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15 Oct 2002 : Column 237continued
This is a very real crisis, and if Post Office Ltd. and Consignia were not supported by the Government, they would be in danger of going bankrupt. In the Minister's judgment, is it likely that the Post Office, in part or in whole, would call in the receivers if it were not backed by Government money? Could the Government allow that? What is their attitude to the current situation?
Why have Consignia and the post office network reached a position where we have to authorise the spending of #210 million of taxpayers' money today? The Government used to take a dividend from Post Office activities and the Post Office used to make a profit. Of course there were growing problems, and we sympathise with the Government about that. The previous Conservative Government recognised the problems nearly 10 years ago, but the Post Office still made a profit for the taxpayer.
Some 28 months ago the PIU reported, and we are implementing part of that report today, but why has it taken the Government so long to get their act together? The website of the Office of the Deputy Prime Minister says, under the heading XFund for Deprived Urban Post Offices", that the Government announced in the urban White Paper in November 2000 that they would establish a #5 million a year fund to sustain and improve post offices in deprived urban areas. It continues:
Mr. John Redwood (Wokingham): Does my hon. Friend think, as I do, that the decision to expend an awful lot of money on converting the Post Office, a profitable, successful and much-loved public service, into Consignia, with all the costs that that entailed, showed that third way economics do not work? Only third way economics could turn a successful, profitable public service into a loss-making corporation in need of subsidy, and which is about to close many of its main outlets.
Mr. Robathan: I am grateful to my right hon. Friend. We all recognise that Consignia is a totally ludicrous name. Allan Leighton must recognise that because I believe that the name will be changed back to Royal Mail on 4 November. This is one thing for which Labour Members cannot blame us.
The problem is not just endless delay and prevarication. Let us look at the PIU report's proposals for a sustainable future for the post office network. Some #30 million of today's money is being set aside for additional investment, which is only one sixth of the amount being spent on closures. One proposal in the report was for access to e-Government. That is a good idea, applauded by all, and for that reason, a year ago, as the Minister said, XYour Guide" was piloted in Leicestershire and elsewhere. It was welcomed and seemed to be a success, although it was insufficiently publicised. Now, however, the Minister tells us that XYour Guide" has been put in the bin. I understand that other Departments, in a classic example of Labour's joined-up government, refused to sign up to the scheme because they think that it would cost too much. That is a great pity, and I think that postmasters who saw XYour Guide" will agree.
What about the proposal for e-commerce? Has there been any action to encourage post offices to become distribution centres or pick-up points for goods purchased over the internet? The PIU report commented:
What about the famed universal bank and, in particular, the card account? That is to be in place by April 2003. The clock is ticking, with six months to go. Everyone I talk to says that the Government are unhappy about allowing post office customers to apply for a card account, yet some 15 per cent. of benefit claimants currently do not have a bank account. The Government's unhappiness is caused by the fact that not enough money will be saved by introducing the account. That fact lies behind the card account customer journey,
Moreover, I understand that the chief executive of the Post Office has been told by the Department for Work and Pensions that postmasters are not allowed to put up posters telling claimants that they can still get benefits in cash from the post officeall because the DWP does not want to pay the small extra cost. For that reason, too, there is a presumed limit of 3 million card accounts. In today's letter, Age Concern told us that
Mr. Robathan: I agree entirely. That is an example of Government bullying: they are forcing people to do something they do not want to do in a typically nanny state way. At the heart of the issue of the card account is the conflict between the DWP, backed by the Treasury, and the DTI. Sadly for the post office network, the DTI is proving to be much the weaker Department.
Plenty of postmasters want to get out of the network, as the Minister said. Some 3,000 postmasters want to take the compensation package under the urban reinvention programme, which says something about morale. Last May, Allan Leighton said:
Mr. Robathan: I agree entirely. I do not remember the Prime Minister saying that, but it does not surprise me at all, given that he says so many things on which he reneges the following monthbut we will not go into such matters.
Postwatch does not know how far the restructuring programme has gone and it is extremely concerned that, far from a sensible restructuring, it, customers and everyone else will be presented with a fait accompliearlier, the hon. Members for Manchester, Central (Mr. Lloyd) and for Ilford, North (Linda Perham) expressed their concern about that. Postwatch will be told that a post office is to close and that it can comment, but it suspects that the Post Office will not listen to its comments, which are made on behalf of the public.