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Rural Post Offices

Volume 401: debated on Thursday 20 March 2003

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8.

How many rural post offices have closed within the last 12 months. [103887]

There were 97 net closures of rural post offices in the twelve months to December 2002. The number of net closures in the last quarter of that year, the most recent for which data are available, was zero.

St. Ives post office in my constituency—a rural post office serving 17,000 people—was recently closed, having been given three weeks' notice, which I find quite unacceptable. Thanks to a massive local effort and a receptive Post Office, St. Ives is to reopen. However, that raises some serious issues, such as the lack of closure notification procedures, the lack of sourcing of alternative sites, the Post Office's inability to recruit and retain sub-postmasters and the lack of attractive products, which are leading to the closure of scores of post offices around the country. What is the Minister going to do about it?

I am grateful to the hon. Gentleman for drawing to the attention of the House the success of the Government's measures to ensure that where there is a proposed closure an alternative can be found. He has done the House a service by explaining how that works—it is exactly what the Government have done. The Post Office has put in place a team of rural transfer advisers to make sure that when the problems that he described arise alternatives can be found, as has been done successfully in his constituency. I made the point that in the most recent quarter for which data are available there were no closures at all. The number of net closures that I gave for the year was less than half the number in 2001–02, which, in turn, was half the number in the preceding year. We have committed £450 million to maintain the rural network up to 2006. We have therefore backed fully, with funding, our commitment that there should be no avoidable closures of rural post offices, and I am delighted that that is working in the hon. Gentleman's constituency.

Many of the rural post offices in my constituency have tried to meet the challenge facing them by diversifying into retail newsagency. They have just discovered that retail newsagents have to obtain newspapers from wholesale newsagents that are granted a monopoly by newspaper publishers—a monopoly that has been abused by increasing service charges by 650 per cent. Would we not help rural post offices generally and retail newsagents across the country by breaking the monopoly of wholesale newsagents?

Of course, these arrangements have been in place for a considerable time, but the Office of Fair Trading is looking at precisely the issue that my hon. Friend raises, and it will report back in due course.

In Northern Ireland, just as elsewhere in Great Britain, rural post offices, in addition to delivering pensions and benefits conveniently, contribute to local village life. Will the Minister acknowledge that there has been disproportionate encouragement to benefit recipients to have bank accounts, and will he use some of the £450 million that he has mentioned to indicate in simple terms that people may still choose, as he has announced this morning, to receive payments in cash at their local post offices? That might just help to avert some further closures.

I agree with the hon. Gentleman about the importance of post offices in the life of a community, and he is right to draw attention to that point. However, in putting in place arrangements for the change to automated credit transfer, we have ensured that anyone who wishes to obtain their benefit in cash from a post office—either through a Post Office card account, or through any of the basic bank accounts that all banks will offer—can continue to do so. Those accounts will be fully accessible at the local post office. The great benefit is that people will be able to use the bank accounts and go to the post office, and post offices will be offering the services that people increasingly want. The old-fashioned giros did not offer a future for the post office, but our new arrangements will.

Given that rural post offices will lose some 40 per cent. of their income over the next two years with the introduction of universal banking, and given that the Government's largesse of £150 million a year will continue only to the end of 2005, taking us up to the next general election, will the Minister explain what happens then? The House, sub-postmasters and the public who use post offices will want to know whether this Government have a long-term, coherent plan for the future of rural post offices after the next general election.

I hope that the hon. Gentleman will welcome the figures that I have given to the House on the falling number of post office closures in rural areas. His suggestion that 40 per cent. of income will be lost to the Post Office assumes, of course, that nobody who obtains their benefit at a post office at the moment will do so in future. However, very many of the benefit recipients who currently use post offices will use the Post Office card account, a basic bank account or an ordinary bank account and continue to obtain their benefit in cash at local post offices, thereby generating income for the post office network. The arrangements beyond 2006 will, of course, be a matter for the next spending review, but the Government's commitment to ensuring a successful future for the post office network in every part of the country will be maintained.