HC Deb 19 February 1980 vol 979 cc264-321 4.32 pm
Mr. Stanley Orme (Salford. West)

I beg to move, That this House, recognising the importance of the sub-post office network in the life of urban and rural communities, is against any moves by the Government which could weaken the system of weekly payments to pensioners, mothers and other benefit recipients through these offices. This issue has caused a great deal of controversy. There has been very little information on it. If we are to believe what was discussed last night by the right hon. Gentleman and his hon. Friends, and not least their amendment today, the pressure which has been exerted from this side of the House—and, I acknowledge, from the other side—has had some effect upon the Government.

The leakage which came from the rain of proposals, and the silence of the Secretary of State, until finally Mr. Norman Taylor, on behalf of the National Federation of Sub-Postmasters, wrote to Members of Parliament and, not least, to the Prime Minister, receiving a reply from the Prime Minister that the matter would have serious consideration, are all indications that this subject is of major importance and involves other issues than the matter of public expenditure, important as that is.

The Secretary of State for Social Services (Mr. Patrick Jenkin)

The right hon. Gentleman says "silence" but is he aware that my hon. Friend the Under-Secretary answered at some length a written question on the subject on 18 January? During Question Time when the right hon. Gentleman was present, on 29 January, my hon. Friend answered a whole series of questions from hon. Members on both sides of the House and explained exactly what point we had reached. It is not right for the hon. Gentleman to say that the Government remained silent. Nothing could be further from the truth.

Mr. Orme

The exchanges in the House and the answers that the hon. Lady gave did not give comfort to some Members. In fact, people were more disturbed following her answers than before because she tried to deflect attention from the issue, and no assurances, such as had been asked for, were given to the House.

The payment of benefits in this country has traditionally been on a weekly basis and people have become accustomed to this. The main benefits are paid to pensioners and mothers in receipt of child benefit. I stress that these two large groups are receiving long-term benefits and are, therefore, distinctly different from those receiving short-term benefits, such as sickness and unemployment benefit. About 70 per cent. of all social security payments are made through sub-post offices. The network now consists of 20,000 post offices throughout the country.

While I am on the subject of post offices, may I say that I think it is rather strange that in the so-called consultations that have taken place Sir William Barlow, chairman of the Post Office, had, at least before 31 January this year, not been consulted. It is rather odd that on a major proposal such as this, on which Sir Derek Rayner intimated that he wanted widespread consultations with the Secretary of State, Sir William Barlow was not consulted.

The network of 20,000 post offices throughout the United Kingdom gives a basic service to the community. I do not think there is a similar service to the community in any other modern State where post offices and sub-post offices play such a key role. I am talking now of both the rural and urban post offices. The benefits they give go far beyond the mere paying out of the weekly benefit, because when someone goes to a post office not only does he or she receive the benefit, but it is possible to be given advice on changes in legislation, and leaflets are available about benefits. The hon. Member for Harrow, West (Mr. Page) may laugh, but I think he would acknowledge that the friendly post office is something to be cherished.

Pensioners, mothers and disabled people can also purchase from a post office national savings stamps and stamps for television licences and many other things. A vital service is thus given to the community. The help and advice which is sought by the public and given by the staff, who know many of their customers personally, is very welcome indeed.

Mr. John Page (Harrow, West)

Will the right hon. Gentleman give way? He did refer to me—

Mr. Orme

Perhaps the hon. Gentleman will forgive me and allow me to get on with my speech in the interests of other Members.

There has been a reduction in recent years, as many hon. Members on both sides of the House know, in the number of post offices. A few years ago, the figure was about 26,000. Today it is nearer 21,000. The Post Office was investigated in 1977, as a result of which we had the Carter report, to which I should like briefly to refer. On page 87 of the report, paragraph 11.2 says: The scale-payment system has provided Britain with the convenience of a dense network of post offices; in contrast the United States, with 17 times the area, has only 30 per cent. more outlets. In paragraph 11.7 the question is asked: Could the social security payments be made in a different way, for instance by cheques cashable at commercial banks or at shops? This is thought to be an inferior alternative: most recipients want cash, weekly, obtainable without extra charge at a place near their homes. The post office network provides much better for suburbs and rural areas than the banks, and shops would probably want some return for cashing cheques; (b) Is the present post office network about right, from the point of view of the Departments which use agency services? The answer is Yes: there is no active demand for a bigger network, but the intensity of the protests at post office closures suggests that a significantly smaller network would be regarded as inadequate". The report continues: No one was able to see any advantage from such a transfer; the Post Office has long experience of running the system, and it would be wasteful to upset the administration in this way". That was the unanimous conclusion of the Carter committee which made a thorough investigation into the Post Office.

We are told by the sub-post offices and by Mr. Norman Taylor that if the payment of benefits were transferred from sub-post offices that could lead to the closure of about 3,000 sub-post offices throughout the United Kingdom. That would have a detrimental effect upon the network and could also have repercussions well beyond the 3,000 sub-post offices.

What would it mean? It is not just a question of the loss of money earned by the sub-post offices to which they are entitled. It would mean severe inconvenience for pensioners, the disabled and mothers, many of whom might have to travel a long distance to get their benefit. They would also find that the post offices to which they had to travel were overcrowded.

Mr. Michael Latham (Melton)


Mr. Orme

I am afraid I cannot give way. I am not being discourteous; I just want to be fair to hon. Members.

I made an investigation in my constituency, which is an urban area, and I found that the post offices were very crowded. People had to queue for their benefits. I have found that the pressure has been for more post offices, not fewer. Great regret has been expressed when sub-post offices have been closed for economic reasons. To break up the network would not be in the interest of the people we represent.

On the question of fortnightly or monthly payments, unless there was a huge transfer of payments into bank accounts, which is unlikely, post offices would still have to carry the same amount of money. If the recipient has a bank account, it is likely to be a post office savings account, and those accounts too would be affected by the widespread closures of sub-post offices. I am talking not about people with bank accounts who can have benefits paid into those accounts but about a large percentage of the people who live in rural and urban areas who need their benefits weekly, who spend the money weekly and do not have bank accounts. I am talking about a service. If that service were transferred, great inconvenience and expense would be caused.

Mr. Tim Eggar (Enfield, North)

Will the right hon. Gentleman give way?

Mr. Orme

If the hon. Gentleman will allow me to make my speech, I am sure that later he will be able to catch Mr. Speaker's eye.

Sir Derek Rayner, the joint managing director of Marks and Spencer, is carrying out this exercise, which is one of 29 exercises covering Government Departments. I believe another 39 projects are also in hand. The Labour Party has no objection to efficiency in the public service, but I feel that the House is entitled to more information. Will the Secretary of State say whether the Rayner reports will be published and made available to hon. Members?

Sir Derek Rayner has been seconded by the Government to make these investigations. He represents a nationally known store which provides what the customer wants and works on the principle that the customer is right. We are entitled to ask Sir Derek what consultations he has had with the customers in this area.

Mr. Patrick Jenkin

I am anticipating what I shall say, Mr. Deputy Speaker, if I catch your eye, but I must make clear that studies of these matters are done by officials in the Department, for which Ministers take responsibility. Advice is available from Sir Derek Rayner, who has great expertise in these matters, but he does not undertake the studies and does not take responsibility for them. We do.

Mr. Orme

The Secretary of State should not criticise us for mentioning Sir Derek Rayner. His secondment received a great deal of publicity and it was said that his investigations would result in a saving in public expenditure. I suggest that the right hon. Gentleman is downgrading the task which Sir Derek Rayner has been set. I am not making a personal attack on Sir Derek; indeed, I pay tribute to the company of which he is joint managing director. All I ask is that he should treat the customers of the sub-post offices in the way he treats the customers in his store.

No doubt reference will be made to Labour's experiment of paying unemployment benefit on a fortnightly basis with the agreement of the claimant. I emphasise that that represents only a tiny proportion of payments made, it is a short-term benefit and the sub-postmasters raised no objection to the experiment. There is a world of difference between that short-term benefit and the long-term benefit received by pensioners, mothers and the disabled.

Mr. Toby Jessel (Twickenham)

Will the right hon. Gentleman give way?

Mr. Orme

No, I cannot give way.

I am also disturbed by what Mr. Norman Taylor says on page 5 of his letter: We have received reports from sub-postmasters of beneficiaries, having been advised to ask for weekly benefit to be paid, either being told it was not possible or being told that … they would have to attend at the unemployment office weekly to obtain it. Faced with the extra expense to obtain their money they have reluctantly had to accept fortnightly payment". I feel sure that the Secretary of State will be able to tell us about the working of the system. I mention that passage from the letter to show the problems which would be created if beneficiaries felt that they were under pressure to transfer payment. Pensioners, for example, have enough to put up with without pressure of that type.

We have all had correspondence on this issue. We all hear of hon. Members who have had several letters on a particular issue and, though we believe them, we sometimes doubt the number.

Mr. Jessel


Mr. Orme

We have all had correspondence on the present issue. I will quote, very briefly, two letters from my constituency. The first reads: Dear Sir, We would like our pension to be left as it is weekly, as it is not wise for old people to have money in the house these days".

Neither should they be expected to carry larger sums from the post office.

The second letter came from a mother in my constituency. It reads: Dear Sir, I was absolutely disgusted to read the current notice in my local post office. With four children I need my family allowance to help me manage through the week. —and she needs it weekly. That is a cry from the heart of a mother with four children who depends upon child benefit being paid weekly as at present.

Let me deal first with the pensioner. It is not propaganda to say that pensioners are genuinely worried. They are worried not only about the threat to local sub-post offices but about carrying two weeks' benefit or more away from the post office at any one time, as was evidenced in that letter.

The letter from the mother highlights an important aspect. If the benefit were to be paid monthly, economic problems would arise because of lack of weekly finance. The House agreed that a mother should have child benefit paid to her as a right, so that she could use it. In a happy family there will be no problem if it is transferred to a bank. Unfortunately, we are dealing not with happy families all the time, but with mothers who have to eke out their money during the week and they may possibly be exploited by their husbands.

Let us consider a mother who has three or four children. If she draws the benefit monthly she will receive £50 or £60. What if she has a feckless husband who is drinking or gambling and who says "You can give me £20 or £30 of that"? That would mean an absolute reduction in the standard of living and rights of that mother and those children. That is what we must guard against. That is why the House decided, after a great deal of debate and pressure from outside, that child benefit should be paid to the mother as of right.

We are not dealing with the mother who can afford to leave the money in the bank for six or eight weeks and perhaps use it in some other way. We are dealing with the working-class mother who has to go to the post office weekly to collect her child benefit. In many instances child benefit is a lifeline to a family. I do not think that any hon. Member can deny that. We all have constituents who face these problems.

With the current rate of inflation, the threat of the increased cost of school meals, and payment for school transport that the House is sanctioning, it would be laughable, if it were not so serious, to suggest that this payment should be made monthly. To suggest it at present, when people are struggling, would be entirely wrong.

This issue also gives rise to wider social implications. We are seeing in our society the continued transfer from the small to the large. It is happening in local government and with public transport. There is a reduction of facilities and offices are being moved into the next town, which can be 10 or more miles away. There is a need to travel, and therefore the cost of that travel must be taken into account if a person does not have personal transport. All that adds up to making life more complicated and more expensive.

I will give a parallel example to the Secretary of State. He is aware of the present argument about pharmacies and the difficulties that the closure of chemists' shops throughout the country will cause. Pharmacies are being transformed into supermarkets and multiple stores. If we continue along this road the same will happen to sub-post offices. The supermarkets and multiple stores are excellent for many things, but they are not capable of being turned into part-chemists' shops or part-sub-post offices. They would not be able to give the type of service that one receives at present. Therefore, this is an important issue.

Reading the reports last night—one can only go by reports; I am not saying that they are absolutely accurate but perhaps the Secretary of State will tell us—I saw that the Secretary of State assured his Back Benchers that rural sub-post offices would not be affected in any way. Does that also apply to urban sub-post offices? I think that we are entitled to know.

Will not the transfer of benefit to a bank—which the right hon. Gentleman sanctions—mean that the post office network would become more expensive and that costs for other services would have to be increased to compensate for that transfer? I am thinking of the cost of the savings unit and the provision of licences that are presently dealt with in post offices. Will it not also mean that the cost of rates, heating and rent will have to be met by the Government?

What about a pensioner or a mother with a small bank account who, for instance, has a credit balance of below £100? There would be a charge, would there not, to that claimant of 20p a time if the account was below £100 in credit—which is what the banks require at present? That would be a large charge, which would be transferred from the Government to the claimant. That would be absolutely wrong. Is it not a fact that the cost per unit going to sub-postmasters is approximately 2.5p? I understand that there are three units to a pension, so that amount will become 7.5p for a pensioner. Does the Secretary of State think that it is possible to obtain a cheaper and more efficient service, as well as the social service about which we are now talking?

I heard the Secretary of State this morning mention using sub-post offices for other means, such a the payment of gas and electricity charges. I am sure that he does not want to put the lid on one hornet's nest and take it off another. He would have real problems with the employees in the gas and electricity industries if there were not wide consent to such proposals after consultation, because such a proposal would affect the living standards and jobs of people in those industries.

The Opposition were absolutely right to choose this subject for debate. We know that there is widespread interest in this matter throughout the country and it is surely the purpose of the House to reflect that interest. I think that we have made an overwhelming case for sub-post offices to remain as they are at present.

Mr. Jessel


Mr. Orme

I remind the House that whilst we have made a great deal of progress with the Government we are not yet home and dry. The motion in the name of the Opposition would finalise the problem and make it clear. There would be no dubiety about the matter. Therefore, I ask the House to vote for the motion at 7 o'clock.

4.59 pm
The Secretary of State for Social Services (Mr. Patrick Jenkin)

I beg to move, to leave out from 'communities' to the end of the Question, and to add instead thereof, 'insists that the Government, in making any changes in the system of paying pensions and benefits intended to give recipients wider choice as to the method of payment and to save administrative costs, ensures the continuance of that network, welcoming the Government's commitment to explore ways of bringing new business to sub-post offices, for instance through the National Girobank and wider opportunities for the payment of bills'.

The House will have listened with some interest to the right hon. Member for Salford, West (Mr. Orme) as he made his case in favour of the Opposition motion.

I shall come to our objections to the motion later on. I also hope in the course of my remarks to be able to answer all the questions that he raised.

Let me say at once that I entirely understand why anxieties have arisen about the Government's intentions, particularly on the part of sub-postmasters and sub-postmistresses. I will come in a moment to the way in which the Government's study—which has not yet been published but will be published—came into the public domain, but I fully accept that the information which reached sub-postmasters has caused them to worry about their future. It might be helpful if I can put the whole issue into context and say where the Government stand.

The Government came into office committed to examine the cost and efficiency of the public sector and, wherever possible, to make savings in administration. As the House knows, Sir Derek Rayner was appointed by the Prime Minister to advise the Government in this field in which he has considerable expertise. I stress the word "advise" because, as I said in my intervention in the right hon. Gentleman's speech, it is Ministers—the Government—who retain responsibility in the matter. The method adopted was that each Department was asked to select a project for study by a team of officials, whose proposals would in due course be considered by Ministers.

The project identified by my Department was the system of paying social security benefits. Some have asked why we chose this topic. There is a little history which is worth putting on the record. Under the Opposition, a fact which the right hon. Gentleman did not make entirely clear in his speech, the DHSS was considering its future operational strategy for social security. With a system as big as ours, on which nearly a quarter of public expenditure goes and which requires an overall staff of 100,000 to administer, we have to plan major operational changes many years in advance.

One thing that struck the planners at an early stage was how the present system relies heavily on weekly payments by order books cashed over post office counters. It is common knowledge that many would prefer to have their payments paid direct into bank accounts. As more and more people are paid salaries and occupational pensions monthly, there is a growing trend in society away from weekly payments.

As long ago as 1976—under the previous Government in which the right hon. Gentleman was Minister for Social Security—a joint working party of DHSS officials, the banks and National Giro was set up to consider the possibility of automatic credit transfer of social security benefits into banks and other accounts. It may not have been entirely clear from the right hon. Gentleman's speech that the working party that was set up by his Government concluded that there were no insuperable obstacles to paying benefits by this method and that it would be significantly cheaper.

Indeed, the previous Government went further. They indicated their acceptance in principle of paying benefits directly to bank accounts provided that a number of administrative aspects could be sorted out. My hon. Friend the Member for Twickenham (Mr. Jesse!), who hopes to catch your eye, Mr. Deputy Speaker, has been assiduous over the years in pressing successive Governments on the matter of paying credit into bank accounts. The House may remember that shortly before the last election on 6 March 1978 my hon. Friend the Member for Twickenham asked the right hon. Member for Salford, West at Question Time: if he can now announce arrangements for retirement pensions to be paid on request direct into pensioners' bank accounts. The right hon. Gentleman referred to the working party that I have just mentioned. My hon. Friend pressed the matter again and asked: why do not the Government get on with it? It is now 18 months since I raised the matter with the Minister. What is the reason for the delay? The right hon. Gentleman replied: I am expecting a report by the end of the month…I am much in favour of the principle, and the introduction of such an arrangement would cover child benefit as well as retirement pensions…I hope to make some progress in the near future."—[Official Report, 6 March 1979: Vol. 963, c. 1077–78.]

Mr. Orme

There is a world of difference between those remarks and fortnightly and monthly payments made in the way suggested by the Secretary of State and Sir Derek Rayner.

Mr. Jenkin

The right hon. Gentleman would carry more conviction if he had been frank with the House at the outset of his speech.

We have found that much progress has been made and I pay tribute to the Opposition for that. Therefore, when officials suggested to me in response to the Rayner exercise that it was a proper subject for further study, I had little difficulty in agreeing. Our study has focused attention closely on more precise suggestions for bringing about the changes which our predecessors initiated. [Interruption.] I can understand the indignation of the hon. Member for Ormskirk (Mr. Kilroy-Silk). I do not suppose that he was present at the Question Time during which the remarks to which I have referred were made.

Mr. Robert Kilroy-Silk (Ormskirk)

What the right hon. Gentleman says about the previous Government's preparations is correct. I know because I saw some of the documents. However, the fact that the previous Government anticipated and planned the proposals does not make them right. We would probably have been more successful in stopping that Government from implementing them than Conservative Members will be tonight in stopping the right hon. Gentleman from implementing his proposals.

Mr. Jenkin

I shall not intervene in the sensitive matter of the quarrel between the hon. Member for Ormskirk and his right hon. Friend. The right hon. Gentleman said: I am much in favour of the principle."— [Official Report, 6 March 1979; Vol. 963, c. 1078.] It is typical of the Opposition that when they see a chance of taking political advantage they quickly—oh so quickly—forget their past.

I shall remind the House of the scale of the operation of our social security system. About 1,000 million payments are made each year by the social security system to about 18 million people and their dependants. The administrative costs of the entire exercise amount to no less than three-quarters of a billion pounds—£750 million—a year. One third of that, about £250 million, is the cost of paying out the benefits—putting the cash in the hands of the people. That is roughly equivalent to the cost of building five big new hospitals every year. That is the measure of the cost of paying benefits.

The more order books that are issued, the more it costs the taxpayer. In a system that has been virtually unchanged for a number of years, it seemed to us that even small improvements in efficiency could save the taxpayer worthwhile sums. It also seemed to us that the present methods offered little choice to the public and that we could do better. Officials were asked to conduct their review. Like the Rayner studies, fundamental questions about the way things are done were asked, such as, "Why is the work being done in the way that it is? Could the arrangements be made simpler and more efficient? Have the arrangements changed with time to reflect changing conditions in society?" Underlying the whole operation was the question, "If we were starting from scratch now, what systems would be devised?" When such questions are asked, interesting and perhaps disquieting facts emerge.

The overwhelming number of benefit payments—something like 95 per cent.—are made weekly despite the fact that almost half the working population, over half of working mothers and almost all occupational pensioners, are now paid monthly. As the House knows, the Department of Employment changed from paying unemployment benefit weekly to fortnightly in September 1978. The individual has a choice: he can register for work fortnightly and collect a fortnightly payment. If he wants a weekly payment, he must sign on weekly. That is the choice. It does not appear to have caused great difficulty although about 95 per cent. of those in receipt of unemployment benefit are now paid fortnightly.

The study also found that paying benefits by direct credit into banks, including the National Giro bank and other accounts every four weeks would be considerably less expensive to the taxpayer than even the cheapest of the existing four-weekly or weekly payment arrangements. I shall give an indication of how much more efficient it would be. The annual cost of making payments weekly by order book is about £10, whereas payment by direct credit into a bank would cost about £2 a year. I must make it clear that I am dealing with a study by officials and not with any Government decisions.

Although some beneficiaries have their pensions paid by monthly or quarterly order, the order still has to be presented to a bank to be cashed. There is as yet no right to have benefits credited direct to a bank account. It may be all the more surprising that we have made no progress in this direction. The study found that half the adult population now uses an ordinary bank account and about three-quarters of the population has access to a cheque account, savings bank, building society and so on.

Finally, the study found that sickness benefit is already paid fortnightly in 20 per cent. of cases. Mobility allowance is paid four-weekly. About three-quarters of a million retirement and war pensioners are paid monthly or less frequently. Nearly half the mothers already cash their child benefit less frequently than once a week. Indeed, one-third cash it every four weeks or less often.

Against that background, it is perhaps not surprising that the study suggested that benefits might be paid less frequently and that the public should be able to have benefits paid directly into a bank, National Girobank or other account if they so choose. The study also found that that could eventually result in savings of up to £50 million a year at today's prices. However, the study made clear that such savings might not be fully achieved for five years or more.

I shall turn now to the status of the report. The simple fact, and I must make this abundantly clear, is that Ministers have as yet reached no decisions. The report has been in our hands for a matter of weeks only and DHSS Ministers have been discussing it with Sir Derek Rayner, as we were asked to do. As yet, there has been no collective discussion by Ministers of the issues raised by the report, let alone any agreement on how or whether to carry the matter forward. If we decide to go ahead, it will inevitably be a fairly long and drawn out process. At present, all we have is a review that has been conducted by officials; no more. Still less is there any commitment to the details in the report. I referred a moment ago to the saving of £50 million. The House will see, when the public expenditure White Paper is published next month that no credit whatever has been taken in the figures up to 1983–4—the last year to which the Paper will refer—for these possible savings.

Mr. Kenneth Marks (Manchester, Gorton)

Will the £50 million savings suggested by the report come from savings in the Civil Service, or from savings in post office and sub-post office staff?

Mr. Jenkin

It will be a question of savings in the overall operation.

Mr. Tam Dalyell (West Lothian)


Mr. Jenkin

I shall not give way, as many hon. Members wish to speak. I wish to give three absolutely clear assurances. The Government will initiate no changes pursuant to this review, until the review has been published. The leading article in The Guardian today is pushing at an open door. It was always our intention to publish the report.

Secondly, the Government will consult widely on the proposals in the report including, of course with the Post Office, representatives of sub-postmasters and with any other interests that may be affected. We wish to consult also representatives of pensioners and other beneficiaries.

Thirdly, there will be no decision to go ahead without a full debate and without the full consent of the House of Commons.

Mr. Percy Grieve (Solihull)

I apologise for interrupting my right hon. Friend so early in his speech. When the Government consider what action to take on the report, will they bear in mind that many pensioners go in fear of being robbed of their pension when they take it in the form of cash from post offices? That fear has been justified by the number of robberies. Many pensioners urgently desire to have their pensions paid less frequently and to have them paid direct into bank accounts.

Mr. Jenkin

I am grateful to my hon. and learned Friend for his remarks. I shall make suggestions with that consideration in mind in a moment.

The impression seems to have got around that the Government have already made decisions and are committed to major changes. That simply is not true. There is no question of any early reforms or of a fait accompli. Certainly there is no question of our trying to do anything by stealth. I hope that the House will accept that.

Mr. Dalyell


Mr. Jenkin

Indeed, one of the difficulties faced by the House is that the report has not yet been published. The House is having to consider these matters on the basis of press reports, answers to parliamentary questions—to which I referred in my earlier intervention—and statements such as that which I issued last week.

Mr. Dalyell


Mr. Jenkin

Many hon. Members wish to speak.

Mr. Dalyell


Mr. Deputy Speaker (Mr. Richard Crawshaw)

Order. The right hon. Gentleman is not giving way.

Mr. Jenkin

Much of the concern turns, of course, on the likely effect of any such changes on the future of the sub-post office network. The right hon. Member for Salford, West made that point clear and I know that many of my right hon. and hon. Friends are concerned about sub-post offices. Ministers are fully alive to this problem and have been from the beginning of the study. We know that sub-post offices, particularly in rural areas, but also in suburban areas—I take the right hon. Gentleman's point—provide an essential service to the public. They are often run in conjunction with shops that sell food and other household necessities. If the sub-post office were not on the premises, many of those shops would cease to be viable.

The Government fully accept that any significant closure of sub-post offices would be wholly inconsistent with our aim of sustaining local communities, and the services on which they depend. The review in no way reflects doubts about the quality of the service provided by sub-postmasters under the present system. Hon. Members will know that the Prime Minister made that clear in a letter to Mr. Norman Taylor of the National Federation of Sub-Postmasters. The letter was sent to him last week.

The Prime Minister's father was a sub-postmaster. He ran a sub-post office in conjunction with the shop in Grantham where she spent her youth. Few hon. Members have had more direct personal experience than my right hon. Friend. The village post office is often the meeting place of the community. The postmaster or postmistress is often the friendly adviser of others in the community. From the beginning of the Rayner study Ministers were clear that the post office and sub-postmasters would have to be involved in any consultations from the earliest stage. It was suggested that Sir William Barlow had not been consulted. It is now becoming clear that my officials' early approaches to the Post Office were greeted with some alarm. The fact of this study quickly reached the ears of Sir William Barlow and at a meeting in the West Country last November—of which unfortunately there seems to be no verbatim record—Sir William felt it right to warn his audience in terms that clearly aroused the gravest anxiety among sub-postmasters and sub-postmistresses.

Mr. Bob Cryer (Keighley)


Mr. Jenkin

If I may say so, the consequences are to be found in the post bags of virtually every right hon. and hon. Member.

More recently, in response to public anxiety, Sir Derek Rayner was authorised to give interviews to the press and tele, vision on the progress that he was making and how his projects were being tackled The report has not yet been published, although it is the Government's firm intention to do so.

Mr. Orme

The Secretary of State will be aware that Sir William Barlow gave evidence to a Select Committee this year. He stated categorically that he had had no consultations with the Government on that issue.

Mr. Jenkin

I spoke to Sir William Barlow in a casual meeting—[HON. MEMBERS: "When?"] Some months ago, before Christmas. I should not for one moment describe it as a consultation, but I made it perfectly clear to Sir William Barlow that these were serious proposals that he would do well to take seriously.

Mr. Cryer

They are being seriously opposed.

Mr. Jenkin

Perhaps that remark should be addressed to Sir William Barlow.

Mr. Dalyell


Mr. Jenkin

I hope that the House will agree that the Government would be failing in their responsibilties if they did not consider very carefully the proposals emerging from the review. We know that there is a growing demand for direct payment into bank accounts. Growing numbers of people are becoming used to budgeting fortnightly or monthly and the great majority of occupational pensions are paid monthly. As part of the study, the Department carried out a market survey. Although these figures have to be treated with caution, it found that about three-fifths of pensioners and four-fifths of mothers said that they would have little difficulty if payments were made fortnightly.

Ministers have made it abundantly clear to officials that some groups, including the very old and the poor—perhaps those on supplementary benefit or in receipt of family income supplement—must be able to continue with weekly payments, if they wish. We also made it clear, and I give this complete assurance to the House—I know that it has not been clear to postmasters—that there is no question of requiring anyone to use a bank account who does not choose, of his own free will, to adopt that method. Anyone who wants to continue to draw cash over the post office counter may do so, although the proposal in the study is that it would be fortnightly rather than weekly for most people.

It is against that background that I turn to the Opposition motion. As the House will recognise, we can entirely accept the sentiment in the opening passage. However, when one turns to the rest of their motion, it seems to me that it is not only wholly inconsistent with what the Labour Government were up to but, far more important, on any reasonable interpretation, it would tie the hands of the present Government by linking the undoubted need to protect the income and ensure the viability of sub-post offices solely to the weekly cash payment of social security benefits. I do not see how the words that they have carefully chosen could have any other meaning.

It simply cannot be right to argue for the perpetuation of the present system of paying benefits as if it were the only way to protect the income of sub-post offices. If it is possible to give people more choice, save the taxpayer money and at the same time protect the network of sub-post offices, surely the Government must be free to explore the options.

As I read the Opposition's motion, any new option to allow payment by direct credit could be said to weaken the system of weekly payments and, as such, would have to be ruled out. Any move to allow payment at less frequent intervals would equally be ruled out. I do not believe that such a complete bar makes any sense at all. The Government must be allowed to continue their study to see if there are ways of giving wider choice and securing the administrative savings in such a way as to safeguard the position of sub-postmasters.

That may have to be done by looking more widely and seeking other ways. I mention two possibilities but make it clear there could be others. First, there could be much wider use of the National Giro Bank.

Mr. Gregor MacKenzie (Rutherglen)


Mr. Jenkin

For instance, if pensions were paid by direct credit into a giro account, pensioners would be free to draw cash in the amounts and at the times to suit their own convenience. There is no way under the present system that the pensioner can draw less than the full weekly pension and leave the balance to accumulate. There is no way that a pensioner who does not wish to carry his full week's cash on his person can draw his pension in two tranches. If pensions were paid direct into giro accounts, a pensioner would be entirely free to make a weekly, or, if he chose, an even more frequent visit to the post office to draw out the cash that he would need, and the rest would be safe in his account and not be at risk being stuffed in his mattress or his teapot where it would be at the risk of housebreakers.

Mr. F. A. Burden (Gillingham)

If the proposal is that pensions should be drawn every fortnight, what arrangements will there be so that there is no lag between the time when people finish drawing the old pension and start drawing the new one? That time-lag might cause considerable difficulties to some families.

Mr. Jenkin

I accept that. If it were fortnightly and I stress the word "if" —there would be a week in arrears and a week in advance. There would be no gap. My hon. Friend's point is perfectly fair.

A much wider use of the National Giro Bank would bring post offices substantial additional business and therefore commission.

A second possibility concerns the payment of fuel bills. I recognise that there can be no question of moving down that road without the fullest consultation with the energy industries. That goes without saying. At the moment there is a statutory bar in the Post Office Act against nationalised industries using the Post Office on an agency basis, as Government Departments use it. For example, the only way that people can pay gas or electricity bills through the Post Office is by paying them into the industry's giro account, and being charged 20p for the privilege. I believe that there are better ways of helping the public to pay bills which would bring business to post offices.

One possibility that could be explored is the question of fuel stamps. That could well bring additional business. There may be other ways to make use of this most valuable social network of sub-post offices in our towns, villages and suburbs. All these possibilities will have to be explored with the various interests—the Post Office, sub-postmasters and the National Giro Bank—before decisions are taken.

What must be clear is that there can be no question of the Government taking decisions—even if we could persuade the House to accept them—to go ahead with major changes in the system of paying social security benefits if we were not at the same time able to assure sub-post offices of the continuance of the sub-post office network. That does not mean complete ossification—and I hope that no one is suggesting that. Every year some sub-post offices close, but others are opening.

The network of sub-post offices is essential. Of that let there be no doubt. Village communities depend on the services that that network makes possible. The Government are determined to preserve it.

The Government's amendment therefore makes it clear that we must be free to carry forward our study and explore all the options with the Post Office. The Opposition's motion seeks to tie our hands firmly by refusing to countenance any change.

If ever there were a case of the Labour Party living in the past while the Conservative Party is looking to the future, surely this is it. I ask my right hon, and hon. Friends to vote against the Opposition motion and to support the Government amendment in the Lobby tonight.

5.29 pm
Mr. Charles R. Morris (Manchester, Openshaw)

I wish to declare an interest. I have held a number of positions with the Post Office, not least a long period as a postal officer serving on post office counters.

I listened to the Secretary of State's speech with fascination and interest. I accept that it is right, indeed it is understandable, that he and the Government should concern themselves with seeking to identify savings in Civil Service manpower and Government administration. But I suggest that the Department of Health and Social Security is not entitled to consider the matter of fortnightly and monthly benefit payments in isolation from the Post Office. Consideration must be given to the impact of the proposals on the lives of elderly pensioners, the disabled, and those who rightly claim family benefits and supplementary benefits.

We are entitled to consider the impact of the proposals on the 21,300 scale payment post offices and the 1,500 Crown post offices which will be affected by the proposals. The Secretary of State said that no final decisions have been made. He said that the decisions will be made by the House, and that consultations are proceeding. I hope that the Secretary of State will give consideration in the discussions to a recent academic report on the subject which was made available last month.

The Secretary of State rightly drew attention to the actions of the previous Labour Government in making unemployment benefits payments payable on a fortnightly basis. The report examined the consequences of that procedure. It examined the impact of fortnightly payments of unemployment benefits on the staff of post offices. It reached the conclusion that the effect would be to reduce post office counter staff by 1 per cent.

But, he went on to suggest that if the analysis was carried further, and the whole area of benefit payments was examined—benefits for the elderly, family benefits, supplementary benefits and the whole gamut of supplementary benefits—fortnightly payments would produce a reduction of 17 per cent. in the staffing of post office counters. Monthly payments of such benefits would produce a reduction of 25 per cent. Translated to posts, this academic study indicated that we face the possibility of redundancies on the scale of about 5,000 stall on the counters of Crown post offices and scale payment post offices.

Reference has been made to the signal contribution that scale payment post offices make. Scale payment post offices have been established for a number of reasons. In recent years they have been encouraged to the detriment of the establishment of Crown post offices. That is why there are 21,000 scale payment post offices and 1,500 crown post offices. They have been encouraged because they are cheap, and because scale payment postmasters are not treated generously in terms of salary and remuneration. Some postmasters receive salaries as low as £1,200, while the average payment is about £5,500. Out of that postmasters have to provide money for staffing and for all the essential prerequisites which are involved in providing the service.

My right hon. Friend the Member for Salford, West (Mr. Orme) and the Secretary of State paid tribute to the service given by the scale payment post offices. I should like to associate myself with those remarks. I should also like to pay tribute to the service given at Crown post office counters.

In many areas, post offices are an essential part of the fabric of community life. It is too easy to claim that the change envisaged by the Government will not be forced upon people. The Secretary of State claimed that £50 million would be saved if the proposals were adopted. He cannot have it both ways. If he argues that there will be a potential saving of £50 million, he cannot argue that the system will not be imposed. It will be imposed on elderly pensioners, as it was imposed on those in receipt of unemployment benefit. The Secretary of State nods. If he means that, he will create a great deal of anxiety and distress for many elderly pensioners.

When the method of payment for unemployment benefit was changed, the Secretary of State said that it would widen the choice. People receiving unemployment benefit had no choice. The Secretary of State claims that 95 per cent. of people receiving unemployment benefit opted for fortnightly payments. If people sought to exercise a choice and receive weekly payments, they had to go to the employment office. If that obtains for elderly pensioners and disabled people, will the Secretary of State seriously argue that they will be obliged to troop to the local office of the DHSS in order to opt out of fortnightly and monthly payments? That is the natural and logical follow-through of his argument. The Secretary of State is shaking his head. He cannot have the argument both ways.

Mr. Patrick Jenkin

The right hon. Gentleman is descending into fantasy when he talks about people going along to the local office of the DHSS every week. He is talking utter nonsense. The proposal in the report is that payments should be made fortnightly. The Government have made it clear that there are categories, including the very old and the very poor, for whom weekly payments should continue.

Mr. Morris

With great respect, the Secretary of State should listen more carefully. I did not suggest that elderly pensioners, the disabled, and mothers with large families would have to go to the local office of the DHSS every week. I argued that if benefits were paid on the same basis as the unemployment benefit is paid, people would have to go to the local office of the DHSS to opt out. If that system will not obtain the Secretary of State will have to invite everyone to exercise a choice before he brings the scheme into operation. With respect, the Secretary of State completely misrepresented my point.

If the proposals go ahead I believe that they will cause distress and anxiety to the most vulnerable sections of the community. It is no use arguing that the same procedures that are used for the payment of unemployment benefits will be used. That represents a cut of only 1 per cent. in post office counter staffing. This will represent a 25 per cent. cut if it is done on a monthly basis, and a 17 per cent. cut if it is done on a fortnightly basis.

There is an even more interesting point. The Secretary of State told us that the Government would seek to find alternative work for skilled post office workers. The post office itself has been trying to find alternative work for post office counters for many years. The Secretary of State puts these ideas forward, yet he says that if the Government make it possible for gas and electricity accounts to be paid at post office counters, there will need to be a change in legislation. Has he had the Prime Minister's authority for saying that legislation will be brought in to give effect to the changes? If there is a possibility of extra work for post office counter workers, it should be identified.

This whole measure has been put to the House on the basis of allowing a wider choice. However, many vulnerable sections of the community have little choice over weekly payments. I have two wards in my constituency in which more than 40 per cent. of the families are on family incomes at or below subsistence level. The thought of fortnightly or monthly payments fills these vulnerable people with anxiety. It should also fill hon. Members with anxiety.

5.43 pm
Mr. Bill Walker (Perth and East Perthshire)

I am very grateful for having caught your eye, Mr. Deputy Speaker, and I welcome the opportunity to speak in this important debate. I welcome the Government amendment, and I am delighted to note that the Opposition are at one with the Government in recognising the importance of sub-post offices to the community. I should also like to take this opportunity to congratu- late my right hon. Friend the Secretary of State, because his amendment sets out the Government's position very clearly. They have shown that they have in mind the best interests of the Post Office, the National Health Service and the public in making their intentions known today.

It is right that any Government should examine the options open to them. It would be wrong not to do so. They must be sure that the services that they provide are more effective and efficient.

My right hon. Friend the Secretary of State was right in saying that the sub-post office enjoys a unique and special position in the life of many communities. In Perthshire there are 15 town sub-post offices. The town sub-post office on a council estate or a small communal estate is as important as the post office in a rural area. There are 71 sub-post offices in the rural areas of Perthshire, and therefore I have an interest in both types. They are unique in many ways, because they serve a large number of small communities. Some of these communities are isolated from the centre of the town because of the inadequacy or expense of public transport. This should not be overlooked.

Many sub-post offices are situated at considerable distances from the nearest habitation or village. Hon. Members should visit some of the beautiful spots in my constituency, where we have some very good post offices. The sub-post office is a splendid example of a small business that provides a unique and essential service. It caters for a variety of needs. In addition to providing postal facilities, it sells groceries, stationery, newspapers, tobacco and many other goods.

Mr. Dalyell

Is it not true that in many parts of the hon. Member's area, and in some parts of mine, such sub-post offices would no longer be viable if they did not receive agency fees from the Post Office?

Mr. Walker

I was just about to come to that point. Sub-post offices are very important small businesses, which provide these services to the community, and they do so because they are convenient to the public. The additional services can be carried out only because the small businesses are made viable by the regular cash flow contributed by the post office section of the business.

The network of sub-post offices is vital to the life of rural and urban communities, and it is right that the Government should explore ways of bringing new business to these sub-post offices. That is important. While examining areas for additional business, I trust that the Government will recognise that the nationalised industries and other utilities, such as electricity and gas, and local government should be encouraged to accept payment of accounts by instalments through sub-post offices. That would make it easier for the public and would help to expand and make more secure the network of these fine small businesses.

I recognise that in many EEC countries, and in North America, retirement pensions and family benefits are paid monthly. It is just possible that more and more people in this country will opt for such payments—but the important thing is the word "opt". The Government scheme, as I understand it, will give these options, of which I heartily approve.

I acknowledge that an increasing number of people are used to being paid monthly through their bank accounts, and therefore they are accustomed to budgeting on a monthly basis. However, in my constituency many pensioners have never had a bank account. Indeed, some of them do not trust banks, and even today they keep their savings in a tin box. That is not unusual in some rural parts of Scotland.

There are some people who have always budgeted weekly. To many working-class families this is a way of life, and it will take time for it to change. I welcome the assurance that the Government are allowing for this period of change. Consequently, I welcome the Government's intention to publish their proposals on social security payments—proposals that are being prepared by Sir Derek Rayner. I like the idea of any improvement in services. I like the idea of more efficiency and better value for money. I am a Scot, and therefore I wish to see the money used more effectively and efficiently.

The firm with which Sir Derek Rayner is associated has been reported to have said in the past that it always took decisions on the basis of good human relations. That had always turned out to be good economic and business practice, as well. If this same philosophy were applied to the running of post offices and making payment to the various Government agencies, we would find that it worked to the advantage of consumers. That is what both sides of the House would wish. But we must not condone a system that says that because we have done it a certain way in the past we must continue to do it that way for ever. That is not sensible. It is not acceptable. I am surprised at the noises coming from the right hon. Member for Western Isles (Mr. Stewart), because people in the Islands are very enterprising. Most of them, however, leave the Islands to go elsewhere, to give the benefit of their inherent skills to the nation at large and to the world. Looking down the list of names where changes have occurred, one sees that a substantial number have come from the Islands. They welcome change. They accept that change is good.

I am confident that Sir Derek's proposals, when examined in the light of the factors that I have mentioned, will be found to be good economic and business practice for the country, for the Department of Health and Social Security and for that important sector with which this debate is concerned, the sub-post offices.

5.51 pm
Mr. David Penhaligon (Truro)

This is one of a series of debates in the House that pose the question "Do we or do we not wish to destroy villages?" I do not. But the Government clearly do. They are already charging people for their children to go to school and closing village schools. Their next target is obviously village sub-post offices. It is clear that villages do not fit into urban man's interpretation of sensible life in Britain. Villages are, therefore, being asked to pay.

The right hon. Gentleman asked whether any hon. Member could beat the Prime Minister's father, who was a sub-postmaster. My claim is that I probably can, having been a sub-postmaster at Chacewater for seven years before retiring shortly before the October 1974 general election and handing over to my wife. I can assure the Secretary of State that the one-third of the country receiving supplementary benefit, consisting of the people who wish to budget weekly—the percentage was higher in my village —draw their money weekly automatically. It would not occur to them to do anything else. Indeed, a queue forms outside the sub-post office before it opens at the appointed hour.

Mr. Alec Woodall (Hemsworth)

Do the hon. Member's constituents who receive their pension and benefits weekly often run out of money, like mine, before they have run out of week?

Mr. Penhaligon

I suspect that that is so. We did not supply weeks in the sub-post office. The Government cannot get away with this. There are only two ways to save money. One is to close sub-post offices and the second is to reduce the amount of pay given to sub-postmasters for carrying out a service. One of the ironies about being a sub-postmaster is that one is on duty for 40 hours a week, whether or not one is doing business.

Mr. Douglas Hogg (Grantham)


Mr. Penhaligon

If the Minister wishes to save money and to reduce the work content he will not simply close the sub-post offices that the Post Office give instructions to be closed; he will go further and close some sub-post offices simply because they are no longer economic to run.

Sub-postmasters have no contract; they are paid for results. I recollect, as a sub-postmaster, the time that national insurance stamps were scrapped. Few other groups have been similarly treated. They are too responsible to strike. To the present Government, they seem a sitting target for what are minor economies.

Mr. Nicholas Baker (Dorset, North)


Mr. Penhaligon

I cannot give way to the hon. Gentleman. If the elderly are forced to go to the nearest town to collect their cash and forced to incur expenditure going there, it is obvious that they will spend that money in that town in order to recover some of the loss of the forced journey. That money will not, therefore, be spent in the village. It will not be spent on the estate. The argument is the same. If the money is spent in the town, the local shopping community will be destroyed.

The Government may save money, but they are looking to save money from the disabled, from the retired and from the unemployed. I humbly submit that if the Government are looking for areas in which to save money, those three categories do not quickly and obviously come to mind. This is a disgraceful proposal. What the Secretary of State said did not give me one iota of reassurance. If the right hon. Gentleman wishes to reassure the elderly and the sub-postmasters and sub-postmistresses, he need only come to the Dispatch Box and say "We were looking into this. I have now given instructions to stop it". That is all that is required.

5.55 pm
Mr. Paul Dean (Somerset, North)

Two sensitive issues have combined to produce fears and anxieties. The close link between the payment of pensions and the future of sub-post offices, particularly in rural and suburban areas, has been clearly demonstrated. Rumour and speculation have fed upon each other. People have assumed that the Rayner axe is about to fall. Such has been the unhappy story so far. It has proved yet again that politics are more than economics and that we have to remember the natural reactions and emotions of people.

I believe that my right hon. Friend, in his speech today, has gone a long way to dispel the fears and to remove the fog surrounding the issue and to reassure both pensioners and sub-postmasters.

The village post office is a vital hub of activity in many villages and is often also the village shop. Neither would be viable in many cases without the other. It would be a false and short-sighted economy to drive this traditional British institution out of business. The Western Daily Press, one of my local newspapers, put the matter concisely in a leading article on 16 February, when it said: We have lost too much from our villages already, with children being transported to distant schools: lost bus services; even closed churches and inns. The survival of the post office is the best hope for the revival of other amenities. That is very effectively put. Were these closures to happen, there would be problems for pensioners who would have to go further to collect their pensions. This would involve greater expense with all the inadequacy of rural transport services and the additional cost in fuel.

I welcome the reassurance by my right hon. Friend in his speech and the possibilities that he opened up of new business for the post offices through the Giro and the payment of fuel bills. If the leaks from the Rayner report have done nothing else, they have at least enabled my right hon. Friend to open up new possibilities for new business for our rural and suburban post offices.

On the payment of pensions, the essence, in my view, is that there should he greater freedom of choice but not compulsion. I can see that it makes good sense that the pensions of those with bank accounts should be paid direct into those accounts if the recipient so wishes. I can also see considerable benefit for many people to receive payment by Giro and other credit account arrangements if they so choose.

I suggest, however, that matters should stop there, at any rate for the time being. We should see how many people take advantage of the new arrangements, the savings that accrue and the difficulties that may arise.

We must remember that there are still many pensioners and others who budget on a weekly basis and who wish to collect their money each week from the post office. The Government would be wrong to stop that. I do not care for the idea of compelling some to draw their money fortnightly, while others are allowed to draw it weekly.

I do not accept that the payment of unemployment benefit on a fortnightly basis is a good analogy. Unemployment benefit is paid on a fortnightly basis because people sign on on a fortnightly basis.

It would be difficult to know where to draw the line between those paid fortnightly and those paid weekly. How could there be a hard and fast rule which would be sufficiently sensitive to the variety of circumstances and conditions that obtain?

What about the widow who receives supplementary benefit for the first time? She is distressed, confused and probably has had no previous contact with the social security system. Is she to be paid fortnightly? I doubt whether that would be an effective arrangement for her.

If we follow that road, there is a real risk of invidious comparisons being drawn in streets and in villages between those paid weekly and those paid fortnightly. If we tried to draw such a line, vulnerable people would be paid on a fortnightly basis. If that were to happen, I fear that the savings would be quite small because of the additional problems that would be created for those people and which would have to be picked up by the social security system.

I suggest to my right hon. Friend that it would be better to take one step at a time. As a first step, let us offer a wider range of choice to pensioners. We should find ways to bring new business to the sub-post offices. Both of those suggestions are in the Government amendment. Both were emphasised by my right hon. Friend in his helpful and sympathetic speech when he opened the debate. On those grounds I shall have no hesitation in voting for the Government amendment.

6.2 pm

Mr. Donald Stewart (Western Isles)

In spite of the statements made by the hon. Member for Somerset, North (Mr. Dean) in favour of the Government amendment, he, together with many of his hon. Friends, have made a case for the Opposition motion. They were all at great pains to point out how disastrous it would be if the present position were changed. They stressed how many people were dependent on weekly budgeting. The message received so far in the debate, apart from the speech of the Secretary of State, is, in modern parlance, "It's not on".

Even though the proposals have not yet been implemented, it is right for the House to send a shot across the bows of the Government.

Mr. Douglas Hogg


Mr. Stewart

No, I shall not give way. Certain stringent actions taken by the Government at this time could be reversed when times are easier, if that time ever occurs. However, the proposed action would inevitably close rural post offices. It would be an irreversible action that would do a great deal of damage to the rural areas.

Apart from one town, my constituency is rural in nature, with isolated communities. One person in four is over 65, as against one person in eight for the rest of Scotland. We face an exceptionally difficult problem. I know that other hon. Members face similar problems which would be exacerbated if the proposals were implemented. It is all very well for Sir Derek Rayner to make suggestions for saving money. It is interesting to note that although weekly, fortnightly or monthly payments would make savings, there is no suggestion that PAYE national insurance contributions should be paid monthly. That is money which is due to the Exchequer.

Mr. Patrick Jenkin

I wish to make it clear that the proposals in the report are not those of Sir Derek Rayner. They are proposals by a team of officials in my Department. They are, therefore, proposals for which I—and not Sir Derek—take responsibility. Sir Derek's role is that of an adviser. I wish to make that clear. I hope that the House will accept that.

Mr. Stewart

That statement makes the Government's position all the more responsible. As well as taking into account areas where economies could be made, they have a responsibility to consider what would happen to the social fabric of our rural communities if the proposals were implemented. They cannot consider such matters in isolation regardless of any proposals from their advisers.

I was amused by the thought—although it would not be true in my constituency —of many pensioners fiddling about between bank accounts. Most of them do not have bank accounts. When they receive their weekly pension every penny has already been allocated and committed. They cannot stretch their pension any further than a week. They must receive their payments weekly.

The Government's proposals would encourage the Post Office to close down rural post offices, and that is what it wishes to do. Anything that reduces the income of the sub-post offices would assist in that end. The Government must prevent that from happening.

It would be ridiculous to claim that the Government are running a vendetta against rural areas, but it is beginning to look that way with the removal of school transport, and so on. The proposals would be another nail in the coffin of the rural areas.

The Government appear to be an Administration without a heart or a soul. If they proceed with the proposals they will be an Administration without a head.

6.8 pm

Mr. T. W. Urwin (Houghton-le-Spring)

shall be brief because of the short time available to debate this important matter. I wish to remind the Minister, despite what he has said, that, since the Rayner proposals became public knowledge through the media, there has been an enormous volume of opposition. In my constituency—and I am sure this has occurred in other constituencies—there has been a steady flow of correspondence from not only sub-postmasters, but from those who would be directly affected if the proposals become effective—pensioners, widows and the disabled. That correspondence has built up in the last few days to batches of 200 letters at one time. If the Minister and his colleagues have not had that experience, I should be happy to send them my batches of correspondence so that they can read and understand the depth of feeling that exists among so many about the fact that the payment of pensions and social security benefits will be withdrawn from sub-post offices.

As many hon. Members have already said, the proposals threaten the viability of sub-post offices, and could put them out of business. I endorse the remarks of the right hon. Member for Western Isles (Mr. Stewart) about the dependence of pensioners on a weekly payment. They work to a tight budget, knowing full well in many cases that the money will be exhausted before the next weekly payment arrives.

To suggest that they should wait for two or four weeks between payments, and be compelled to open a bank account, is absolutely preposterous. I cannot imagine how Rayner, the Minister, or anybody else could arrive at such a conclusion in a mad bid to save a few pounds. It is the wrong area in which to seek cuts in public expenditure.

I suggest to the Minister that, instead of pursuing this course of action, the acknowledgement of a social responsibility and obligation to pensioners and other recipients of social security benefits would far outweigh any other responsibilities with which the Government have to contend. They should withdraw completely from, and forget for ever more any suggestion of any change in the existing system of payment of benefits.

6.10 pm
Mr. Tim Eggar (Enfield, North)

It is unfortunate that the debate is taking place today. Having heard the Secretary of State's remarks, it is unfortunate that the idea ever spread that the Government were intending to force pensioners and others in receipt of benefits to receive the payments fornightly or monthly. Rumour and speculation have already caused distress to many thousands of the elderly throughout the country. That rumour and speculation has deeply concerned many sub-postmasters, who have seen their livelihoods threatened.

The way in which the Opposition have chosen to treat the subject is unfortunate. They have deliberately set out to frighten the elderly. They have deliberately set out to feed the rumours. They have done so although the National Federation of Sub-Postmasters has made it clear that the one thing that it does not want is for this to become a political issue.

I stress that I am broadly in sympathy with the Government's overall economic policies. I recognise that that support involves cutting public expenditure. I recognise also that it is no good Conservative Members supporting the Government's general economic policies while on every occasion trying to resist public expenditure restrictions.

I remember the advice that I was given by a Labour Member soon after I entered the House. He told me that if I wished to criticise the Government I should do so on the big issues and not on the minor ones. Why am I speaking in the debate?

Mr. Douglas Hogg

Why, indeed?

Mr. Eggar

The issue that we are discussing involves much more than the £50 million that will be saved during the year. It goes much further than that. It calls into question the Government's attitude. The way in which the issue has been approached and handled is symptomatic of an attitude and approach to governing that, if it is permitted to continue, will go far to undermine the Government's economic strategy and the Government themselves.

There are two major criticisms of the Government's treatment of the Rayner proposals. The first is that the proposals were allowed to reach the Floor of the House without the Government previously having explained their viewpoint. The second criticism is that any undermining of the sub-post office network goes contrary to the Conservative belief in the family, the community, and the support of small business men.

In May the Government received a mandate to cut public expenditure. Despite that, we have to rule with the consent of the electorate. We must carry the people with us. If the voters do not understand, or do not have explained to them, the reasons for the measures that we are taking in relatively small areas—such as the one that we are discussing—in our efforts to restrict public expenditure, they will begin to doubt not merely that Government proposal but the Government's overall economic policy.

There is a danger that we are forgetting that there is a reverse side to the Conservative approach—a side that stresses the need for a reduction in public expenditure. I refer to the approach that stresses the importance of self-help, of family life and of the community. It is not much good if, in our enthusiasm to save public money, we destroy the social fabric and the way of life that prospered well before the explosion in State expenditure that was brought about by Governments of both the main parties in the past 20 years.

In many areas in my urban constituency—I do not represent a rural area—I sec the way in which the local sub-post offices provide a valuable social and economic function.

Mr. Douglas Hogg


Mr. Eggar

No, I shall not give way to my hon. Friend. I know that other hon. Members wish to participate in the debate.

In most areas the sub-post offices are providing the only remaining local general stores. They are important local meeting places. They are a source of local information that is second to none. They are an unseen and unsung corner of an efficient system of self-help and mutual help in the community that is preferable to visits to DHSS offices.

The importance of sub-post offices to the community may best be judged by the number of people who consciously prefer to collect their pensions at a sub-post office, even if a Crown office is nearer to them. They can be judged also by the public outcry that follows when any sub-post office is threatened with closure. For many people the sub-post offices, even in the urban areas, are the centres of communities. They are centres of community life that would disappear if the sub-post offices were not present. They are worthy of our support.

Despite those submissions, I support the Minister's argument that pensioners and child benefit recipients should have the right to be paid fortnightly or monthly. However, there must be choice. Many pensioners in my constituency could not manage on other than a weekly budget. I accept the argument against transporting large sums of cash throughout the country to sub-post offices. However, if we wish to break the extraordinary British habit of weekly budgeting and the use of cash, we should do so by introducing an amendment to the Truck Acts. We should not start by altering the basis of payment to those who are in retirement.

I welcome the Minister's commitment to the continued viability of the sub-post office network. I hope that I detected a strong undertaking from the Minister that he will not do anything to undermine the viability of the present network. I merely say to the Government that there is always a danger that we shall win all the battles but finally lose the war.

Mr. Speaker

I remind the House that the Front Benches have agreed that they will not seek to catch my eye until 6.38 pm. If hon. Members make five-minute speeches I shall be able to call four more hon. Members to participate in the debate.

6.17 pm
Mr. Robert Kilroy-Silk (Ormskirk)

In common with my right hon. and hon. Friends, I am against any move on the part of the Government that will weaken the system of weekly payments to pensioners, to mothers and to other benefit recipients.

The Secretary of State made great play of the Government's amendment, which states that the proposals are intended to give recipients a wider choice as to the method of payment and to save administrative costs".

To widen the area of choice would seem to be an acceptable objective. However, by giving choice to some—by definition the "some" will be a minority, the relatively rich recipients of pensions and social security benefits who will want their pensions and benefits paid at other than weekly intervals—we shall limit the choice that is available to others.

In the first instance, there would necessarily be a loss of business to the sub-post offices. If a significant number wish to exercise their option to have other than weekly payments, that will have a significant impact on the viability of sub-post offices. If there were large savings and a sufficiently significant impact, the viability of sub-post offices would be threatened. Therefore, the choice open to the majority who want weekly payments would not exist.

Mr. W. R. Rees-Davies (Thanet, West)


Mr. Kilroy-Silk

As many hon. Members have said, sub-post offices in urban areas as well as rural areas provide an essential service. They are the hubs around which the whole community thrives. In the urban areas in my constituency, and in the rural areas, of which there are many in my constituency, the village shops and all that goes with them exist only because within the same premises are sub-post offices. if the sub-post office is threatened by the payment of benefits other than at weekly intervals the shop is threatened and with it the rapport, the ethos and the atmosphere of that area.

Already 6,000 sub-post offices have closed. The number is now down to 21,000 and 3,000 more are threatened by the Government's proposal. There is another important aspect of the issue. If it were accepted that people should now have freedom of choice to exercise the option to have benefits paid other than at weekly intervals it would not only damage the viability of the post Office; it would also mean that any future Government could say that there would be harmonisation and rationalisation of the system. Having forced in this thin end of the wedge it would be very much the prerogative of a future Government to say that the system should be extended because only a minority of people were being paid benefits on a weekly basis.

The Secretary of State did not give any assurance to my hon. Friends and his hon. Friends who insisted on a guarantee that those who wished to continue with weekly payments would get them and that they would not be compelled to do otherwise. It is all right to widen choice —albeit at the expense of the many for the benefit of the few—but it is not acceptable if the widening of the choice for the few eventually implants in the minds of future Ministers the use of compulsion to ensure that the minority who want weekly payments should now comply with the new system of payment into the bank. I do not say that that is in the mind of the Secretary of State but it might happen in future.

Many of the constituents of hon. Member's on both sides of the House cannot manage other than on weekly payments. Pensioners have already been clobbered by increases in VAT, the price of gas, rates, and all the other changes brought on by inflation. They cannot manage without weekly benefit payments. That also applies certainly to the vast majority of my constituents who receive child benefits. They need that money each week. The week is long enough as it is without their being threatened by the Secretary of State that benefits will be paid out over a longer period and paid into a bank account.

Those people have already been clobbered enough by this Government by the prospect of paying more for transport and school meals for their children; by having to pay increased prescription charges and increases in prices in every conceivable sector. Those increases are the result of the deliberate policy of the Government. It ill becomes the Secretary of State, therefore, to propose to clobber them even further by suggesting that in future they will not receive child benefit payment weekly.

This Government have already cheated the pensioners out of the increase that they would have received under the Labour Government. The Government have cheated them out of the increase that they should have received had the Government made correct assumptions about the levels at which earnings would increase this year. Pensioners have been swindled dramatically by this Government. They should not, along with those in receipt of child benefit or other social security payments allow themselves to be swindled by these proposals. My hon. Friends will oppose this, as we would have done had a Labour Government brought forward such proposals. I hope that Tory Members will similarly have the courage of their convictions.

6.23 pm
Mr. Dudley Smith (Warwick and Leamington)

It is admirable that the Government should seek to improve the public service by making it more efficient, but I think it is rather unwise to start a hare running such as this one that has caused a great deal of anxiety to those affected. Public discussion about possible ideas is one thing but suggestions that there may be implementation of policy is entirely another.

I was worried to hear my right hon. Friend speaking about the part played by Sir William Barlow the chairman of the Post Office. If Sir William Barlow has made the speeches my right hon. Friend suggested he has made I believe that he has acted reprehensibly. I support the idea of wider choice in methods of payment and support the Government's amendment. I regret that it was necessary for the Opposition to bring forward this motion today. But I do not blame them. They are playing politics with the issue. However, I do not think that the motion would have been necessary had the problem been handled better from the start.

Any suggestion that we should move even gradually toward the payment of pensions and other benefits on a monthly, or even fortnightly, basis must be resisted particularly where rural areas are concerned. I must tell my right hon. Friend that if this proposition comes before the House I will not give the proposal my support.

I wonder sometimes whether the bureaucrats and the efficiency experts live in the same world as ordinary people. Certainly I wonder whether they live in the world of those who are confined to rural areas. Our rural areas are part of our heritage and they have been badly undermined by successive Governments over the last 30 years. If we believe in anything, surely we must believe in preserving and stabilising village life.

It is true that the villages have changed considerably in recent years because of weekend residents, but there are still large numbers of people, many of them old, still living in the villages. Surely it is realised that changes of the type originally mooted would be impractical anyway. Few villages nowadays have even the tiniest branch of a bank and most of them have an unreliable bus service or no bus service at all. Surely it is realised that the sub-post office is much more than a cash counter; much more than a paying-out machine. Sub-post offices are nearly always the focal point of the village and they combine many other services alongside that of being a shop.

I had a letter this morning from one of the sub-postmistresses in my area. She said I am in close contact with my pensioners and often I am the only source of advice. In those circumstances I hope that these proposals will be forgotten after this debate. Sub-post offices provide excellent facilities, though I believe that the Post Office would like to see large numbers of rural post offices phased out. I am not impressed by that idea, because I do not admire the judgment of the Post Office which in so many other respects has proved to be fallible. I hope that my hon. Friend the Minister of State, Department of Industry (Mr. Butler) will call Sir William Barlow to account over this issue.

Let us by all means bring in new business to the rural sub-post offices—

Mr. Rees-Davies


Mr. Smith

No, I cannot give way because I have promised to make my speech short. Let us by all means bring in extra business to the sub-post offices and let us do all we can to help rural populations where life is very different from the life which is lived in Whitehall. While we are reforming, preaching efficiency and cutting out waste—a policy I fully support—can we at the same time apply the principles of common sense?

6.27 pm
Mr. John Maxton (Glasgow, Cathcart)

The debate so far has concentrated on the problems of the rural areas. There have only been passing references to the towns and to smaller council schemes. I think that the House should be aware of the dangers to the large council house schemes in our industrial cities that are posed by these proposals.

One of the largest council house schemes in Europe, with a population of 38,000, is in my constituency. Taking supplementary benefits, child benefits and old-age pensions together, I would have thought that almost 60 per cent. of those people will be receiving benefits in some form or another. Within that area there is not one bank to serve a population of 38,000. For the payment of their benefits those people, therefore, rely absolutely on the sub-post offices.

I received a letter from a sub-postmaster in one of the poorest parts of that area. I have not managed to check his figures, but he says that 85 per cent. of his income comes as a result of the payment of benefits to people in the area. It would need only a small number of those people to decide that they would use banks and have their benefits paid fortnightly to make his business non-viable. He would have to give up. It is not a matter of his being told by the Post Office that he would have to give up. He would have to give up because he could not operate—there would be no profit in it for him.

My correspondent made the point that he is one shop in a row of 10. He said that if his shop, as a sub-post office, closed because it was no longer viable, the people who received benefit from him would no longer be able to shop in the other nine shops. They would have to go elsewhere, outside Castlemilk altogther, in order to obtain their money. As a result, they would also do their shopping elsewhere. Therefore, not only the sub-post office but a large number of the other shops would close. A major social benefit would be taken away if sub-post offices in such areas were to close.

I am trying to be brief, because I am well aware that other hon. Members wish to speak. We should bear in mind the problems associated with large housing schemes where, let us be honest, private enterprise has failed to provide basic services. In the area to which I have referred, there are no banks, and the shops are of a poor standard compared with the chain stores. Incidentally, there is no Marks and Spencer's to serve the population of 38,000. There are no cinemas, theatres or bingo halls. There is very little.

The sub-post offices provides a valuable service in those circumstances. What people in areas such as that want is not fewer sub-post offices but more. I recently received a petition from several thousand people asking that another shop in the area be given the right to have sub-post office facilities. I therefore urge the Minister to bear in mind the problems associated with the large housing schemes within our bigger urban areas.

6.31 p.m.

Mr. Paul Hawkins (Norfolk, South-West)

I shall try to be brief, Mr. Speaker. I am grateful to you for calling me. The importance of sub-post offices is recognised by everyone. I represent an enormous rural area, which has 120 villages. I should like to stress two things. Village post offices and the shops that go with them are viable only if people shop in them. That point must be remembered, because people are inclined only to buy the last packet of fags on a Saturday night there and to do all their other shopping in the supermarket, 10 or 11 miles away. That is how people can assist in helping their own sub-post offices.

I entirely agree with my right hon. Friend that we must find out all the ways of cutting out waste and unnecessary expenditure. I do not agree with my hon. Friend the Member for Warwick and Leamington (Mr. Smith) that we cannot find ways of giving sub-post offices extra jobs to do while at the same time cutting out the undoubted waste that exists in the Post Office system. One way would be to allow sub-post offices to sell road fund licences. I have never been able to understand why that has not been done, and I hope that that possibility can be explored by the Department of Transport.

I should like to ask my right hon. Friend whether Sir William Barlow and the Post Office are paying out to sub-post offices a fair share of the £132½ million that they receive from the DHSS. That information must be found out in order to ensure that sub-post offices receive their fair share of the total sum that is paid to the Post Office.

A point that is often forgotten is that many rural areas—there are several villages in my constituency alone—are without any post offices at all. The idea of paying by cheque or paying monthly could help those villages considerably. As has been pointed out, the cost of transport from such a village—generally they are the smallest villages situated a long way from a small market town—is more than £1. If payment could be made fortnightly or into a bank account, I believe that would help those who live in such villages. We always try to get sub-post offices to re-open, but without a big enough community they are just not viable.

The Government have done the right thing in moving the amendment, which I shall certainly support. However, we must find ways and means of modernising and returning to the village some of the life that has been lost through losing the parson, the shops and perhaps some of the bigger farmers. We must try by all means possible to return life to the village. One way is to support the village post office, which is of such a great help to the community.

Several Hon. Members


Mr. Speaker

Order. I remind the House that it is hoped to start the winding-up speeches at 6.38 pm.

6.35 pm
Mr. Kenneth Marks (Manchester, Gorton)

I seem to be setting the standard for being called immediately before the Front-Bench speakers. When last I spoke I was allocated four minutes, and today it is three. Having listened to some of the speeches by Conservative Members, and read again the early-day motions which they signed, I am amazed that they can go into the Lobby with the Secretary of State tonight.

The Government must learn that the combination of cuts in public expenditure and the play of free market forces means that certain groups in the community make more sacrifices than others. They are the groups who can least afford it, such as less-well-off old people, the disabled and parents with young families, especially those families who have one parent working for below average earnings.

There are a number of aspects to this problem. Transport is one of them. Car ownership is fine for those who have cars. It is convenient and logical to use them. But it means that bus services, particularly in rural areas, are reduced, and those who cannot afford cars can no longer afford the bus fares, even if there is a bus service left. Shopping has also been mentioned. The better-off can buy weekly in supermarkets and can go by car. They can use freezers. But the extension of that kind of shopping means that small village shops either close or put up their prices. It is the same group of people who must pay the higher prices.

The problem of sub-post offices applies equally to towns; it is not confined to villages and suburban areas. The three-quarters of a mile journey to a sub-post office in a city area can be extremely hazardous for old people. To us, sub-post offices may just be places where we can buy stamps and the occasional greeting card, but to old people and others they are the link with the community. They are their advice centres on national bureaucracy, and they mean much more to such people than they do to the rest of us.

It has been argued that 60 per cent. of people would be quite happy to have their pensions paid monthly. I do not doubt that. I am sure that when hon. Members come to draw their parliamentary pensions they will say "Pay it into the bank". But by doing so we deprive those who have lived on weekly earnings all their lives. There are those of us who have done the switch from weekly wage to monthly salary, be it for promotion purposes or whatever. That switch is hard at first, because there is too much month at the end of the money. But, as some of my hon. Friends have pointed out, we are talking about people with too much week at the end of the money.

The Secretary of State has not been clear about where the proposed £50 million cuts will come from. He has said that there will be no significant closures, but we do not know what "significant" means in that context. I urge him to re- think the whole matter. He should recognise the importance of the sub-post office, even if it is not the absolutely efficient place which everyone would hope it to be. He should remember that what is convenient and logical for us can spell disaster for the people about whom we are talking. I assure the Secretary of State that we shall keep a very close eye on him.

6.39 pm
Mr. J. W. Rooker (Birmingham, Perry Barr)

The speeches of Conservative Members have shown that this has been an admirably suitable subject for debate. It is quite clear that the Secretary of State has had a drubbing from his own Back Benchers. Incidentally, he has sought through interventions to make something of a scapegoat of Sir William Barlow and to downgrade the work of Sir Derek Rayner.

I do not believe that any hon. Member can accept that it is fair and just to give a so-called freedom or wider choice to a minority of people which has the consequential effect of removing a freedom —namely, that of using the local sub-post office—from the majority of our citizens. That is an unacceptable arrangement to the Opposition and to many of the Government supporters who spoke. It is unacceptable to a vast array of bodies in this country, including the National Consumer Council, which wrote to every Member of Parliament. That is the record.

Mr. Patrick Jenkin


Mr. Rooker

I shall give way only once.

Mr. Patrick Jenkin

I understand the hon. Gentleman's reluctance to give way. He is speaking from the Front Bench. Speaking from the Government Front Bench before the election, his right hon. Friend the Member for Salford, West (Mr. Orme) said: I am much in favour of the principle, and the introduction of such an arrangement would cover child benefit as well as retirement pensions."—[Official Report, 6 March 1979; Vol. 963, c. 1078.] Is the hon. Gentleman now entirely resiling from that?

Mr. Rooker

I expected that. In the words of the present Chief Secretary to the Treasury—[HON. MEMBERS: "Answer the question."] I do not have to answer the question. My right hon. Friend made it clear. We were not talking about the same issue. We were not talking about compulsory fortnightly payments of old-age pensions and compulsory monthly payments of child benefit. They are two separate issues. The Secretary of State knows that. A record number of early-day motions were tabled by hon. Members on both sides of the House on this subject. At the last count, eight had been tabled. There is one tabled by Scottish Members today. That shows that the matter is highly charged. Our constituents are aware of it.

The Secretary of State was a little less than fair when he started to talk about how he would secure the savings. If the average payment for a transaction in a post office is 7p or 12p—it was 12p according to one parliamentary answer that I received—it does not matter. The answer, to save that money, is to put the burden on the individual citizen who cannot keep £100 in a bank account and who will be forced to pay 20p for every transaction. The savings will come from the poor and needy, who will be forced to use a system not of their own choice.

If Government supporters are in any doubt about whether there will be freedom of choice for the majority of pensioners, they need to look only at the exchanges at Question Time on 29 January, when the Under-Secretary of State for Health and Social Security, in answer to a question by the hon. Member for Brentwood and Ongar (Mr. McCrindle), said: Other people may need to adapt to a different payment period that will strike a better balance between their wishes for fairly frequent payment and the needs of taxpayers who have to foot the bill."—[Official Report, 29 January 1980; Vol 177, c. 1106.] If that is not an indication of compulsion, I do not know what is. That is what is proposed for pensioners.

The Secretary of State gave examples of people who did not collect their child benefit for weeks on end. There are examples in every hon. Member's constituency, certainly in my own, of mothers with one child, who collect only £4, queueing up at sub-post offices at 8.30 am, half an hour before they open. There are many occasions when constituents have come to me at holiday time—especially at bank holidays, including Christmas—telling me that they received a double payment of their old-age pension. They argued with the sub-postmaster that they did not want a double payment that week because of the problems it caused their family budget and the security risks involved.

This is not a rural problem. There are urban villages in our great cities where one sub-post office, whether in a grocer's or a draper's shop, can mean viability for that shop and for half a dozen other shops as well. Without the sub-post office, the other shops will not have customers. They will close. That will lead to urban decay and to the growth of the multiples. People will have to go to the multiples for the sub-post office function.

Recently this winter in Birmingham every sub-post office co-operated with the local authority social services department in distributing a leaflet to pensioners, the elderly and the disabled on how to get through the winter. That was done free of charge. A copy was received by every person who needed it. There was no charge by the sub-postmasters. That important social service will not be available if there is a diminution in the number of sub-post offices which must carry an extra work load. There may be a diminution of Crown post offices. We have not talked much about that today. However, there could be a spin-off effect on to the Crown post offices. This is not just a village problem in the rural areas. It is also a major problem in the urban areas.

Pensioners may now be paid, if they wish, at four-weekly or 13-weekly intervals. Many, not the majority, are paid in that way under the social security claims and payments regulations 1979. The assessment of the advice I am given from the Library is that it would be necessary to amend the regulations if the Government wanted to stop weekly payments. It seems that they already have the power to make monthly payments through bank accounts as an option. However, I have a feeling that after today we shall not hear too much about this issue. This will be one of the matters that slip to the bottom of Ministers' in-trays. It is clear from the speeches of some Government supporters that these proposals will not be passed.

We heard a lot about the attitude of Sir Derek Rayner. He said that he did not propose to close any post office. He said that that was not his job. It is neither the job of the Government nor that of the Post Office to close sub-post offices. The decision to close a sub-post office is that of the sub-postmaster. That is not within the sphere of the Government to organise.

I do not know how the Government have the effrontery to propose an amendment to the Opposition motion, claiming that there will be loads of new business for the State bank, the National Giro, and work for the State fuel companies, the gas and electricity organisations, all of which have workers under threat. We presume that their own payments systems are efficient. If not, they would have been belly-aching before.

It is clear that there have not been many consultations by the Government on this matter. This has been hatched up as a result of Back Bench pressure, the lobby of sub-postmasters, who will come to the House tomorrow in vast numbers, the correspondence that hon. Members have received, and the petitions organised in the sub-post offices. The people in the country understand a threat. They do not need sanctimonious speeches of the type that they heard from the Secretary of State today, implying that the Opposition did not understand the problem. The people outside the House, the elderly and the disabled, understand the problem. This is a classic chance of being able to nip the matter in the bud.

The Secretary of State has not answered every question. He did not tell us from where the saving of £50 million would come. If the Government had done their work properly, they would know on what basis the saving of £50 million would be made. They would know the possible percentage take-up and how much of the savings would come from the workers, many of whom are part-time women workers in sub-post offices. They would know what the savings would be from rent and rates and the cutback in civil servants at the DHSS.

Unless the Government can answer those questions, we shall know that this is a half-baked scheme, as one Government supporter described it to the Prime Minister re- cently. The right hon. Lady replied that some half-baked schemes could become fully baked. The House does not often have the chance to nip in the bud a crazy half-baked scheme. The vote at 7 o'clock is a golden opportunity for us to do so. Even if the scheme were presented to the House half-baked, fully baked, dressed up like a turkey, wrapped in a Japanese kimono and with a free copy of Men Only, it would still be thrown out.

6.48 pm
The Minister of State, Department of Industry (Mr. Adam Butler)

The motion is typical of an Opposition bereft of ideas. They thought that they saw disarray on the Government Benches. They therefore put down a highly opportunistic motion. But like many opportunists, they have ended up with egg on their faces; and in the process they have caused a great deal of unnecessary alarm outside the House among sub-postmasters and postmasters.

There were some serious contributions from the Opposition, but most of the serious contributions came from Government supporters, who spoke eloquently and with experience about the important part that the village post office, and those in certain urban areas, play in the community.

I also speak with some experience because Bosworth, despite its industries, has many village post offices whose staff have written to me as others have written to my colleagues. In addition, I have lived for more than 20 years in a small village of some 400 souls. So I have a double experience in this matter. I do not therefore need any lectures from the Opposition on this, nor charges from the hon. Member for Truro (Mr. Penhaligon) that the Government want to destroy villages—what a ridiculous and unsubstantiated accusation.

The village is an essential part of our national life, and I suggest that local planners have a special responsibility to ensure that villages are given a chance to prosper. They should make a conscious effort to ensure that villages are of a viable size to survive with a population to support a village shop, a village hall, a church—this is a random order of priorities—and a pub. These things are essential to give a village a life of its own, to make it self-sustaining and to persuade people who wish to use it purely for commuter purposes to live in it properly and make their contribution to it.

However, it cannot be denied that in the smaller villages, and in some urban areas, the local post office is struggling and, even in combination with a shop, the income it provides is too low. In urban areas, residents are attracted away to the town centres and it is the elderly, the carless, and the mothers with young children at home who have to patronise the local store. Yet there are dedicated sub-postmasters and sub-postmistresses who continue, in the face of these financial difficulties, to serve the public; and we must do our best to support these men and women.

One of the benefits of high fuel costs is that out-of-the-way shops and post offices have gained business. They have benefited, too, from the special prices of the bulk wholesale groups, and so their prices now stand better comparison than they once did with those of the town centre supermarkets. This at least provides them with one reason for hope. Nevertheless, they are under pressure. The fact is that 15 per cent. of sub-post offices are on the Post Office's minimum scale-payment. For one-third of these, it has been possible to find takers by agreeing special conditions, such as shorter than normal opening hours. It is also true that over the last three years the Post Office network has been reduced by some 400 sub-post offices. Against this background, any change affecting the income of sub-postmasters and sub-postmistresses, and the lives of the local communities, must be considered very carefully indeed.

Yet the starting point has to be the potential savings of any change in arrangements; and the choice to those who receive benefits which is so mocked at by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) and many of his colleagues, the choice which should be available to the individual and which is presently denied. However, we know well that the right hon. Member for Salford, West (Mr. Orme) accepted in principle that this choice should be given.

The weakness of the Opposition motion is that it displays the rigidity of the Socialist approach. Apparently nothing must change. There is, according to the right hon. Member for Salford, West, an overwhelming case for things to remain as they are. So the Opposition demand that all benefits must be paid weekly, regardless of the fact that two-thirds of wage-earners are now paid monthly, and that unemployment benefit is paid fortnightly. It was they who brought in the pilot scheme regarding fortnightly unemployment benefit payments in the full knowledge of the consequences of this in possible loss of revenue to sub-post offices.

That is why the motion is so opportunist. The Opposition sought to exploit our concern and mistook a sincere anxiety in our ranks for dissension. How wrong they will prove to be when we vote tonight!

Mr. Rooker

Will the hon. Member give way?

Mr. Butler

I am sorry, I have no time.

There is no mention in the motion of cost savings, athough that was the philosophy of the Labour Party when it was in government and still is as it continues in opposition today. As the Leader of the Opposition made absolutely clear to me on steel matters, it did not matter a tuppenny damn to him whether the taxpayer had to find another £10 million or £20 million. That is an attitude of mind which we are not prepared to adopt.

We welcome the opportunity to have administrative costs in the operation of the social security system. However, this must not prejudice the sub-post office network; we must ensure its continuance. It is the job of the Post Office management to run the network and it has to come to the best commercial arrangements it can, but if the Rayner proposals are to be brought in—and no decisions have yet been taken—the Government must and will examine what ways exist of finding replacement income.

My hon. Friends mentioned some of the possibilities. Certainly we have to consider whether we should change the 1969 Act, as my right hon. Friend said, to allow the sub-post offices to deal as agents with the bills from nationalised industries. My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) asked about vehicle licensing. This is something which my right hon. Friend the Minister of Transport is actively considering at the moment. I do not believe that this will bring a vast amount of extra business, because not every sub-post office will be able to deal with vehicle licensing, but if it were extended to another thousand or so it would help. We need to adopt an imaginative approach. Fuel stamps have been mentioned. The sale of Government stock is another possibility, together with the sale of lottery stamps. Those who have any breadth of imagination would agree that all these matters should be examined.

My right hon. Friend has made it clear that we have every intention of ensuring the continuance of the sub-post office network, but it will need an effort from all concerned, including the Post Office and sub-post offices; and the Giro bank where there is scope for an increase in activity. There must be an effort by the Post Office to compete for additional business on commercial terms.

Local communities must also have regard to their sub-post offices. It is within the power of the local authorities, and indeed of the parish councils, to make money available to ensure the future of sub-post offices in their local community. If a local community believes that it is essential to retain a particular sub-post office, then surely it is not unreasonable to ask that local community itself to make a contribution to what it believes

—and rightly—to be one of its social assets.

Mr. Eggar

Is my hon. Friend saying that, because he is going to undermine the viability of the present sub-post office network, the local authorities will have to pick up the bill?

Mr. Butler

I was delighted to give way to my hon. Friend because he made a very good contribution two hours ago. I have made it clear that we shall not undermine this network. The amendment says that we will ensure the future of the network. However, I say again that it is not an unreasonable proposition that, as with rural buses, the local authority should be asked to make a contribution to ensure the continuance of a social asset.

The Government have not made any decisions on the Rayner proposals. As my right hon. Friend has said, before any decisions are made there will be full and proper consultation and a debate in the House.

I commend the amendment to my hon. Friends.

Question put, That the orginal words stand part of the Question:—

The House divided: Ayes 269, Noes 317.

Division No. 190] AYES [7 pm
Abse, Leo Cant, R. B. Douglas-Mann, Bruce
Adams, Allen Carmichael, Neil Dubs, Alfred
Allaun, Frank Carter-Jones, Lewis Duffy, A. E. P.
Alton, David Cartwright, John Dunlop, John
Anderson, Donald Clark, Dr David (South Shields) Dunnett, Jack
Archer, Rt Hon Peter Cocks, Rt Hon Michael (Bristol S) Dunwoody, Mrs Gwyneth
Armstrong, Rt Hon Ernest Cohen, Stanley Eadie, Alex
Ashley, Rt Hon Jack Coleman, Donald Eastham, Ken
Ashton, Joe Conlan, Bernard Edwards, Robert (Wolv SE)
Atkinson, Norman (H'gey, Tott'ham) Cook, Robin F. Eggar, Timothy
Bagier, Gordon A. T. Cowans, Harry Ellis, Raymond (NE Derbyshire)
Barnett, Guy (Greenwich) Cox, Tom (Wandsworth, Tooting) Ellis, Tom (Wrexham)
Barnett, Rt Hon Joel (Heywood) Craigen, J. M. (Glasgow, Maryhill) English, Michael
Beith, A. J. Crowther, J. S. Evans, loan (Aberdare)
Benn, Rt Hon Anthony Wedgwood Cryer, Bob Evans, John (Newton)
Bennett, Andrew (Stockport N) Cunliffe, Lawrence Ewing, Harry
Bidwell, Sydney Cunningham, George (Islington S) Faulds, Andrew
Booth, Rt Hon Albert Cunningham, Dr John (Whitehaven) Field, Frank
Boothroyd, Miss Betty Dalyell, Tarn Fitch, Alan
Bottomley, Rt Hon Arthur (M'brough) Davidson, Arthur Flannery, Martin
Bradley, Tom Davies, Rt Hon Denzil (Llanelli) Fletcher, L. R. (Ilkeston)
Bray, Dr Jeremy Davies, ifor (Gower) Fletcher, Ted (Darlington)
Brown, Hugh D. (Provan) Davis, Clinton (Hackney Central) Foot, Rt Hon Michael
Brown, Robert C. (Newcastle W) Davis, Terry (B'rm'ham, Stechford) Forrester, John
Brown, Ronald W. (Hackney S) Deakins, Eric Foster, Derek
Brown, Ron (Edinburgh, Leith) Dean, Joseph (Leeds West) Fraser, John (Lambeth, Norwood)
Buchan, Norman Dempsey, James Freeson, Rt Hon Reginald
Callaghan, Rt Hon J. (Cardiff SE) Dewar, Donald Freud, Clement
Callaghan, Jim (Middleton & P) Dixon, Donald Garrett, John (Norwich S)
Campbell, Ian Dobson, Frank Garrett, W. E. (Wallsend)
Campbell-Savours, Dale Dormand, Jack George, Bruce
Canavan, Dennis Douglas, Dick Ginsburg, David
Golding, John McNally, Thomas Sandelson, Neville
Gourlay, Harry McNamara, Kevin Sever, John
Grant, George (Morpeth) McWilliam, John Sheerman, Barry
Grant, John (Islington C) Magee, Bryan Sheldon, Rt Hon Robert (A'ton-u-L)
Grimond, Rt Hon J. Marks, Kenneth Shore, Rt Hon Peter (Step and Pop)
Hamilton, James (Bothwell) Marshall, David (Gl'sgow, Shettles'n) Short, Mrs Renée
Hamilton, W. W. (Central Fife) Marshall, Dr Edmund (Goole) Silkin, Rt Hon John (Deptford)
Hardy, Peter Marshall, Jim (Leicester South) Silkin, Rt Hon S. C. (Dulwich)
Harrison, Rt Hon Walter Martin, Michael (Gl'gow, Springb'rn) Silverman, Julius
Hart, Rt Hon Dame Judith Mason, Rt Hon Roy Smith, Cyril (Rochdale)
Hattersley, Rt Hon Roy Maxton, John Smith, Rt Hon J. (North Lanarkshire)
Haynes, Frank Maynard, Miss Joan Snape, Peter
Healey, Rt Hon Denis Meacher, Michael Soley, Clive
Heffer, Eric S. Mellish, Rt Hon Robert Spearing, Nigel
Hogg, Norman (E Dunbartonshire) Mikardo, Ian Spriggs, Leslle
Holland, Stuart (L'beth, Vauxhall) Millan, Rt Hon Bruce Stallard, A. W.
Home Robertson, John Miller, Dr M. S. (East Kilbride) Steel, Rt Hon David
Homewood, William Mitchell, Austin (Grimsby) Stewart, Rt Hon Donald (W Isles)
Hooley, Frank Mitchell, R. C. (Soton, Itchen) Stoddart, David
Horam, John Morgan, Geraint Stott, Roger
Howell, Rt Hon Denis (B'ham, Sm H) Morris, Rt Hon Alfred (Wythenshawe) Strang, Gavin
Howells, Geraint Morris, Rt Hon Charles (Openshaw) Straw, Jack
Huckfield, Les Morris, Rt Hon John (Aberavon) Summerskill, Hon Dr Shirley
Hudson Davies, Gwilym Ednyfed Morton, George Taylor, Mrs Ann (Bolton West)
Hughes, Robert (Aberdeen North) Moyle, Rt Hon Roland Thomas, Dafydd (Merioneth)
Hughes, Roy (Newport) Mulley, Rt Hon Frederick Thomas, Jeffrey (Abertillery)
Janner, Hon Greville Newens, Stanley Thomas, Mike (Newcastle East)
Jay, Rt Hon Douglas Oakes, Rt Hon Gordon Thomas, Dr Roger (Carmarthen)
John, Brynmor Ogden, Eric Thorne, Stan (Preston South)
Johnson, James (Hull West) O'Halloran, Michael Tllley, John
Johnson, Walter (Derby South) O'Neill, Martin Torney, Tom
Jones, Rt Hon Alec (Rhondda) Orme, Rt Hon Stanley Urwin, Rt Hon Tom
Jones, Barry (East Flint) Owen, Rt Hon Dr David Varley, Rt Hon Eric G.
Jones, Dan (Burnley) Palmer, Arthur Wainwright, Edwin (Dearne Valley)
Kaufman, Rt Hon Gerald Park, George Wainwrlght, Richard (Colne Valley)
Kerr, Russell Parker, John Walker, Rt Hon Harold (Doncaster)
Kilfedder, James A. Parry, Robert Watkins, David
Kilroy-Silk, Robert Pavitt, Laurie Weetch, Ken
Kinnock, Neil Pendry, Tom Wellbeloved, James
Lambie, David Penhallgon, David Welsh, Michael
Lamborn, Harry Powell, Raymond (Ogmore) White, Frank R. (Bury a Radcliffe)
Leadbitter, Ted Prescott, John White, James (Glasgow, Pollok)
Leighton, Ronald Price, Christopher (Lewisham West) Whitehead, Phillip
Lewis, Arthur (Newham North West) Race, Reg Whitlock, William
Lewis, Ron (Carlisle) Radice, Giles Wigley, Dafydd
Litherland, Robert Rees, Rt Hon Merlyn (Leeds South) Willey, Rt Hon Frederick
Lofthouse, Geoffrey Richardson, Jo Williams, Rt Hon Alan (Swansea W)
Lyon, Alexander (York) Roberts, Albert (Normanton) Williams, Sir Thomas (Warrington)
Lyons, Edward (Bradford West) Roberts, Allan (Bootle) Wilson, Rt Hon Sir Harold (Huyton)
McCartney, Hugh Roberts, Ernest (Hackney North) Winnick, David
McDonald, Dr Oonagh Roberts, Gwllym (Cannock) Woodall, Alec
McElhone, Frank Robertson, George Woolmer, Kenneth
McGuire, Michael (Ince) Robinson, Geoffrey (Coventry NW) Wrigglesworth, Ian
McKay, Allen (Penistone) Rodgers, Rt Hon William Wright, Sheila
McKelvey, William Rooker, J. W. Young, David (Bolton East)
MacKenzie, Rt Hon Gregor Roper, John
Maclennan, Robert Ross, Ernest (Dundee West) TELLERS FOR THE AYES:
McMahon, Andrew Ross, Stephen (Isle of Wight) Mr. Ted Graham and
McMillan, Tom (Glasgow, Central) Ryman, John Mr. James Tinn.
Adley, Robert Blaker, Peter Butcher, John
Aitken, Jonathan Body, Richard Butler, Hon Adam
Alexander, Richard Bonsor, Sir Nicholas Cadbury, Jocelyn
Alison, Michael Boscawen, Hon Robert Carlisle, John (Luton West)
Amery, Rt Hon Julian Bottomley, Peter (Woolwich West) Carlisle, Kenneth (Lincoln)
Ancram, Michael Bowden, Andrew Carlisle, Rt Hon Mark (Runcorn)
Arnold, Tom Boyson, Dr Rhodes Chalker, Mrs Lynda
Aspinwall, Jack Braine, Sir Bernard Channon, Paul
Atkins, Robert (Preston North) Bright, Graham Chapman, Sydney
Atkinson, David (B'mouth, East) Brinton, Tim Churchill, W. S.
Baker, Kenneth (St. Marylebone) Brittan, Leon Clark, Hon Alan (Plymouth, Sutton)
Baker, Nicholas (North Dorset) Brocklebank-Fowler, Christopher Clark, Sir William (Croydon South)
Banks, Robert Brooke, Hon Peter Clarke, Kenneth (Rushcliffe)
Beaumont-Dark, Anthony Brotherton, Michael Clegg, Sir Walter
Bell, Sir Ronald Brown, Michael (Brigg & Sc'thorpe) Cockeram, Eric
Bendall, Vivian Browne, John (Winchester) Colvin, Michael
Bennett, Sir Frederic (Torbay) Bruce-Gardyne, John Cope, John
Benyon, Thomas (Abingdon) Bryan, Sir Paul Cormack, Patrick
Benyon, W. (Buckingham) Buchanan-Smith, Hon Alick Corrie, John
Best, Keith Buck, Antony Costain, A. P.
Bevan, David Gilroy Budgen, Nick Cranborne, Viscount
Biffen, Rt Hon John Bulmer, Esmond Critchley, Julian
Blackburn, John Burden, F. A. Crouch, David
Dean, Paul (North Somerset) Kellett-Bowman, Mrs Elaine Pym, Rt Hon Francis
Dickens, Geoffrey Kershaw, Anthony Raison, Timothy
Dorrell, Stephen Kimball, Marcus Rathbone, Tim
Douglas-Hamilton, Lord James King, Rt Hon Tom Rees, Peter (Dover and Deal)
Dover, Denshore Kitson, Sir Timothy Rees-Davies, W. R.
du Cann, Rt Hon Edward Knight, Mrs Jill Renton, Tim
Dunn, Robert (Dartford) Knox, David Rhodes James, Robert
Durant, Tony Lamont, Norman Rhys Williams, Sir Brandon
Dykes, Hugh Lang, Ian Ridley, Hon Nicholas
Eden, Rt Hon Sir John Langford-Holt, Sir John Ridsdale, Julian
Edwards, Rt Hon N. (Pembroke) Latham, Michael Rifkind, Malcolm
Elliott, Sir William Lawrence, Ivan Roberts, Wyn (Conway)
Eyre, Reginald Lawson, Nigel Rossi, Hugh
Fairbairn, Nicholas Lee, John Rost, Peter
Fairgrieve, Russell Lennox-Boyd, Hon Mark Royle, Sir Anthony
Faith, Mrs Sheila Lester, Jim (Beeston) Sainsbury, Hon Timothy
Farr, John Lewis, Kenneth (Rutland) St. John-Stevas, Rt Hon Norman
Fell, Anthony Lloyd, Ian (Havant & Waterloo) Scott, Nicholas
Fenner, Mrs Peggy Lloyd, Peter (Fareham) Shaw, Giles (Pudsey)
Finsberg, Geoffrey Loveridge, John Shaw, Michael (Scarborough)
Fisher, Sir Nigel Luce, Richard Shelton, William (Streatham)
Fletcher, Alexander (Edinburgh N) Lyell, Nicholas Shepherd, Colin (Hereford)
Fletcher-Cooke, Charles Macfarlane, Neil Shepherd, Richard (Aldridge-Br'hills)
Fookes, Miss Janet MacGregor, John Shersby, Michael
Forman, Nigel MacKay, John (Argyll) Silvester, Fred
Fowler, Rt Hon Norman McNair-Wilson, Michael (Newbury) Sims, Roger
Fox, Marcus McNair-Wilson, Patrick (New Fotest) Skeet, T. H. H.
Fraser, Rt Hon H. (Stafford & St) McQuarrie, Albert Smith, Dudley (War. and Leam'ton)
Fraser, Peter (South Angus) Madel, David Speller, Tony
Galbraith, Hon T. G. D. Major, John Spence, John
Gardiner, George (Reigate) Marland, Paul Spicer, Jim (West Dorset)
Gardner, Edward (South Fylde) Marlow, Tony Spicer, Michael (S Worcestershire)
Garel-Jones, Tristan Marshall, Michael (Arundel) Sproat, lain
Gilmour, Rt Hon Sir Ian Marten, Nell (Banbury) Squire, Robin
Glyn, Dr Alan Mates, Michael Stainton, Keith
Goodhart, Philip Mather, Carol Stanley, John
Goodhew, Victor Maude, Rt Hon Angus Steen, Anthony
Goodlad, Alastair Mawby, Ray Stevens, Martin
Gorst, John Mawhinney, Dr Brian Stewart, Ian (Hitchin)
Gow, Ian Mayhew, Patrick Stewart, John (East Renfrewshire)
Gower, Sir Raymond Mellor, David Stokes, John
Grant, Anthony (Harrow C) Meyer, Sir Anthony Stradling Thomas, J.
Gray, Hamish Miller, Hal (Bromsgrove & Redditch) Tapsell, Peter
Greenway, Harry Mills, lain (Meriden) Taylor, Robert (Croydon NW)
Grieve, Percy Mills, Peter (West Devon) Tebbit, Norman
Griffiths, Eldon (Bury St Edmunds) Miscampbell, Norman Temple-Morris, Peter
Griffiths, Peter (Portsmouth N) Mitchell, David (Basingstoke) Thomas, Rt Hon Peter (Hendon S)
Grist, Ian Moate, Roger Thompson, Donald
Grylls, Michael Montgomery, Fergus Thorne, Neil (llford South)
Gummer, John Selwyn Moore, John Thornton, Malcolm
Hamilton, Hon Archie (Eps'm&Ew'll) Morris, Michael (Northampton, Sth) Townend, John (Bridlington)
Hamilton, Michael (Salisbury) Morrison, Hon Charles (Devizes) Townsend, Cyril D. (Bexleyheath)
Hampson, Dr Keith Morrison, Hon Peter (City of Chester) Trippier, David
Hannam, John Mudd, David Trotter, Neville
Haselhurst, Alan Murphy, Christopher van Straubenzee, W. R.
Hastings, Stephen Myles, David Vaughan, Dr Gerard
Havers, Rt Hon Sir Michael Neale, Gerrard Viggers, peter
Hawkins, Paul Needham, Richard Waddington, David
Hawksley, Warren Nelson, Anthony Wakeham, John
Hayhoe, Barney Neubert, Michael Waldegrave, Hon William
Heath, Rt Hon Edward Newton, Tony Walker, Rt Hon Peter (Worcester)
Heddle, John Normanton, Tom Walker, Bill (Perth & E Perthshire)
Henderson, Barry Nott, Rt Hon John Walker-Smith, Rt Hon Sir Derek
Heseltine, Rt Hon Michael Onslow, Cranley Waller, Gary
Hicks, Robert Oppenheim, Rt Hon Mrs Sally Walters, Dennis
Higgins, Rt Hon Terence L. Osborn, John Ward, John
Hill, James Page, John (Harrow, West) Warren, Kenneth
Hogg, Hon Douglas (Grantham) Page, Rt Hon Sir R. Graham Watson, John
Holland, Philip (Carlton) Page, Richard (SW Hertfordshire) Wells, John (Maidstone)
Hooson, Tom Parkinson, Cecil Wells, Bowen (Hert'rd & Stev'nage)
Hordern, Peter Parris, Matthew Whitelaw, Rt Hon William
Howe, Rt Hon Sir Geoffrey Patten, Christopher (Bath) Whitney, Raymond
Howell, Rt Hon David (Guildford) Patten, John (Oxford) Wickenden, Keith
Howell, Ralph (North Norfolk) Pattie, Geoffrey Wiggin, Jerry
Hunt, David (Wirral) Pawsey, James Wilkinson, John
Hunt, John (Ravensbourne) Percival, Sir Ian Williams, Deiwyn (Montgomery)
Hurd, Hon Douglas Peyton, Rt Hon John Winterton, Nicholas
Irving, Charles (Cheltenham) Pink, R. Bonner Wolfson, Mark
Jenkin, Rt Hon Patrick Pollock, Alexander Young, Sir George (Acton)
Jessel, Toby Porter, George Younger, Rt Hon George
Johnson Smith, Geoffrey Prentice, Rt Hon Reg
Jopling, Rt Hon Michael Price, David (Eastleigh) TELLERS FOR THE NOES:
Joseph, Rt Hon Sir Keith Prior, Rt Hon James Mr. Spencer Le Marchant and
Kaberry, Sir Donald Proctor, K. Harvey Mr. Anthony Berry.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.

Main Question, as amended, put and agreed to.

Resolved, That this House, recognising the importance of the sub-post office network in the life of urban and rural communities, insists that the Government, in making any changes in the system of paying pensions and benefits intended to give recipients wider choice as to the method of payment and to save administrative costs, ensures the continuance of that network, welcoming the Government's commitment to explore ways of bringing new business to sub-post offices, for instance through the National Girobank and wider opportunities for the payment of bills.