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Rural Post Offices

Volume 459: debated on Thursday 3 May 2007

I apologise, Mr. Speaker. As the House has no doubt gathered, I had hoped to answer several questions by this stage in the proceedings. I am glad that Question 11 has survived.

The consultation on the post office network finished on 8 March. I intend to make a statement to Parliament fairly shortly setting out the Government’s response.

I welcome the Secretary of State to the Dispatch Box and thank him for that reply. I was pleased when he made his statement to the House recognising the value of rural post offices and the contribution that they make to village life, particularly in rural areas such as the Vale of York. Does he share my concern at the widespread belief that the Government consultation process will lead to widespread closures of rural post offices? We have lost our banks, so the post office has a particular role to play in village life and is a lifeline. Will he therefore join me in encouraging people who live in rural areas to spend between £5 and £10 each week in their local post office and to use that post office, and will he back Conservative plans to allow more council work to be done through rural post offices?

On that last point, the hon. Lady will recall that when I made my statement to the House last December I said that one of the things that I wanted to do was to encourage more local authorities to use post offices if they could. Some local authorities are good at that; some are bad. The bad ones are spread across all political parties, so I do not think that she can enjoy any satisfaction in that respect.

In relation to the hon. Lady’s point about rural post offices, yes, they are important. I said in December that maintaining a national network is important, and we intend to do that. However, we must have regard to the fact that the Post Office was losing £2 million every week the year before last and that it is losing £4 million every week this year. We have to do something about that. I agree with her that the best way of saving any post office is to encourage people to use it. Sometimes there is a gap between the number of people who say they support the local post office and the number who actually go into it. I want to see a national network maintained and the proposals that I will make to the House shortly will, I hope, ensure that we do that.

I have about 120 villages in my constituency. Many of them are not at all looking forward to the statement, because they feel a great deal of trepidation about the small post offices in Somerset. The problem of settlement in my area is that we have a large number of villages that are geographically quite close, but quite distant by road and without any public transport. Will that be recognised in the Secretary of State’s proposals? The post offices are serving distinct communities and serving them very well indeed.

One of the things on which we consulted was the criteria for the location of post offices. I will be making a statement on that shortly. It is important to take account not only of natural barriers, such as mountains and rivers, but of the practical difficulties that sometimes arise. However, it would be wrong—I am quite sure that the hon. Gentleman has not done this regarding his constituency—to suggest that the present situation can continue without any change. We need to make changes. The National Federation of Sub-Postmasters itself has said that the present network is unsustainable and many postmasters say that changes that would maintain a smaller but perhaps more viable network could be the best possible future for the post office network.

Does the Secretary of State recall the grandiosely titled urban network reinvention programme of 2002, which was a long-winded euphemism for closing down about one in three urban post offices? This consultation is about closing down rural post offices. Why do not the Government get a real policy and set post offices and sub-postmasters free to work on their own without all the restrictions that are put on them? At the same time, they should give post offices proper Government business, as used to be the case—I recall that the Secretary of State had something to do with the Department for Work and Pensions at one stage—and allow individual post offices to flourish. At the moment, post offices are closing throughout the country, and many more will close after the statement.

Yes, it is the case that over a number of years—this process started under the Conservative Government—people have been choosing to have benefits, pensions, child benefit and so on paid into their bank accounts. People should have that choice and the hon. Gentleman’s suggestion that somehow all the changes can be reversed simply misleads people.

It is the case, too, that a number of urban post offices have closed over the past few years. I said in December that I thought that we needed to take a further 2,500 post offices out of the network through closure. However, they will not be exclusively rural post offices. We need to ensure that we have a national network with access criteria that guarantee that people have reasonable access to a post office. Most members of the public realise that the big problem facing post offices is the fact that over a number of years, fewer and fewer people have been going into them. The business level has thus fallen, so we need to address that. Unlike the Conservative party, we have public money available to support the network. The £1.7 billion that has been put into the post office network over the past few years has represented an important commitment, given that a national network is important to us all.

The Secretary of State is—I hope like me—often a very reasonable man. In that spirit of reasonableness, may I say that I was glad that the Government delayed their decision on the consultation on the future of the post office network until after Easter, and thus, perforce, after the local government elections, which has given the Department a proper opportunity to consider the large number of responses that it received? However, that has had the unintended consequence that the Government’s response to the Trade and Industry Committee’s report “Stamp of Approval?” is technically overdue. I commend the report to hon. Members and urge the Secretary of State to ensure that when he responds to the consultation—I presume that he will make a statement to the House next week or the week after—the response to the report is published at the same time, rather than a few weeks later, which I think is the Department’s intention.

I will have a look at that. As the House knows, the Government are not able to make an announcement in respect of the Post Office or anything else until the election period has finished. As I indicated earlier, I hope to make a statement fairly soon. I think that the Select Committee’s report was a good report. I hope that several of the hon. Gentleman’s colleagues who have asked questions today will have a good read of it before I make my statement, because it makes a lot of sensible points and recognises that we need to make changes. The present situation is unsustainable, so reform is absolutely necessary.

Does the right hon. Gentleman accept that given the social importance of rural post offices, especially to the elderly, the infirm, the handicapped and those without their own transport, the House should get together to determine a way in which the political parties, which are all interested in the matter, and the Post Office can agree a policy that would meet the concerns of most hon. Members, especially those who represent rural areas? Is this not an issue that might generate cross-party consultation and discussion?

I agree with the hon. Gentleman, but his words might fall on stony ground. I understand the temptation for Opposition parties to say, when there are post office closures, that it would not have happened if their party was in government, but most of us realise that successive Governments have wrestled with the difficult problem. There is less business going through the doors of post offices. We need to ensure that there is a national network. The hon. Gentleman makes a good point about the importance of post offices, particularly in rural areas, but also in urban areas; they provide a good service.

If I had accepted the advice that we should go for a commercial network, there would be only about 4,000 branches, and that would be ridiculous, because a large number of people, for one reason or another, cannot use banking services. That is why I want to maintain a national network. However, it is completely misleading for people to suggest that the present situation does not need change, and that we can carry on with mounting losses, which would have to be borne. It would be very nice if we could get consensus, but I suspect that on this issue, as with so many others, it is unlikely.

The Secretary of State rightly recognised that the best way to support local post offices is to encourage people to use them. Will he admit that before the Government started actively discouraging pensioners and others from drawing their pensions from the post offices, post offices benefited not just from the remuneration that they received from the Department for Work and Pensions for handling those transactions, but from increased use by pensioners and others? Consequently, it will cost the Government more to preserve the post office network by subsiding it than it would have done if the Government had continued to use them.

No, I do not agree with the right hon. Gentleman. He may recall that in the last year of the Conservative Government, when he was Secretary of State for Social Security, his Department was already considering how it could encourage more people to put money into their bank accounts. It was doing so partly because that would cost the Department less, but it was also concerned about the fact that the old giros were open to fraud—as he will recall, because he made lots of conference speeches about that. The only reason why he can say, “Well, that didn’t happen very much under my regime” is because he left office a few months later, but the process started when he was Secretary of State, and indeed before that, in relation to child benefit—so I do not agree with what he is saying.

All Conservative Members of Parliament must recall that they stood for election on the basis of a manifesto that endorsed the David James report, which called for an even greater transfer of money directly to people’s bank accounts. The right hon. Gentleman may not want to admit it publicly, but there is recognition that there have been profound changes to the way in which people do business and choose to receive their pensions or benefits. We need to respond to that, and we are prepared to back the Post Office financially, as well as in other ways.