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On Second Reading, the Secretary of State said:


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Although at the outset I welcomed the new clause in principle, it is not apparent why a new clause drafted in such general and unspecific terms was not included in the Bill at the start. It would have been preferable for us to be able to examine it more closely in Committee, and to hear from the Secretary of State or the Minister the details that lay behind it. Is it, in fact, such a last-minute panic measure that Ministers do not know what the back-up will be, and how the new clause will work?

Perhaps the belated appearance of the new clause is due to a disagreement between the Treasury and the DTI about the scale and terms of the financial support that will be offered to the post office network. Perhaps, like my hon. Friend the Member for Aylesbury (Mr. Lidington), I am unduly suspicious, but the Minister has still not given a good explanation of why the provision was not announced on Second Reading--or, indeed, of why the Chancellor of the Exchequer did not mention it in his Budget statement. The sums involved are surely of a size to merit some attention in a Budget statement.

The new clause will have raised considerable expectations throughout the country among those running sub-post offices. It will also have raised expectations among customers hoping that their post offices will be saved. I hope that those expectations will not be disappointed. It is one thing to enter into broad, vague, nebulous commitments of the kind envisaged in the new clause; it is a quantum leap to carry them into positive effect.

Once the mist engendered by this exercise has dispersed, those people will want to see real results. They will want to see post offices that have been threatened with closure saved, and new ones opening. It is up to Ministers to ensure that, if public money is used for this purpose, such benefits occur. If they do not occur, and are not seen to occur, the House and the country will know that this has been little more than a public-relations exercise.

Mr. Drew: Unlike Conservative Members who have given the new clause a curmudgeonly welcome, I give it, along with the Government amendments grouped with it, a warm welcome. This is an important initiative and, if the Government are accused of having listened, so much the better. There has been a major campaign, led--dare I say--by the Western Daily Press in my area, and taken up by many other newspapers and media outlets. It has touched a raw nerve. We all know about the problems from which sub-post offices suffer. There is a wonderful irony in being lectured by the Opposition. They accuse us of precipitate action yet they failed to tackle the problems. They had 18 years in which to act, but they did not intend to pursue the policy that the new clause outlines. It is mildly amusing that they will vote in favour of it--or, at least, not against it--while Conservative Front-Bench Members maintain that they support privatisation. I do not know how they resolve that contradiction.

Mr. Lilley: In welcoming the new clause as a major step forward, does not the hon. Gentleman tacitly admit

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that Government policy of compelling people to have benefits paid into bank accounts instead of a post office potentially threatens the post office network, thus making the subsidy necessary? Without the policy, the new clause would be neither necessary nor a major initiative.

Mr. Drew: We have held that debate so often in the past, I hoped that the right hon. Gentleman would have got it right by now. There is no compulsion; people from the Prime Minister down have the right to choose the way in which they wish to draw their benefits. That will remain the case. If we changed that, it would not stop the decline in the sub-post office network. The new clause gets to the root of the problems. We need some form of subvention, for which the details need to be worked out. The Government are pledged to do that, and we should therefore welcome the new clause and consider its implementation.

I agreed with the hon. Member for South-West Hertfordshire (Mr. Page) that having the performance and innovation unit report would help. It would tease out some of the details that we require. The report is a major piece of work for which we have waited for some months. The longer we wait, the more detail it will hopefully contain. It will then better be able to show the way in which new clause 1 can be implemented.

Mr. Letwin: Like me, the hon. Gentleman has participated in many debates on the Bill. Does he support permanent subsidies to sub-post offices as a way forward in principle?

Mr. Drew: If the hon. Gentleman will allow me to advance my thoughts, I shall explain my approach. I do not oppose the idea that the Government should provide more income to help the sub-post office network, which clearly needs additional income. I do not mind whether the money is a subsidy or in a different form. The campaigns and speeches of hon. Members from all parties have alerted us to the problem, and the new clause presents a method of dealing with it. I hope that I can explain that briefly.

Mr. Peter Bottomley (Worthing, West): The question of payment--subsidy or not--arises because decisions between Departments have resulted in the withdrawal of £400 million from the sub-post office network. How much of that sum should be replaced by payments under new clause 1?

Mr. Drew: I cannot give a categorical answer about the money because that is up to the Government Front Bench, but I hope that we will think ahead about the extent to which we can help individual sub-post offices while maintaining the overall network.

I believe that the Minister for Competitiveness agreed with the view that I expressed in an Opposition day debate last week. We must strike a balance between the amount that we grant individual sub-post offices to help them through temporary difficulties or to find methods to build for the future and the way in which we help the whole network. My answer is to increase the speed of the evolution of smart cards. I do not believe that that will be achieved entirely by the public sector, but it might be done by the public and private sectors in harness. I should like that to happen.

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The Opposition have created difficulties for us. There is nothing wrong with that in some respects, but they have sold their view that our policy is ACT or nothing, and that has made it more difficult for us to present our case to the sub-postmasters and mistresses. Some of us have always believed that ACT should be considered in addition to the obvious answer: the evolution of the smart card. My right hon. Friend the Secretary of State can speak for himself, but we heard clarification on that matter during the debate initiated by the Opposition last week.

Mr. Letwin: Will the hon. Gentleman give way?

Mr. Drew: If the hon. Gentleman will please excuse me, I must continue.

The nub of the debate is the degree to which the Government can support investment in the smart card as we would want it to be and the way in which they can help individual sub-post offices. We must decide how best to use our money and how to influence the sub-post office structure to keep the universal service obligation. I have already said that I wish that I knew how the official Opposition would keep it if they followed their route of privatisation. We must keep the entrepreneurial spirit of individual post offices alive while giving support through the pay structure and the other ways in which payments are made already.

Such matters are complicated, but a considerable number of community sub-post offices already rely--not exclusively, but to a large extent--on a subsidy or a salary payment. That is what I was trying to get at in my question to my right hon. Friend the Secretary of State. We can enhance and extend that system, but our proposals must be clear. The discussions need to be based on that fact and taken forward from there. The detail will emerge from the consultations and negotiations, but, as well as providing stability and value for money, the system must be fair and transparent. All those issues are important. They must be talked through with the various organisations that will have both a part to play and a view on the proposals.

I welcome new clause 1. We should recognise that structures will change, but that is not the only way forward and in no way do I wish to denigrate the many thousands of businesses that make up the sub-post offices network. Some people or businesses already own a succession of sub-post offices, which may provide stability, but I want to see the community enterprise idea alive and well. That may be a way to retain services in villages and suburban areas, but it may also allow us to reintroduce them. That is happening in villages in my constituency. The village shop in Whiteshill has close links with the sub-post office and Coaley provides an example of how services--the most important of which is the postal service--could be reintroduced. If a village shop can work in harness with the sub-post office, there is much more chance of the service being retained.

New clause 1 represents an important new dimension to the discussion and the proposals cannot be introduced soon enough because we are losing sub-post offices. That is nothing new and there are no quick fixes. If there were, I presume that the previous Government would have produced some, but they failed lamentably. It is important to guarantee the universal service obligation, which is what the Bill is largely about. We have put on record the

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fact that we want a network of sub-post offices, for now and the future, and the proposals constitute the way in which that should be done.

It is important to strike a balance in the debate. Some of us have watched it assiduously and have made suggestions and it is good that the Government have listened not only to the campaign outside, but to what hon. Members on both sides of the House have said. That is why new clause 1 should be welcomed unreservedly. Rather than go on the defensive, we should begin to enhance the chances of our sub-post offices so that they have a genuine future.


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