Post Offices
The next item of business is a Scottish National party debate on motion S1M-638, in the name of Fiona Hyslop, on the role of post offices, and on an amendment to that motion. Members who wish to contribute to this debate should press their request-to-speak buttons now.
I would like to welcome the sub-postmasters and sub-postmistresses from across Scotland who are here for the debate. As they are a group of people who are famed for their lack of spare time, it is a measure of their concern that they have taken time to attend the Parliament.
I would also like to thank people for the messages that I have received in the past few days; from postmasters and postmistresses from Hawick to Armadale to Tynecastle in Edinburgh. To all those people, I give a solemn pledge that the SNP shares their concerns and fears about the future of their livelihoods and of the vital services that they provide. We are committed to supporting them however we can.
In recent months, I have spoken to many of the dedicated men and women who run our sub-post office network. They do it for the narrowest of margins. They take a wage from their business; for the hours they put in, many of them would be lucky if it exceeded the national minimum wage.
Talking to those men and women, I was struck by their concerns not only about their own future, but about the future of their customers. They know many of their customers on a first name basis; the lives of those people are the subject of everyday conversation while business is sorted out—the birth of a child or grandchild, good news and bad.
Often, for older people living alone, the visit to cash the pension is one of the social focal points of the week. The worries of the sub-postmasters and sub-postmistresses about how their customers would cope if the trip to the post office was replaced by a visit to the nearest hole-in-the-wall cash point were evident.
There are worries about practical issues relating to how the new system would work. Do we really expect home helps who cash pensions to be given the personal identification numbers of their clients? Would we want that? What happens to the pensioner who lives in a community where the post office has closed and the cash point issues money in a minimum denomination of £10? What is that person to do with a £66 pension payment—will they miss out on £6? What about the million dollar question—or rather that of the people who do not have a million dollars—of people who are in overdraft? Do they have to set up an additional account, with additional charges?
Those are real concerns that have been expressed to me by people on the front line of the proposed change. However, the people to whom I spoke expressed another emotion—that of disappointment. Those people, who serve our community, are disappointed that a Government with a much vaunted commitment to social inclusion is allowing such a valuable resource to go to the wall.
Every postmaster to whom I spoke is alive to the potential for social inclusion that the post office network offers. They are all disappointed that the opportunity that they offer is being spurned by a Westminster Government that is committed to false economies. We have a Labour Treasury that can read a balance sheet but cannot understand the value of community.
There is real concern that by the time the Government wakes up to the potential offered by the post office network it will be too late. A letter from Dr Tom Begg, chairman of the Post Office Users Council for Scotland says:
"What would be wrong is for the community to blunder into losing the comprehensive national network because the government had not fully considered the implications of altering benefits policy."
The fear is that, through false economy and misdirected policy, the Westminster Government is blundering into a situation where the existence of hundreds of sub-post offices is put in jeopardy.
After the disappearance of the post office network from much of the landscape of Scotland, the shops and businesses that depend on the network to draw in business will follow. A pound that is cashed locally is spent locally. Instead of encouraging social inclusion, the Government's policy will lead to greater exclusion; boarded-up village shops and empty shopping parades will be the hallmark of Westminster's commitment to social justice. It makes a mockery of the millions of pounds that the Government in Scotland is spending on social inclusion partnerships if the Government in London is ripping the heart out of communities that are already under severe strain.
Many Labour members have put their faith in the decision to postpone a move to automated credit transfer until 2003. They believe that that decision, combined with the commitment to retain the Horizon programme, means that the bleak scenario that I have described has been averted. They are wrong. The threat to the network is as real as it ever was.
I say that for two reasons. First, Horizon is far from being online. So far, only 2,000 post offices have been automated and a further 17,000 are on the waiting list. There is every chance that it could be 2004 or 2005 before the job is complete—even then, it might not link the whole network.
Secondly, even if Horizon is up and running, the shift away from post offices will be enough to sink many hundreds of sub-post offices. The ones that remain will find the battle to survive tougher every day. As we have already seen in the Highlands and in the Borders, more and more people will simply walk away from their franchises, cutting their losses before the situation worsens, and no one will be prepared or able to take their place.
Let us be clear: any move towards banks through compulsory ACT will mean that post offices will be lost. Westminster's failure to make sufficient commitments to the Post Office for implementing Horizon and the rapid move towards ACT mean that post offices will not have the time to adapt, nor will they be able to find alternative markets to fill the gap left by the loss of business through benefit payments.
I will quote the report on the matter published by the Westminster Trade and Industry Committee, published last September:
"The Post Office is in effect being obliged to use its resources to pay half the price of the automation necessary for preservation of the national network of sub post offices, with a real risk that it may find it difficult to recover the costs by generating new business. The Government must recognise that in setting the annual minimum dividend, particularly in the years 2003-2005."
Far from recognising that concern, there is something two-faced about announcing commitment to the network at the same time as announcing that, from 2003, Benefits Agency transactions will be cut from 12p per transaction to 1p. That will further undermine Post Office income and will hasten closures across Scotland.
According to research conducted by the Communication Workers Union, there are 888 post offices in Scotland whose businesses are more than 40 per cent dependent on Benefits Agency work. The transaction charge decision alone will already have put some post offices over the brink. Unless Westminster acts, hundreds more will follow.
A transparent and unequivocal commitment from the Government, which means detail, not just platitudes, must be made to the post office network. We need an unequivocal commitment, spelling out precisely how the Government is prepared to support the network. Unless that is forthcoming, the transaction charges must be restored to the current level and compulsory ACT must be postponed until, at the very least, all post offices are fully automated with Horizon and the public have been given a settling-in period to adapt to the new regime.
Over and above all those arguments, the opinion of the customer should count most. New Labour at Westminster likes to talk a good game about modernisation. In business, where I worked in financial services, the modern approach is to put the customer at the centre of plans. That is diametrically opposite to what the Government and the Benefits Agency propose: they want to put their convenience first and let the customer hang.
In yesterday's Edinburgh Evening News, Phyllis Herriot, chairwoman of the Scottish Pensioners Forum, said:
"A lot of pensioners don't have bank accounts. They are quite happy going down to the Post Office with their pension books. I know the Government is going to save money, but surely it's what suits the pensioner that should be the issue."
Phyllis is quite right: the opinions and rights of the users of the system are imperative.
Does Fiona Hyslop think that the Lib-Lab Government here has failed to understand the social implications for communities? The visit to the post office is not just a question of getting money. In remote places, it is a social event that is vital to the whole well-being of the community.
When I visited post offices in Armadale, that very point was made. The social fabric of Scotland is at risk. The Post Office is reserved to Westminster, but we have every right to discuss matters that affect the economic and social fabric of Scotland.
The quietness among members opposite is quite shameful. Perhaps they feel ashamed about what is happening; perhaps they are concerned to protect their position at Westminster.
Has Fiona Hyslop read the amendment? It says that the Executive
"acknowledges the vital importance of post offices to the economic and social fabric of Scotland".
But the problem is that the Westminster Government is bent on destroying that.
I quote from a letter from the National Federation of Sub-Postmasters. It says:
"Last Friday's announcement did nothing more than dress up the Government's previous empty reassurances in a different way."
Platitudes are not the same as real detail and commitment. Phyllis Herriot is right: the opinions of the customers and the users of the system are imperative. The rights that the Government proposes to trample over include: the right of pensioners to have their money paid to them in a form that they find convenient; the right of young mums to have family allowance paid directly in cash so that they can feed their children before feeding their overdraft; and the right of those who are unable to open or manage bank accounts to have the human dignity of managing their own cash. Those people's views are being ignored. People on the streets and in the post offices definitely feel that the Government is ignoring them. I spoke to one such woman in Monkton in Ayrshire yesterday.
Will the member give way?
No. I am concluding.
I will close with a quotation of a member of the other Parliament, who put the argument in a nutshell when he responded to a constituent's concerns on the subject:
"The Government's plans as they stand are unacceptable. People should not be forced into having their pensions paid through ACT if they do not want to do so. We will continue to campaign for a choice for pensioners in this matter."
That MP was Gordon Brown, writing in 1993, when the Tories first tried to introduce the measure. He was right then and he is wrong now. I urge members to support the motion.
I move,
That the Parliament notes the important role played by post offices and sub-post offices in the economic and social fabric of many of our communities and notes with concern proposals from Her Majesty's Government to change the method of benefit payments (Automated Credit Transfer Scheme to banks) which could result in the closure of sub-post offices and the impact this could have on the social inclusion targets of the Scottish Executive; further notes that recent announcements to allow some cash payments to continue to be paid from post offices will be too little too late to alleviate this serious situation, and therefore calls upon the Scottish Executive to make urgent representations on this issue to Her Majesty's Government in order to defend the interests of our urban and rural communities and urges it to be proactive in making representations to other relevant agencies to ensure the continuance and development of post offices in Scotland and the improvement of the availability of financial services in poorer communities in Scotland.
So far, this has been an unreal debate. I acknowledge that the truth is often a stranger to the SNP, but some of the activities of SNP members earlier today have shown them to be even more remote from the truth.
We, too, welcome to the chamber anyone from our communities, throughout Scotland, who has real concerns about their future. All members welcome those people to the chamber. The Government at Westminster, supported by the Executive here, believes in the postal service: £5.5 billion is spent every year; 16 million letters and 750,000 parcels are delivered every day; and we have a network of 20,000 post offices in the UK and almost 2,000 in Scotland. Does anyone in the chamber suggest that we are not wholly committed to ensuring that that network exists?
I want to do something that is simple to do from the dispatch box: to nail the lies that are peddled by the SNP and to stop the scaremongering. In political debate, it is okay to have what I would call a knockabout; that word describes the SNP's contribution. When, however, one is considering the livelihoods of men and women—postmasters and postmistresses—and of the excellent work force that is part of the postal service, one has to be careful not to dress up fiction and sell it as fact.
We want everyone who claims benefits, in every post office in Scotland, to know "you have a choice". Those words appear on a poster, from which I will quote for Fiona Hyslop's benefit:
"At the moment you can collect your money at the Post Office or have it paid into a Bank or Building Society account . . . So even after 2003"—
or 2001 or 2005—
"you will still be able to collect your cash at a Post Office if you want."
Whether the SNP likes it or not, that is a fact and I want it to be recorded as such today. All I want the SNP to do is to acknowledge that after the dates I mentioned, people who want cash at a post office will get it. There is no equivocation on that point.
The minister refers to the letters and posters that have been distributed to post offices. I will quote again from the letter from the National Federation of Sub-Postmasters:
"The Government says customers can still collect their benefits in cash at post offices if they are ‘unable or unwilling to use a bank account', but cannot tell us how this will happen or how they are going to guarantee the future for the thousands of post offices under threat."
People may be allowed to collect their money from post offices if they protest very hard that they do not want it to be paid elsewhere, but they will still be directed to bank accounts, whether those accounts are based inside or outside post offices. I know about marketing—I worked in financial services. Either way, there is no real choice. The sub-postmistresses and sub-postmasters know that and it is about time the Government woke up and listened to their concerns; they have not been assured by what the Government says.
I would have hoped that someone with a semblance of knowledge of financial services would understand what is happening.
It is vital for pensioners, people on benefits and those listening to this debate that I put on record the comments of the Secretary of State for Trade and Industry, speaking in the debate on the Postal Services Bill. He said:
"There are two categories: there are those people who have bank accounts at the moment and those who choose not to have a bank account."
Much was made of that. He continued:
"We are working on an arrangement with the banks that will cover those who presently are unbanked, so that they will be able to get their benefit at a post office in full, with no deduction."
For emphasis, the secretary of state said:
"Let us be clear: they will get the full benefit in cash at a post office."
I am not giving way, Fergus.
The secretary of state continued:
"For those people who have bank accounts, there will be an arrangement to ensure that the money is paid into the bank account. There will then be a facility to withdraw that money at a post office in cash, again with no deduction from the benefit payment. That is the situation that we are putting in place. It is simple. That is the position that will apply. There will be arrangements through Horizon to ensure that the individuals on the automated network will be able to secure that position."—[Official Report, House of Commons, 15 February 2000; Vol 344, c 810.]
I do not know how much clearer I can be about nailing the lies that have been peddled in the chamber today.
Will the minister give way?
I am not giving way, Fergus. As the member knows, I usually give way—I am very courteous—but I do not have much time.
We must nail the lies and we must stop the scaremongering. It is unfair for our older people to be faced with dreadful statements that they will go to the post office and be turned away at the gate and will have to open a bank account. That is utter nonsense. People do not need a bank account if they do not have one; the cash will be available.
It was important to take some time today to make that point.
Will the minister give way?
I am not giving way, Margaret.
The media today have been littered with stories. In no part of the coverage was there any suggestion that the current benefit cash payment will not continue in the future. Our commitment is not just about what will happen in 2001, when the procedure will be complete, or in 2003, a space of two years, or in the introductory period from 2003 to 2005; it is a permanent commitment that is built into the bill.
I want to stress the fact that, for the first time, we have a Government that is building into a bill at Westminster obligations on the post authorities to ensure that there is an effective, viable network. It may be that in some areas the post office is not commercially viable, but is a social necessity. That is the issue that should unite us today. No one would argue against the proposition that we should have an effective network.
I see the Presiding Officer's light coming on; I am moving towards my conclusion. There are genuine worries, fears and concerns, which should be debated. We should have dialogue and discussion, but it serves no useful purpose in a democracy to parade lies as self-evident truths. That simply cannot happen if we are to have a mature debate.
I finish on this point. There are challenges ahead. Fiona Hyslop knows the financial services sector. There is the modernisation of central and local government. There are new banking procedures. This Parliament, in unity, must work together with all concerned to ensure that we have a viable system in future. We should remember that the most dependent post offices in the country —in terms of benefits—are not in rural, but urban, areas. Rural post offices have huge social cachet, however, because they are not only a provider of benefit alternatives, but a focus for the community—whether for shopping or for myriad other services, including health.
I will finish now, Presiding Officer; I will not incur your wrath much further. My plea is that we should have a debate. Let us welcome a debate on reserved matters—I fought hard for that on the consultative steering group. Bruce Crawford can shake his head all he wants but I was instrumental in ensuring that we could debate reserved issues. We owe it to ourselves as parties, to this Parliament and to Westminster to make sure that the debate is based on facts, not lies. Telling lies serves nobody's purpose and only scares people of an age when they can do without that.
I move amendment S1M-638.1, to leave out from "notes the" to end and insert:
"acknowledges the vital importance of post offices to the economic and social fabric of Scotland; notes the commitments given by the UK Government on maintaining a nationwide network of post offices for the benefit of communities in Scotland; supports the increased commercial freedom being given to the Post Office to develop new products within the public sector; acknowledges that all benefit recipients should be able to choose to have their benefit payments transacted by the Post Office, and urges the UK Government to maintain a network of post offices and offer reassurances to sub-postmasters and sub-postmistresses through a positive programme of continuous improvement and expansion of services."
On a point of order. In the speech that the Minister for Enterprise and Lifelong Learning has just delivered, he repeatedly accused the SNP—and presumably those who have spoken for the SNP—of lying. Is that in order under standing orders? If it is in order, is it not incumbent on the person who is making such a very serious, factual allegation to offer members the opportunity to challenge the statement by giving way—which the minister, on this occasion, declined to do?
I will check the Official Report to see what the minister said. If further action is needed, it will be taken. The minister was winding up when he refused interventions. That is understandable in that circumstance, but we will check the record and see whether anything should be acted upon.
Today's debate gives me a feeling of déjà vu. There are slightly more SNP and SLD members present now than there were on 27 January to debate my motion on the future of rural post offices. That debate was restricted to half an hour and many members wanted to speak but could not. I had hoped this slightly longer debate would allow them to, but it will be really productive only if there is something new and different to say. I do not want to repeat my speech of 27 January. As is usual in legal proceedings, I declare it part of my current remarks.
The issue remains as it was on 27 January: without benefits and pensions work, hundreds of Scottish post offices will cease to be financially viable. Many members of the public could be faced with a cashless service that they do not want. In the debate on 27 January, Mr Home Robertson undertook to make representations to HM Government. I note that Mr McLeish did not refer to the outcome of those representations, so I assume that they will be mentioned in the minister's winding-up speech.
Since 27 January, the situation has become even less clear. Mr Stephen Byers, the Secretary of State for Trade and Industry, announced in the House of Commons that there would be subsidies for post offices, but he did not say how, to whom or by whom they might be paid. Sources close to him are apparently suggesting that the subsidies could be paid by local authorities rather than the Government. As has been argued in this chamber, many local authorities' budgets are not sufficient to meet the basic needs of maintaining roads and schools, so the prospect of their maintaining rural post offices is negligible.
Mr Byers's lack of clarity is not the only problem. Mr Alan Johnson, the Parliamentary Under-Secretary of State at the DTI, tells us that there will be a new, simple electronic money transfer system. Despite persistent probing by the National Federation of Sub-Postmasters, among others, we have no clear indication of how that system will work, how it will relate to bank systems and what it is intended to achieve. It may be what underpins Government comments that people will be able to receive payments in cash, but it has not given any justification that stands up to scrutiny.
The climate of uncertainty is destructive. People are not keen to take over post offices. In my neighbouring village of Beattock, there is no longer a post office because nobody wants to run it. There are many sub-postmasters and sub-postmistresses who have invested hundreds of thousands of pounds. It is estimated that in Scotland they have invested £100 million of their own money—the entrepreneurial approach that the Minister for Enterprise and Lifelong Learning wants to encourage. Because of the uncertainty, those people cannot sell their businesses if they want to move out, and banks that want to develop and expand are unclear about the future.
Mr McLeish seemed to allude to the fact that the Government has the opportunity to redeem the situation by giving us clarity of purpose and telling us how, step by step, the public can continue to be paid in cash. The Scottish Executive has tremendous scope to contribute to an exciting future of expanded services for post offices.
We had a rather dysfunctional debate on modernising government the other day. If the Government is serious about modernisation and delivering services to people in their communities, the post office network offers the opportunity to do that. From applying for housing benefit to getting an application form for one of the Government's many seats on quangos, all could be done in a supervised, interactive environment in local post offices.
I will replicate my previous speech in one way: by concluding with a remark, which applies equally to urban and rural post offices, from Katharine Stewart's book "The Post in the Hills":
"in a rural area like this the post office has always been a natural focus of community life. In the queue for postal orders or the savings bank all the news from the activities of the local council to the School Board to events of national significance can be discussed and addressed. The latest gossip is also greatly shared and enjoyed".
Post offices are at the heart of every community across Scotland. Let us do all we can to keep them there.
There is a great deal of support for post offices here today. We all accept that the post office is more than a business. It is more than a place to receives one's benefits. It performs a vital service in thousands of communities around the country. Sub-postmasters and sub-postmistresses often perform the additional and unofficial functions of the village social worker, home help or local tourist officer.
Rural communities know only too well the devastation that is caused by the loss of such a treasured service. I am sorry to say that during the Tory years the number of post offices in the UK fell by more than 3,500—one in six of the network. The losses were felt especially hard in rural areas, as sub-post offices closed and services retreated to the towns and cities. I draw parallels with similar discussions that we have had on shops and petrol stations. If the Tories had succeeded with their plans to privatise the Post Office fully, and to allow market forces to wreak havoc on our rural communities, I wonder just how much worse the situation might be today.
Although privatisation has been stopped, figures show that the rate of sub-post office closures has accelerated since Labour came to power, which is surprising. Projected figures for the year ending in March show that we are looking at perhaps as many as 500 sub-post office closures. That is unacceptable. As more and more sub-post offices are struggling to survive, it is unfair that further insecurity and uncertainty is placed upon them.
We accept and understand that the Post Office is a reserved matter for Westminster. The Liberal Democrats at Westminster have demanded—and received—assurances that ACT processing of benefits will not take place until automatic platforms are available in all post offices. That will at least allow our sub-post offices to compete.
We have argued strongly that customers must be able to choose the right to receive benefits directly from the post office, without a bank account being involved in the transaction. Liberal Democrats at Westminster are campaigning for assurances and guarantees for sub-postmasters and sub-postmistresses that their income will not be threatened by future changes.
Our Westminster team argues that the universal service provision should be re-written to guarantee that the social value of rural post offices—which has been mentioned today—is taken into account in determining the financial viability of the service. Liberal Democrats at Westminster are leading the fight against the neglect of the post office network by successive Labour and Conservative Governments. Where has the Scottish National party been while that fight has been going on?
Will the member give way?
No. I will let the member in shortly.
In December, Liberal Democrat MP Steve Webb tabled an early-day motion demanding income safeguards and guarantees. It drew 90 signatories from both sides of the House of Commons. Only one of the six Scottish National party MPs bothered to sign up in support.
In January, the Liberal Democrat MP Vincent Cable forced a vote on a Lib Dem motion that attacked the neglect of the Post Office by successive Governments. Forty Lib Dems, one Irish MP, one Welsh MP and Martin Bell voted against the Government. The Tories abstained because they refused to accept responsibility for decimating the Post Office in the past. Where was the SNP? Not one Scottish National party MP turned up to vote against post office closures—at Westminster, where it matters.
In February, the Postal Services Bill received a second reading; once again, we had the chance to say what we thought of the closures. Eight out of 10 Scottish Lib Dems voted against the closures. An amazing two out of six SNP members bothered to turn up and vote. Perhaps Alex Salmond has a guilty conscience about failing to turn up when it really mattered. His party is kicking up a fuss now, to hide its guilty tracks.
We must not allow the SNP's failures and neglect to hide the fact that dangers still confront our post offices. The Communication Workers Union and others tell us that between a quarter and a half of our post offices could be threatened by the loss of some £400 million of income through changes in benefit processing. In Ross, Skye and Inverness West, 23 of the 84 post offices depend on benefits for more than 40 per cent of their income. Those figures are, I understand, typical across the country.
We must demand clarification and assurances from Westminster that it intends to defend our post offices. The Executive's amendment urges the UK Government to maintain the network and to offer reassurances to postmasters and postmistresses. The UK Government tells us that its proposals do not threaten the network. It must demonstrate that by offering assurances and guarantees to the thousands of postmasters and postmistresses around the country who feel threatened by the changes.
I hope that the whole Parliament can join together today to condemn the closures and to urge the UK Government to offer the guarantees and assurances we all seek.
We now move to the open part of the debate. Due to overruns by all the opening speakers, we will be able hear only two back-bench members.
It is a pity that the minister has gone. He used rather intemperate and unusual language this afternoon. To accuse the SNP of telling lies, when our briefing material comes from evidence given to us by the Post Office Users National Council and by the National Federation of Sub-Postmasters, is effectively to call those groups liars. Is Henry McLeish also calling his colleague in Fife, Rachel Squire, who has been campaigning on the issue, a liar?
I am glad to see that the minister has returned. His veneer of reasonableness has slipped badly this afternoon. His language has been that of a rough-house centre half who used to play for East Fife, rather than that of a responsible minister.
I will not give way to Mr McLeish. It is about time that he sat down and listened to other people for a change. He should sit on his bottom. His language today has been shocking. I can sum up his contribution quite clearly from his body language and from the words that he used: he feels that the Executive is losing.
As this important issue has unfolded, it has become clear to me that the bureaucrats and the technocrats have taken over the shop. It is now time for the politicians to get a grip and put an end to the damaging plans for our post offices. It has been clear for many years, including the years when the Tories were in power, that the Benefits Agency was determined, for technical and operational reasons and for reasons of fiscal rectitude, to introduce an automated credit transfer system. Politicians should be asking why a single Government agency, acting in its own interests, can be allowed to damage a huge national asset such as the Post Office.
Over the past few years, there has been a lot of talk about joined-up government. This is a prime case for ganged-up government. It is time that the rest of the UK Government, and Labour ministers in the Scottish Government, ganged up against the bully boys from the Department of Social Security. If ministers did that, Scotland might respect them a bit more. Unfortunately, it would appear from the terms of Henry McLeish's amendment that the Scottish Government is not prepared to stand up and be part of the gang to take on the bullies. Instead, we have heard words of comfort with no real substance. The minister's amendment states that
"all benefit recipients should be able to choose to have their benefit payments transacted by the Post Office".
Those are fine words, but they do not add up to a row of beans. Although the Secretary of State for Social Security has announced that there will be no compulsory move to ACT until 2003, the central question of whether the Post Office will be fully automated by then or will be able to provide an alternative banking facility has not been answered.
The Government says that it is responding to market conditions by creating choice for people, and we saw the minister brandishing his document this afternoon. However, that claim is not borne out by the facts. According to existing data, 80 to 85 per cent of current benefit claimants have bank accounts, yet as many as 70 per cent choose to receive cash payments through their post office. There is a variety of economic and social reasons for that, but anybody making an objective assessment of the statistics can see that the customers are voting with their feet.
The House of Commons Trade and Industry Select Committee has been examining the issue and some of its conclusions are quite interesting. The Secretary of State for Social Security told the select committee that
"the vast majority of new entrants into the system . . . are opting to go to ACT."
The committee did a bit of digging, and came up with this conclusion:
"We sought the latest figures on ACT for new benefit claimants. The image presented of a flood of new entrants opting for ACT is exaggerated. Most new pensioners are in fact not opting for ACT. Fewer than one in 10 income support recipients elect for ACT. Fewer than 1 in 3 of new benefit recipients opt for ACT."
The customers have made their choice and it is quite clear that they are not happy with what they see.
I am glad that many members have taken an interest in Ayrshire over the past few weeks, and I hope that they continue to do so. Now that everyone has got used to finding their way there, perhaps they will all come and spend their holidays there in the summer and contribute to the local economy, including that of the rural post offices and associated stores.
I represent a rural constituency and I do not need any lessons from anybody on the vital role that rural post offices play. I have had representations from a number of postmasters and postmistresses in Carrick, Cumnock and Doon Valley who were concerned about what these proposals might mean. We know that 95 per cent of people in the United Kingdom live within a mile of their local post office, but that only 60 per cent live within a mile of a bank; we know that 60 per cent of rural villages have a post office, but that only 9 per cent have a bank; and we know that one in eight families do not have a bank account. We can therefore begin to understand why people are concerned.
I do not have a problem about debating reserved matters in the Scottish Parliament if they concern Scotland, but I am concerned about the way in which this debate has taken on a scaremongering tone. Factual information has not been presented.
No, I will not give way. I have only four minutes and I intend to use them wisely.
People in my constituency—the consumers as well as the postmasters and postmistresses—want to be reassured. They want to be reassured that people will still be able to receive their benefits in the post office. As was rightly pointed out, people do not want to queue up in the rain outside a cash machine and be charged for the privilege. Perhaps we should consider the role of some of the banks and financial institutions in that.
I have taken considerable time to read the recorded deliberations of the House of Commons on this issue. Henry McLeish has already spelt out what Stephen Byers said. Stephen Byers apparently had to spell it out several times, so—to assist the minister in getting the message over—I will spell it out again today. A clear commitment was given that people will continue to be able to receive their benefits in cash at the post office, in full and without any charges, until the introduction of ACT and afterwards. I do not know how much more clearly that can be spelt out.
No, I have already said that I am not giving way.
We have heard today about social justice. I would like to say a couple of things about social justice in relation to the postal services. I bet that few people know what it is about, but clause 30 of the Postal Services Bill gives the secretary of state powers to direct the new postal services commission to impose, as a condition of issuing a licence, a requirement that the licence holder provide free postal services for the blind. That will ensure that people who require certain articles to be sent through the post, for example, large-print books, continue to get that service free. That is the kind of social justice that we are talking about.
Another kind of social justice is exemplified by today's announcement by the Minister for Finance in relation to village shops and post offices and in relation to the changes in mandatory rates relief. The announcement will benefit the rural post offices and shops that are the lifeblood of their communities. Please do not perpetuate the notion that there will be home helps out in the street queueing up to collect the pensions of their elderly clients—it is simply not true. A commitment has been made that anybody who currently signs an authority for a third party to receive benefit on their behalf will continue to be able to do so.
I do not pretend to know the chapter and verse of that, but the commitment has been given, and I accept that that commitment was made in good faith. Frankly, if it is not delivered, I will have something to say about it. But let us get on and do the business; let us get that commitment delivered.
We now move to closing speeches. I call Euan Robson to wind up for the Liberal Democrats.
During last summer and autumn, my colleagues Archy Kirkwood MP, Michael Moore MP, Ian Jenkins and I visited a number of post offices in our two Borders constituencies to hear from practitioners what they felt about the Westminster Government's proposals for changing the way in which benefits were paid. We found that sub-postmasters and sub-postmistresses, and their regular customers, were profoundly concerned about the future.
As we know, many sub-post offices operate on the edge of viability. Many would close if the Government were to implement compulsory automated credit transfer for the payment of benefits. It has to be recognised, however, that even a partial loss of benefit transactions would threaten viability. I shall read the minister's opening speech carefully when the Official Report comes out, but I heard very little from him about levels of income for sub-postmasters and sub-postmistresses after 2003, and that is a critical point.
It is right to try to diversify and broaden business opportunities for sub-postmasters. However, in the Borders—and I am sure that the situation is similar elsewhere—those new types of businesses each earned less than £200 a year. That contrasts with the anticipated loss of £5,000 per annum that one postmaster in the south of my constituency said that he would suffer if there was compulsory ACT. There would be a haemorrhaging of his income even if some of his customers opted for ACT after 2003.
In the autumn, we conducted a survey of sub-postmasters and sub-post offices, the results of which my colleagues published last month. According to those results, 71 per cent of post offices in the Borders are in rural areas and serve small communities. Five post offices serve communities with populations of 100 residents or fewer. I am sure that the situation is similar in the Highlands. Many post offices—67 per cent—are combined with a retail outlet, of which more than half are the only shop in the village. The footfall of those seeking post office services boosts the retail business.
The cumulative service to Borders communities is illustrated by the fact that more than half the sub-postmasters and sub-postmistresses have been serving their customers for more than 10 years. In addition, eight have served for more than 20 years and two have served for more than 40 years. Although all sub-postmasters believe that a significant proportion of their work would be lost if Benefits Agency work was removed, 75 per cent believe that they would lose more than 40 per cent of their work in those circumstances.
I stress again the fact that the loss of even a part of the Benefits Agency work could have a detrimental impact on the viability of a post office as a business. In the survey, 84 per cent of sub-postmasters indicated that the loss of Benefits Agency work, if the ACT transfer took place, would mean that their businesses would become unprofitable. Furthermore, as 58 per cent of sub-postmasters live on site, the loss of all ACT transactions could threaten their homes as well as their businesses. Even the loss of some ACT transactions would put those people's homes at risk.
Is Mr Robson reassured by what the Government has been saying, or does he agree with us that these points are facts and certainly not lies?
I am partly reassured by what the Secretary of State for Trade and Industry said. For a while, the Westminster Government sleepwalked into a crisis. However, it has understood—because of representations from various quarters—that there is a significant threat to the rural post office network. We must not exaggerate that threat at the present time, but we must underscore the fact that the critical factor in all this is incomes for sub-postmasters and sub-postmistresses. What will their incomes be after 2003? [Interruption.] Forgive me for banging the lectern—I am unused to speaking from a lectern.
During the period of the previous Conservative Government, 4,000 sub-post offices closed. The rate of closure is currently about 200 per annum. We must reverse that trend. It is time to reverse decades of decline. The first thing to do is to recognise that the key factor is the income of sub-postmasters after 2003. We could also consider options for paying council tax through post offices. We could certainly consider expanding business opportunities. However, business opportunities are limited in areas such as Stichill and Eccles, in my constituency, which I visited recently. There is no point in introducing a bureau de change there, as most of the clients are pensioners and single parents who have great difficulty in finding the money for transport to the nearest towns.
This has been a useful debate, but I appeal to Westminster to focus on income levels and customer service rather than on administrative savings.
I recently undertook a survey of sub-post offices in central and north-east Fife. It is a pity that Henry McLeish is leaving the chamber, as I am talking about his constituents. I want to talk about the fears and concerns of the sub-postmasters and sub-postmistresses in those areas. Many have taken out loans to secure the deposit that is required by the Post Office, as they thought that the purchase of a sub-post office would be a secure investment. Those people will now be in debt with their incomes greatly reduced and some might even become bankrupt if their businesses have to close.
If the Benefits Agency and the Government automate the payments of benefits into bank accounts, the results would be disastrous for most village post offices. Not only would the post office close, but there would be numerous effects on the surrounding area. Neighbouring shops would close, resulting in further job losses and leaving the public with no option but to shop in the town centre. The empty shop units would then become derelict and be vandalised.
The automation plans take no account of the many people who have no bank accounts and would not qualify for them. The main people who collect benefits are the elderly, who cannot get about as easily as others; in fact, many pensions are collected by home helps for pensioners who are housebound. What will happen to them? Furthermore, what will happen to the young and unemployed who have no satisfactory identification to open a bank account, and to the section of the community who might have a criminal record and would not get such an account? A large section of everyday people fall into those categories.
It is difficult to believe that banks want the type of account that those people would operate, with money going in and coming straight out again. It also seems unfair that the type of account that would be offered will incur a fee if the balance falls below £50. People on benefits are already on a tight budget and it is grossly unfair to be penalised anything from £5 upwards for operating an account in credit. No thought seems to have been given to the opinions of the people whom the changes will affect and, after all, most of them have worked all their lives paying their stamp to earn their pension.
The Post Office currently has an on-going computerisation plan. The postmasters proposed a swipe card to replace benefit books, which would have reduced benefit fraud. That is running at about £5 billion a year, mostly through stolen and forged books. The present scheme is not the answer. It will close not only hundreds of post offices but countless local shops as people will spend their money where they collect their pensions and benefits. Although there might need to be changes to stop fraud, most fraud occurs at the Benefits Agency end with false claims and so on, not at post offices. If the Benefits Agency, the Government and the Post Office worked together, options could be found that would suit everyone concerned, most of all the general public.
The majority of the two thirds of post offices that responded to my survey said that they would lose more than 40 per cent of their income and many would face closure. One response said:
"It would be nice to think that the Government would listen to what the people want and not force them into something which is impractical and sometimes impossible for them."
My whole speech was derived from comments from sub-postmasters and sub-postmistresses in central and north-east Fife. I ask the Executive to allay their concerns and fears with early concrete proposals to ensure the viability of their businesses and to end the uncertainty that hangs over them.
Ceann Comhairle—I am not sure what that means, but it sounds rather better than Deputy Presiding Officer—having been an Opposition MP for quite a long time, I fully appreciate the attraction of a good scare story. However, I should gently tell SNP members that the job of an Opposition in Parliament is to try to scare the Government, not to stir up unnecessary alarm among pensioners and claimants. We have had a lot of that in this debate.
Will the minister give way?
No.
The SNP's approach was in marked contrast to the sensible debate initiated by David Mundell on 27 January on the same subject. A number of genuine and serious points have been made not only by John Farquhar Munro, Cathy Jamieson and Euan Robson, but by David Mundell and Keith Harding. I hope that I am not destroying the reputations of those two men by saying so.
Before turning to those important points, I must deal with the merchants of panic on the SNP benches. I gather that, as Fiona Hyslop took the lead in this debate, she would be the postmaster general in an independent nationalist Scotland. Although she might have taken this opportunity to tell us a bit about the style and the cost of redesigned nationalist pillar boxes all over Scotland, I got the impression from her speech today that she might try to force all pensioners and claimants to collect cash from post offices whether they want to or not. So much for the rights of about half the new pensioners and child benefit recipients who prefer to receive payments directly into their bank accounts.
It is quite shameful that the minister treats the seriousness of this debate with such frivolity. Is the minister aware of the Communication Workers Union's report that, within his own constituency of East Lothian, 13 out of the 28 post offices rely on benefit payments? The minister talks about choice. Yes, we want to move to an automated system, but not one that is compulsory and not before the Post Office is ready to deliver it.
That is precisely the approach that is lacking. I wish that members of the SNP would listen to our proposals. Perhaps then we could progress to a constructive debate.
As usual, the nationalists tell us nothing about the cost of their proposal to force everyone to go on handling cash whether they want to or not. However, I presume that that will be another charge on the amazing, elastic penny for Scotland. I can assure Fiona Hyslop and her colleagues that the taxpayers of Scotland will count those pennies carefully.
David Mundell was fairly constructive, if I may put it that way. However, given that Fiona Hyslop referred to my constituency, I cannot let David escape the fact that there were five Crown post offices in the county when I was first elected for East Lothian. The Tories did away with four of them and let a number of village post offices go. So I will not take either of the Opposition parties terribly seriously in this debate.
However, I take the interests of pensioners and people who claim benefits very seriously indeed. We are committed to retaining and developing post office services throughout Scotland, particularly in rural areas. One third of the people of Scotland live in rural communities and this Executive has conveyed a strong and clear message to the UK Government about the importance of sub-post offices in those areas.
I must nail the big scaremongering lie about compulsory ACT, which we heard again today from Fiona Hyslop and which is all over the press. There is no question of compulsory ACT. The Westminster Government gave an unequivocal undertaking that people who want to draw pensions and benefits in cash through their local post offices will be able to do so. It is as simple as that.
I want to respond to the genuine and understandable concerns of sub-postmasters and sub-postmistresses by highlighting the new opportunities—[Interruption.]
Can we have some order, please.
I will highlight the new opportunities that we will help sub-postmasters and sub-postmistresses to develop, so that they will be able to play an even greater role in the development of local communities throughout Scotland. We do not just want post offices to survive; we want them to thrive and to develop.
Will the minister give way?
I am sorry, but I do not have time. There will be other opportunities.
Henry McLeish explained the opportunities for new business for all Scotland's 2,036 post offices that will exist when they are connected to the Horizon computer system by the end of 2001 and when more automated teller machines are installed in post offices. This week, I received an interesting letter from a postmaster in my own constituency who made the case for the development of a new type of National Savings account as a way of promoting new banking services. That sort of innovation must be the way forward for our post offices.
Wind up, please.
I welcome the fact that the Cabinet Office's performance and innovation unit is shortly to report on ways of developing the business of post offices. Scottish interests have been taken into account in that study.
Finally, I remind the chamber of the clear statutory safeguards for post office services that are built into the Postal Services Bill, which is going through the Westminster Parliament. The bill includes criteria for universal access to postal services and a powerful commission to protect the public interest. I also refer members to the Minister for Finance's comments today on rate relief.
We fully understand the fact that post offices provide lifeline services as the only local retail outlet in many neighbourhoods. That is why we are determined to work with them to develop a modern network with a secure future that serves the developing needs of towns and villages throughout Scotland. We reject the irresponsible scaremongering of the nationalist Opposition in this debate.
I call Alex Neil to close the debate for the Scottish National party.
How long do I have, Presiding Officer?
You have eight minutes.
I first declare an interest on behalf of Fiona Hyslop and me. We are both from Ayr. Members know what Rabbie said about Ayr:
"Auld Ayr, whom ne'er a town surpasses,
For honest men and bonie lassies".
It seems from the debate that the Prime Minister, Tony Blair, is the only person who does not know where Ayr is.
I will discuss the fundamental problem that is faced by post offices and by the people who use them throughout the country. This is not scaremongering—the people who work in post offices, the people who own them and the people who use them have genuine concerns about the future viability of post offices both in rural areas and in peripheral housing schemes in urban areas.
There are two major threats to the future of sub-post offices. The first is the reduction in the income generated for post offices by their work on behalf of the Benefits Agency. As Euan Robson rightly said, between now and 2003 there will be a 90 per cent reduction—from 12p to 1p per transaction—in the money paid by the Benefits Agency to post offices for every transaction that they undertake on its behalf. Given that post offices in Scotland rely on Benefits Agency revenue for 40 per cent of their income, that is a substantial reduction in income for post offices and is a threat to their viability. As Euan Robson pointed out, many of those businesses are marginal. In rural areas, many of those businesses are not only post offices, but local village shops—both sides are required to make those businesses viable propositions. Loss of income is a major reason why people are worried.
Will Mr Neil confirm that he said that the Post Office would get 1p for each transaction? That is a complete lie. What has been said is that the fee will remain the same for each transaction, or it might even be higher. One penny is the efficiency gain from the modernisation programme.
It is not a complete lie; it is an inaccuracy.
It is not an inaccuracy, either.
I simply rephrased the question.
Stephen Byers, the Secretary of State for Trade and Industry, said that the Benefits Agency, over the next three years, will make that scale of reduction in payments per transaction to the post offices. That is a major threat to the income of the Post Office.
The second threat is the introduction of ACT. I take the point that has been made—that ACT will not be made compulsory at the moment. However, Labour's argument is, "Trust us, trust us; we will keep our word—we will never make it compulsory." Those are the same people who asked us to trust them on the privatisation of air traffic control. Before 1997, Labour said, "Trust us—we will never privatise air traffic control." One of the first things that Labour did when it got into government was break its word by privatising air traffic control. People are worried, because they know that this is a Government—in Edinburgh and in London—that they cannot trust.
Members should consider the implications for post offices of the projected loss of income—the loss is projected not only by the SNP but by postmasters and other independent organisations. As Euan Robson pointed out, when a local post office suffers a substantial loss of income the results are job losses and closure.
Members need only consider what happened when banks closed down. A report by Richard Willis, of the University of Newcastle upon Tyne, analysed the effects of bank closures during the past six years. His main conclusions were that the significant closures were in deprived areas—the same will happen with post offices. Post offices in deprived areas rely on the work they do for the Benefits Agency for up to 80 per cent of their income.
Does Alex Neil agree that it is not only rural post offices that are important, but those in urban areas? I recently carried out a survey in the Stirling area that showed that post offices in Bannockburn would lose 90 per cent of their business, those in Causewayhead would lose 80 per cent and those in Raploch would lose 70 per cent. The postmasters told me that they would go bankrupt if that happened.
I agree with Mr Monteith. The most needed post offices—those in deprived and rural areas—are most likely to close first because of their reliance on income from the Benefits Agency and the cost of running a marginal business in rural areas.
Could I persuade Alex Neil to comment on a minister who accuses the SNP of scaremongering, but in whose constituency 40 per cent of the income of 10 of its 20 post offices is based on benefits? One of the people who have made representations on the matter is the executive officer of the National Federation of Sub-Postmasters who lives and works in Methil, in the minister's constituency. Will Alex also comment on that?
The facts speak for themselves. The minister should have sat through the whole debate and listened to every speech that was made by members of this party before making such accusations.
The debate has focused on the worries of people who own, run and work for post offices, but we should consider the effect on people who use post offices. People who collect benefits from the post office include lone parents, unemployed people, pensioners, income support claimants and other low-income groups. We have had no guarantee that bank charges will not be levied on transactions in post offices—the issue is under discussion. Last week, banks south of the border announced that they were considering major new charges. Those charges would make a substantial dent in the income of a pensioner or an unemployed person.
The proposals are bad news for post offices, for rural communities, for urban areas, for claimants and for Scotland.