Rural Sub-Post Offices
The final item of business today is a members' business debate on motion S1M-361, in the name of David Mundell, on rural sub-post offices. This debate will be concluded in 30 minutes.
Motion debated,
That the Parliament recognises that current Benefit Agency "modernisation" proposals will encourage the payment of more pensions and other benefits by automated bank transfer, rather than at Post Offices, potentially leading to the closure of hundreds of rural sub-post-offices in Scotland, and calls upon the Scottish Executive to make representations to the Benefits Agency and the Post Office as to the serious adverse effects such closures would have on the needs and sustainability of rural communities in Scotland.
On a point of order, Presiding Officer. I understand that representations about extending this debate were made to you, but that an extension was deemed not to be possible. Will consideration be given in future to extending the time for debates on members' motions that address reserved matters that are of wide interest but are unlikely to be dealt with under Executive or Opposition business, rather than local issues?
I assure you that that question has been given careful consideration by me, by my two deputies and by the bureau. We have decided to stick to the parliamentary timetable except on very rare occasions. If we did not, we would extend the debate every time members' business dealt with non-constituency business such as this, as it is difficult to pick and choose.
Members' debates belong to the members who initiate them and to the ministers who reply; if anyone else speaks in between, that is a bonus. Unless the Procedures Committee decides to change standing orders, we will adhere to the current procedure.
I welcome this debate on my motion on the future of rural post offices. I was particularly pleased that members of all parties felt able to sign my motion, which recognises the substantial fears that exist across Scotland about the future of the rural post office network.
Because of the nature of my region, I have focused on the rural issues, but I readily accept that post offices face difficulties in urban areas, particularly in deprived communities. Other members may choose to mention those issues in their speeches.
Many organisations have campaigned on this issue. In particular, I want to recognise the Campaign for Scotland's Post Offices that has been run by the Scottish edition of The Express, which has done much to highlight the difficulties ahead.
I am sure that there will be no argument today about the valuable role that postmasters and postmistresses play in their communities across Scotland. They provide human contact. We hear much about exclusion, but one can be little more excluded than those who are geographically isolated in communities that have no services and no opportunity for that human contact.
Postmasters and postmistresses also provide help and advice, particularly to the elderly, who live in an increasingly complicated world of benefits, bill payment options and information overload. Rural pensioners and benefits recipients can pick up their benefits in cash denominations that they select, get help and advice in paying bills, and collect stamps to pay for services such as the telephone. Many people neither have nor want bank accounts—they should not be forced to have accounts just so that the Government can save money.
One of the many sub-postmasters and mistresses who have written to me is Mrs Nancy Currie of Kirkpatrick Fleming near Lockerbie, who says:
"I pay an average 100 pensions or allowances weekly, 30 of those people do not have cars and are dependent on public transport, for them to rely on public transport to get to the nearest bank will be difficult and for the not so fit almost impossible".
The core problem, as I am sure most members appreciate, is the basis on which sub-post offices are funded. At the moment, postmasters and postmistresses throughout Scotland are paid according to the amount of pensions and benefits they pay over the counter to their customers. The Benefits Agency proposals will encourage, if not at this stage require, the payment of more pensions and other benefits by automated bank transfer from 2003.
If sub-post offices continue to be funded on the current basis, a significant number will become financially non-viable. For example, in the Clydesdale constituency, there are 31 post offices, of which 24 rely for more than 40 per cent of their business on Benefits Agency work. Of the 45 post offices in the Dumfries constituency, 32 rely on Benefits Agency work for more than 40 per cent of their income.
Let us not forget the investment made by sub- postmasters. In the UK, more than £1 billion has been invested by people, many of them running
very small businesses of the sort that we say we want to encourage. Many of them have set up their own businesses, of which being a postmaster or postmistress is a fundamental part. In Scottish terms, that represents a personal investment of some £100 million. However, if the Benefits Agency changes go through, literally hundreds of post offices will be forced out of business.
I do not believe that this issue is simply about post offices; it is about the whole future of rural Scotland.
Before Mr Mundell moves on, will he agree that it is not simply a matter of the loss of income from benefit transactions that will affect rural post offices? When they go in to collect their benefits, people undertake other transactions. If benefit payments are lost, it is likely that those other transactions will also be lost.
That is the very point that Mr Lunn, the postmaster at Canonbie in Dumfriesshire, made when he wrote to me. He said that if people are forced to travel outwith the area for cash, they will conduct those other transactions where they have travelled to.
I do not know whether this constitutes a declaration of interests, but my grandmother was postmistress in the village of Wamphray in Dumfriesshire from 1932 to 1968. However, it was a different type of community that she served, not least because of the drastic changes in the number of people employed in agriculture. Those changes have been followed in the past few years by the complete collapse in the profitability of farming, which has taken money out of rural areas.
My grandmother saw the station in the village close. Since she retired, the shop that co-existed with the post office has also closed. The church survived only because of the determined efforts of local people, and now a threat hangs over the village school. That is the reality of many rural communities in Scotland today. The closure of post offices would simply pull another rug from beneath their feet.
This debate is about delivering on the idea of joined-up government. It is about having a vision for the future in our rural communities and the strategy to deliver it. If we agree—I assume we do, but we may not—that it is a good thing to have vibrant and thriving rural communities in Scotland, we must accept that a minimum level of core services is needed if a cross-section of the population is to be able to live there.
Postmasters and postmistresses are among the most entrepreneurial people in our communities. I am sure that there is enormous scope for them to work collaboratively with others to maintain and develop their businesses and to support and enrich their communities.
The other day, the millennium commissioner for Scotland told me of a possible project in the islands that would combine a church, community centre and post office under one roof. That must be the way ahead, but it needs joined-up thinking.
There must also be scope for the Post Office to operate more banking services. Post offices already handle £1 out of every £4 in circulation in Scotland. Banking services offer postmasters and postmistresses additional revenue streams and provide additional services to urban and rural customers.
There must also be scope for the Post Office to take advantage of its current programme to wire up all post offices so that it is able to operate supervised interactive computer services from every post office in Scotland. That will provide a tremendous opportunity to deliver UK Government, Scottish Government and local government services to the people in a more useful way. The Post Office tells me that although it would gladly take on services that local government operates, and that local authorities want the Post Office to take on such services, local government does not want to pay the Post Office for doing so.
I hope that I have covered a range of the issues as I see them and allowed time for others to speak. I heard Mike Russell say that he read the 1945 Liberal manifesto at night—a curious passion. I refer him instead to a good little book called "The Post in the Hills", which was written by Katharine Stewart, who operated one of the smallest post offices in Scotland. The book is full of interesting anecdotes, for example the surprise of some French people when they found that the French language was well known in the Highlands.
I proffer this little quotation, which sums up the service that post offices provide:
"In our small corner we have been able to keep in close touch with the human side of things, the look in the eye, the touch of the hand, as news, good or bad is communicated".
I hope that the minister will convey the details of today's discussion to the UK Cabinet committee that is examining some of these issues. In addition, I hope that he will take the details to his department and to the Scottish Executive, and commit to delivering a strategy that not only highlights the dangers of an ill-thought-out change in benefits payments, but delivers a policy that enables our rural communities not only to survive, but to thrive.
Members will have heard Sir David Steel's remarks about the timing of this debate. We have 14 minutes left, and eight members want to speak. If members keep their speeches to less than two
minutes, they can get their local reference on the record and all may yet be called.
I will try to be as brief as possible. I want to tell members why I have not signed David Mundell's motion. It is not because I do not feel that the Post Office is important—it is—but because it omitted to refer to important developments in the Post Office and raised the scaremongering spectre of closures, which will not serve well those communities that are in danger of losing their post office, such as a village in Dumfries where the post office is up for sale.
The post office network has declined at a rate of 1 per cent per year during the past 20 years, so we should be concerned. I was pleased that David referred to computerisation of the network, because that presents an opportunity for rural post offices. Something like 12 times as many rural communities have post offices as have banks. If arrangements can be made—Cathy Jamieson may be able to tell us more about that—with the high street banks, they would allow rural post offices to provide an extra service in rural communities and thereby strengthen their role.
The other fact that I wish to draw to members' attention is that the Government has said that it will not compel benefits payments to be made into bank accounts and that it will continue to be possible for claimants to withdraw all their benefit cash across the post office counter. That comment was made by Alan Johnson, the Parliamentary Under-Secretary of State for Trade and Industry, in a debate on this issue in the House of Commons on 17 January. This issue has been debated a number of times at Westminster.
I will draw my remarks to a conclusion, as my two minutes are almost up. I would have liked to say a lot more, but I think it is important that we recognise and advertise the possibilities for the Post Office and recognise that rural sub-post offices can have an increased and valuable role in our communities in the future.
I congratulate David Mundell on introducing the motion, on which I believe there is strong unanimity among political parties. In my constituency, I have either 64 or 67 sub-post offices—I have two different lists.
Sub-post offices are an essential institution for rural Scotland. They are under threat for one reason and one reason only, which is this insidious and misguided proposal that will become law—unless we hear tonight that the Scottish
Executive will speak out strongly against it. The proposal is that payment of benefits will effectively be taken away from post offices. That accounts for 35 to 40 per cent of the business of most post offices. If that business goes, the sub-post offices will go; it is as simple as that. This evening, I bring a strong message from Highland Council, which is pursuing that line. This is not a party political argument and I am not advancing it as such.
During the holiday period, I heard Brian Wilson say that people would be allowed a referendum. If the sub-post office cannot survive because there is not enough income, a referendum will not make any difference, except for the massive extra bureaucracy and expense of holding it.
What is required is quite simple—the proposal must be cancelled and we should have an honest and open debate about the impact of the modern system on sub-post offices. If the proposal goes ahead, they will close.
I regret the new argument, which we hear more and more, that it is scaremongering for someone to speak out and say what they think is right. That is an argument that will rebound on its proponents. I regret making a speech tonight that might be interpreted as party political.
Sub-post offices are essential, as they are a lifeline; it is often an old person's only daily contact. What will happen if they close? How will we know if old people are still alive?
Earlier in the short lifetime of this Parliament, I asked whether the Executive would speak out against this insidious move; the Executive's answer was that it was in regular contact with Her Majesty's Government. It will not be enough to duck the question in this Parliament. I invite the minister to say publicly to the people of Scotland, and to sub-postmasters and mistresses, what he will say to Westminster about the issue. He should not tell us that he will have private talks with ministers at Westminster; he should tell us what he will say to them. The public expect no less.
The post office network is of huge importance to the efficiency of our economy in Scotland. It has the unique characteristic of universal service provision. The post office network stretches into every airt and pairt of Scotland—that is its strength. However, it has been in decline for decades. One per cent of the network—that is, 200 sub-post offices—is closing per annum. There are a variety of reasons for that. Governments have taken too much out and put in too little by way of investment, and attempts at privatisation have caused uncertainty.
The proposal to remove payments of benefit
from post offices could be a near death blow. Benefit payments account for between 30 and 70 per cent of business at sub-post offices. Another factor is that 2 million to 3 million people do not have a bank account.
The proposal should be opposed on several grounds. As well as opposing this one act of lunacy against post offices, we must consider how to reverse the decline in the post office network. It is a priceless asset, which is in decline. We must reverse that. I am glad to hear that at the very least people will be allowed to choose to have their benefits paid over the post office counter.
We should encourage the Post Office to extend the services that it provides. It has a unique asset in the fact that it is in every part of the country. It has particular expertise in, for example, people's addresses, which offers an opportunity to help keep databases up to date. David Mundell said that sub-postmasters and mistresses are entrepreneurs. We must give them the commercial freedom to extend their services, although we must keep the Post Office in public ownership. We must hang on to the unique characteristic of universal service provision, and to protect that, we might have to take special steps to retain sub-post offices. I thank David for enabling us to debate a vital subject.
Although the Highlands and Islands population is only a tiny percentage of the 28 million people who use the post office every week, the importance of the post office in such rural areas in enormous. Devolution and the Scottish Parliament was designed to look after the interests of rural communities as well as those of urban man, and the Government must show its commitment on this issue.
In the north of Scotland, only two post offices are run by Post Office Counters Ltd. All the other offices are either franchised or run by sub- postmasters, which means that they can be given up at only three months' notice. If that were to happen, it would be a terrible blow to vulnerable people. The rural network of post offices is a lifeline to the elderly, the infirm, the sick and those without a car who have to cope with the ever- decreasing public transport system to get their benefits from post offices further and further away from their homes.
How will poorer benefit claimants survive for a month without any money, as the automated credit transfer system will pay monthly in arrears? That is unfair and only adds to the burdens already faced by rural pensioners. Why should anyone be forced to have a bank account if they have survived into the 21st century perfectly well without one? Is there any evidence that the banks really want the Benefits Agency business? So far, I have not found any bank that will give a straight yes—
Will the member give way?
I am sorry, but I do not have time.
One gets the impression that the banks regard that as an expensive nuisance. There is not a sufficient banking network in remote and rural areas, and there is likely to be even less of one in the near future. I hope that bank machines are put into post offices.
The loss of 40 per cent of post office business would make most rural post offices commercially unviable, and the loss of post office assistant jobs would threaten more jobs on the retail side of such businesses. The closure of the post office often means the end of the only shop in the village. It cannot be the way ahead—it is a step backwards. We should be encouraging rural communities by improving their infrastructure. Let us have some joined-up government, to ensure a good, accessible network of postal centres.
This is an important debate, and I congratulate David Mundell on it. Many of us agree that rural sub-post offices are important; people who are concerned about the issue can be reassured that the Parliament takes it seriously.
The decision to automate benefit payments through bank accounts is not in itself wrong—it might be more convenient for some people to receive benefits in that way. However, there must be choice. The policy should not be compulsory— and it is not compulsory—because it would have a detrimental effect on rural post offices, which provide a lifeline service to our aging rural population. In rural areas, there is very little access to banks and many pensioners and families on benefit prefer to collect cash in hand, while some do not have bank accounts. They cannot afford to travel to the bank, even if they have access to a car. In some areas, that can be an 80-mile round trip, and in the case of the smaller islands, a ferry trip might be necessary.
We also face the prospect of banks charging £1 for the privilege of withdrawing money from autotellers—that is unacceptable. People on benefits must have a choice as to how to collect them. Some banks levy charges on account balances below £100. Those figures might not sound much to us, but to someone on a tight budget, every penny counts.
Post offices are more than a place to pick up
benefits; in many small villages, they are the only public place where people can meet to chat and even do their shopping, as many double as shops. Many are located in unusual places—Maureen Macmillan told me that her local post office is in Mary Finlayson's porch.
Post offices are, of course, a reserved matter. I welcome the fact that broad consultation will take place with communities if post offices are to close, but the Scottish Parliament must also examine the matter and consider innovative ways of making those post offices more viable. Pay-phones used to be located in post offices before everyone had telephones; now we might have to consider locating computers in post offices for the community to access.
I will make two brief points.
Until now, the network of post offices has been based on the assumption that there should be a post office branch within one mile of the homes of between 94 and 95 per cent of the population. If the proposed method of benefit payment becomes compulsory, there is absolutely no prospect of sustaining such a network.
Secondly, at a time of great change and difficulties, the situation in Scotland will not be helped by the abolition—if I may mention that word after the earlier debate today—of the Post Office Users Council for Scotland as an independent body. Scotland, Wales and Northern Ireland have their own post office users councils, but under the pending legislation, and despite the protestations of those agencies, they will be absorbed into the London-based Post Office Users National Council. The Scottish sub-committee will not have an independent right of access to the new commissioner for postal services, and not only will the chair remain a Department of Trade and Industry appointment, but membership will be determined by the national council. At this time, in particular, we should support the calls of the Post Office Users Council for Scotland and advocate that body's continued statutory independence, so that Scotland's rural post offices can receive the attention that they deserve.
I tried my best to fit everyone in, but I apologise to the three members who were not called.
I am grateful to David Mundell for initiating this important debate and to members from all parties and from all parts of Scotland for taking part. As the member for a largely rural constituency, I welcome the opportunity to contribute personally to an important debate about the future of Scotland's rural post offices, as well as replying on behalf of the Scottish Executive.
Like Rhoda Grant and colleagues from all parties, I am well aware of the importance of post offices in rural communities. In many parts of Scotland, the sub-post office is the only local retail outlet, so those post offices are often lifeline services, literally, and the loss of such services can have serious effects on rural communities.
Most of Scotland's land area is rural; almost a third of Scotland's people live in rural communities. That is why the Parliament has a Rural Affairs Committee, why our Executive has a rural affairs department, and why we have established a cross-cutting ministerial committee in the Scottish Executive on rural development. Rural issues are high on the agenda for the Scottish Executive—we intend to make a real difference to the lives of rural Scots.
The regulation of postal services remains the responsibility of the UK Government, but the Scottish Executive is conveying a strong and clear message to both the UK Government and the management of the Post Office about the importance of post offices to Scotland's rural communities.
As a constituency MP and MSP, and incidentally as the husband of a Scottish Borders councillor, I am acutely aware of the problems that have been highlighted during the debate. I had some pretty vigorous exchanges with the management of both Post Office Counters Ltd and Scottish Power about the withdrawal of Powercards from post offices some time ago, and I am less than impressed by the fact that POCL refuses to allow a willing applicant to reopen the sub-post office in my home village. The member for Roxburgh and Berwickshire, Euan Robson, will recognise that case.
My colleague Ross Finnie, the Minister for Rural Affairs, has had a meeting with the managing director of POCL in Scotland and I am sure that the Post Office now understands fully our determination to ensure the retention of a proper network of rural post offices.
We welcome the proposals in the new Post Office Bill to establish new statutory criteria for access to post office counter services, to be monitored by a new postal services commission. The bill will also strengthen the Post Office Users National Council, by giving it responsibilities to monitor the availability of services, in particular in rural and socially deprived areas.
A new code of practice is to be established to deal with proposed conversions or closures of post
offices; that should enable the new regulator to tackle the insidious process of closures when sub- postmasters retire. Nora Radcliffe, among others, spoke about the problems that can result from that.
The motion refers specifically to the transaction of Benefits Agency payments through post offices. Social security is a reserved matter, but it is important to have regard to the implications for rural post offices of the plan to pay benefits by automated credit transfer through bank accounts from 2003.
I visited one of the many rural post offices in my constituency last week, and I found that over 10 per cent of the sub-postmaster's income from Post Office Counters Ltd was attributable to benefit transactions. Any loss of that business could threaten the viability of some small post offices. We should also have regard to the needs of pensioners and claimants, because travel to the nearest bank to draw money can involve long, complicated and expensive journeys.
The figures and concerns set out in an article in The Herald today illustrate the scale of the problems that have to be addressed, not only in rural communities. I see that Benefits Agency transactions can amount to 40 per cent or more of the income of some sub-post offices.
I have written to Alistair Darling on the issue in his capacity as a constituency MP, and I trust that ministers and officials at the Department of Social Security will take account of what has been said in this debate. The Benefits Agency has given undertakings to provide for pensioners and claimants who want to go on drawing their money from local post offices—I reject the self-confessed scaremongering from Fergus Ewing on that point—and to phase in the new arrangements between 2003 and 2005.
The Prime Minister represents a partly rural constituency in County Durham. That might have influenced his decision to commission the performance and innovation unit in the Cabinet Office to undertake a study into the post office network, to evaluate the contribution of post offices in local communities and to consider possible developments. We should be thinking about those developments, as Elaine Murray pointed out. The Scottish Executive is taking a close interest in that initiative and, at our suggestion, members of the study team have been visiting the Borders this week.
It is important to emphasise that there is much more to a post office than forms, stamps and envelopes. Modern information technology offers great potential for developing the role of rural post offices. The horizon project that was referred to earlier will provide every post office with an integrated on-line information technology system by 2001. That will make it possible spectacularly to enhance and expand the services that are available through post offices. For example, post offices will be able to extend arrangements with banks, to enable them to provide high street banking services—and other services—on an agency basis in villages all over Scotland. Elaine Murray made that point earlier.
Those developments will bring tremendous advantages for rural Scotland, by improving the services available to local people and businesses, and by securing the viability of their post offices. The Scottish Executive will assist in that process in any way that it can.
The Scottish Executive is totally committed to the promotion of rural interests. We share the concerns about the future of village post offices that have been expressed during the debate and we are conveying those concerns to the UK Government. We remain optimistic about the potential for developing a successful future for Scotland's rural communities and their post offices. I am therefore grateful to Mr Mundell for giving us an opportunity to debate this subject.
Meeting closed at 17:38.