S2M-4101 Post Office Card Accounts

Scottish Parliament

Thursday 30 March 2006

[THE PRESIDING OFFICER opened the meeting at 09:15]

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Post Office Card Accounts

The Deputy Presiding Officer (Trish Godman): The final item of business today is a members' business debate on motion S2M-4101, in the name of Richard Lochhead, on Post Office card accounts. The debate will be concluded without any question being put.

Motion debated,

That the Parliament notes the recent announcement that Post Office card accounts are to be phased out by 2010; notes that this news has come as a shock to pension and benefits claimants in north-east Scotland, many of whom rely on the service especially where there are no local bank branches, as well as to Post Office staff who view the scheme as a vital service; believes that the phasing out of this service could put the future of some rural post offices in severe jeopardy and lead to many of these lifeline services being lost to communities already being stripped of other vital services; supports the National Federation of SubPostmasters campaign to have Post Office card accounts retained, and considers that the Scottish Executive should make appropriate representations to the UK Government on behalf of Post Office card account users in Scotland.

17:11

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17:30

Stewart Stevenson (Banff and Buchan) (SNP): I congratulate Richard Lochhead on securing this timely debate.

It is interesting that most members' speeches have focused on rural areas. I think that that is a mistake, because this is not only a rural issue; it is also an issue for people who live in urban areas. I will explain why. In rural areas, the Post Office card account has an important role in supporting the post office network and preserving a lynchpin source of economic and retail activity in communities, but for its users it is an important instrument by which people can manage their money.

One of the great paradoxes in our society is that we expect the most sophisticated money management of the people who have least money. If I or other members here run out of money and realise that we will have to spend a little bit more, we will go to a cash machine, stick our card in and get the money out. We will not think too much about it. If we do, it might be a momentary twinge that we may have to account to our spouse when he or she does the accounts at the end of the month. I do that, even if colleagues do not.

For people with less money, however, basic accounting and the management of money is a constant and enduring challenge. In the old days, for people without much money, the most effective way of accounting was jam-jar accounting. People had a set of jam jars on the sideboard and they put money in the jam jar for the rent, for the tallyman, for the insurance policy and so on. They could see what they were doing.

The principle of jam-jar accounting is the one that the Post Office card account supports. People know that, each month, there will be a certain amount of money in the electronic jam jar and that they can spend it in the way that they plan. That is the value of this instrument: it helps people to manage their money. The important point is that the money is not in one big pot—they can think of it as being in different little pots that they can use for different purposes.

The POCA is one example—it is by no means the only one—of the Government approaching something in the wrong way. It had an open tender among financial organisations to establish the infrastructure for the POCA. An American bank won the contract, but it was not one of the major banks that already supply bank accounts to people the length and breadth of the British isles that could, at a relatively small marginal cost, have provided the service within the context of their overall computer processing systems.

The contract went to a US bank that had no track record of providing processing services in the United Kingdom. The cost of providing the service was substantially higher than it would have been if the Government had sat round the table with the existing banks and co-operatively got them to provide a service. That is one reason why the Government has, almost perversely, sought to make it difficult for people to have the accounts—so the accounts wither on the vine and the Government does not have to provide economic support for them.

As I represent a rural area, I join colleagues in saying that in rural areas we value the post office above almost any other high street activity. We must make every effort to aggregate remaining economic activity into post offices. Banks will continue to close. I know that one branch of a bank closed because it was doing only 20 transactions a week. Other branches are doing a similarly low number of transactions. The post office remains important and this card remains important to many people. I hope that the minister can find a way, within the limits of the powers of this Parliament, to help people to preserve this card.

17:34