop left in the local community. Indeed, I can think of only two post offices in my constituency that are not part of another business. It seems to me that in the last few years, the Post Office has deliberately gone out of its way to get rid of stand-alone post offices and get postmasters to take post offices on as part of another business, which is an interesting development to note.
The post office business itself does not provide a living for those running the business, but it is an important part of the business—the two elements cross-subsidise each other. The loss of the post office business or any other part of the business could bring the whole business down. In my view, we need to find ways of ensuring that the whole business is more viable.
I point out to the Minister the example of what has happened in Scotland. The Scottish Government have introduced a business bonus scheme that provides relief to businesses with properties in Scotland with a combined rateable value of £18,000 or less. The scheme has now been expanded, and where the cumulative rateable value of the properties of a business falls between £18,000 and £25,000, the scheme will offer some relief—up to 25%—to individual properties. As a result, all properties with a rateable value of up to £10,000 pay no business rates; those properties with a rateable value of between £10,000 and £12,000 get relief of 50%; those properties between £12,000 and £18,000 get relief of 25%; and, as I explained, if the cumulative values of the properties of a business are up to £25,000, the business can also get 25% relief on individual properties.
That scheme has been a huge boost to small businesses in constituencies such as mine, where many were struggling with the rates, which is one of small businesses’ major costs. It has obviously helped small post offices in villages and towns throughout Scotland.
In addition, the Scottish Government have launched a post office diversification fund, which has recently made awards totalling £1 million to help post offices to diversify and launch new business activities, in order to strengthen the vital role that they play in our local communities. The fund opened in July, with 49 post offices in 22 areas bidding successfully and receiving awards of up to £25,000. Examples of the diversification schemes that were approved include setting up an internet café, which the hon. Member for Ynys Môn (Albert Owen) was talking about earlier, and selling local produce. Indeed, I believe that one of the successful schemes involved setting up a post office in a fish and chip shop. That shows that those who run post offices are really thinking about how to meet the challenge of the future. The Welsh Assembly has, I believe, taken similar measures to boost post offices.
Those are concrete examples of how relatively small sums of money can be utilised—
The hon. Gentleman is making a very strong argument about rural post offices and indeed about some post offices in urban areas, including small towns. As he said, the diversification programme gives grants, but one of the drawbacks is that if a business suffers and has to close or change, it loses that grant. Is there not an issue with mutualisation? I hope that the Minister will refer to it in his winding-up speech. Businesses are uncertain about which part will be mutual and what assets actually belong to the postmaster and can be held on to by them.
The hon. Gentleman makes a good point and I was going to come on to the question of mutualisation in a moment.
As I was saying, the examples I have just given are concrete examples of how relatively small sums of money can be utilised to help to strengthen the post office network and hopefully put it on a more secure financial footing, thus helping to boost economic growth in many rural communities where there is often little other economic activity.
Indeed, Mervyn Jones, the commercial director of the National Federation of SubPostmasters, commented on the Scottish scheme:
“This announcement of successful applicants by the Scottish Government is most welcome. It means that many sub-postmasters can now invest in their businesses which will help them make their post offices more viable. The success of this scheme demonstrates the commitment that both the Scottish Government and our sub-postmasters have in maintaining this vital community service.”
I also note that, in a briefing for this debate, the National Federation of SubPostmasters says:
“Local and devolved government should offer full, automatic small business rates relief to support post offices; and provide grant funding to enable improvements in post offices and their retail businesses.”
That is what the Scottish Government and the Welsh Assembly are already doing, so perhaps the Minister should consider doing it in the parts of England that could also benefit from such schemes.
However much help is given to sub-post offices, it will not assist them if the basic business is allowed to atrophy. We had a lively debate on the Postal Services Bill last week. The Minister will not be surprised to learn that I still oppose the privatisation of Royal Mail, but I am interested in some of the possibilities for the post office network that are contained in the Bill, and I would like to explore his intentions with regard to those possibilities.
In that debate on the Postal Services Bill, I asked if there was any international equivalent of what is being proposed in the Bill, whereby there would be a division between the mail carrier and the post offices. I did not get a response to that question; indeed, it is a question that the National Federation of SubPostmasters has also asked. I wonder whether the Minister can let us know today if such an example exists that we can look at, to see how the proposed system might operate.
Clearly, that matter is of some importance because much of the work of the existing network comes through the inter-business agreement between the two companies in the network. Once again, the National Federation of SubPostmasters has raised concerns that that agreement might not be continued after privatisation. I know that the Minister’s view is that the brand identities of Royal Mail and Post Office are so interlinked that it would be in their interests to continue, but I am not so sure, once commercial profit becomes the overriding motive of the privatised delivery service, that it will necessarily continue with that link rather than considering other links as ways of delivering services. The future of post offices, particularly those outside major urban centres, remains in danger.
I turn to the point raised by the hon. Member for Ynys Môn about the mutualisation of the Post Office. I am a huge supporter of mutuals, and the idea is interesting. I would genuinely like to know more from the Minister and the coalition Government about how they propose to take it forward and how it would work. As I said earlier, all but two of the post offices in my constituency form part of another business. In other areas, many are situated in branches of WH Smith, for example, or a local supermarket. The structure is diverse, and it is difficult to see how it might work as a mutual organisation. I am not saying that that is impossible, but I wish that he would give us more detail so we can consider it, especially before the Bill is debated in Committee. I think that many Members would be interested in supporting the concept of a mutual structure, but we need to know the detail of how it will work. There is a great reluctance simply to accept the concept without knowing exactly what is being proposed.
Many post offices are integrated with other parts of a business, so individual sub-postmasters are concerned to know how that will work in a mutual structure. As the hon. Member for Ynys Môn asked, will the post office or the whole business be part of the mutual? How will the mutual interrelate with the rest of the business? If the Minister can convince many of us that there is a way forward, I think he will be able to gain support for the mutualisation rather than the privatisation of Royal Mail.
The post office network continues to play a vital part in the life of local communities, even in its slimmed-down state, and I hope that it will continue to do so for many years to come. I also hope that the Minister is right in saying that the days of mass closures are behind us, but it seems to me that a great deal of uncertainty remains about the future of the post office network, given the privatisation of the mail carrier and the woolly nature of the privatisation proposals. He needs urgently to flesh out Government policy on mutualisation.
The devolved Administrations are doing much to help keep existing post offices open, but we need a clear path for the future of the whole network and the confidence for sub-postmasters to continue investing in their businesses. If mutualisation is to work, they need a much stronger say in how those businesses are run, but there must still be a link to the main carrier, Royal Mail.
I thank my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) for securing this debate on what is clearly an important issue; hence the number of Members here. I also reinforce his comments. Post offices are the lifeline of our local communities. They provide advice and community cohesion. Indeed, one very small post office in Kingskerswell in my constituency provides a local newsletter, which is fantastic. It is absolutely right that the value of post offices cannot be judged only in economic terms. I endorse my hon. Friend’s comments regarding the £1.3 billion investment, which I welcome, being offered by the Government over the next four years to prevent closures and assist with refits.
A decade of closures has hit my part of the world particularly hard. The south-west has had the largest decline of any region in the number of post offices. During that period, we lost 214 through Labour’s urban reinvention programme and 277 through the network closure programme. As a result, the south-west has only 1,303 post offices left, which is not very many given the rural spread and nature of its communities.
Survival in my part of the world and in my constituency has, in many cases, been driven by local support. Broadhempston, one of the smallest villages in my constituency, is a good example of the big society in action. It would not have survived without the support of local volunteers. The securing of premises, fundraising and manpower have been locally driven; the only paid individual is one part-time manager. It is a tribute to what that community, and communities in general, can achieve. The post office opening hours in that small village are Monday to Friday, 9 to 12. That is the beginning of a good service, but a number of problems remain that I feel the Government can help us address.
We need to enable small post offices to offer more services. Many of the last decade’s closures occurred because the ability to provide services such as TV licences or payment of car tax were either rationed to one post office in a group of four or five, or removed altogether and offered on the internet instead. I urge the Government to consider what we can do about that.
I also ask the Government to be sensitive to local needs. Broadhempston provides services in the morning, but not in the afternoons or on Saturdays. At the moment, the Post Office is refusing to pay the postmaster to work those additional hours, which are crucial. Broadhempston has no broadband, so our businesses depend absolutely on the post office. The Government should be locally sensitive in deciding where to agree to fund extra services. I would like some of that £1.3 billion to go not just to refits but to service provision. Afternoon services will also benefit an elderly population and small businesses; across the country, 19% of small businesses visit the post office daily, and 47% visit twice a week.
My third point has already been mentioned. How can we provide financial support? I welcome the concept of mutualisation and, like many Members, want more information about how it will work, but I would also like us to support those who are already helping themselves. Individuals have invested a lot locally, both in bricks and mortar and through volunteer support. I would like those who have put themselves and their financial assets forward to be helped with match funding or other financial assistance, because many of them have entered into extremely long-term commitments.
In closing—I have made my contribution short—I ask the Minister to consider carefully the specific needs of the south-west. Geographically, we are spread out, and we need support on the ground for our small rural post offices.
I am pleased to be called in this debate, and I thank the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) for raising the issue yet again. As he said, he has a good and honourable history on the matter.
I am pleased to continue the debate that we started last Wednesday, when we had only limited time. As the Minister knows, I have serious concerns about the plan to break up the Post Office and Royal Mail. I have been the secretary of the Communication Workers Union liaison group in this place for more than a decade, and have worked with sub-postmasters and sub-postmistresses on every campaign to oppose the closures that have been deeply damaging to many communities in all our constituencies, particularly in rural areas, as has been pointed out.
My concern about the announcement is what the detail will be. I do not remember Hooper recommending such measures as necessary to save Royal Mail. All the things that Hooper 1 and 2 focused on did not result in a recommendation to break up the two organisations. As has been said, there are substantial synergies. One third of Post Office’s income comes from the synergies and the services it delivers for Royal Mail.
I have three concerns for the Minister to address. What will the announced subsidy of £1.34 billion be spent on? What back-of-a-fag-packet calculations has he done? He has put none in the public domain so far. Will that £1.34 billion come on top of the currently planned subsidy of £180 million a year from 2011, or will it include that sum? On the cost of breaking up Post Office Ltd, how much is it calculated will be required to set up a parallel structure removing it from Royal Mail? It is currently a subsidiary of Royal Mail to whose new chief executive it is answerable through another chief executive.
The second problem relates to the historical business model of Royal Mail versus the promises that there will be continuing synergies. It is easy to make promises that that will happen—I heard the new chief executive say that it will—but, in reality, when it comes down to the wire will that be the case? For example, when Royal Mail at the centre was asking too much for the right to issue TV licences, it transferred that business out and would not take it. My local post office could not get that business because Royal Mail at the centre was asking for a fee that there was no willingness to pay. In fact, we started to get that service from PayPal at a service station at the bottom of my village.
I recall the detail well, but to me it was an example of a centralised organisation not having in mind the interests of the peripheral parts of the organisation, particularly small businesses. That is why although I am a Co-op party member, I have serious concerns about a mutual taking over all of Post Office Ltd, because it will become another central organisation, with its own raison d'être that is not necessarily the same as that of people in sub-post offices. I have some serious concerns about how the detail of the proposal will work.
I see the Minister smiling. The other issue is that this is another Lib Dem promise. We know that their promises are worth absolutely nothing, particularly to those who voted for them. That is similarly the case with regards the question raised by the hon. Member for Angus (Mr Weir). To say that there will be no closure programme is the stupidest thing I have ever heard. It is like saying, “The world will stand still because we have done this in the Postal Services Bill.” The world will not stand still; changes will be required. Again, that was mentioned in a Lib Dem promise. It is easy to make promises, but unfortunately the hon. Member for Kingston and Surbiton (Mr Davey) is actually a Minister now; he is in government and he must back up such promises with facts. Is he saying that regardless of how far the income of every single sub-post office in every village or urban community declines, the Government will continue to pile in subsidy? As I said in the debate last week, my calculation is that it would take £270 million a year to guarantee that.
We have heard many opinions so far and my hon. Friend is making a very important point, but there is a way to boil things down. Most countries have specific provisions in legislation to protect post office numbers but, as it stands, the Postal Services Bill does not.
My hon. Friend has made a factual statement and it will be recorded in Hansard. There is, in fact, a duty on the Post Office in Germany to provide post offices for towns and communities of a certain size; it has to do that as part of its duty. Under the Postal Services Act 2000, that should have been part of our duty. That legislation said that we could have freedom, but the freedom should have been constrained by discipline, which would have saved post offices in small communities. We should have looked at the business case in such communities and guaranteed that the subsidy would go in.
Of course, the hon. Gentleman is right. Nothing stands still in business. There is a cleansing effect and businesses going to the wall are part of that. However, does he recognise that the stage before that, which is within management control, is to help people in small businesses run their business better? That has not been done effectively by the Post Office to date.
The hon. Gentleman is slightly over-egging the pudding. I think that the National Federation of SubPostmasters has tried such an approach. It is not as though that organisation has been standing still; it has been talking to its members about innovation and getting more footfall, as the footfall declines. Let us be frank. Many of us are now semi-urban dwellers who travel to large centres to do our shopping—we drive past our post office, regardless of the service it provides. I am and always have been a post office user, but my local postmasters and postmistresses tell me that very few people from the big estates in my village use the post office there; they drive to the centre of the town, where there is a big supermarket and post office.
I shall not give way, because I am conscious of the time. I hope that the hon. Gentleman does not mind, but I think that other hon. Members want to speak.
My third concern relates to the structure of the Post Office itself. There are two types of post office: Crown offices, whose closure causes the most damage in terms of people’s perception of what they get from the post office, and privately owned, subsidised sub-post offices. The plan was that in 2011 we would need £180 million to maintain the subsidy. Many such post offices are rural; very few are in urban areas.
There was an early Crown post office closure model in my area; a sorting office was kept in Grangemouth in my main town, and a Crown office was retained and rented out to a former post office manager. He has a wonderful shop there. However, the Government are now talking about restructuring in such a way that they will take the sorting office and delivery office away, and it will become completely unviable for an individual to rent such a unit.
In Linlithgow, which used to be the county town, the sorting office went first and then the Post Office said it was unviable to keep the front shop so the post office was moved into a large sweet shop—everyone will know the name, but I will not give it any publicity. Every Monday, it is overcrowded and people cannot get in when it is bucketing down with rain outside. That post office is at the far east of the town. Anyone who knows the geography of Scotland will know that from South Queensferry at the bridges there is no post office until that one in the east of Linlithgow. After that, there are no post offices until Polmont in Falkirk. Post office provision has been unbelievably stripped back.
That is what happens when delivery and sorting are taken away. The same thing happened in Bathgate, where the post office is at the back of a supermarket. If there is a market model, the structure of the Crown offices, which will be given over to Post Office Ltd, will mean there is temptation to do the sensible thing—under a market model—and move away from retaining such buildings in the centre of towns and put them in easier areas outside the town, such as industrial estates. That will be a real threat to Crown offices, which are fundamental to the viability and perception of post offices.
The final problem I shall mention is PayPal. Someone who now works for the Communication Workers Union used to work for PayPal at quite a senior level. They left PayPal and eventually came to the CWU. They said that the board of PayPal would take a loss-leading position to strip out the Post Office monopoly on the things it does now with Royal Mail. That is its aim. PayPal also wants to do cash deliveries. At the moment, there is a system of secure cash deliveries to post offices. PayPal wants to do that. It also wants to pay out benefits—it wants to do everything. PayPal will undertake a campaign to undermine Post Office Ltd, regardless of whether it is a mutual.
The Government are throwing Post Office Ltd to the wolves. The subsidies will not continue, or they will have to grow exponentially. Will the Government explain what safeguards there will be? As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) suggested, will they write in a guarantee that every community of a certain size will have a post office and that the Government will subsidise it? If not, they are sending Post Office Ltd to destruction.
I congratulate my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) on securing this Westminster Hall debate. I thank the Minister for being here and for producing various briefings on the Postal Services Bill for my colleagues. The future of the post office network is close to my heart, not only because I am one of the vice-chairs of the all-party group on post offices, but because my rural constituents of Colne Valley, west Yorkshire, have suffered many post office closures in recent years. In fact, my parents lost their local branch in Holmbridge in the past couple of years.
We all know the crucial role post offices play in our local communities. It is sometimes only when they have gone that we really appreciate what they offered our communities. The role of the Meltham post office in my patch has become all the more important because the last bank branch has closed there this month, with Lloyds TSB pulling out. That leaves the post office branch with the only town centre cash machine, which is crucial.
I am very lucky because I live just a couple of hundred yards from a fabulous community post office in my village of Honley. I can tax my car there, get foreign currency, get my dry cleaning done, and I can even get tasty fresh olive bread—yes, even in west Yorkshire we get such lovely goodies. However, as we heard earlier, we cannot get everything done there. I cannot renew my TV licence and, although I can pay my Yorkshire Water bill, I would be penalised £2.50 for the transaction. The branch is also doing Santander bank work. It is handling bags full of coins and change from businesses and charities, which is a good service. However, for an hour’s coin handling, the sub-postmaster tells me that they receive only about £1. That is hardly the basis for a stable business, so all is not well.
What can be done? The National Federation of SubPostmasters has identified several measures that could enhance the network. We heard about many such measures during the debate, and we will hear some more in the next 40 minutes. However, I will end my contribution with the thoughts of my local sub-postmaster, Brenda, who has been running the Honley branch for four and a half years. I called her last night while jotting down some notes. Please remember that it is her business and her family’s livelihood.
She made three points. First, Government Departments, central and local, and including the Department for Work and Pensions, must make the Post Office their No. 1 facilitator of services—a point we heard earlier—and prioritise it ahead of telephone and online provision. Secondly, we must understand that post offices need to deliver more work to flourish. They are ideally placed to be the focal point of the big society. Thirdly, we must speculate to accumulate; we have already heard about the £1.3 billion of investment, which Brenda welcomes, but we need to invest now if we are to have a network for decades to come. Money from Royal Mail needs to be invested to bring the branches into the 21st century. Brenda highlighted the fact that that means basic equipment, such as proper scales, which they struggle without. We need to invest in that if we are to have an accessible network that makes sub-postmasters proud, so that in 10 years’ time we will not need to put in the rural subsidy.
I am afraid that I have almost finished. In summary, the Postal Services Bill signals a crossroads for the post office network. It is a great opportunity, and I hope that my colleagues in all parts of the Chamber will join me in fighting for a sustainable, long-term future for our post office network.
I apologise for having to leave during the previous speaker’s contribution, Mr Caton—it was probably the excitement of the previous debate. I congratulate the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) on securing this important and timely debate, which follows the Government’s announcement last week.
I want to start by saying that I support the post office network, and I do so as a customer; I ensure that I pay all my bills across the counter at my local town post office. In doing so, I hope to set an example. As a Member, I ensure that all my office transactions are done in local post offices. As has been mentioned, it is wrong for Members to drive past post offices that are closing down and say, “Isn’t it a crying shame?”, before going to other outlets. We must lead by example in our communities if we are to keep our post offices.
The important business for post offices is not only from individuals, but from Government Departments and local government. The hon. Member for The Cotswolds rightly said that we need innovative business. One simple business transaction that local government could encourage council tax payers to undertake would be to pay their bills in local post offices. During the network change programme, I suggested that to my local council, because it was outraged that central Government were closing post offices. I challenged it simply to state on the notice that it sent to each household in my constituency that that service was available in post offices, but it refused to do so. Worse still, the chief executive said categorically that the council could save a lot of money by having people pay the bills electronically or in one-off payments.
I think that we are all in this together. We talk about the big society, and my Anglesey community has a big heart, but we do not need lectures on that from anyone. There needs to be interdependency and help from the public, private and third sectors, a point I will come to later. I opposed the network change programme’s closures because it was too rigid and came from the centre. I wish that the Conservative Opposition at the time had said that they would put money into that, but they did not commit themselves in the last Parliament to put in the subsidy, which is why I did not support the Conservative motion. I abstained, and people who know me know that I do not do that very often; if I think something is right I will vote for it, and if I think something is wrong I will vote against it. It was wrong of the Conservatives not to commit themselves to the subsidy, but the new Government have said that they will commit additional money to help the post office network, and I support that. It would be churlish not to do so. I think that that is important and must be sustained.
Echoing the comments of the hon. Member for Angus (Mr Weir), I am confused about the mutualisation programme. I support mutualisation. Indeed, I told the previous Secretary of State and the Minister responsible for the Post Office at the time that Royal Mail should be mutualised, because I believe that it is so special in the fabric of British society that it must be treated differently. It should be neither left to the laissez-faire approach and the free-for-all of the market, nor cushioned as it had been under previous management and Governments. I was told that mutualisation was the wrong model, but I do not think that Hooper looked at that model carefully enough. Welsh Water, for example, which operates in my constituency, is a not-for-profit organisation. It provides a universal, quality service in Wales, and all its profits are reinvested in the company for the benefit of the customers. That is the kind of model we need for Royal Mail. I hope that the Minister will give some details on the mutualisation for the post office network.
Ultimately, post offices are private businesses in the main. They are run by individuals who have invested their own hard cash, time and effort to provide a public service. They are private means. There are also the private subsidies from Government and, in the case of Wales and Scotland, a special diversification programme to help keep the businesses open, so there are three streams of investment to the post office business.
I wonder how the mutualisation will work and, if there is difficulty, how post offices will get help. There will be difficulty, because business is dropping as the pattern continues of people using mechanisation and electronic mail, which is taking over. There are big concerns, which I am sure the Minister will try to address, because it is important that people know now what will happen. I have friends who are postmen, sub-postmasters and in management, whom I work with, and they are all confused about that. We need clarity on that matter
I want to add to something my hon. Friend has said. Our understanding from Post Office Ltd is that only about 4,000 of the 11,500 post offices now open are profitable. In addition to the public subsidy, Post Office Ltd cross-subsidises the loss-making post offices to the tune of £400 million. The Government subsidy is welcome, but we have to be clear that it really is an uphill task. Mutualisation will have to be tremendously successful to make up the shortfall for those 7,500 post offices.
My hon. Friend is absolutely right, although it is not for me to answer on the Government’s proposals. I would like to see something developed along the lines of the people’s bank. I would like to see credit union activities in local communities, in which people will have a real say on what goes on.
I thank my hon. Friend for mentioning credit unions. Does he agree with me that one of the useful things that the Government could do with the subsidy they propose to put into post offices is support the back office integration that needs to happen and the technology that would allow post offices and credit unions to work together?
I absolutely agree, and I think that a mutual, with its ethics, could do that. There is a way forward, but I am unsure of the detail at present, so I will not commit that that can be done in the proposals we have seen and in the form they have been given.
Other Members wish to speak, so I will conclude my remarks by referring to another issue that the National Federation of SubPostmasters has raised: the separation of the Post Office from Royal Mail, and the inter-business agreement. The hon. Member for Angus asked whether there is an international model that the Minister has in mind that is successful, and I would be grateful if the Minister responded. If we do away with a third of the business or privatise it, there is a risk that it will look at its shareholders as its main priority, rather than the post office network. Those are my concerns, and I am sure that the Minister will look to address them.
[Mr Philip Hollobone in the Chair]
I will make a short contribution, as I know that many Members wish to speak. I congratulate my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) on securing the debate on an issue that is important for all our constituents. The two counties represented in my constituency were badly affected by the most recent round of post office closures. In the Yorkshire part, we lost post offices in Airmyn, Pollington and on Westfield avenue in Goole. Over in Lincolnshire, we lost them at Wrawby, West Butterwick and Eastoft. When my village of Airmyn lost its post office, we sadly also lost our village shop, so we are left with only our pub.
Justin Tomlinson (North Swindon): Does my hon. Friend agree that rural pubs offer an opportunity to protect and enhance the post office network? The Red Lion pub in my constituency recently submitted an application to offer the post office service, which I support, as it is probably a good opportunity to protect our service.
I do. As it happens, I was in a different Red Lion this past weekend, in Epworth—it is wonderful. There is an opportunity for pubs and other organisations to be used for outreach services. In fact, I was planning to speak about outreach in a couple of minutes.
The impact of post office closures, particularly on rural communities, cannot be overestimated. I do not believe that the previous Government fully appreciated the impact of losing services such as the village post office and shop.
My hon. Friend makes a good point about losing the local post office and shop. We had a similar case in Fulford in my constituency: the post office and shop were not viable, but together they are a viable concern and an important community facility. Once the post office goes, the local shop goes, and that is something that we have to remember.
I absolutely agree. I remember reading in local newspapers that my hon. Friend ran a campaign for the Fulford post office and delivered a petition to No. 10 Downing street. I know that he worked incredibly hard on that.
I want to say a couple of things about what local authorities can do to support the post office network. The hon. Member for Ynys Môn (Albert Owen) made a point about that. One of my local councils in north Lincolnshire attempted two or three years ago to put into the council budget and local council policy the establishment of council terminals in every sub-post office so that residents could pay their bills and access council services and essential advice. All of that was costed and put into the budget proposals but, sadly, it was rejected by the Labour-run council, which missed a huge opportunity. I am sure there are plenty of examples around the country of missed opportunities to engage local authorities in doing what they should be doing, which is standing up for their rural areas as much as their urban areas, and supporting what we all accept is important. Everyone has fine words. They say that they support post offices, but actually doing something is a little harder sometimes.
Another point that I want to pick up on is rural broadband, where post offices could have a role. Several of my villages have no access to broadband and are unlikely to get it any time soon. I welcome the announcement about the additional funding that will be coming our way. There is the potential in some of our villages for post offices to help roll out a mobile broadband or satellite broadband network, but there must be structures in place to manage a local solution such as that. Perhaps the Government could give some consideration to it.
Is my hon. Friend as concerned as I am about the back-door closure of post offices, which I raised in a debate last week? I am enormously grateful to the Minister for recognising the problem. He may be interested to know that, of the 2,406 audits that were done in 2009, 265 suspensions were held, and there were only two reinstatements after appeal. That very much reinforces the picture that suspensions are being used as a means of closing post offices, which I am sure we would all deprecate.
I absolutely agree. I join my hon. Friend in condemning that, and I am sure that the Minister will respond to his comments.
The additional funding is extremely welcome. In fact, it was publicised in my local paper just last weekend. I was out door-knocking this weekend in several villages, and quite a few people who had seen the article told me how grateful they are that the Government have finally committed to the post office network.
Will there be additional funding to extend outreach services where we have lost post offices? We lost several post offices, which were replaced with outreach. Unfortunately, the outreach services are often available for only two or three hours a week during the middle of the working day. For people such as myself in my village, it is utterly impossible to use those services. Perhaps we could have a bit more information on whether outreach services will benefit from the subsidy.
We all have a responsibility to support the post office network and Royal Mail in general. During my four years of campaigning, I used Royal Mail for all my deliveries—my opponent sadly did not. When we tax our cars, we can lead by example; we can use Royal Mail and support our post offices. As I said, words are easy but actions are sometimes a little harder, but we all have a role to play in our communities.
Order. The previous Chairman indicated that the winding-up speeches would start at 10 past 12. Realistically, we will have time for only two more speakers, so I intend to call Gregg McClymont followed by Lorely Burt. I ask that they each speak for three minutes.
Thank you, Mr Hollobone. I shall speak even more briefly than that.
I spoke on Second Reading and have had conversations and briefings with the Minister. All politics is local, so it is understandable that we have heard a great deal today about local post office branches; in villages, in particular, they are a lifeline. However, I want to raise the broader picture and speak a little about how the Postal Services Bill is drafted.
I said in an intervention that statutory provision for post offices should be written into the Bill. At the moment, it is unclear what mutualisation actually means, but however well it proceeds we have a big problem, because 7,500 post offices do not make a profit. The two most successful mail services in the world are the German and Dutch services. In both those countries, provision for post office services is written into statute. I reiterate the point that however worthy the good intentions of the Government and Members on both sides of the House in respect of the Bill, unless we make provision in it for post office numbers, given the economics of Royal Mail and the Post Office, we are looking at significant closures down the line.
The hon. Member for Northampton South (Mr Binley) made a valid point about allowing managers to manage, but given the economics of the Royal Mail and post offices, even wonderful managers will have a difficult task protecting the 7,500 post offices that do not make a profit.
I am tempted to produce a line from the Leader of the Opposition: I understand that I ask the questions and the Government answer them. Does the hon. Gentleman agree that given the logic of the economics of the post office network and Royal Mail, it is difficult to see how to protect the 11,500 post offices we currently have unless we write into the Bill provision to protect them? That is the key point.
I admire the hon. Gentleman’s confidence and enthusiasm. We hear a great deal—understandably—from Government Members about the Labour Government closing 5,000 post offices, but that Government’s criteria meant that we have maintained 11,500 although only 4,000 are profitable. I say in all sincerity that unless we write into the Bill provision to protect the number of post offices we have now, we will see post office closures down the line, and that is something that everyone in the House would deprecate. I ask the Minister whether he will put that provision in the Bill.
My final point is about the universal service. I understand that the first universal service order that Ofcom will make as the regulator will not require parliamentary assent. When Ofcom makes its universal service order we will not be able to say that we do not accept it. That is important.
For the past 10 years, we watched the near desecration of the post office network under the Labour Government, who presided over a subsidised decline of the post office. Well, things will change radically. I very much look forward to the statement that I believe is coming tomorrow. There will be no closure programme under this Government.
No, I am sorry, but I have only two minutes.
There will be more services and more potential. I greatly welcome separation from the Royal Mail. It will give the Post Office much more say in its own affairs; it will no longer be a junior partner. Can we build into the Postal Services Bill provision for the Secretary of State to seek a review of the access criteria, subject to parliamentary approval? There is concern about that.
I would like to know a little more about what conditions need to be in place before mutualisation can happen.
No, I am sorry, but I have no time.
On funding, it is absolutely brilliant that we will have the £1.3 billion which, at last, will give the Post Office the boost that it needs. The most important thing is that it will enable the Post Office to move into the 21st century. We have already been told a little about essentials, and we are really looking forward to bringing down the barriers that have been created by previous Governments, so that we can open up the Post Office to the sort of thing that it is very capable of doing. Government work, new mail services—including local collection and drop-off—the Post Office bank, which was mentioned by Members earlier, access to all the major high street banks and benefit changes are all things that the Post Office is well equipped to do, and I look forward to my hon. Friend the Minister outlining in the statement tomorrow exactly what can be done.
I congratulate the hon. Member for the Cotswolds (Geoffrey Clifton-Brown) on securing the debate. It is clear from the turnout and the speeches that hon. Members on both sides of the House have high regard for the post office network.
Our post office network is much more than a network of businesses. Post offices are the lifeblood of our communities and an essential part of our social network. For many people, particularly those who do not have bank accounts or access to the internet, they are the only means of accessing services, withdrawing pensions and paying bills. We all know sub-postmasters who frequently go that extra mile, those who will notice that Mrs Jones has not turned up to collect her pension and will make discreet inquiries to see if anything is amiss.
When we were in government, we established access criteria for the first time, in recognition of the business and social importance of the post office network. The access criteria developed by the Labour Government ensured that 99% of people living in deprived urban areas, and 90% of people nationally, would be within one mile of a post office. That is extremely important, because it provides the access that some of the most vulnerable in our society need. We then put in money to keep open 11,500 post offices, whereas a purely commercial network would have been reduced to some 4,000. We put in £150 million per year up to 2011 to subsidise that network, with an increase to £180 million for 2011-12. We welcome the recent Government announcement that there will be continued support for post offices.
Anyone who runs a business knows that it is necessary to be constantly prepared to change and adapt. Post offices need to attract new customers, and offer new products to existing customers. Sub-postmasters retire and new people come in. When someone first decides to take over the running of a local post office, they need to know that their business will be viable. When sub-postmasters retire, they sometimes decide to keep the premises as their home. That means that newcomers have not only to identify premises and find the funds to start up, but also find the funds to install the counters and facilities to meet post office requirements. To make that sort of commitment they need the confidence that they can make a go of it, and absolutely fundamental to that confidence is the inter-business agreement with Royal Mail. That is why the National Federation of SubPostmasters wants the guarantee of a minimum 10-year agreement signed and sealed between Royal Mail and Post Office Ltd. Anything less would be a betrayal. It would be a death sentence hanging over all but the busiest of our post offices.
I share the hon. Lady’s concern about the impact on business start-ups and business innovation. I represent a very rural constituency, and one thing that we have seen over recent years is new businesses springing up and using the internet to sell goods further afield than the isolated rural areas in which they are based. I am very concerned that the loss both of the universal service commitment and of post offices is inhibiting business growth. That will absolutely undermine existing small businesses and disincentivise new ones, not only in the post office network but in the wider rural economy.
Indeed. The hon. Lady makes reference to the important role of post offices in rural communities, but those very post offices are the ones that would be most threatened if the inter-business agreement were not in place. It is absolutely vital, as the National Federation of Sub-postmasters suggests, that we have some sort of 10-year agreement to guarantee that business.
Proceeding to privatise Royal Mail without such guarantees for Post Office Ltd would also call into question the wisdom of investing considerable sums of taxpayers’ money in a business that had no chance of being viable—a bit like redecorating flood-prone properties without shoring up the flood defences. It is not sufficient for there to be vague assurances and assumptions that somehow Royal Mail would automatically choose Post Office Ltd for its counter services. No astute business person would be satisfied with anything less than protection through written contracts and legislation. The Postal Services Bill does not provide that protection, and the Opposition will be tabling amendments that would provide Post Office Ltd with the necessary certainty that a privatised Royal Mail will continue to use the post office network for its counter services.
It is very worrying to hear the National Federation of SubPostmasters report that the Government are very resistant to its requests for the guarantee of a 10-year agreement. That is no way to treat sub-postmasters who have invested considerable sums of their own money in the local post office network, and it will certainly not encourage new entrants to take over when sub-postmasters retire. That is one area in which the Government can, and should, take action to safeguard the third of Post Office income that derives from Royal Mail.
Furthermore, one in seven rural post offices provides premises, facilities and supervision for Royal Mail delivery staff. Sub-postmasters running the 900 mail-work post offices are paid according to the number of postmen and women they supervise. That pay is frequently about 25% of the income of such post offices. They need a guarantee that the income will continue. There is no guarantee that a privatised Royal Mail, quite possibly owned by foreign interests, would honour or renew the inter-business agreement, and without determined Government action in that respect post offices will lose their core business.
In addition, we need to know what other specific proposals the Government have to increase footfall in our post office network. As I have said, all businesses need to attract new customers and identify new services that will interest their customers. One notable success story is that post offices have become major suppliers of foreign currency.
I have just explained why we put in money to ensure that 7,500 branches, in addition to the 4,000 commercially viable ones, were in fact kept open. The crucial issue we all have to address, and on which we need answers from the Minister, is how to make those post offices viable so that, in the words of some of the hon. Gentleman’s colleagues, the subsidy is not needed for ever and at the end of the day there is a viable business that can survive, and provide the network that we all want.
May I finish, please?
The Labour Government undertook to develop a successor to the Post Office card account, and the contract was awarded to the Post Office. We need specific details from this Government about their vision for such accounts and how their scope could be broadened. We also prepared the way for increasing the range of banking services to be made available through local post offices. Hon. Members might remember that we instigated a consultation, and they might have encouraged their constituents to take part in that last February, and to respond to a survey about the type of banking services they would like to be able to access at their local post office. How do the Government intend to take forward that work, and what specific plans do they have to extend and promote banking services through the post office network? It is not simply a question of making services available at post offices; we cannot turn the clocks back.
In some areas, as few as 7% of women over the age of 65 in lower-income groups have regular access to the internet, but that figure rises to almost 100% among younger men on middle and high incomes, many of whom want and expect to be able to access services online. They are likely, for example, to renew their driving licences at the click of a mouse, rather than in their local post office, even when they might physically call in to the shop that houses the post office to buy snacks or drinks, or to rent a DVD.
In terms of the sub-postmasters’ vision of an enhanced role for post offices as the front-line provider of an expanded range of Government services, what specific plans do the Government have to make that happen? Fine words and lofty aspirations are not enough. Even the straightforward availability of services might not in itself be sufficient. Even the plentiful good will towards post offices that exists in our communities is unlikely, on its own, to increase footfall. How exactly do the Government plan to turn that vision into a queue of real people choosing to carry out business transactions at post office counters?
Local councils can also play a role, but some councils have not always been supportive of the post office network. For example, a couple of years ago, we found hidden away in the small print on the back of council tax demands from my county council plans to cease accepting payments via the post office network. I persuaded councillors to allow representatives of local sub-postmasters to address the full council, and those plans were dropped.
To sum up, we want to hear specifics from the Minister. We want an explicit commitment to protect the inter-business agreement between Royal Mail and Post Office Ltd and to hear specific plans for increased Government use of post offices and developing more business for them. I look forward to hearing the Minister’s answers.
The debate has been extremely good; I counted at least 26 Members present during our discussion. We heard passionate defences of the services that many of our constituents enjoy up and down our country, and I want to reply to as much of the debate as possible, although I will be making a statement in the very near future—but not tomorrow; I apologise to my hon. Friend the Member for Solihull (Lorely Burt). We will publish our policy statement soon, and I hope that hon. Members will enjoy reading it and questioning me and other Ministers as we go through the Postal Services Bill over the next few weeks and, possibly, months.
I congratulate the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) on his exemplary speech. He started by praising the Government, which is always a good beginning. It would have been even better if, with a Norfolk accent, he had burst into song like the postman; nevertheless, he talked cogently about the issues in his constituency and showed what a fine constituency MP he is. He has campaigned for his constituents, particularly for the local post offices in Stratton and the Beeches, and, although they were closed, he is still campaigning and working with local sub-postmasters and councils on putting forward a report to Post Office Ltd. His remarks about the importance of outreach services and their potential were well made.
Even before the debate, the hon. Gentleman scored a major victory because he got a review for those post offices and the potential for reopening them. He is meeting Post Office Ltd management shortly, and I wish him luck. He will understand that through legislation and Government practice over time, Post Office Ltd and Royal Mail operate at arm’s length, so it would be wrong for a Minister to instruct Post Office Ltd to meet his demands in detail, but he has already made a powerful case. I am sure that he will be listened to closely.
The hon. Members for Angus (Mr Weir) and for Ynys Môn (Albert Owen), among others, raised our plans for mutualisation. There is a little confusion, so I am grateful for the opportunity to put it right. The proposals in the Bill focus on Post Office Ltd—the national organisation that holds everything from the intellectual property, to the brand, the contracts, the discipline codes and so on. We are proposing that it could become a mutualised organisation in due course, if the network became more financially viable through our other plans. Let us be clear: that would mean an organisation that could be owned and run by sub-postmasters, post office employees and communities.
How are we approaching that? Because we need a number of years for our policies to take effect, it will be some time before we can be sure that the post office network is completely viable, but I hope that in the lifetime of this Parliament we can move towards mutualisation. We want a real debate, so I welcome the contributions that we have had. We have already had a pamphlet from Mutuo discussing the possibilities of mutualisation. The Government have asked Co-operatives UK to consult widely, not only within post offices, but in the co-operative movement and other mutualised organisations with expertise in the area. We asked it to do that because Government do not run co-operative and mutual organisations. This is not about Government imposing a structure; if the process is to be successful, it must be organic, which is why we are keen for the first big consultation on it to be led from outside Government.
Of course, Government must take responsibility, and once we have had the response to the Co-operatives UK-led consultation, we will hold a national consultation, which I expect to start some time after the Postal Services Bill receives Royal Assent. Members of the wider public can then be involved in the consultation. That will prepare the ground and the details, so when we have a financially viable post office network, or a network that is on train to becoming financially viable, the mutualisation option will become real. That is not to say that individual post offices cannot be mutualised.
As hon. Members know, individual post offices are often single, sub-postmaster-run, privately owned businesses. Some are chains run by different agents—such as WH Smith —and some already operate on a mutual basis, either as community mutuals, and we have heard examples of those, or through mutual organisations such as Co-operatives UK. Mutualisation already exists locally, and I think that more than 1,000 post offices are already run in that way. We are talking about mutualising the national organisation, which will improve the incentive structure by aligning the incentives for local sub-postmasters at community level with the incentives of the national organisation.
I hope that is a full answer. I am grateful for the opportunity to put it on record.