Bid to save Post Office Card Account defeated

5.05.00pm GMT Mon 10th Nov 2008

A Liberal Democrat bid to help ensure the future of the Post Office was defeated yesterday, after Labour MPs voted it down.

The party's Shadow Secretary for Work and Pensions, Jenny Willott MP, introduced the proposal, which focused particularly on recent speculation that the Government is considering a tender for the Post Office Card Account (POCA) from a third party.

The Liberal Democrat motion read:

"That this House notes with concern the fact that the Department for Work and Pensions has written to Post Office card account holders informing them that the Post Office card account contract ends in 2010; further notes that Post Office card account holders, many of whom have made a conscious decision to support the Post Office by retaining their card account, are being instructed to take out bank accounts in order to receive benefits beyond 2010; expresses its dismay at the fact that the letter does not mention the fact that a replacement for the current card account is currently out to tender, or make any mention of other Post Office products or services; believes that this is a deliberate attempt to encourage people to switch payment to direct debit and remove the role of the Post Office; further notes the additional damage inflicted on the Post Office by the Driver and Vehicle Licensing Agency, which is currently sending out licence renewal reminders as part of a communications campaign which makes no mention of the Post Office; calls on Ministers in the Department for Business, Enterprise and Regulatory Reform to encourage Ministers in the Department for Work and Pensions to consider the impact on communities across the country if the Post Office card account is not renewed; and encourages all Government departments to make their services available through post offices in order to ensure that they have a viable future."

Justifying the need for the motion, Jenny outlined the Government's gradual erosion of services available from the Post Office:

"The reason why post offices and Royal Mail Group have suffered such hits on their profits is that the Government are removing a wide range of services from the Post Office... In 2006, they announced that people could no longer pay for their television licences at post offices. In the same year, they told people who received their benefits and pensions through the Post Office card account that it was being withdrawn, and that they would have to open bank accounts to continue to receive their benefits. In 2008, the DVLA sent out reminder notices asking people to pay by direct debit, making no mention of the possibility of paying via the Post Office. Step by step, the Government are taking business away from the Post Office."

She also pointed to inconsistencies across Government, as access to pensions and benefits would be hampered by the loss of POCA. Whilst the Department for Business, Enterprise and Regulatory Reform (BERR) claims to be reorganising "the network so that it is financially viable, the DWP is doing all it can to undermine a valuable piece of business that the Post Office has."

Greg Mulholland MP warned, "The Government underestimate the public's anger and sheer exasperation at the way in which the Government has handled the post office network in recent years." He reiterated concerns for the future of rural Post Offices, expressed by other Liberal Democrat MPs, but also pointed out the knock-on effect on a national level:

"The Government have not faced up to the reality that if they do not follow through and ensure that the post office network is the recipient of POCA, that will sound the last post for a genuinely national post office network, as 3,000 more post offices have been predicted to go, which would leave about 8,500. That is simply not a sustainable amount, so the post office network will not be able to continue."

Andrew Stunell MP stressed some Post Office customers would be unable to use the retail banking sector as an alternative, due to a poor credit rating or mobility issues. He also highlighted the insensitivity of such a move, given the current economic climate.

"Now that banks have never been more distrusted or reviled or more in disgrace, along come the Government, telling my constituents, "Leave the safe haven of a simple public sector system based on your local post office and put your trust in a nice big bright shiny bank where you can make a small contribution to a fat cat's big bonus".

John Thurso MP gave the winding up speech in favour of the motion: 

"At the heart of this debate are the needs and desires of some of the most vulnerable in our society, including pensioners, the unbanked... the disabled and all those on benefit. They trust their local post office to help them... It is that human contact that is missing, but that is so important to many people. Our constituents do not want to spend hours on a telephone, only to be given the wrong answer, or put on to another department when they finally get through.

"Our constituents value and want to maintain their post offices. They do not trust banks, and they have proved to be absolutely right in that. However, they do trust the Post Office. The replacement card account contract is wanted bythe customers, our constituents. It is vital to the future of the network and supported by the vast majority of Members on both sides of the House. The Government have been overseeing the systematic removal of business from the post offices and it is time to stop."

The Liberal Democrat motion was defeated by 240 votes to 278. The Liberal Democrats gained support from Conservative MPs with Labour MPs voting against. A government amendment was then passed by 279 votes to 232.

Read Jenny Willott's speech in full

Read Greg Mulholland's speech in full

Read Andrew Stunell's speech in full

Read John Thurso's speech in full