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Postal Services

Volume 464: debated on Thursday 11 October 2007

4. What recent developments there have been in Government policy on the long-term future of sub-post offices; and if he will make a statement. (156871)

On 17 May, following public consultation, my right hon. Friend the Secretary of State confirmed, subject to European state aid clearance, funding of up to £1.7 billion until 2011 to support the post office network and place it on a more stable footing.

That Government funding includes a network subsidy of £150 million a year to support the network. Despite that subsidy, because of continued losses of around £4 million a week and a reduction of approximately 4 million a week in the number of people who use post offices, it is necessary, as the Secretary of State announced, to reduce the size of the network while maintaining national coverage. That process began last week and will continue in the next 15 months or so.

Notwithstanding the subsidy of public money involved, that answer reveals a paucity of long-term policy and intellectual thought about how we can use that much-loved and much-needed facility, which all our constituents want. Will the Minister confirm that the 77 closures that were announced in the east midlands recently would not have been announced—the announcement would have been held back—if a general election had been called? Will he also confirm whether, when he announces the closures in Leicestershire and Rutland in November, there is any genuine chance of a consultation period that allows some of the closures not to happen? Or will they be enforced?

The timing of the programme has nothing to do with general election timing.

There is a balance to be struck between finishing the programme and the uncertainty that hangs over sub-postmasters and mistresses while it continues. We have set out our timetable to try to achieve that balance.

I thank my hon. Friend for visiting my constituency last Thursday to see for himself exactly how rural services are being delivered through what was initially a pilot scheme two years ago. Would he care to share the experiences that he had last Thursday with the rest of the House?

My hon. Friend is absolutely right. Alongside the difficult closures that are taking place, the Post Office is developing valuable outreach services. I had the pleasure of seeing them in his constituency last week, in the village of Twynholm, for example, where a member of staff from the neighbouring post office visits several days a week for several hours. The hours are well known to local people and the service has been up and running for two years. From talking to members of staff and the customers who use the service, I found that it was extremely popular. There are imaginative and creative ways in which the Post Office can provide services, particularly in rural areas where it might no longer be possible to sustain a full-time permanent post office.

One of the Post Office’s outreach services, to which the Minister just referred, is the possibility of home visits. When I suggested to the Post Office that it might like to make 3,500 home visits in my constituency, it seemed reluctant to do so. The loss of footfall arises largely from Government policy, which has removed business. Having closed rural post offices, we are now proposing to close urban post offices in some of the most deprived areas of the country, which will do immense social damage. Instead of ramming that proposal through, would the Government care to take it back and consider the proposals that the National Federation of Sub-Postmasters has made to develop proper businesses, so that instead of killing those small businesses we can allow them to grow?

The hon. Gentleman refers to the National Federation of Sub-Postmasters, whose general secretary has said:

“Although regrettable we believe that these closures are necessary to ensure the remaining post offices are able to thrive in the future.”

If the Opposition’s policy is to reverse making available the payment of benefits into bank accounts, I should remind the hon. Gentleman of the cost. It costs the taxpayer 1p for a benefit or pension to be paid into a bank account. It costs 80p to make that payment through the Post Office card account and £1.80 to do so by girocheque. If the Opposition’s policy is to reverse that, the cost would be about £200 million a year, which I am afraid we would have to add to the list of other uncosted spending promises that they have already compiled.

I declare an interest as a member of a multi-generation sub-post office family in the village where I live. Has the Minister had a chance to read the National Consumer Council report, “Post office closures 2002 to 2006”, which was critical of the closures in that period? The post office closures that were announced then did not produce a strategic reshaping of the network; rather, they hit the poorest and most vulnerable members of society. The NCC does not believe that the 95 per cent. requirement for people in rural areas to be within three miles of a post office will be adequate to prevent that from happening again. Would the Minister care to comment on that?

I have indeed read the report to which my hon. Friend refers. He is right that there are lessons to be learned from post office closures. The access criteria are important to ensure national coverage even after the change, which is why we are compensating the hard-working sub-postmasters and sub-postmistresses for their efforts. The process does the right thing by them, but also ensures that closures do not happen in an ad hoc way, on a first come, first serve basis that leaves holes in the network without trying to ensure national coverage.

Does the Minister not recognise that, once closed, a post office is lost for ever to the community? Those vital services, which are so valued by the community, require the community’s input, to ensure that no unnecessary closures are made and that decisions are not made that do the same damage as the urban reinvention programme did to the post office network in urban areas. Will he therefore extend the consultation period, once the Post Office has made its proposals, so that it can be meaningful for local communities and so that any mistakes made by the Post Office can be corrected?

The hon. Gentleman asks about extending the consultation period. As I said a few moments ago, there is a balance to be struck in doing that and lifting the uncertainty from sub-postmasters around the country. That is why we have tried to strike the balance in the way we have.

I have certainly encouraged Post Office Ltd to engage properly with local communities. Postwatch, the consumer voice, has a critical role to play in the consultations. Local authorities, too, have a critical role in engaging with Post Office Ltd and informing it of future regeneration plans and so on, so that plans can be made as best as possible. However, we cannot escape the fact that 4 million fewer people a week are using post offices, compared with a couple of years ago, and that the network is losing £4 million a week. We are committed to social network subsidy for the Post Office, and if that subsidy were not available, many more post offices would close. That is why we have committed £150 million a year to support the network.