Reid, Thurso and Smith quiz McFadden on the Post Office

10.11.00am BST (GMT +0100) Sat 9th May 2009

• [May 7] Alan Reid (Argyll & Bute, Liberal Democrat): ' . . MAY I again urge the Minister to seize the opportunity when the legislation comes to this House to secure the future of the Post Office by giving it its own board and proper resources so that it can develop a strategy on a Post bank, . . ?

What plans he has for the future viability of the Post Office network.

Patrick McFadden (Minister of State (Employment Relations and Postal Affairs), Department for Business, Enterprise & Regulatory Reform; Wolverhampton South East, Labour): The Government will continue to support the post office network financially with a subsidy worth £150 million per year until 2011 and, building on the recent allocation of the contract for the Post Office card account, we will continue to work with Post Office Ltd to support new areas of work and new business opportunities for the post office network.

• Alan Reid (Argyll & Bute, Liberal Democrat): I thank the Minister for that answer, but with the banking system in great difficulties and discredited in the eyes of the public, the Post bank proposals give the Government an ideal opportunity to provide local and trusted access to the banking system. The banks have long been closing branches in rural communities, but the Post Office's extensive network has the potential to put local banking back at the heart of our communities and give our post offices a secure future. Will the Government commit to setting up a Post bank?

Patrick McFadden: I agree that banking and financial services are an important part of the Post Office's work, and it is already the leading supplier of foreign exchange services to the public. It also provides savings products and insurances, and millions of bank accounts held with high street banks are also available through post offices. It makes sense for Post Office Ltd to build on those services, and I know that both the company and sub-postmasters are very keen to expand their services in the banking and financial services area.

• . . John Thurso (Caithness, Sutherland & Easter Ross, Liberal Democrat): The legislation passing through the other place offers a once in a generation opportunity to give the Post Office a viable future, quite apart from the proposals for Royal Mail. May I again urge the Minister to seize the opportunity when the legislation comes to this House to secure the future of the Post Office by giving it its own board and proper resources so that it can develop a strategy on a Post bank, instead of leaving it as the poor relation of Royal Mail, withering on inadequate subsidies?

Patrick McFadden: Given the hon. Gentleman's question, I think that he will agree that there is much in the Bill that the Post Office can be enthusiastic about. It will have its own board, which will give it an increased standing. With the Post Office card account contract awarded by the Government just a few months ago, as well as a new contract between the Department for Transport and Post Office Ltd on the renewal of driving licences, there is reason to look forward to greater stability in the network. There is a great deal for the Post Office in the Government's plans to reform postal services.

• . . Robert Smith (Aberdeenshire West & Kincardine, Liberal Democrat): Will the Minister take forward the Post bank proposal with more urgency? It is not just about giving the Post Office a new breath of life, but about restoring confidence for individual small savers in a basic simple banking system, where they put in deposits and small loans are made out. The Post bank could restore confidence after the banking crisis.

Patrick McFadden: I assure the House that there is no lack of urgency or energy on the part of the Government about working with the Post Office on securing its future. Only yesterday, I was extolling the Post Office's potential to provide services for the new identity cards, but, sadly, if the Liberal Democrats were in power that opportunity would not be available to Post Office Ltd.

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