Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Sainsbury of Turville moved Amendments Nos. 31 to 37:

    Page 94, line 9, leave out ("has the same meaning as in") and insert ("means any persons who, by virtue of").

29 Jun 2000 : Column 1130

    Page 94, line 10, at end insert ("are or are treated as statutory undertakers for the purposes of that Act or any provision of that Act.").

    Page 94, line 18, leave out ("has the same meaning as in") and insert ("means any persons who, by virtue of").

    Page 94, line 19, at end insert ("are or are treated as statutory undertakers for the purposes of that Act or any provision of that Act.").

    Page 94, line 33, leave out from ("in") to ("the") and insert ("any other case").

    Page 95, line 38, at end insert ("as a universal service provider").

On Question, amendments agreed to.

7 p.m.

Clause 103 [Subsidy for public post offices]:

Baroness Miller of Hendon moved Amendment No. 38:

    Page 61, line 46, at end insert--

("( ) Payments under a scheme under this section shall be made only following an independent assessment of whether such payments would create a competitive disadvantage between public post offices.").

The noble Baroness said: My Lords, this amendment is intended to probe government thinking on the subsidy clause. As it stands, the provision is extremely vague and short on detail. The amendment would ensure that before any subsidy was paid an independent assessment was made of the effect of the subsidy on competition between different sub-post offices, which we believe would be valuable. Obviously, there is a danger that subsidies will create a distortion in the market. For example, if the subsidy is paid to one sub-post office, what will be the effect on the next nearest sub-post office or village shop, which might not be a sub-post office but might sell products in competition with it?

Obviously, there is a real risk of creating artificial competitive distortions in the market. We were not particularly keen on subsidies and wanted more business. However, if there are to be subsidies we must ensure that they do not distort the market, which is the purpose of this simple amendment. I beg to move.

Lord Sainsbury of Turville: My Lords, this amendment has the effect of delaying payments under a scheme while an additional and unnecessary assessment is made of the effects of the payment on competition between postal operators. As with any government subsidy, competition and state aid rules would apply to the provision of any assistance through a scheme made under this clause. Any such scheme would, therefore, be subject to oversight by the relevant competition authorities in the UK and the European Commission.

The proposed amendment does not specify who might carry out an independent assessment of whether payments under a scheme would create a competitive disadvantage between public post offices; nor, for that matter, does it say from whom it should be independent. I find it difficult to envisage any persons or bodies more independent and well fitted to carry out

29 Jun 2000 : Column 1131

such an assessment than the competition authorities. As I have said, it is implicit that any scheme is subject to competition and state aid rules.

The amendment is also technically deficient. First, it is concerned only with the assessment of the effect of payments on competition between public post offices. That would be a very narrow consideration--too narrow in our view. If a scheme is judged to be compliant with competition and state aid rules we expect it to be so in relation to all relevant markets, not simply for the purposes of competition between public post offices. The amendment is also deficient because, while it requires an independent assessment before payments can be made, it does not provide that payment cannot be made if the assessment is such that payments will create a competitive disadvantage between public post offices.

The Government are committed to fair and open markets and want to encourage competition. That is something on which I hope we can agree. We are also aware of the need to make provision to allow for the possibility of a scheme to support post offices, particularly those in rural and deprived urban areas. When we consider a scheme under these provisions we shall ensure that it complies with competition and state aid rules. Any scheme will also have to come before Parliament, itself an independent body, for approval by affirmative resolution. Therefore, there will be plenty of opportunity to comment on the merits or demerits of a specific scheme, including its effect on competition. Therefore, I ask the noble Baroness to withdraw her amendment.

Baroness Miller of Hendon: My Lords, I am amazed that I have moved so many deficient amendments in one afternoon and evening. I surprise myself. I believe that the noble Lord gave an undertaking--I shall read his response with care--that any subsidy would be subject to a test as to whether or not it hindered competition. If, having read the Minister's response carefully, I am not satisfied and must return to this matter I shall ensure that any amendment is not defective. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford moved Amendment No. 39:

    Page 61, line 46, at end insert--

("( ) A scheme under this section must provide for payments under the scheme to be made subject to conditions specified in or determined under the scheme enabling payments of any benefits to which section 5 of the Social Security Administration Act 1992 applies to be made at a public post office to which the scheme applies--
(a) in cash;
(b) in a manner which ensures the identification of the recipient; and
(c) to a designated proxy of the recipient.").

The noble Baroness said: My Lords, earlier today the noble Lord, Lord Dearing, used the expression "he who waits". I wonder whether this is my opportunity and that "she who waits" is appropriate. I fear not.

29 Jun 2000 : Column 1132

I return to subsidies for sub-post offices, the challenges that they face in the move to ACT and the pressure placed on sub-post offices to remain viable in future. I totally accept the confirmation by the noble Lord, Lord Sainsbury, and other Ministers that welfare benefit payments will be available in cash. However, what is not clear is who is to bear the cost of these transactions. We have been through the arguments already and I do not anticipate going through each of them again, which I am sure is a great relief to the Minister.

The noble Lord accepts that when books and giros disappear and are replaced by cards, or whatever it be, there will be a cost. When another place debated the Statement on the Post Office network the Secretary of State said that transaction costs were likely to be negotiated. For example, I understand that at the moment the cost of a pension transaction is 13p. We do not know what the cost or saving will be when the new system kicks in. If there is a saving who will get it, and how will it be paid? I hope that in tabling this amendment again I shall receive answers to some of those questions. In the same debate my right honourable friend Peter Lilley pressed the Minister to say,

    "whether sub-post offices will receive the same amount or less per transaction than they currently receive from the Post Office? Will the same number of transactions or fewer transactions be made? If sub-post offices receive the same revenues, from where will the savings come that the Secretary of State anticipates? If they receive less revenue, will not post office closures accelerate in future?".--[Official Report, Commons, 28/6/00; col. 914.]

The response of the Minister in another place still leaves big question marks. I hope that this afternoon these questions can be answered.

In an earlier debate the Minister responded to a question from me about universal service provision. I forget the exact phraseology that I used. The Minister said that universal service provision did not cover welfare benefit payments. That sent shivers down my spine and caused me extreme worry. I hope that I have given a lifeline to the Minister to enable him to think about his earlier response. The noble Lord said that universal service provision concerned letters and had nothing to do with welfare benefit payments. The whole purpose of the Bill is to ensure that in future the Post Office remains viable and can do the kinds of things that we wish it to do. Until now one of its activities has been the payment of welfare benefits. At Committee stage I was also disturbed to hear the Minister suggest that perhaps other organisations might look at the question of payments. These two negatives give me great concern about the future of welfare benefit payments, and for that reason I have tabled these amendments again. The House would be greatly helped if the Minister could clarify the position.

At Committee stage the Minister gave the following response:

    "There are two issues involved. One is the subsidy issue. I hope I have made clear that, if we have a subsidy scheme, it has not been decided who it would be. Therefore, there have been no discussions with various bodies. As there are alternative bodies, it might not be sensible at this point to say that it would be done through the commission".--[Official Report, 15/6/00, col. 1816.]

29 Jun 2000 : Column 1133

I became even more confused. In my innocence, I had assumed throughout the debates at both stages of the Child Support, Pensions and Social Security Bill and this Bill that it was the Government's intention that welfare benefits would continue to be paid through the post office. However, one receives misleading messages. For that reason, I have tabled this amendment again to try to clarify the intentions of the Government, particularly as to the future but also in relation to the cost implications. As I said earlier, I have not received answers to the questions that I put. I hope that my argument may tease from the Minister a more fulfilling response. I beg to move.

Next Section Back to Table of Contents Lords Hansard Home Page