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Universal Bank

4. Mr. David Heathcoat-Amory (Wells): What the cost of setting up and running the Post Office universal bank will be to (a) the Post Office and (b) the Government. [144530]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): Universal banking services will be funded by the Government and the banks. Until the full details of universal banking services have been settled, it is too early to say what Government support may be required.

Mr. Heathcoat-Amory: Not content with attacking people who sell in pounds and ounces, why are the Government attacking another group of traders--sub-post offices, which are shutting at the rate of almost two a day because of the Treasury-inspired decision, which the right hon. Gentleman's Department should have stopped, to remove about 40 per cent. of their income which they derive through the present system of encashment of benefits and pensions at post offices? Why has the right

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hon. Gentleman done nothing to stop that, and why will he not even tell the House the cost of his alternative plans? We know that the costs are mounting. Why does he not tell us what they are? If they exceed the eventual Treasury savings, why does he not just call the whole thing off and permit the vital local network of post offices to go on serving its customers and its local pensioners as it always has done, without the additional and wholly unnecessary threat from the Government?

Mr. Byers: Perhaps the House would like some facts, rather than relying on the right hon. Gentleman's prejudice. The highest rate of post office closures took place under a Conservative Government. Automated credit transfer, which the right hon. Gentleman blames for closures, will not be introduced until 2003 and has nothing to do with the present situation. I should have thought that the right hon. Gentleman would applaud the fact that on 20 December the six main high street banks reached an agreement with the Government for universal banking services. I am confident that within the next few weeks we will sign a memorandum of understanding with those banks, and with other high street banks as well. What the right hon. Gentleman is not prepared to accept is that the Government are giving new hope and a new future to the post office network. He does not like that, but that is the reality, providing new banking services for consumers which will also benefit the network.

Mr. Jim Cousins (Newcastle upon Tyne, Central): I urge my right hon. Friend to be cautious about the term "universal bank". I do so on behalf of the Universal building society based in Newcastle in my constituency, which, I believe my right hon. Friend is aware, is concerned about that.

I congratulate the Government on their initiative in creating a payment method in the control of the Post Office which can deliver benefit payments and make direct debit payments, making the payment of bills cheaper for a much larger number of people, but I urge my right hon. Friend to be a little cautious in his dealings with the high street banks, which may well use this as an opportunity to secure a deal that will not be favourable to the Post Office and its prospective customers in future. When he drafts the memorandum of understanding, will he be careful to avoid a rip-off by the high street banks?

Mr. Byers: I take counsel from my hon. Friend. We shall need to look carefully at the details of the agreement that we enter into with the high street banks. The important point is that, as a result of the agreement that we have struck, two types of bank account will be operated through the Post Office, both providing a Post Office-based solution. There will be the basic bank account, provided by the banks themselves, and a Post Office bank account. The good news, particularly for people on low incomes, is that both accounts will offer direct debit facilities with utilities, which will lead to a reduction in the amount that individuals pay. Most of us are aware that families on low incomes, who at the moment do not have such benefits, pay a disproportionately high share of their income in fuel and other utility payments. As a result of this initiative, the Government will reduce those costs and ensure that many

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people who at the moment are financially excluded will have the benefits that most hon. Members simply take for granted.

Mr. Tony Baldry (Banbury): In his negotiations with the banks, the Secretary of State must have suggested a figure of public money that the Treasury was willing to make available to the universal bank. That figure cannot be commercial in confidence because, clearly, it is public money. Surely the Secretary of State can now share with the House the amount that the Government are prepared to commit to ensuring that the universal bank is a success.

Mr. Byers: We want the other banks to come alongside the six that have signed up, because that will mean more income for the Government, so the negotiations are not yet complete, but when they are, yes, of course, that information will be made available to the House. Those negotiations have not yet been concluded, so most right hon. and hon. Members will understand why that information cannot yet be disclosed to the House.

Mr. Ian Pearson (Dudley, South): Does my right hon. Friend agree that many car workers will want to use the Post Office's banking services, and will he take this opportunity roundly to condemn CGNU for its decision to ban the sale of mortgage protection insurance services to MG Rover employees? After the chairman of Rover has been to see the company, will he haul it in to ask it what it thinks it is playing at?

Mr. Byers: I hope that when CGNU has had the opportunity of hearing from John Towers at first hand, it will be able to reconsider its policy on that matter.

Mr. Brian Cotter (Weston-super-Mare): In response to a question in December, the Minister said that cost would be a consideration in choosing the software system for the universal bank, implying that the cheapest system might be chosen. As there have in the past been many high-profile examples of computer systems failing, will he assure the House that the system chosen will be the most effective, and that cost will not be the deciding factor? Who will be responsible for the universal banking system--the Post Office, the banks or the Government?

Mr. Byers: I think I told the House that cost would be a factor to be taken into account; the situation would be rather unusual if that were not the case. However, it will not be the only factor. We want to achieve value for money, which will involve looking at the quality of the service to be offered. Universal banking services will be a post office-based solution, and the memorandum of understanding will state clearly the various responsibilities of the key stakeholders--the Government, the Post Office and the banks themselves. If the hon. Gentleman can wait just a few weeks more, we will be able to publish the memorandum of understanding, and he will be able to see the details.

The important point for the post office network is that, as a result of the Government's initiatives, there will be universal banking services, every post office will be computerised by Easter, and Government general practitioners will start in pilots in March this year. The Government are acting for the Post Office, which is in

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total contrast with the approach of the Opposition, who simply let the market determine what would happen to the network and did not give any real hope for the future.

EU Information and Consultation Directive

5. Mr. David Kidney (Stafford): What recent representations he has received on the proposed European directive on information and consultation. [144531]

The Secretary of State for Trade and Industry (Mr. Stephen Byers): We have received various representations on the proposed European directive. The Government remain opposed to the directive which, we believe, contains a number of weaknesses. However, we believe that the time is right to consider our own United Kingdom arrangements in that area. I have therefore written today to the Trades Union Congress and the Confederation of British Industry, inviting them to take part in a review of existing collective redundancy legislation and, in particular, to consider what more should be done to promote effective consultation.

Mr. Kidney: I am grateful for my right hon. Friend's answer, and am very pleased that my question elicited that constructive announcement. However, does he accept that, in the United Kingdom today, when workers' livelihoods are at stake in negotiations involving their employers, they really ought to know and be consulted about that, rather than first hear of their redundancies on the morning news bulletin? Will he give an assurance that the process that he described will result in a law that makes good practices on consultation and information routine everywhere in Britain?

Mr. Byers: I agree that it is simply unacceptable for hard-working and dedicated workers to be kept in the dark about the future intentions of their employers. We therefore need to engage constructively with both sides of industry, which we are doing by inviting the TUC and CBI to participate. I am confident that they will both respond positively, as it is not in anyone's interest to have a situation in which the work force do not feel that they are part of the undertaking for which they work.

Yesterday evening, I had the pleasure of helping to launch the TUC Partnership Institute, which aims to bring together both sides of business in a constructive way--not as a soft option or a quick fix, but as a way for both sides to work together. That is a different approach to the workplace, which we have tried to create with the legislation that we have put through. It is about moving away from the conflict that the Opposition tried to promote in the workplace; it recognises that we will achieve a lot more if we work together in a real sense of partnership and consensus.

Mr. Edward Leigh (Gainsborough): When the Secretary of State next visits Europe, will he have a word with our continental partners about how they implement directives, and especially this directive? On the continent, people have a healthy, not cynical, attitude to European directives, and believe that they are meant for guidance. For instance, one can go into any marketplace in France

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and sometimes hear market traders hurling out their wares in pre-revolutionary weights and measurements or livres. Why not? Laissez-faire, laissez-passer.

Mr. Speaker: Order. The hon. Gentleman is a bit wide of the question.

Mr. Byers: I would not have expected anything else of the hon. Gentleman. We have looked carefully at the proposed European directive, which is flawed in several important areas and is not an appropriate vehicle to be imposed directly on the UK system. For example, our whole system of corporate structures is quite different from that on the continent. However, in many respects, the directive reflects the continental system of corporate governance, not that in the United Kingdom. The directive is not appropriate for several reasons, but the issue is important and we should deal with it in our domestic setting.

Ms Margaret Moran (Luton, South): I thank my right hon. Friend for his announcement of the review of workers' rights to consultation. I hope that the review will prompt fresh legislation, which might be called the Vauxhall workers Bill. Such legislation should ensure that no other workers suffer the agony of being told by telephone or radio that their jobs are to go and that no other employer treats workers as shabbily as General Motors treated the Vauxhall workers at Luton. Does my right hon. Friend agree that we need to ensure that workers have continuing consultation and are provided with adequate information, so that proper partnership and dialogue are in place before closures occur, rather than afterwards?

Mr. Byers: I was grateful to my hon. Friend for bringing to see me before Christmas a number of people from the Vauxhall work force at Luton who had been affected by General Motors' decision. They made a number of important points, but their main point, which they constantly pushed, concerned the way in which General Motors had treated them. Just over two years ago, they had entered into a partnership agreement, but the company had not honoured it. They felt that they should have been involved in the final decision. Those factors, as well as other incidents of which hon. Members are aware, have been a key driving force in our decision to launch the initiative announced today. It is unacceptable for people to learn about their fate on a local radio news station. That is not the right way to do business at the beginning of the 21st century; there must be a better way. In discussions with the TUC and the CBI, I want to find ways in which we can map out in the real spirit of partnership an approach that is appropriate for the United Kingdom.

Mr. John Bercow (Buckingham): There is, of course, a world of difference between the Government introducing legislation and the European Union poking its oversized nose into the matter. Will the Secretary of State confirm that, in addition to being opposed by the Government, the present form of the directive is also vigorously opposed by the Confederation of British Industry, the Institute of Directors, the Federation of Small Businesses, the Forum of Private Business and the British Chambers of Commerce? Is he aware that his predecessor, the current Secretary of State for Northern Ireland, made a solemn

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pledge in front of the Select Committee on Trade and Industry on 4 November 1998, when he said that the British Government would prevent the introduction of the directive in this country? Does he understand, therefore, that if the Government now sell out to the German view and accept the directive's application to companies with only 50 employees, it will be the latest example given by them of perfidy and betrayal in respect of corporate business?

Mr. Byers: I wish that the hon. Gentleman would speak up, so that I can hear him.

Mr. Alan Duncan (Rutland and Melton): The country will have heard him.

Mr. Byers: I pity the country.

We have made it clear that we share the concerns about the detail of the directive that have been expressed by many of the organisations mentioned. However, engagement by the work force with the decisions that are taken by their company is an important issue that must be addressed. We do not agree with the detail of the directive, but we feel that it relates to an issue that can be dealt with in the United Kingdom setting. If the hon. Member for Buckingham (Mr. Bercow) agrees that such an issue exists, he should welcome the fact that we are dealing with it in domestic legislation. That is what I am announcing today. There is an issue that needs to be addressed and I think it can be dealt with more quickly and effectively in the domestic setting.

Mr. Derek Foster (Bishop Auckland): Is my right hon. Friend aware that the treatment of the Luton workers caused a great deal of anger among Labour Back Benchers and has given rise to a growing view that the Government should throw their weight behind the European directive, notwithstanding its flaws? I am very pleased to learn from him that the Government are taking the matter seriously. We will want to consider his proposals very closely.

Mr. Byers: It is only right that that should happen. Some of the European directives, including the works councils directive, which we have endorsed, contain flaws and are not working as effectively in industry as we would like them to. There are instances of similar problems elsewhere. When General Motors made its announcement about Luton, it also announced the loss of about 2,000 jobs in Germany.

The work force there was not consulted or given information about the decision. The system in continental Europe does not work as effectively as most of us would like. It is therefore more appropriate to consider what is needed in the United Kingdom domestic setting and take suitable action.

Miss Anne McIntosh (Vale of York): Will the Secretary of State assure the House that no legislation is needed? Will he confirm that the record that successive Governments achieved over 20 years through our flexible labour market was envied in Europe, and that industrial relations should be tackled on the basis of a voluntary agreement between the employer and the employee?

Mr. Byers: I think there is no problem with a flexible labour market, provided that minimum standards are

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attached to it to ensure that individuals are not exploited. The Conservative party tried to take us back to the Victorian approach to industrial relations, of master and servant. Conservative Members continue to support that. The right hon. Member for Wells (Mr. Heathcoat-Amory) is open about it, as can be seen if people take the time and trouble to read his writings on such matters. The Conservative party wishes to return to the master-servant relationship.

However, the Labour party believes that minimum standards, such as the rights to paid leave in a family emergency, to paid holidays and to a national minimum wage are basic entitlements in any decent, civilised society at the beginning of the 21st century. We are providing those entitlements; the Conservative party would take them all away.

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