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Post Office Restructuring

Volume 468: debated on Thursday 29 November 2007

[Relevant documents: Third Report from the Trade and Industry Committee, Session 2006-07, Stamp of Approval? Restructuring the Post Office Network, HC 276, Eighth Report and Seventh Special Report from the Trade and Industry Committee, Session 2006-07, on Restructuring the Post Office Network, HC 593, and Restructuring the Post Office Network: Government Response to the Committee’s Eighth Report, HC 1083.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Blizzard.]

A huge number of Members wish to speak in the debate, of whom no fewer than 15 have already advised me of their wish to speak. We have three hours, and the Minister and Front-Bench spokesmen will need at least 15 minutes each to respond to the debate. If Members wish to help their colleagues to get in, they will need to be tolerably brief in their contributions.

It is a great pleasure that the swansong debate of the Select Committee on Trade and Industry, now the Select Committee on Business, Enterprise and Regulatory Reform, should be so popular. I am informed by the Speaker’s Office that this is the most popular ever Westminster Hall debate on a Select Committee report, so I shall try to be brief in my opening remarks. It may help the House to know that I intend to waive my right to reply at the end, unless the Minister sits down before the formal end of our proceedings. That will enable him to deal with interventions from colleagues on all sides of the House.

The new Select Committee will launch an inquiry early in the new year into the progress of the post office closure process. We will have hearings, probably in late January or early February, and will revisit the process then, because this matter is obviously of deep concern to many colleagues.

When the Committee produced the report, there were 14,263 post offices—8,000 fewer outlets than in 1979 and 4,000 fewer than in 1997. The National Federation of Sub-Postmasters reminds me, in its helpful brief, that the network is bigger than the major bank and building society networks combined. Its very strength is its depth and reach, and although the Committee has reluctantly gone along with the Government’s target of 2,500 closures, I am still concerned that that depth and reach are threatened by the closure programme. It is worth remembering that those 2,500 further closures, which will reduce the network by a further 18 per cent., are ones for which sub-postmasters will be compensated.

I regret that I shall not be serving on the new Committee, which I should have liked to have done. I wonder whether my hon. Friend can explain the following situation to me. In Little Harrowden, in my constituency, the sub-postmasters, John and Muriel, want to continue their profitable business. They do not receive any subsidies, yet they are being closed down. Some 150 villagers attended a public meeting about it last night, and there will be a march of protest. Is there any chance for it?

I rather suspect that that question was meant more for the Minister than for me. First, let me say how much we miss my hon. Friend on the Committee. He made an outstanding contribution to its work and I was as surprised and disappointed as anyone else when he was removed from it. Its number has been reduced from 14 to 11, so that is why; it was not a punishment.

My hon. Friend makes an important point. It still is not clear to me what commercial criteria are being applied to the closure of individual offices. I know that colleagues on both sides of the House share this concern. It seems as though commercially viable offices are sometimes being closed in preference to less viable offices.

I thank my hon. Friend for giving way on that point. He may be aware that the two post offices proposed for closure in my constituency are our two top-performing post offices. Does he find that surprising?

I do indeed. Without pre-judging the Committee’s inquiry, that is one of the issues that we want to look at in the new year. Clearly, it seems strange to punish the sub-postmasters or mistresses of vibrant and commercially successful offices for their success.

I apologise to you, Sir John, and other hon. Members, because I have an event in my constituency at 5 pm and will not be here to hear the concluding part of the debate. May I offer the hon. Gentleman another example along the same lines? The Trafalgar street post office has the highest number of customers of any sub-post office in my constituency, yet is one of the four selected for closure. Does he agree that there seems to be no rhyme or reason to that?

I wear a strictly bipartisan hat today. I sit on the Opposition side of the House, but I represent an all-party Committee. All that I will say is that the post office business has a difficult task in finding the 2,500 closures that the Government have demanded. I have been told that the number could be plus or minus 10 or 20 either way, but they have required and requested 2,500 closures. That is likely to lead to some difficult decisions. That figure seemed suspiciously round to our Committee. As we said in the report, we do not understand how the figure was arrived at. I strongly suspect that it is a Treasury-driven figure rather than a network-driven one. I hope that the Government will show more flexibility as they go through the processes and find offices, such as those that have been mentioned, which genuinely need to be kept open.

My hon. Friend goes to the heart of the matter. How was the 2,500 figure arrived at and how much flexibility is there in it? If we are stuck with that figure, does it mean that one post office will be competing against another, rather than on whether it should survive?

That is exactly what is happening. One post office is, indeed, competing against another, which is often regrettable.

I am approximately one third of the way down my first of nine pages, but I give way with pleasure to my hon. Friend on the Committee.

I thank the hon. Gentleman. Is the situation not even worse than that? People who have campaigned against post office closures have been told that if they save a post office in their area, another one in that area is then immediately targeted. What is the point of a consultation in those circumstances?

I agree. Speaking as someone whose constituency comes at the tail end of this process, I am very concerned that every time an extra office is squeezed in, the Hereford and Worcester area loses its flexibility to save an office, so we might be really stuffed. I think that a number of people in the west midlands share that concern.

Can I make a tiny bit of progress and finish my thought? Then I shall give way again, I promise.

The attendance at this debate shows how very serious this issue is, and we are talking only about compensated closures. We must also face the key issue of what will happen after the uncompensated closures that will surely come as a result of retirements and other processes. We must always remind ourselves how vital post offices are to the communities they serve, particularly in rural and deprived urban areas, which do not feature enough in public debates on this issue. Post offices are often the only place where cash can be obtained. The Government rightly talk about financial inclusion, but there is no more basic element of financial inclusion than getting cash, and post offices are often the only place where one can get it. Now, to whom did I say I would give way next?

My hon. Friend is being very generous. May I give him an example from my constituency, in which five post offices are threatened with closure? One of them, in Willingdon village, is popular, makes money and was refurbished only a few years ago at a cost of £40,000. The postmaster, Andrea Etwell, is keen to keep it going, so what is the logic of shutting it down?

I must say that I am ignorant on that point. Surely the compensation costs will be higher for closing such offices; that should be of some concern to the Minister.

The hon. Gentleman mentioned the issue of rural versus suburban, let alone urban. The social network payment, which we welcome, was invented to support the rural network. Even with the very least ambition, that will now be spread much thinner. Does the hon. Gentleman agree that it is wrong to invent something and then fundamentally change it? Within that budget, money was set aside for reinventing post offices that needed refurbishing. If we lose that money, we lose the Post Office completely.

I am very happy to agree with the hon. Gentleman. I shall return to that matter in more detail if I am able to get there within a reasonable time.

Sir John, I shall give way to everyone who wishes to make a point, because I think it is only fair, given the importance of the subject.

Does my hon. Friend recognise that the discussions about which post offices should be closed down create envy for some of us? My sub-postmasters have no idea which one is to be closed down, and we have recently been informed that we are not going to be told for months to come. Does he realise that that is causing severe dislocation?

I do indeed. My right hon. Friend anticipates something that I intend to speak about shortly in my remarks, if I can get there. I shall make one more point from my script, and then I shall give way again.

Another issue that concerned me greatly over the summer was the apparent attempt to gag sub-postmasters. In effect, they were not allowed to campaign for their own future. I have had a comprehensive apology from the managing director of Post Office Ltd for that, but, as I wrote in reply to his apology—I have had no further response—I find it difficult to understand why such threats found their way “by accident” into important communications with sub-postmasters. I believe that the company realised how disastrous would be the idea of mystery shoppers checking up on what sub-postmasters were saying, but it was a deliberate policy. The Post Office appears to have backtracked on it, but it has left a legacy of fear in the minds of many sub-postmasters.

On the consultation, did my hon. Friend see in the press over the weekend reports of a list of post offices intended to be closed in several counties? The list accidentally included several other counties, including Warwickshire, and several post offices in my constituency, including one in Kenilworth. Does he agree that it would be disgraceful if decisions had already been taken, in some cases before consultation has even begun?

I agree with my hon. Friend. In fact, I find it difficult to understand how the Post Office can approach its job without having a rough idea of which offices it will actually close. That is why I have a great deal of sympathy with what my right hon. Friend the Member for West Dorset (Mr. Letwin) said about the issue. There are significant variations in the reduction outlets listed in plans that have been published so far, ranging between 18 per cent. in the east midlands and 10 per cent. in North Yorkshire. The Post Office must know roughly what it plans to do, otherwise it could not hit the Government-imposed target of 2,500. I fundamentally share the concerns of my hon. Friend the Member for Rugby and Kenilworth, (Jeremy Wright).

I am just seeking clarification. The hon. Member for Wellingborough (Mr. Bone) said that the sub-post office that is to close in his constituency is profitable, and the hon. Member for Eastbourne (Mr. Waterson) said that one of his sub-post offices makes money. Is the hon. Member for Mid-Worcestershire (Peter Luff) able to say how they got that information? I am not aware that it comes out in the public domain.

The hon. Gentleman is absolutely right. Sub-postmasters themselves know how much money they make. It is fair to say that there are some extremely successful sub-post offices. They make considerable sums of money for their owners who, I should add, work hard to earn that money. Equally, there are some marginal and less than marginal sub-post offices. I anticipate that the Minister’s response will be what I believe he said in this place on Tuesday during a smaller debate on the same subject. That is, that the network as a whole loses money and that there are costs in supporting the whole network, so that even an office that makes money for its proprietor might lose money for the network. I understand that he has to juggle such issues. The only way of getting such information is by relying on information from sub-postmasters themselves. I may be wrong, but that is the only information source of which I am aware.

My hon. Friend had reached a point in his speech, if he can remember that far back, when he was dealing with the importance to the local community of post offices. I wonder whether there is a disconnect between some of the Government’s policies in other Departments and the policy on post offices. For example, in Passfield in my constituency, some sheltered housing was given permission to be built only because it would be close to a rural network shop and local post office. If that post office were to close, as is threatened, would the sheltered housing also have to close, given how important the post office is to it?

My right hon. Friend makes an extremely powerful point. Indeed, the regional spatial strategy plan revisions going on at present around the country suggest that many new houses will be built in parts of the country where post offices are probably about to close. The issue that he raises so powerfully on behalf of his constituents has a wider policy resonance, and I entirely share his concern.

The network change programme—I wish it were instead called the national closure programme, which is a much more honest phrase—has begun in earnest. It began in three areas on 2 October. My own area is last.

I am not sure whether it is an advantage to be last in the process, because I think that when the Chairman of the Select Committee gets the branch access reports for the sub-post offices that are slated for closure, he will be disappointed by the cursory data that exist therein. In fact, as far as I can see, no weight is given to the fact that a post office that is slated for closure is the last shop in the village. Of the 25 post offices in North-West Leicestershire, just two are slated for closure, and one of them is the last shop in the village. The decision to close it is not sensible, to put it mildly. We need a more transparent process and fuller calculations.

I am grateful to the hon. Gentleman for making that important point. I cannot say that I am looking forward to receiving the reports—they are clearly inadequate—but I am grateful for his information.

My own consultation process has been profoundly flawed. Bizarrely, Worcestershire has been put in with the black country as a coherent geographical entity, which I do not understand at all. I have had some strange correspondence with Post Office Counters and the Minister about the location of Bromsgrove and Redditch, which the Post Office seems to think are not in Worcestershire but in the west midlands. I have not been able to put that right yet, and even the Minister’s most recent letter of 13 October repeated the same mistake and said that they were part of the west midlands. The Post Office’s grasp of geography does not give one great confidence, never mind anything else.

I also do not yet know the schedule for my consultation period. Originally, the process was due to begin in mid-July and run precisely for the period of the school holidays, which was just about the worst and most idiotic time to have a major consultation. I went on to the website at the weekend and discovered that the date had been moved to late August. My researcher rang up the network consultation team yesterday but could not get through. She was eventually told to send an e-mail, which has been acknowledged as a response to the consultation, not as a request for further information. The consultation team cannot even tell us when the consultation will begin. That does not give me great confidence in the consultation and communications procedures being used by the Post Office. I do not necessarily blame it for that. We always thought that this was an ambitious closure programme and a tight time scale, and I am sure that its resources are being stretched thin by the process.

Does the hon. Gentleman share my concern that some of my proposed closures are close to the Wiltshire border, although we do not yet know what will happen in Wiltshire? There seems to be a divide-and-rule strategy—this is closure by attrition. We are lucky to have a groundswell of feeling in this Chamber, but the Post Office has been very crafty in not providing full information.

The hon. Lady is absolutely right. In my own case, consultations for Gloucestershire and Oxfordshire will begin very soon, whereas my area has been left until August. When I wrote to the Post Office to object to being included with the black country rather than Gloucestershire, I was told that the consultation could not cross regional boundaries. Actually, Gloucestershire and Oxfordshire are in two different regions for the purposes of Government office definitions. The Post Office really does not seem to know what it is doing, and that worries me. The hon. Lady is absolutely right to be concerned.

I am grateful to the hon. Gentleman for giving way. He referred to the timing of the consultation process. It is planned that the closures in the highlands will be announced at the beginning of January and that the consultation will take place in January, February and March, the three coldest months of the year when there is snow and ice on the roads of the country’s most remote and geographically isolated region. Does the hon. Gentleman think that that is a sensible way of trying to get the public involved and responding to the consultation, or does it sound more like something that has been constructed to stop people getting involved?

No, I shall stop giving way for a while now. I have to make some progress, as I have a series of questions to ask.

Order, May I just say that the hon. Gentleman has given way 15 times, I believe, and that he will not be able to make any progress—nor will the rest of us—if this continues? May I ask people to constrain themselves and to intervene only once, except in dire emergencies?

That is absolutely right. I did say that I would stop giving way, but I promised before the debate to give way to my hon. Friend the Member for Rayleigh (Mr. Francois). If he still wants me to give way to him, I will happily do so.

I thank my hon. Friend. I am campaigning to save the Chase post office in Rayleigh. In that context, I replied to the national consultation team both by e-mail and with a hard copy in the post. It is as well that I did, because the hard copy that I sent in the post was recently returned to me, unopened and still in the envelope. The envelope is addressed:

“National Consultation Team

Freepost Consultation Team”,

which is exactly what we were told to do. Someone has ringed the address and put a question mark beside it. It is a little depressing that even the Royal Mail and the Post Office cannot deliver a reply to consultation on post office closures through their own system. Does my hon. Friend agree that that further undermines the credibility of what is already a creaky consultation exercise?

I hope that you understand, Sir John, why I was prepared to give way to my hon. Friend. The Post Office has a lot to answer for in that example. You could not make it up.

Five consultation exercises have ended, and the first final closure decisions are due next week. Will the Minister confirm when those decisions will be released? Written questions to the Department on the closure plan are being directed to the Post Office, but those replies are not being put in Hansard, or deposited in the Library. For the sake of an open and transparent process, could such correspondence please be deposited in the Library?

There are questions about the purdah period, and I suspect that some of my colleagues may wish to ask them in a slightly more partisan spirit. I have looked at the Cabinet Office guidelines, and I am puzzled by the decision to suspend the consultation during local elections, which we knew were going to happen when the timetable was arranged.

I am worried—this is a conspiracy theory—that the Post Office might be setting post offices up as Aunt Sallies to focus campaigning activities on one post office and to distract from others. I take an interest in the Hampshire process because my in-laws live in the New Forest, and I have spoken to my hon. Friends the Members for New Forest, East (Dr. Lewis), and for New Forest, West (Mr. Swayne). Coincidentally, they have both expressed regret that other important engagements prevent them from being here today. My hon. Friend the Member for New Forest, East highlighted Bramshaw post office, which I know well. If that closes, people living in the village will have to walk a mile down a dangerous road to Cadnam, which is impossible to do safely and securely. Almost exactly the same is happening in Tiptoe, which is in the constituency of my hon. Friend the Member for New Forest, West. Again, it is an isolated village, and people living there will have an almost impossible walk.

I would not be surprised if the Post Office reprieved those two post offices, and if they were set up to focus opposition, because closing them would be crazy. I know both areas well, particularly Bramshaw, and I hope very much that those post offices remain open. I know exactly the objections that my hon. Friends have made, and they are well founded in fact.

The access criteria and flexibility that underpin the new process—a minimum proportion of the population must live within a given distance from a post office or outreach point—will see reductions in access from current levels. I welcome the Government’s amendment of the original access criteria to provide greater flexibility in taking account of public transport—that is not apparent in Bramshaw and Tiptoe—alternative access, local demography, local economic impact, and so on. I also welcome the widening of the coverage from 10 per cent. most deprived areas to 15 per cent., which was a sensible change. The provisions relating to Scotland are broadly welcome to my hon. Friends in Scotland.

My only concern is about the proposed outreach offices, some of which are already working. Does the Minister believe that two hours a week are sufficient for an outreach facility? I am not convinced that that is a meaningful service to offer to a community, however it is offered.

No, I must plough on, unless an hon. Member who has not intervened does so. I apologise for that. I would love to give way, but other hon. Members want to speak.

Turning to Postwatch, I have expressed concern that the 18-month programme was too demanding for the Post Office. The Committee has repeatedly said that the six-week consultation period is too short. Cabinet Office guidelines should have been followed, and the consultation period should have been 12 weeks to enable local communities and local councils—parish, district, county and unitary—to consider the matter as part of their cycle of meetings. I know that they are involved before the formal consultation begins, but public consideration is now limited to six weeks, which is not enough. Some councils do not meet that often, particularly when their councillors are volunteers—for example, parish councils—who need time to consider these complicated matters. I welcome the 11 weeks of pre-consultation, which is good, but the public consultation is too short.

Postwatch is playing a valuable role in that short period. It looks likely that it will not now be merged with the National Consumer Council during the closure programme period. Will the Minister confirm that Postwatch is reprieved until the end of next year, and that it will continue to make its valuable contribution to consultations on local closure issues?

I would be interested to know what evidence there is to show that the Post Office is listening. I have expressed my concern about Aunt Sallies—that some post offices will be removed from the process and others will be put in—and that is something that the Committee wants to look at carefully. I do not believe that the Post Office’s plan for every closure will be perfect first time round. Evidence of change to the original proposals is important to justify the consultation process.

As I approach the end of my comments, I turn to my most important point. I have discussed the difference between unplanned and uncompensated closures and the planned and compensated ones that are part of this programme. Unplanned closures could leave holes in the new network. The Government’s research in 2000 showed that numerical access criteria, such as that which has been adopted, could see coverage levels maintained if a high proportion of outlets closed. Now that coverage levels are likely to be reduced, the clear implication is that further, unplanned, uncompensated closures could be sustained by the network while meeting the access criteria that the Government have laid down. They claim that 12,000 outlets are sustainable, but there is no compulsion to replace post offices that close in future, as long as the access criteria continue to be met. Indeed, the Minister said in this very place this week that access criteria

“offer some certainty for the future, which will help to ensure reasonable access to the network in both urban and rural areas.”—[Official Report, Westminster Hall, 27 November 2007; Vol. 468, c. 49WH.]

I emphasise “some” certainty.

I would like to see an update of the performance and innovation unit’s 2000 report on the consequences of those access criteria, but that has not been delivered. Bald assertions that the national network will be maintained are not good enough, and the Committee again calls for a statement on exactly how that will happen. We have pressed the point, but we have still not received a satisfactory response. How small could the network be while still meeting the access criteria?

I thank my hon. Friend—he is a friend—for the excellent report that we have in front of us. Did he or any member of his Committee at the end of the process understand the reason for the 2,500 figure? Does his Committee agree that it would have been better to have obtained the criteria and the reasons, and then gone for genuine consultation? Does he agree that it seems to everyone that everything was decided in advance, that that is what will happen whatever we say today, and that 2,500 will be the future for no real reason?

As always, the hon. Lady makes a powerful and important point, and I can only agree with her.

I shall rush through my remaining questions to give hon. Members a chance to make their contributions. Will the Minister outline progress on Commission approval for the £1.7 billion support package for 2007-11? We welcome the pledge in principle to continue the social network payment beyond 2011, which is now enshrined in Government promises. However, another £750 million in the package has not been properly explained, so will the Minister clarify what the rest of the state aid package is? Can he confirm the view that has been expressed here that the network subsidy scheme will spread the subsidy more thinly, because it now covers urban and rural post offices, whereas it previously covered only rural? A modest request is to ask him whether he will please at least commit to ensure that support will rise in line with inflation during the period that it applies.

Briefly, we do not want a permanently subsidised network; we want a viable network that stands on its own feet, and that is common ground on both sides. The Post Office Ltd business needs more imagination and entrepreneurialism than it has shown so far. To be fair, the new managing director, Alan Cook, is doing precisely that, and I welcome many of his initiatives, such as that on life assurance, and the effective TV advertising campaign, but I am concerned about the inhibitions still being placed on sub-postmasters and what they can do in their own shops.

There are sharp issues concerning Paypoint. Many of my constituents were upset to lose the ability to go to their post office to pay their television licence, for example. There are some difficult issues, and Royal Mail Group has taken a one-sided approach.

Another important point—the last one before I sit down—is to ask the Minister to bring us up to date with the Post Office card account tendering process. What is going on? We remain disappointed by the apparently limited functionality that the new card will offer. At least the mistakes could be corrected, which was not so with the original Post Office card account. This is a big opportunity to bring big new custom to the Post Office, but that opportunity is not being seized. I hope that the tenders offer some imaginative ideas, and I hope that the Post Office tender will win. We must recognise the risk that it may not do so. The loss of the Post Office card account to the network would be a devastating, perhaps even fatal, blow.

I have raised many questions for the Minister, and I have spoken for far longer than I wanted—I suspect that my speech has lasted as long as I planned, but responses to interventions took up more time. I shall repeat this one question: how big can the network be and still meet the Government’s access criteria? This is the first stage, I fear, of a continuing process by which there will be more and more closures. The Government can hide behind the access criteria and say simply, “We are meeting our criteria and we do not have to plug the gap,” but that would be very serious indeed. The fundamental strength of the network—its size, depth, breadth and reach—gives it a great deal of power in the marketplace. I am grateful to hon. Members for their constructive contributions and I look forward to the rest of the debate.

Order, May I make a plea, yet again, for brevity? I am going to have difficulty accommodating those who have written to me to say that they wish to contribute, let alone all hon. Members who rose.

I congratulate the hon. Member for Mid-Worcestershire (Peter Luff) on the debate.

I go back to this question: how can one close profitable businesses? It makes no sense whatever to me. Perhaps the Minister will reflect in his winding-up speech on whether or why people cannot buy the franchise. My parish council would willingly put up money to buy out the post office. When I looked at franchises such as Starbucks, Costa Coffee, McDonald’s and Kentucky Fried Chicken, I found it extraordinary that one can actually buy a franchise, do a deal and take the risk of its making money. Is there not something wrong with the fact that we cannot do that with post offices in our rural areas or semi-rural areas, such as my village of Rodmersham, whose post office is threatened with closure? So I think that there is another category, which I shall come to in a moment.

What is the real logic of closing profitable post offices when Crown post offices are crammed, even if the 2.5 mile geographical criterion is adhered to? In both Sheerness and Sittingbourne, there is not enough car parking, the queue extends outside of the offices and it can take up to 45 minutes before people are served. Will the Minister say how that is a 21st service? Clearly, it is not.

The more offices are closed, the bigger others become; they are managed worse, and there is a bigger issue. People will simply say that they cannot be bothered to go to them, and there will be a decline in the take at the main Crown post offices. I urge the Minister to return to thinking about the unclaimed assets from many pension funds and banks in the City that the Treasury is going to take. We want to set up social networks and to go a third way.

There is a third way, and we could lead the process in our own communities: we could ask for money from the social fund and from our parish council precepts and run the post office. Will the Minister say why we cannot do so? I do not see any logic and I cannot understand why the Government want to close down 2,500 profitable offices? It would be a different matter if they were unprofitable or running a deficit, but the three post offices in my constituency make money.

I am also concerned about how contracts are structured with sub-post offices. I believe that the structure makes no commercial sense and that the Post Office has missed a trick. People who run post offices receive a kind of salary, and a percentage for each piece of trade, which is a barmy way in which to run a business. It is not too late for the Government to say, honestly, that they have made a mistake. They could say just before the closures are announced, “Do you know what? There is a better way of organising this,” They could make sub-post offices structures better. That is the main message that I want to send to the Minister.

I am personally sorry about the matter. If the post office in my village closes, it would mean the death of the village. It takes certain things to make a village: a cricket square, a church, a primary school and a post office. When one of those goes, the other three follow. It does not matter which goes first, it would mean the death of the community for 20 or 30 years. That is not what we are here to bring about. We are here to sustain communities, whether they are in semi-urban, semi-rural or rural areas.

There is a serious flaw in the 2.5 mile criterion. We are 2.3 miles from the main Crown post office and serve around 16 villages beyond Rodmersham. Is the Minister going to tell me that people are going to walk those distances? There is no bus service, so people in my village who are in their late 50s, 60s or 70s badly need a post office. They will not use public transport; there is none. The Government would be killing the community of which we feel so proud and which has lasted many hundreds of years.

In conclusion, I plead with the Minister to look at the third way, and to give us the opportunity to buy out the post office and run it ourselves.

I shall try to be as brief as the hon. Member for Sittingbourne and Sheppey (Derek Wyatt).

I served on the Committee that drew up the report, and we heard a great deal of evidence about the whole system. We were concerned about the 2,500 figure and why the Government came to it. There does not seem to be any rhyme or reason to it, and it will lead to some perverse decisions. As I mentioned, in a campaign in Scotland when people lobbied against the closure of their post office, they were told that, if they were successful, another post office would close. That does not seem to be a logical stance. Presumably, the new target was accepted by the post offices to be necessary under the previous criteria, so why would it suddenly become unnecessary? That question needs to be revisited.

Is that not similar to the threatening tone of the letter that was sent in the summer to sub-postmasters about what they could say? The consultation has the same threatening tone by effectively saying, “If you save this post office, we will go for another of your post offices,” That is worrying.

It is worrying, because it sets communities against one another in the plan, which is dangerous.

As was mentioned by the Chairman of the Committee, we were clear that the six-week consultation programme was insufficient and that it should have been at least 12 weeks. What happens if one post office is taken out of the plan during the consultation period and another put in? Whether there would be another six-week consultation process is not clear, so will the Minister make it so? It would be iniquitous, to say the least, if someone who used the second post office ended up with no consultation period whatever.

We also mentioned the question of local authorities. The report makes it clear that the Committee felt that the local authorities must have a significant input. In evidence, we made the point that, at least in Scotland, many local authorities work on a six-week rolling programme, so it is difficult for them to look at the consultation in the middle of such a period. In the Highland region, the consultation will come out in January. My colleagues who serve on Highland regional council have been trying to persuade the Post Office to give them an early indication of which post offices will be targeted, but it refuses to do so. The Post Office will conduct a consultation in the winter months, which will not work.

The Committee also made an important specific recommendation. The report states:

“It is essential that the proposed restructuring does result in a sustainable network such that no further significant restructuring will be necessary for many years, with the network maintained even as sub-postmasters retire or resign in the future.”

That point was taken up by the National Federation of SubPostmasters, but, sadly, such an aim will not be achieved by the programme, and I suspect that we will be back in the same position within a few years.

The fundamental difficulty with the process is that it merely follows on from the previous closure programmes and does not, despite the rhetoric, look at the overall network and how it should be rebalanced to meet the needs of communities throughout the country. It is aimed merely at reducing the network by 2,500, and the problem is that the current network has evolved piecemeal through unplanned closures in the past. The urban reinvention programme was a classic example: it was not really a programme, but an attempt to get rid of a large number of post offices, and it proceeded at times on the basis of having a large sum of money with which to close post offices and then asking which ones wanted to close.

The result is that there are areas with no post office service and other areas where offices are close to one another. One village in my constituency, Friokheim, lost its post office, but it should have kept it under previous criteria. To be fair to the Post Office, it tried to get someone to open a post office, but not surprisingly, given the uncertainty, it could not get anybody to do so. Under the new criteria, however, the village will no longer be entitled to a post office. I have raised with the Post Office the question whether the village would qualify for outreach services, but they are apparently being considered only for areas that do not meet the new criteria—the 38 excepted postcode districts. That is very short-sighted of the Post Office, and I continue to seek to persuade it to reconsider. Outreach services are not perfect, but they do retain some services in an area.

Elsewhere in my constituency, in the town of Forfar, the two remaining sub-post offices are very close to each other on one side of the town, but there is nothing on the other side. Under the proposals, however, one of those offices is likely to close. In the past, a more sensible solution would have been possible, with one office on each side of the town, but that will not be possible, because the programme looks only at closures.

The Committee made it clear in its recommendations that it is essential for a proper network to be maintained and that that will require not only incentives for sub-postmasters to move to offices where the need is greater, but the opening of new post offices, because large volumes of new house building around the country will result in significant changes in settlement patterns. That strengthens the case for a clearly defined policy on the opening of new post offices, but the programme does not offer that and is purely about closures in the existing network.

The other fundamental reason why we will not have a sustainable network relates to the way in which the excepted areas are dealt with. When the then Secretary of State appeared before the Committee, I pressed him on what would happen if there were unplanned closures in the excepted areas. My constituency contains one excepted area and shares another with a neighbouring constituency. Inevitably, there will be further unplanned closures when a postmaster dies or retires or simply decides that he wants to give up. However, I have been unable to get any real answers as to what will happen. I have pressed the Post Office on the issue, and I have been told that it will look at outreach services for such areas. However, if there is a closure in one of the excepted areas, where post offices should be retained, the service to the area will be diminished, even though such areas are already considered to have an inadequate service under the criteria that have been set down. That is unacceptable.

I do not want to take up too much time, although I could go on about many other issues, but financial inclusion has been mentioned. Postcomm has made the pertinent point that about 65 per cent. of rural communities have a post office, while only 10 per cent. have a bank branch. One result of the proposed changes, therefore, will be that the last outpost of financial services in many areas will go.

I also want to ask the Minister about the purdah. It suddenly appeared last week that some of the closures were being postponed because of the purdah period. When the closure programme was set up, we all knew when the local elections would be. Interestingly, when Alan Cook spoke to the Post Office group last week, he said that the purdah period had been mentioned to the Post Office only recently, and I wonder why it has suddenly leapt up at such a late stage.

To be fair to the Post Office, it is trying to move into other areas, although it is somewhat ironic that it has said that one of its saviours will be the move into telephony, which used to be part of the old General Post Office. However, the Post Office is trying to move into areas where the market is very crowded. We live in the age of uSwitch, when we are told to keep switching providers to get a better deal, but I am not convinced that the Post Office’s proposals will be its salvation.

The real problem is that the Government insist on treating the Post Office as simply another commercial entity, which must be gradually weaned off the network subsidy. That is not realistic, and we should accept the need for continuing help from the Government to meet the social responsibilities that exist throughout the network, and particularly in rural areas.

I was not a member of the Select Committee, but I see that it has recognised and accepted the changes in our society that justify a major rationalisation of the Post Office. In fact, paragraph 3 of the Committee’s response to the Government’s response says that:

“we accept the justification for the proposed major, systematic overhaul of the post office network”.

I raised an eyebrow when it went on to say that:

“we simply wish that this necessary action had been undertaken earlier.”

It seems, therefore, that the case for doing the work has been made.

I read that paragraph last night when I was preparing for the debate, and it is open to misinterpretation, so I am not surprised that it has been mentioned. The Committee reluctantly accepted that there was a need to rationalise the network, given the Government’s changes to the business being done by post offices. However, we wished that the Government, having crippled the network—that is a pejorative phrase, which a Committee Chairman should perhaps not use—had moved rather more quickly to address the situation systematically. None the less, we deeply regretted that we were in that situation in the first place.

We all find it regrettable that there are millions fewer customers and millions of pounds of losses and that the network has become dependent on public subsidy. Indeed, it is now essential for the Government to make it clear that there will be a long-term subsidy into the future. As far as Post Office Ltd is concerned, a commercial network would have about 4,000 branches, but the Government and the Post Office together say that there will be a network of 12,000 branches. Clearly, the difference between the two—two thirds of the whole—can exist only because of the long-term payment of public subsidy.

The changes that have taken place are not entirely of the Government’s making. We need only look at some of the business that has been withdrawn from post offices, in addition to the payment of pensions and benefits. In my area, councils are withdrawing the facility to pay council tax through the post office, while the BBC has withdrawn the facility to pay the TV licence. Many private sector organisations that serve the public are also pressing their customers to pay their bills by direct debit. It is right that we face up to the consequences of those changes and debate how we can have a proper and sustainable network for the future.

On that point, the more business that disappears from Post Office Counters, the greater the potential for losses. That in turn means that the Post Office as a business will find it more and more difficult to compete with those who are trying to muscle in on the limited business that it still does.

Yes, that is the unpalatable fact that we face. Let us all support the new management of Post Office Ltd in its ambition to increase the range of services at post offices and to make them relevant to today’s way of living. I will make some suggestions about that in a moment.

I have listened to hon. Members’ interventions and I, too, want to voice my dissatisfaction about the consultation process. That goes back to my experience of the urban reinvention programme in Stafford, where there were a number of closures. I could see the sense behind all but one of them and I did not object to them, but when I did object to one, I had the backing of the local community, the local council and Postwatch. None the less, Post Office Ltd would not listen or accept that it had got things wrong in that one case out of so many.

One of the most unattractive aspects of the closure of that post office, which was in a part of Stafford called Doxey, was that the sub-postmaster was willing to close it and take the compensation for going. That was a particularly unsatisfactory reason for choosing the post office for closure. That is why, when the then Secretary of State, now the Chancellor of the Exchequer, made a statement about the process on the Floor of the House on 14 December 2006, I asked him to confirm that it would not simply be a case of selecting post offices for closure on the basis of who volunteered to take the money. In fairness to my right hon. Friend, he did give me that reassurance, saying that

“some people who want to go might not be able to do so, as it is important to have a national network.”—[Official Report, 14 December 2006; Vol. 454, c. 1034.]

That was confirmed in the Government’s evidence to the Select Committee and in their response to the Committee’s report.

The next unhappy event in Stafford was that the Crown post office was moved into a WH Smith store. Again, I have no confidence in the outcome of the consultation that took place. I can see the sense in moving a number of post offices to bright, town centre premises under the franchise agreement that Post Office Ltd made with WH Smith—indeed, the WH Smith store in Stafford is in the pedestrian area in the town centre—but the commercial pressures on WH Smith were unfortunately such that it wanted to put the post office on the first floor of a building with a tiny lift. Previously, the lift had carried materials, but it was now proposed that it would carry people with buggies, children, pushchairs and motability scooters. No matter how hard I and the disability access group for Stafford, the council and Postwatch argued that the arrangement was not suitable, no account was taken of it. The move has taken place. So of course I look forward with trepidation to the start of the process in Staffordshire at the beginning of 2008.

I wanted to ask the hon. Gentleman whether his experience of the lack of consultation over the WH Smith move was like my experience; it seemed that things were almost being kept secret from people, apart from the fact that a few key politicians were written to. One of the most obvious places at which to consult seemed to me to be the current post office; there could have been a board up, and leaflets, saying “This is what we are planning.” That did not seem to occur to those responsible. It was swept under the carpet and the move at Kirkintilloch happened just last week.

No, I do not impugn the management’s intentions; I believe that it was sincere in its consultations. Of course in a consultation all points of view will be listened to, but that does not mean that they will all be agreed to, so perhaps I am being a little unfair, although in both instances I thought that there was a strong case for a change of opinion.

We are now, locally, trying to get everyone ready for the preparation of the local area implementation plan. I have contacted all the councils and Postwatch; the community is alert to the fact that the process is about to start. I have asked the councils to get ready the kind of information that will supplement what Post Office Ltd will collect. Examples might include local geographical features that might be physical barriers to access, which appear on a plan to be within three miles of a post office—such as a river or a motorway. I have asked them to examine public transport access to show that there may not be a decent public transport service to the post office that it is proposed to retain, and to consider impending changes in circumstances, such as new housing developments that might change the picture very soon. In that way, the councils, the community council, Postwatch and I are as ready as we can be to deal with the consultation and for my third attempt to get Post Office Ltd to listen to a well made argument.

I observe the experiences of those who have already gone through this process, and I add my voice to those of hon. Members who have angrily asked the Minister how profitable post offices can be closed in this process. My hon. Friend may be able to comment on what people mean by “profitable”, and explain that things are not as they seem. However, there is great concern in my area about the possibility that good-quality, profitable post offices may come into the frame for closure, simply because the access criteria could be met without them. I should not like that to happen. It is not economic common sense.

I have some suggestions for ways of helping post offices, including those with a shop in them. I am thinking both of those that will survive the cull but will still need support to succeed in the future, and of places that will lose their post office, but want the shop to stay open. I am grateful to the community council of Staffordshire, the Rural Shops Alliance and, in particular, its new chief executive, Ken Parsons, for their input into the four suggestions that I have to make. By way of an introduction I want to point out that in Staffordshire, most rural post offices, at least, are part of a sole village shop, and that a closure of the local post office could lead to the closure of the shop. For many of those shops the post office income is between a quarter and a half of their income. Although my introduction is about rural areas, my suggestions apply equally to urban areas.

First, I would like more support for shopkeepers and post office managers. They need support to show that the Government, the council and the community are on their side. They need help to rebuild morale and give them hope for a sustainable future. In a moment I shall suggest some practical support that we need to give them, but that is not all they need; they need to know that there is a will that they should survive and prosper.

The second of my suggestions is access to consultancy advice, independent of Post Office Ltd. However good the new management is, I do not think that its members are the people to give advice to post office managers and shopkeepers about the future of their businesses. Of course, for those who lose their post office, so that the shop where it is located is at risk of closure, such consultancy is particularly important. I should like a commitment from the Minister to a right to have access to free consultancy in those cases. In my dealings with the regional development agency and the regional business link, during which I have been trying to obtain an assurance that such consultancy advice will be available, I have been unable to get a straight answer. Will the Minister step in and make it clear that that would be an entitlement, and clarify where the payment for the consultancy would come from? The consultancy help is needed on extending the range of services to cover, for example, parcel post, if the post office is lost, as well as cash withdrawals, bill payment, and changing demands for things such as phone cards. It is needed also in relation to increasing footfall through softer services, such as a social hub, a meeting place, and support for vulnerable people.

The third suggestion concerns grant support. Perhaps for some people that would be match funded, but should not we help people to keep their businesses up to date in areas where there is a social as well as a commercial need for their survival? Aspects of that approach include converting space into new retail space, making shop alterations and adding new fittings that are beyond the owner’s means. There was, previously, a similar scheme called the community services grant scheme, operated by the Countryside Agency. Will the Minister confirm that there will be something similar in future?

My hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt) mentioned the fourth of my suggestions. If a full-blown private enterprise village shop and post office will not be possible, can we give communities support to explore other ways of running their village shop, through a social enterprise, a co-operative or some other community effort? There are about 170 community-run shops nationwide already.

Local authorities are well placed to be real partners in providing this help. In particular, I want to point out the success of the local authority business growth initiative. It seems to make sense for councils to make use of some of the income that they receive from the promotion of new businesses, to help businesses in areas of stress—particularly in rural areas. Ultimately, the responsibility is the Government’s to co-ordinate support from councils, community councils, regional development agencies, Business Link and different Departments. I ask the Minister to make sure that that co-ordination is given.

I am waiting to hear the result of the Office of Fair Trading investigation into newspaper and magazine distribution, which also has an important impact on small shop businesses of the kind that I am talking about. This is a matter not just of economic development but of social inclusion. It is worth fighting for social inclusion and I hope that the Minister thinks so too.

It is a pleasure to follow the hon. Member for Stafford (Mr. Kidney), who made some perfectly valid points about economic and social changes, which are reducing the footfall in post offices, and ended with some positive suggestions about how one might increase turnover. I commend my hon. Friend the Member for Mid-Worcestershire (Peter Luff) and the Select Committee on their report, and on their diligence and persistence. They did exactly what a Select Committee should do—hence the attendance at this debate. Indeed, one could argue that this, rather than the one being held in the Chamber, is today’s topical debate.

I declare an interest: 35 years ago I was economic adviser to the Post Office, which generated me a modest entitlement to an occupational pension, which I declare.

The house names of Hampshire villages tell a story. The Old Station house marks where Dr. Beeching visited us; the Old School house marks the retreat of the village school; the Old Rectory marks the retreat of the Church of England. In my constituency we now increasingly have houses called the Old Post Office. We have one in my village. The Government can say that the process did not begin in 1997—and they are right. In North-West Hampshire we face the prospect of losing, within six months, more than a quarter of our remaining post offices. That is a tremendous shock to the system—a disproportionate and, I believe, wholly indefensible hit. That is roughly twice as many as the national average.

I have had the same dialogue with Mr. Nickolls at the Post Office that I expect other hon. Members have had. He is the executioner of the programme. He has made it clear that if I secure a reprieve in one place, there will be a fresh conviction elsewhere. It is quite clear that the target is 2,500. There are some very perverse results. Ashford Hill lost its conventional post office 10 years ago, and it was relocated to the back of the pub, the Ship. People can go in and ask Reg Rabbetts for a pint of lager and a book of stamps. It is a popular facility, in a village with no bus service. That is now being held out as the model—outreach—but it is now proposed to close the post office at the back of the pub.

The right hon. Gentleman mentioned outreach. Does he share my concern that the branch access reports have been produced for branches that have been recommended for full closure, but that we do not have the same, albeit limited, information for those for which outreach is proposed? It is very difficult to make the relevant comparisons.

I take the hon. Lady’s point, which brings me to St. Mary Bourne, a resourceful village that raised money and built a village shop and post office 10 years ago. That is a community shop of exactly the type that has been mentioned, but it is now going to be closed. Outreach has been negotiated, which means that the post office will remain in the same shop, but the strong room in which the post office was located must be destroyed and relocated, at some cost, alongside the counter. Nevertheless, Mr. Rod Sutcliffe has negotiated a skilful and successful outreach deal. I have also had a petition from a small and popular rural post office in Linkenholt and another from the post office in St Giles road in Tadley. I visited all the post offices except one. One post office has, at the Post Office’s request, spent a large sum investing in a strong room: it completed that about a year ago but is now about to be closed.

Two neighbouring villages—Goodworth Clatford and Anna Valley—are going to lose their post offices. If I had to single out an example, although it is invidious to do so because I do not think that any of these post offices should close, the most effective campaign has been run by Goodworth Clatford, where Richard Green has headed a successful campaign called SOCPO: Save Our Clatford Post Office.

Taking up the point made by the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) and the hon. Member for Stafford, my point is this: two of the three local authorities in my local area are interested in saving the post offices. I have had a dialogue with Mr. Nickolls and asked whether, if the local authority wants to rescue a post office, this can be done. The answer was that it is difficult but, in theory, yes. Perhaps the local authorities place a higher value on keeping these institutions going than do the Government. Can local authorities find the information that they need from the Post Office? No. They need to know how much they have to put in to keep the post office open, but they cannot get that information.

I hope that we get at least one thing out of this debate: the Minister should instruct the Post Office that, where a parish, district or county council, in good faith, wants to open negotiations with the Post Office to keep a post office open, it should be given the necessary information. If the Government are serious about devolving decision making and empowering local communities, it would be monstrous if a centrally driven programme led to the closure of popular local institutions, even though local people were prepared to put up the money so that the Government were not out of pocket.

I hope that the Minister will at least accede to that request so that negotiations can get under way to stop the unnecessary closure of successful and popular post offices.

I congratulate the Trade and Industry Committee on its excellent series of reports on the future of the post office network.

I want to concentrate on the current round of closures. The Committee is right to say that the consultation period should have been 12 weeks, as set out in the Cabinet Office guidelines, instead of six. One example of why we need a longer consultation period is the post office at Kirn in my constituency, which is one of those on the closure list.

Echoing what the right hon. Member for North-West Hampshire (Sir George Young) said, the financial information has to be given to groups that want to try to keep their local post office open. In Kirn, that is not the local council, but a local community group called EnviroKirn, which wants to submit a proposal to run the post office as a community business. However, EnviroKirn has been told by the Post Office that it would have to submit detailed financial proposals within the six-week consultation period, which is clearly nowhere near enough time. In their response to the public consultation, the Government said:

“We will also expect Post Office Ltd to engage constructively with groups who present a viable case for community ownership in those circumstances.”

In EnviroKirn, we have a bona fide, well established community group that has advanced a proposal to take over and run its local post office as a community business. I hope that the Government will speak to Post Office Ltd and encourage it to engage constructively with EnviroKirn so that we can check that it is advancing a community business proposal that stacks up and is financially sound. I hope that that proposal will be considered seriously by the Post Office.

Kirn, a village just outside the town of Dunoon, is an example of how the closure of many local post offices would have a severe impact on the local economy. The closure of Kirn post office will, as well as forcing pensioners to travel to the main post office in Dunoon, seriously damage the viability of the other shops in the village, because people collect their pensions and benefits in the village post office and spend much of the cash in the shops round about. However, if Kirn post office is closed, people will be forced to travel to the main post office in a supermarket in Dunoon.

Exactly the same arguments apply to the Hillfoot street post office on the other side of Dunoon, where the local post office is also under threat of closure and is surrounded by local shops. Closing Kirn and Hillfoot street post offices will mean people collecting their pensions and benefits in the main post office in the supermarket and, having been forced to travel there, they will inevitably spend their money in the supermarket, meaning that the profits from the money they spend will go out of the town rather than being collected by local shops and re-circulated in the community.

I am listening closely to what the hon. Gentleman is saying. Can I just draw to his attention the following example? Some two or three years ago, when Safeway supermarkets were taken over by Morrisons, Morrisons decided that it wanted every single post office out of its premises. There was a major campaign in Dumfries in my constituency to oppose that. I discovered from inquiring into what was happening that more than 50 per cent. of the business that was being transacted through that supermarket was, in effect, business from outlying villages. People came to the supermarkets: they did not use the sub-post office in their village, but went to the supermarket. The advantage of the post office coming out of the supermarket was that it drove people back to the villages.

The hon. Gentleman makes a good point. If the only post office is in a supermarket, it is taking money away from local shops. However, it is important to note that supermarkets get taken over by other companies and that can have knock-on effects.

The same arguments that apply to Dunoon apply to Campbeltown, where two of the town’s three post offices are on the hit list and the only remaining post office is in a supermarket. Pensioners will have further to go to collect their pension, local businesses will suffer and there are also doubts—as in Dunoon—about whether the remaining post office will be able to cope, because there are often long queues. Closing two of the three post offices in the town will obviously add to the queues. I doubt whether the Post Office has done serious analysis on whether the remaining post office can cope.

In Helensburgh, another town in my constituency, the East Princes street post office, a very busy and profitable business, is on the hit list. I cannot see how closing it makes any sense. Helensburgh has a population of more than 10,000 and is therefore considered as urban under the Government’s definition, under which 95 per cent. of the total urban population of the UK must be within 1 mile of a post office. Yet closing East Princes street post office will leave a large proportion of the east end of Helensburgh more than a mile from the town’s main post office. I am not sure whether the Post Office is aware of it, but there are plans for substantial extra house building at the east end of the town, meaning that a much greater proportion of the town’s population will be more than 1 mile away.

On nonsensical urban post office closures, may I draw my hon. Friend’s attention to Kelvindale post office in Glasgow, which the Post Office asked the Postmaster General to take on just 18 months ago and which is nearly half an hour’s walk from any of the alternatives? A great campaign run by Katy Gordon has collected more than 700 signatures against that. Does that not show that the Post Office has not done its homework on these closures?

I am grateful for that intervention. I agree with my hon. Friend, in that I have severe doubts about the homework that the Post Office has done.

Closing the post office in East Princes street will mean that pensioners have to travel to the main post office instead. That will be inconvenient for them and will mean the loss of the social value that a small local post office brings. Also, I do not see where the financial benefits to the taxpayer will come from in closing that profitable business. The main post office struggles to cope at present. Clearly, extra staff will have to be recruited there to replace the staff who will be made redundant at East Princes street, so there will be no saving in staff costs.

The Post Office consultation document suggests that, because pensioners have free bus travel, they will not have to incur any extra expense taking the bus to the main post office. However, the taxpayer clearly picks up the bill for those extra bus journeys. Surely the cost to the taxpayer of the extra bus journeys for every pensioner who collects their pension at a post office must outweigh the cost of paying the pension through their local post office. I ask the Government to take all those extra costs into account before proceeding with the closure programme. I hope that the Post Office will take on board all the points that I have made and will keep some of or all the post offices on the hit list open.

The Select Committee report makes excellent points about the future of the network after the closure programme. Even if post offices are not compulsorily closed, unplanned closures will inevitably happen unless the Government give the remaining post offices enough business to make them profitable, and of course unplanned closures will lead to the Government’s access criteria no longer being met.

As the report notes, the future of the Post Office card account is vital. It should be extended to include simple functions such as making cash deposits. In fact, POCA should be developed into a basic bank account. That is the route that the post office has gone down in France and Germany, and I urge the Government to go down it in this country. A Post Office bank account would make the network sustainable because of the network’s wide reach and high level of public recognition and trust. Making the Post Office into a bank would enable the Government to meet their own objectives of financial inclusion. I urge the Government to adopt the Post Office bank solution, as I believe that it is the only way to make the post office network viable in the long term.

Our local communities are the bedrock on which our wider society is formed. Hove and Portslade, which I represent, are fortunate to have a strong sense of local community, the cornerstone of which is often to be found on the local high street. Those pockets of small independent traders provide so much more than just a local facility at the end of people’s roads; they provide a means through which a local community can interact and bond with one another. Faces that become familiar over time soon become friends. In turn, those who are more able look out for those who are less so. The very existence of small independent traders binds the local community together, which in turn fosters strong and enduring local relations.

I am aware that my hon. Friend the Minister is not responsible for the closure of individual post offices, but his Department has been responsible for the criteria on which post offices are to close. That is what I would like clarification on. He has kindly agreed to meet me and local traders on 13 December, for which I thank him.

The Richardson road area of shops in Hove consists solely of independent shopkeepers. The existence of that parade of shops represents much more than that to local residents. Indeed, a local writer, Christopher Hawtree, has described it as a nook and a village. The consultation on the closure of post offices specifies that among the criteria that need to be taken into consideration is the impact of closure on local trade. How much weight would the Minister put on those economic factors, and how would the Post Office assess that impact, which is far from clear?

The shopkeepers consider themselves the backbone of the local community, providing a truly personal service to the surrounding area. Local residents can purchase all the necessities of everyday life there. At the centre of those facilities is the local post office, which faces the prospect of closure. That would, I believe, mean the gradual break-up of a group of independent businesses that, although independent from mainstream commercial ownership, are completely dependent on one another for their sustainability.

The local butcher, John O’Connell, born and brought up in the area, said:

“It is disgusting that the Post Office is closing.”

He said that the Post Office should be taken over by the Government. The baker, Clayton Morris, of Upper Crust sandwich shop, said:

“The Post Office closure will create a negative impact on the small but busy business community in Richardson road, including my own.”

Kevin Moffatt, the florist, said:

“The closure would rip the community apart as the Post Office is a vital life line”.

All those traders are terrified of the impact of the closure of their local facility.

Demographics are supposed to be an issue, and many residents in the immediate area are elderly people who find the prospect of travel, even over a relatively short distance, daunting. The alternative post offices suggested are both across busy roads. Many local residents are senior citizens for whom an extended journey to the post office of even half a mile would be very problematic. For those of limited mobility, a bus journey could prove difficult and the cost of a taxi prohibitive. It seems unfair that those with physical disadvantages or disability should be deprived of access to what is seen by many to be an essential service.

The Government have placed a distance limit on the closure of post offices, which seems a sound idea. However, due to the high density of housing in my constituency, a large proportion of my constituents do not own cars. Is the Post Office looking into that? If demographics are a consideration, as they are supposed to be, should not the age and mobility of users of the post office be taken into consideration or at least investigated? As well as relying on the post office for their pensions, many elderly residents who are not online see it as their only link to family and friends who have moved away.

We have already seen for ourselves the devastating effects that large supermarkets have had on local high streets throughout the country. We are fortunate in Hove and Portslade that despite rapidly expanding numbers of supermarkets, we have managed to maintain our independent local shopping areas and a sustainable community, which I believe should be upheld. Independent businesses are interdependent in a way that our larger supermarkets simply are not. We have seen all too often in recent years the domino effect that occurs when a key business is removed from the local infrastructure. Streets that once were bustling and the heart of a community become unsustainable as residents move further afield for the services that they need. I wonder whether sustainability should also be a major criterion.

To the west of my constituency, we face the closure of another local post office. The Trafalgar road post office lies within a diverse local community with a very strong sense of identity. It has been run by the Patel family as part of their convenience store for about 20 years. Were that post office to close also, not only would many have to travel much further afield to buy a stamp, but there would be a decline in the businesses in the area. However, that is not my major concern about Trafalgar road, though it is that of my constituents.

My major concern is that, when I had a meeting with Post Office Ltd regarding the possible closure of my two local post offices, it said that it was unaware that a planning application had been passed for the Frank Gehry-designed King Alfred site a very short distance away, which includes 650 flats and is supposed to be finished within three years. I suspect that the Post Office is also unaware that part of the South East England development agency plan is to build 10,000 new homes at Shoreham harbour, for which the post office to which I am referring would be the closest local post office.

I echo the comments of the hon. Member for Argyll and Bute (Mr. Reid): exactly how were those decisions made? It is fair enough to say that it is the job of the MP and the local people to import this issue into the consultation process, but a decision had already been made, before it even got to us, that those were the post offices that the Post Office felt were appropriate for closure. I feel that there is a lack of transparency about the commercial decisions made. I am unaware of exactly why the Post Office has chosen to close, for example, the Richardson Road post office. That should also be part of the consultation process. We should be given all the information, including financial information, from the Post Office, before these decisions are made.

I too shall keep my remarks brief, not only so that other people can speak but to give the Minister maximum time to reply, as he will need his full entitlement to answer the many points made, and I do not want to curtail his opportunity to respond. I thank my hon. Friend the Member for Mid-Worcestershire (Peter Luff), who must be gratified by the response to his report and to this debate.

I shall mention an area of the country that has not yet been mentioned: London. The Minister might be interested to know that last week the Greater London Forum for the Elderly held a meeting in Committee Room 14 that focused solely on the issue of post offices. Interestingly, talking about that one issue brought out almost every other issue one can think of concerning elderly people in London.

The meeting was packed out with angry elderly people from the London area, many of whom must have been Labour supporters. Their concern was about what would happen. As evidenced in my constituency, where we had five closures during the last round of post office reconstruction, what happens is simple. Most of the sub-post offices that hon. Members are discussing are the keystone in a local parade of shops. Just as when the last shop in a small village closes the village begins to wind down, when the important shop in a parade of shops closes, the parade begins to lose support. People do not go there any longer, and it becomes decrepit.

Suburban areas are becoming decrepit and run-down as a consequence of such developments in post offices and elsewhere. That difficulty is the first consequence of the closure of a post office—often a profitable post office. I admit that three of the five closed post offices that I mentioned were not profitable, but the other two were.

As a consequence, the local parade loses support. Older people must make the journey to the Crown post office in the high street, which then becomes overused. Anyone who goes into Orpington high street will invariably see a huge queue outside the only Crown post office. It is a consequence of the closure of sub-post offices in the immediate area. That has a knock-on effect. As the hon. Member for Hove (Ms Barlow) said, it has a considerable effect on the sustainability of residential areas, even in large or stand-alone cities such as Hove and Brighton. It is consequently understandable that the matter should be of concern not just in rural areas such as the highlands of Scotland but in densely populated areas. I wish that the Minister would take that into account.

I was struck by the remarks of the hon. Member for Sittingbourne and Sheppey (Derek Wyatt), who is no longer here. I thought that he showed a positive and an entrepreneurial approach. The hon. Member for Stafford (Mr. Kidney) was also constructive in his four points showing how we could help, and my right hon. Friend the Member for North-West Hampshire (Sir George Young) made the point that to respond to the needs of local people, we need information. Information is power, and power is being withheld from us. If we empowered local communities, we could make a difference.

As my hon. Friend the Member for Mid-Worcestershire said in his opening remarks, this is the biggest turnout for any debate ever held in Westminster Hall. I hope that the Minister, rather than just allowing the Post Office to plough on in this way, will recognise that this debate reflects feeling throughout the country. I hope that he will stop for a moment, reflect and take back those strong feelings to the Post Office. It is surely possible to respond more positively to this undoubtedly difficult situation. We do not deny that it is difficult or that there has been a loss of footfall and all the rest of it, but we need something other than a negative, cost-cutting, close-them-down approach. It must be possible to do something sensible.

I believe, as my hon. Friend said, that we have a remarkable asset in the post office network. Post offices number more than all the bank outlets in the country. That is astonishing. If we cannot keep them going in some form and with some imagination, we are failing the country, and that will redound very badly on this Government.

I shall be brief. I wish to share with colleagues the experiences in my constituency after a rural postal pilot that ran from September 2005 to 2006. We have a major challenge before us. We are dealing with a historic network that grew over many years. As I showed earlier when I intervened on the hon. Member for Argyll and Bute (Mr. Reid), people in today’s world conduct their business differently. It was astonishing to discover that, despite the fact that their village still had a rural post office, people chose not to use it because it was more convenient to use the facility in the supermarket when they did their shopping. The way that people conduct their business creates a constant battle.

Initially, during the rural postal pilot in my constituency—the outreach or hub and spoke system, as it was described—there were some difficulties with the computer equipment and intermittent disruption to service in the three village shops, which was managed by a sub-postmistress from the town of Castle Douglas. There was great anger in one of the villages. I attended a public meeting last January and was deeply concerned that the whole system might fall apart, but there was good intent. The hours of three village sub-post offices were being cut by 50 per cent. to about eight to 10 hours a week, and they were trying to juggle the hours so the sub-postmistress who managed the system could do so on different days.

I was anxious at the beginning, but it has settled down. My hon. Friend the Minister has been to view the system in operation. At the public meeting last January, people were demanding that the sub-post office open on a Saturday morning. It was ironic. A woman who had run the post office with her husband some time before got up and said, “It’s a pity that no one wanted to use the sub-post office on a Saturday morning when we were running the business and shop.” People have genuine concerns, but their genuine commitment is also important. That is why—somewhat tongue in cheek—I asked the Minister responsible during the last session of questions to the Department for Business, Enterprise and Regulatory Reform, “How many of us in this Chamber will use our sub-post offices when we reach retirement age and our state pension is paid into a Post Office card account?” We must give a commitment as individuals and communities to use those facilities.

The outreach system has been relatively successful. Another recent experience—perhaps it relates to the point made by my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt)—came from a small village in my constituency that was probably under serious threat. Another sub-postmistress in a larger town some 7 miles away decided to employ the gentleman in the shop that held the sub-post office for that village. He does not work for the Post Office; he works for her. As a direct result, that post office is open every minute that the shop is open. If the shop is open 30 hours a week, the sub-post office is open 30 hours a week. He is employed by the sub-postmistress. For all intents and purposes, it is a franchise.

In another initiative in my constituency, a group of people have come together in an attractive small village to develop a facility to re-establish their post office. It will happen on 11, 12 and 13 December. It is a major initiative being undertaken by local people.

I turn to the subject of Crown post offices or directly managed services. As I said earlier, I wonder whether some of these businesses are making money. I ask because the directly managed post office in Dumfries closed about 18 months ago. It was perceived to be a very busy post office, with people constantly queuing—I mean no disrespect to the staff, who were working very hard—but a business decision was made by Post Office Ltd that it should be closed. Despite the fact that everyone saw it as being a busy post office, I was astonished when Post Office Ltd made me aware of its annual losses. I therefore say to my colleagues that being busy does not mean being profitable, because additional costs lie within.

I thank you, Sir John, for allowing me to contribute to the debate and to share my thoughts. There are ways forward. I have given a commitment to my constituents, because the changes will happen next summer in my area. If the service is under threat, but people can make a commitment to use it, we should explore all the opportunities that might arise through delivering it in a different form. We are all beginning to recognise that standing still is not an option. We need to think outside the box when deciding how to provide those services in future.

I congratulate my hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Select Committee, on an excellent and timely report that is of vital interest to all in the House.

It is not new for the House to examine the subject. Indeed, not that long ago, I found myself in the same position that my hon. Friend the Member for Wealden (Charles Hendry) now finds himself in, expecting to find a way to reflect the deep anxiety that the Government now face because of the serious local consequences that result from their decisions.

We are in the thick of it in Cheshire, as we speak. The outreach proposals were quickly taken up by our local newspapers. They are not particularly partisan, and christened them the outrage proposals. There is deep anxiety. People have a fantastic respect for the services that local post offices currently provide in our local communities. When one represents both a mixture of rural and urban areas, including towns, one is conscious of the great adaptability of post offices; the way in which they offer their services is the apex of what it means today to have a community centre. For that reason, post offices have been doing their best to increase their footfall and to be commercial and entrepreneurial.

When one looks at the maps sent to us all when such great processes descend upon us, it is interesting to note how flawed and somewhat self-serving the data appear to be. From what has been said already—not least by my right hon. Friend the Member for North-West Hampshire (Sir George Young), when he spoke of the fear factor that has crept in, which was also mentioned by my right hon. Friend the Member for West Dorset (Mr. Letwin)—there is a real sense of divide and rule, with sub-postmasters and sub-postmistresses having to set themselves up against people whom they had thought of as colleagues working to produce a service across the country.

I am therefore pleased that, in our campaign in Cheshire, we have been able to defeat those divide-and-rule tactics, and I pay respect to my colleagues. Edward Timpson is working in Crewe and Nantwich, where we are fighting two potential closures in each town; Graham Evans is in Weaver Vale, where we are fighting a closure near Frodsham; and in Chester, Stephen Mosley is fighting six potential closures at Aldford, Brook lane, Brook street, Christleton, Handbridge and Watergate street. I thank my hon. Friend the Member for Wealden for visiting Chester recently to support that active campaign.

It is important to recognise that it is not only those post offices proposed for closure that are profitable. Those currently proposed for outreach are also profitable, but the arrangements are such that it could tip them into loss. The grave danger is that the outreach programme could be a self-fulfilling prophesy—from postponement through outreach of what was originally meant to be a closure, to potential closure because the economic base of those post offices is being undermined.

In my constituency, Hargrave and Meadow Bank post offices are proposed for closure. Unfortunately, it seems that closure will now proceed. However, we have six post offices on the outreach programme: Cholmondeley post office, in the fantastic award-winning farm complex of which the post office is the absolute driver and which was hugely supported two years ago by the Post Office; Delamere; Little Budworth; Threapwood; and Tilston. I visited three of them last Friday. They are all profitable. Indeed, picking up on a point made by the hon. Member for Dumfries and Galloway (Mr. Brown), the owner at Threapwood has trained her assistant so that the post office can be open all the time. If it is to be restricted to a maximum of four hours a week, it will not justify the extra job, yet it could be kept open the whole time on the same basis as the post office in the hon. Gentleman’s constituency.

At the moment, we have an inflexibility in the discussions and consultations, which is not proving productive and is causing distrust. I am deeply concerned about the flawed data that we have been given to help us make rational decisions when trying to meet some of the arguments being put out by the Post Office. My constituency has borders with Wales, now regarded by those doing the Government’s bidding as a completely different country, and by a different region because my southern border is the regional border with the west midlands. As a result, I have no data about a post office that is only 200 ft away from the post office in my constituency that is being considered for closure. It is a short distance across a Roman bridge across the River Dee to get to into Wales and the business would therefore go to the other post office, yet we do not know whether it is being proposed for closure. We do not know what will happen in Shropshire; looking at the dates, it seems that we will have finished our programme by the time Shropshire is scheduled to start. It is clearly a dysfunctional process.

The grave danger from the point of view of those affected—the local communities, customers and people in general—is that the outcome is a foregone conclusion. We have described over many debates the sense of community and belonging that post offices provide and the access to services that they give to people. We fear that the consultation is designed by the end rather than as a means for the Government genuinely to listen within the democratic process. That matters, because when we talk about the community, we are dealing with the democratic process. It should not be a crude, blunt commercial decision. Post offices belong to the sense of community, as has often been highlighted. I believe that the fear factor, with the appalling confidentiality constraints placed upon sub-postmasters and sub-postmistresses, has led to the belief that the intention is to bring to an end any kind of objection.

We could have many arguments about the evidence base, but my real concern is what the Post Office has to say. For instance, it wrote in November to the estate manager at Cholmondeley post office:

“London Mayoral elections, and Local Authority Elections in England Wales, will be held in May 2008. As you will be aware, the closure of any Post Office can be highly sensitive and can potentially become a local political issue.”

That is dead right, Minister. It continued:

“For that reason, we have been asked by Government to introduce a freeze on some elements on the Network Change Programme during the run up to these elections. Specifically, we shall not be running any public consultations, nor making any final closure decisions, in the period immediately prior to elections from April 7th to May 2nd next year.”

It is too late. I can tell the Minister that a big political issue is already going on. For those who already despise the Government that is no change, but the Government are adding to the list of people who despise them for forcing upon them a decision with no evidence base for a programme of 2,500 closures. They will put that at the Government’s door.

The Minister, waiting to answer the debate on a Select Committee report, owes it not only to all those Members who are deeply concerned and who are campaigning on behalf of their constituents, but to the people, as part of the democratic process, to identify where the 2,500—a perfect number—came from, what was the evidence base and why it should be a major benefit to local people, rather than a further diminution of their sense of what is owed to them as members of the local community.

I urge the Minister—it is within his gift—to recognise that the best thing to do is to withdraw the 2,500 demand and say that we need to think again. It is a political issue, not a commercial one. The Minister cannot wash his hands of the matter, hiding behind the Post Office or setting up a citizens jury, saying, “It’s not me, guv, it’s someone else’s problem.” It is to do with the people that he is required to represent through the Executive. The Executive have made the demand; it is the Executive who have caused the difficulties. We call upon the Minister to withdraw the 2,500 closure programme, so that we can think again. We could then be more rational and sensible of what is valuable to our communities.

I welcome the Committee’s report and the work that it has done. I was privileged to be a member of the Trade and Industry Committee, albeit briefly, under the chairmanship of my hon. Friend the Member for Mid-Worcestershire (Peter Luff). A number of the concerns that were raised in the report have already been borne out in practice in my constituency, but I want to focus my remarks on three specific areas.

My first point concerns the overall number of closures, which has been mentioned by several hon. Members but which I want to address in a little more detail. The report questioned how the target of 2,500 closures was established, and the Government response said that that was the minimum number of closures required to get the network back on a stable footing and to ensure the continuation of a national network. When I consider my own constituency, however, I wonder whether the target is perhaps driving some unintended consequences.

Over the past five years in Basingstoke, we have already seen a quarter of our branches close as part of various previous programmes, and the new closure programme seems sure to mean further cuts, perhaps in an attempt to reach the 2,500 target. We might see two closures, which would leave us with just 14 branches in total. Previous cuts involved closures of underperforming branches, but I understand from my local postmasters that the two that are proposed for closure—Kings Furlong and Old Basing—are two of the top-performing branches in the region.

Is the Minister content that the target-driven approach means that the Post Office is running the risk of losing not just branches that are not financially viable but those that have added value to the network over the years? The documentation is really unclear as to what account has been taken of business viability, so will the Minister address that?

Secondly, the report rightly identifies that the proposed access criteria do little to anticipate future network shrinkage. We are all acutely aware of the difficulties that many small businesses can experience in sustaining themselves, particularly in the case of the sort of small shop from which post offices are often run, and there is a real lack of detail on how that issue will be dealt with in future. I have had first-hand experience of that problem in my constituency. One of the post offices that is earmarked for closure is coincidentally situated in a store that is currently up for sale. The hon. Member for Stafford (Mr. Kidney) picked up, I think, on the point that assurances have been given that those post offices that are up for sale will not automatically be designated for closure. I have been reassured by the Post Office that potential sale was not one of the criteria for identifying that particular office for closure, but it is up for closure none the less. I have been informed that it is entirely possible that the branch will be reprieved and remain open, but it is difficult to square that with the fact that the shopkeeper himself might be looking to close the branch, which would leave the community without the facilities that it previously provided.

Fortunately, a very tenacious Old Basing resident, Mrs. Onnalee Cubbitt, has run an excellent campaign to keep the Old Basing branch open not just for the benefit of that village but for the benefit of the villages of Mapledurwell, Up Nately and Newnam. She has identified an alternative local shopkeeper who would be very willing to take over the sub-post office; he is in fact a sub-postmaster elsewhere in my constituency. How will the Post Office square that? If it decides to keep the Old Basing office open, will it pay the costs of transferring the business to the new sub-postmaster? Likewise, in other areas of the country, how will it monitor natural shrinkage and wastage and ensure that new post offices are open to cover the voids that will invariably appear?

Let me turn to access criteria. The report notes that it is really not clear how they were determined. I might add that it is unclear how they have been applied. The only data made available by the Post Office are those for the branches that are to be closed. I have spoken directly to the consultation team and, although it took some three weeks for them to reply, which I have to say was deeply disappointing given the shortness of the consultation period, I eventually obtained clarification that it was impossible to review any data for neighbouring branches. It is impossible, therefore, for those who wish actively to participate in the consultation to assess whether the criteria have been fairly applied.

Basingstoke, which is an urban area, has a relatively high population density, and has just 16 post offices, so for the magic 2,500 target to be achieved, choices have to be made on which branch in my community should close. In the case of the Kings Furlong, a branch run by Mr. Buttress has been earmarked for closure in preference to a nearby branch situated in one of the newsagents owned by the Martin McColl chain. Mr. Buttress is an independent operator who, I understand, has built up and invested in a highly successful and thriving branch over 30 years, yet his branch is facing closure, rather than another that is just under 2 miles away. Is that because it is near the Martin McColl branch or because his operation is less viable than one run by a chain? I cannot be sure, because we have not seen the relevant criteria. Are the Government content that that lack of clarity over criteria could lead to some believing that national chains could have an advantage over independents, even if the independent offers better value and service for the community?

Another issue of access relates to public transport. As we are all well aware, public transport in many of our constituencies is a moving feast. That is certainly true in Hampshire, where huge pressure on county council budgets means that we experience regular cuts to both urban and rural services. If public transport is a critical access criterion, how will the Post Office monitor the changes in public transport access that communities experience not just every 10 years but on a yearly basis?

Let me again draw from an example in my own constituency. The Post Office was completely unaware of the proposals by Hampshire county council to cut bus services between Old Basing and the nearest alternative post office, in Chineham. As a result of action by the local council, the proposed cuts are being reviewed, but that is a short-term measure and there could still be vulnerability in future. How will the Post Office monitor that situation and respond to changing patterns of public transport on a national basis—a consideration that will become increasingly important as the network becomes stretched?

There is tremendous scope for the Post Office to be far more open in its consultation, so that those who want to be involved in the procedure feel that it is more than just for show and might benefit their communities.

It is a pleasure to take part in the debate, not least because it is the most populous debate ever to have taken place in this debating chamber. I congratulate my hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Committee, together with hon. Members from all parts of the House who have contributed to the debate.

I am sure that the Minister will answer many of the points that have been made. What has come out again and again from each contribution, however, is that there are more and more questions about the way in which the consultation and the closure programme are happening and about the implications for our communities. It might seem to hon. Members that it is distant days since we were promised that we had a new beginning and a new Government, who would consider things afresh. Let us nevertheless take those promises, however tired and distant they now seem, and ask the Minister to use that sense of renewal and reconsider the proposal to order 2,500 post office closures—an order that was made at the highest level by the current Chancellor, who was previously the Secretary of State at the Department.

We have heard from both sides of the House about the implications of the closures, and I hope that the Minister will leave the door open to a reconsideration of their impact, particularly given how they work in practice. I represent Beverley and Holderness, which is a rural area with an older-than-average population. Some 18 per cent. of its population is over 65, compared with the 15 per cent. national average, and many people live in isolated rural communities with a less-than-ideal public transport network. Against that backdrop, the post office closures seem all the more ill-advised.

The communities that I represent have had to put up with a lot over the last 10 years—I am not making a partisan, political point. Members here have been involved with me in debates on community hospitals. They are critical and yet the practice hours of minor injuries units have been cut, as too have the number of beds in local hospitals. Our local primary care trust has proposed to close every bed in Hornsea cottage hospital. The post office closures will deal a further blow to vulnerable rural communities, which want the Government to recognise their problems and provide support, especially now that the Government are under new direction and prepared to consider issues anew.

The Government’s restructuring programme has not been kind to the East Riding, in which my constituency sits. The latter has seen four proposed closures: in Hollym near Withernsea, in Mappleton near Hornsea, in Lockington near Beverley and in Grovehill road in Beverley. All are earmarked for closure, except for the post office in Lockington the opening hours of which will go from 20 hours a week to four hours a week outreach. I think that the Minister would accept that that is not an adequate or proper substitute.

There are all sorts of problems in the areas around my constituency. In Haltemprice and Howden, the Kirkella post office is threatened with closure. I would like to congratulate my right hon. Friend the Member for Haltemprice and Howden (David Davis) on his efforts in fighting that, as well as the thousands of people who have signed petitions and the hundreds of people who have written to the Post Office in the hope that this is a genuine consultation that could lead to change.

I congratulate my neighbour to the north, my right hon. Friend the Member for East Yorkshire (Mr. Knight). He has one post office threatened with closure, and five threatened with downgrades. In Brigg and Goole, one post office is threatened with closure and four are threatened with downgrading. I congratulate campaigners there as well, led by Andrew Percy, on their efforts fighting for post offices such as Westfield avenue post office in Goole. Across the Humber bridge, in Cleethorpes, three are threatened. I also congratulate local campaigners there who contacted me following my efforts in Beverley, and Mr. Martin Vickers who presented a petition on behalf of the Fleetgate branch in Barton.

Across the political divide and my whole area, the impact of post office closures is recognised as severe and has led communities to come out strongly to try and save post offices. During the six-week consultation period, more than 8,000 residents in Hull and the East Riding wrote to the Post Office opposing the planned closures. Altogether, thousands of petition signatures have been collected, and two weeks ago I handed in a petition to No. 10 Downing street addressed to the Prime Minister containing nearly 5,000 names opposing the planned closures in my constituency.

Much of the attention in my constituency has focused on Grovehill road post office. As Members on both sides of the House have suggested, some of the decisions seem bizarre, but few in the country are more bizarre than that on Grovehill road. Under a previous closure, Woodmansey post office was told to move to Grovehill road, which is close to the Swinemoor estate, which houses the lowest-income families in Beverley. If the Minister were to visit that post office on a Monday morning—

Sitting suspended for Division in the House.

On resuming—

I am aware of the limited time and of the time that we want to allow the Minister to give us a forthright and full set of answers.

I was saying that I would focus on the Grovehill road post office in Beverley. The Government’s main reason for wanting to close 2,500 post offices is cost. The headline figure often used is that subsidy costs £3.5 million a week. However, as I said when I met Adrian Wales, a network development manager at the Post Office, there must be something very wrong with the Post Office’s systems if a branch such as the Grovehill road post office does not turn a profit. Many Members have today made a similar point about branches.

According to the branch’s sub-postmaster, it takes in about £155,000 to £160,000 of Post Office business a week. It is extremely busy and entirely focused on post office work. Hundreds of people rely on it and thousands of customers visit it every month. I joined a long queue of customers on a Monday morning last month an hour before the branch opened. More than a dozen people were in line a full 30 minutes before it was due to open its doors. With Beverley set to expand further, there can be little doubt that the branch will be in even greater demand in future.

Money is not the only relevant matter, however. The Committee’s report rightly stated:

“We believe that other natural and social barriers should also be taken into account. These might explicitly allow for other factors affecting actual accessibility, rather than raw distance”.

Grovehill is situated on one of the largest social and private housing estates in the East Riding. Its occupants are some of the lowest-income and most vulnerable in the area, and hundreds of elderly people live in and around the estate. Forcing those people to walk from the centre of Beverley, at least 20 minutes away, carrying large amounts of cash, does not strike me as a sensible proposal.

The closure of Grovehill post office will also have an adverse impact on congestion. If the branch were to close, people would be forced to use the main Register square branch in the centre of town, which is not on a through road. The nearest bus stop is more than 250 yards away, which was mentioned in the Post Office consultation even though the bus from Grovehill does not go to it. People from Grovehill will find themselves at the bus station—a rather longer walk away. There are no parking spaces outside the branch except for those with a disabled driver badge, and precious few for them. Congestion in and around Register square is already a frequent occurrence and will only be exacerbated by the addition of hundreds of Grovehill road customers. Many existing users of Register square report that they already suffer quite long queues.

The Grovehill road branch is a success. Local people depend on it, and its closure would have more than just financial repercussions. It would damage community spirit and affect the most vulnerable—the disabled, the elderly, those on low income and those without transport. That is a cost that cannot easily be calculated. When I organised a public meeting at short notice to discuss the proposed closure of Grovehill, more than 80 people braved a cold autumn night to show their support. I am sure that the Minister recognises the social value of post offices, but I hope that he will listen to the arguments that have been made.

The matter of how the consultation is being conducted has come up again and again. The period is six weeks, even though the Cabinet Office suggests 12 weeks. We have been told, “If you save one, you lose another,” yet we have not seen any mechanism of how that subsequent loss will be consulted on. That is not to mention the intrinsic fear and threat. Not all the consultations have been done together, so there seems to be a dropping-down effect. Will the last area of the country have to pick up the slack for any post offices closed? What does the Minister have to say about that, and can he confirm that the Post Office set out on this ill advised consultation not by itself but with ministerial approval? That is an important question, and I hope that he might answer it.

Will the Minister also touch on the social network payment? In my constituency people do not understand why a payment system set up specifically to support rural needs has been moved across to urban areas in a way that might dilute it and be another attack on rural communities that have suffered so much.

One last question: what guarantee can the Minister give to the communities that I represent that there will not be ongoing cuts and closures after the initial 2,500? He must give us some confidence that, even if those ill-thought-out closures go ahead, there is not another set around the corner.

I am pleased to have caught your eye, Sir John, and delighted to participate in this debate on an excellent report and to follow the characteristically forceful speech of my hon. Friend the Member for Beverley and Holderness (Mr. Stuart) and the excellent speech of my hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Committee.

My hon. Friend the Member for Mid-Worcestershire mentioned the advertising campaign that the Post Office has embarked on. It points to a gulf between national strategy and what is happening in the consultation. It is an ambitious campaign, calling itself the “People’s Post Office”. It promotes the services available through the Post Office and is based on confidence. That confidence is entirely lacking from the consultation process, which is not about the right configuration of the post office network and assessing whether post offices are in the right places; it is all about closure. What an absence of ambition that suggests, and what a gulf there is between the public money that is being spent on the advertising campaign and the public money that is being spent on the consultation process. If there is a need for joined-up thinking in the Government, there is certainly a need for better joined-up thinking in the Royal Mail and the Department that has caused it to make cuts.

I am conscious of the limited time, but I wish to mention some of the post offices in my constituency that are threatened with closure, and three in particular: Bidborough, St. John’s road and Langton Green. There is also the one in Hawkhurst, which, although it is just in the constituency of my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe), is nevertheless used by many of my constituents. We have had a passionate campaign, covering all parts of the constituency, supporting each of those post offices for different reasons. If the consultation process is in any way genuine, it cannot be the case that all four post offices must close. Indeed, I regard whether changes are made as a test of the honesty of the consultation process. The arguments that have been put to post office managers through public meetings, petitions, letters and representations are so compelling that not to change the proposals would be an insult to the intelligence of my constituents and a disgraceful treatment of them, considering the time and effort that they have put into responding to the consultation process. Despite the scepticism that many of us feel about the process, I hope that it is genuine.

I wish to touch on the key arguments about the two post offices about which there was the strongest outpouring of concern. One was on St. John’s road in Tunbridge Wells, where there has been a post office for 60 years, yet in the space of six weeks we may lose it for ever. The petition that has been put together in the short time available has had more than 1,500 signatories. We had a public meeting in St. John’s church, which was organised at short notice and attended by more than 300 people. Like many of the post offices that hon. Members have mentioned, it is profitable and successful. It is run with real commercial flair by Sam and Ray Patel, the postmaster and postmistress. One feature of their business that came across strongly in the public meeting was how much it is growing, particularly the parcels business, through the growth of the internet.

Many small businesses, based either in commercial premises or more often at home, are making use of the post office’s parcel facility, trading professionally on eBay or delivering other mail-order goods and services. Business is growing both for my constituents and for the post office. Sam and Ray Patel provide a service in taking in bulky parcels that are necessary if we are to prosper through the new form of business. There will be no substitute for that if people have to take their bulky parcels and queue in the grossly inadequate facilities of the Crown post office at Fiveways, which often has queues outside the door. In the cold and dark of winter, it is not a suitable environment to encourage business.

It is important that we look to the future of our small businesses, as well as the particular small business of the St. John’s road post office. It is in a prospering part of town, and new businesses and retail shops are opening all around the post office. Is it not a symptom of the Post Office’s failure of ambition that that is the one business in the area that is to be contracted, with a view to closure? The business is not contracting; the Post Office has proposed that it should.

In Bidborough, the inadequacies of the consultation process have again been exposed. There we have an equally dynamic postmaster and postmistress, Reshma and Kiran Misrani. They took on the business 16 months ago and moved their family to the village of Bidborough. They uprooted and have established themselves successfully in the post office. Frankly, they were sold a pup. When they took on the business and had disruption to their family life, they expected to be there for many years, providing a service to the people of Bidborough. Instead, that has been immediately threatened. One grave concern about the consultation process is that it is based on a snapshot of profitability and turnover at one point in time.

Such is the dynamism and entrepreneurialism of the couple that the business is booming. The post office had been operating under reduced hours, but they have been allowed to open for longer hours, thus allowing more business to be done. Bidborough is not terribly well connected by public transport. It is on a ridge, so one must go downhill and then uphill to struggle to Southborough, which would be the nearest alternative. Bidborough also has good parking facilities, in contrast to Southborough.

In the short time that was available, my constituents, postmasters and postmistresses have made some compelling arguments. I hope that the consultation, the results of which we are about to find out, will reassure us. It is important for our confidence in the Government that they preside over a process that is genuine, not an attempt to hoodwink our constituents.

I start by congratulating the hon. Member for Mid-Worcestershire (Peter Luff), who is occasionally my hon. Friend on other matters, on his erudite and insightful introduction to this important report. I know from experience that he is an optimist who will always look for a middle way in which to resolve difficult issues such as these. Unfortunately, it is up to neither him nor me to find a middle way; it is entirely the responsibility of the Government to live up to their political responsibilities to take into account things that have been missing from the calculations used to determine that 2,500 of our post offices should close.

The hon. Gentleman’s first-class presentation highlighted the cross-party concern, which is neither tokenistic nor superficial, but deep-seated, that we are losing a social service under this accountancy-led pursuit of apparent savings. My concerns are twofold: first, the consultation process left a great deal to be desired, and secondly, the motives of the closure programme are far from rooted in data-based decision making. My hon. Friend the Member for Richmond Park (Susan Kramer), when she had responsibility for this portfolio, made several comments that sum up many of the points made today. She said:

“The government view appears to be that the post office will inevitably continue to decline and it is just the government’s job to manage the decline as best it can.”

That sentiment has been echoed in today’s debate. She went on:

“We are extremely concerned that the whole process is being taken at the same time as the government’s proposals to scrap postwatch and move its functions to a new consumer body. This will inevitably lead to a much weaker level of scrutiny and protection than was offered for example during the last major closure process.”

That sentiment has also been echoed by the hon. Member for Mid-Worcestershire and others. My hon. Friend also said:

“We believe that there has been insufficient transparency about all the facts necessary to fully consider the future of the post office and Royal Mail.”

In those three statements, my hon. Friend has summarised the cross-party worries that have been expressed today. That concern is compounded by the content of the letter that has already been mentioned, which implies a level of Government pressure on the timing of Post Office announcements. The letter says:

“London Mayoral elections, and Local Authority elections in England and Wales, will be held in May 2008. As you will be aware, the closure of any Post Office can be highly sensitive and can potentially become a local political issue. For that reason, we have been asked by Government to introduce a freeze on some elements of the Network Change Programme during the run up to these elections.”

Nothing could be clearer than the fact that while the Government seem to shy away from taking political responsibility and considering the social consequences of the programme of closures, they nevertheless recognise the political importance of protecting themselves, in the run-up to elections, from what they obviously realise will be unpopular decisions.

On the issue of timing, various hon. Members, including the hon. Member for Angus (Mr. Weir), pointed out the difficulty of consulting at such an inclement time of year. In Scotland, they still have winter in January—

Indeed, and perhaps all the way to June from time to time. In that sense, it is difficult to see why winter is a satisfactory time for consultation, especially given that the Government are willing to impose pressure regarding Post Office announcements for the sake of political expedience. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander)—perhaps he should look for a shorter constituency name—has also asked whether this is the right time to consult. I think, by inference, it is, if one does not want many people to respond. If the Government can move the timetable for announcements, they can also move the timetable for consultation. Even with the best will in the world, postmasters will not be able to fulfil all the requirements of that consultation process.

The hon. Member for Rayleigh (Mr. Francois) suggested something even more sinister. His submission was returned to him labelled “return to sender”. Could it be that the Post Office network consultation response centre is already a covert victim of the closure programme? We can only speculate.

On the consultation response form that one was encouraged to fill in, there are tick boxes. One set of choices says:

“Please cross one box from the following list of options that best describes you.”

The choices include “Individual”, “Individual - Subpostmaster” and “Trade Union”. One of the choices is “Central Government”, so there is nothing to prevent the Government from expressing a view. Indeed, the Post Office seems to expect it. I hope that on consideration of today’s debate, there will be some movement from the Minister that will give us more room for optimism about the Government’s willingness to take seriously the strong and heartfelt opposition to the changes.

As the hon. Member for Tunbridge Wells (Greg Clark) implied, however, it looks as though the process is designed for closures. As with the nuclear consultation, one feels that the outcome has been pre-judged, but this is worse because it has been pre-judged to produce a specific and extraordinarily round figure—2,500 post offices are to shut. In my book, that means that the recommendation is based on one of two possibilities. It could be based on detailed research, which we should be allowed to see, indicating that exactly that number of post offices can be shut without damaging substantially the infrastructure of the post office network and the communities it serves. The only other possibility is that it is an arbitrary figure that has been imposed on us by accountancy-led rather than service-based decision making.

The 2,500 figure is so worrisome that I ask the Minister to explain the rationale behind it either today or by writing to those of us who have contributed to the debate. Within that rationale, I would expect to see some kind of statistical analysis of the likely consequences to turnover in those communities and, even more importantly, a social impact assessment of the figure. While he is at it, he could also explain why it is reasonable for the Post Office to inform right hon. and hon. Members that if we save one post office, another will have to shut. How can that be rational? How can anyone in the business of politics or industry pretend that such an arbitrary restriction is anything other than dogmatic?

The hon. Member for Sittingbourne and Sheppey (Derek Wyatt) said that at the heart of every village there is a cricket square, a primary school and a post office. I would add a church and a pub, both of which deal with spirits in their own way, but there is little doubt that post offices are regarded as being iconic and a reference point for the status of individual settlements. The hon. Member for Orpington (Mr. Horam) pointed out that the communities affected are not always rural. They can be communities in cities, so this is not simply a rural-based concern.

Moving away from any inference of sentimentality, because I do not think that anyone is arguing for the protection of post offices on a sentimental basis, let us consider the alternatives. My hon. friend the Member for Argyll and Bute (Mr. Reid) pointed out that there is money, effort and collective initiative going into and a co-operative movement behind the idea of saving post offices. His example was EnviroKirn, which wants to protect the service as a local community project but has been given only six weeks to submit a business plan. That is just ridiculous. In the closed economic flow systems of small communities, it is obvious to EnviroKirn that it can do something viable to protect the service.

My next question is whether the Minister will reconsider the extraordinarily strict and restrictive room for manoeuvre that has been allowed to those who in all good faith are trying to come up with business solutions to the closure programme. The Post Office should be grabbing those solutions with both hands, not rejecting them as it seems to have done so far. The co-operative idea is almost 200 years old. The concept was initiated by Robert Owen, a son of my constituency, and the tenets that he put forward then would be appropriate for the Post Office to recall and take seriously now.

I also observe that it is hard for people to understand why profitable post offices are being closed. Perhaps the Minister could clarify that.

The hon. Member for Mid-Worcestershire said that pensioners are being told that since they can travel for nothing, they can go to the next place with a post office if there is no chance of having one in their own community. That works only if the value of a pensioner’s time is discounted to zero. Subscribing even a minimum wage to an elderly pensioner and assuming that his wife comes along for free as a volunteer puts tens of pounds on to the cost of visiting a post office. This is no moot point. It is a practical point that relates to respecting individuals who have time on their hands but who, because they have spent a lifetime in work, now feel that their local community services could reasonably be entrusted to the Government’s political direction.

I can give two examples of worrisome developments in the implementation of the closure programme. Llandinam, which is a lovely small community in my constituency, is blessed with an active sub-postmaster who extended a small shop into a general store and is now worried that his investment could be wasted if the store is closed. What certainty can people like him who have invested in good faith have that their money has not been wasted and that the needs of their community and their business needs are being taken into account?

Then there is the case of Foel post office, which is even more of a concern. In June 2006, the Post Office stated in a letter:

“I can confirm that it is our future intention to retain Post Office facilities at Foel Post Office Branch.”

Nothing could be clearer than that, but, in response to concerns raised by the proprietor, Mrs. Hamilton, I received a letter that states:

“Contact has been maintained with Mrs Hamilton via telephone calls to discuss her application and we are currently awaiting documents to progress the application. However, Post Office Ltd does advise prospective subpostmasters to exercise caution and prudence until the full details of our plans are known.”

How can there be such a volte-face in less than 18 months, while at the same time sub-postmasters are expected to act with professionalism and to trust the integrity of the Post Office? Investments of real money and real time were made between those two letters, and Mrs. Hamilton made a career decision to throw her heart and soul into the facility. Now she lives with uncertainty, and that harms the prospects of her developing her business in the short term.

We have heard many other examples. I shall provide no more, as the hon. Members for Eddisbury (Mr. O'Brien), for Hove (Ms Barlow) and for Dumfries and Galloway (Mr. Brown) all had similar stories to tell. This debate is a clarion call from those of us who really care about post office services and an appeal to the Government to think again.

Let me conclude with a few suggestions about the way forward. First, we need strategy not tactics. In the absence of clearly defined, logical data, the 2,500 closures programme seems more like a tactical move than a strategic one, at least at present. We need clarity about the social consequences of closures, and about the practical risk of turning thriving local communities into dormitory villages for larger towns perhaps 10 or 15 miles away.

We also need to consider the potential that the Government have to be proactive and to reinstitute several services previously provided by post offices but now removed. Why is it so hard, for example, to follow through the proposal by some to have a basic bank account in the form of the post office card account? As the hon. Member for Angus pointed out, two thirds of his communities have post offices but only one tenth have banks. Why is it so difficult to reinstitute some of the paperwork that increasingly is being replaced by the internet? People are willing to pay a little more for the human service that they get in post offices. Is it really wise to deny them that free choice?

Fundamentally, we need creative solutions. Once again, I suggest that rather than asking which post offices are to close, the strategic question should be what we can do together—Government, Post Office and local communities—to maintain the post offices that we care so much about.

The right hon. Member for North-West Hampshire (Sir George Young) cited Beeching. There is a risk that the decline in our post office services will be as ignominious as the decline in our rail services. As with Beeching’s cuts, it will be hard to reinstate them once they have gone. I am hoping that we can have a serious debate stretching from Basingstoke to Beverley, and from the Labour party to the Liberal Democrats, the Conservatives and all points in between to ensure that we make the right decision for the country rather than an expedient decision for the Treasury.

It is not too late to do those things and to think about potential funding solutions that will interrelate with the debate about the future of the Royal Mail. Perhaps we need to surcharge the private competitors in the business for the universal service obligation and use some of that hypothecated income towards protecting the Post Office. Perhaps we need to look at stamp revenue and other creative solutions within the postal system and see whether there is a way that we can continue to support this social service. Whatever the outcome, we cannot afford to be tribal about it, and we certainly cannot be process-led. We must be outcomes-led.

We need an honest debate and I look forward to what I believe will be a considered response by the Minister. The Liberal Democrats and I will participate, and I suspect that the Conservatives will participate, too, if given the chance. However, without candour, we will let down the people whom we represent, and the Government will fail to show leadership.

I ask the Minister to respond to the questions that other hon. Members and I have raised. I hope that this is the beginning of a sensible dialogue that will slow down and stall the closure programme. In the absence of such hesitation by the Government, I fear that common sense will also have been lost in the post.

I congratulate my hon. Friend the Member for Mid-Worcestershire (Peter Luff) on his introduction to the debate but, more importantly, I congratulate him and his Select Committee on the document that they produced. It is thorough, comprehensive and thoughtful, and it merits reading right the way through. I hope that those who spoke today have taken advantage of the chance to do that. I congratulate my hon. Friend not just on the report but more generally on the way in which he leads his Committee and the thoroughness with which it looks at so many of the difficult and important issues that we are facing.

We have heard in the debate just how much post offices matter to Members on both sides of the House. Strong constituency representations have been brought to bear, and we even had three Government Parliamentary Private Secretaries speak who were unable to find a single word of praise for the process. I hope that the Minister will reflect on that. We now have a new Prime Minister, a new Secretary of State, a newly named Department and a new Minister, but, sadly, the same old policy. Postman Jim has given way to the aptly named Postman Pat, but, up and down the country, Mrs. Gogginses in their post office are in despair because the man whom they thought would stand up for them and look after their interests is the very man who is letting them down.

I hope that the Minister will acknowledge the clear message from all colleagues that the closure programme threatens to do lasting damage to communities. Instead, we should be investing in post offices and allowing them to grow.

At the heart of this debate is a misguided and flawed policy. The Government should be determined to invest in the infrastructure of our post office network, and additional services should be offered, which is what sub-postmasters tell us they want. I have never met a sub-postmaster who said they wanted to depend on subsidy. They all say that they want to offer more services, bring in more customers, and depend on business, but they are being denied that opportunity.

We should be doing more to offer local government services and national Government services through those post offices, which could become a hub for members of the community to access those services. They should be allowed to work with carriers other than the Royal Mail. In the 21st century, they should be freed up, rather than tied down, but the Minister has refused to allow that. We should actively explore the concept put forward by the National Federation of SubPostmasters of developing banking services.

We have ended up with a proposal to close 2,500 post offices. Hon. Members on both sides of the House have said that they simply do not know how that figure has been arrived at. The hon. Member for Montgomeryshire (Lembit Öpik) said that it might have been accountancy-led, but the reality is that it was politically-led. It is the number of closures that the Government thought they could get away with, so it is not about what is right, or how big the network should be. They thought that they could close that number, and that by parcelling them into small chunks they could get those closures through the system.

At the end of the process, the Minister and his colleagues will have supervised the closure of one third of the network since Labour came to power 10 years ago. The number of sub-post offices will have fallen from 18,000 to just 12,000. That is to his shame, and he and his colleagues who have held that brief have witnessed that decline. There has never been a time when post offices have closed at such a rate.

Hon. Members have expressed a number of genuine and realistic concerns, and have talked with passion about the nature of the consultation process. It is too short, and the Minister should tell us today that he will increase it from six weeks to 12. Cabinet Office guidelines say that it should be 12 weeks, but he has chosen to ignore those guidelines, although he told me this week in a parliamentary answer that those same guidelines dictate that we should stop the process during purdah in the local government elections. Why does he choose to accept Cabinet Office guidelines when it is to his advantage, and to ignore them when it is politically expedient to do so?

We have heard from many hon. Members that the access criteria are fundamentally flawed. Distances may look fine on a map, but do not take account of topography. Hon. Member after hon. Member spoke about hills that their constituents will be expected to climb. With the proposed closure of Town Row post office in my constituency, people will have to climb a narrow, steep hill, which no elderly person could possibly be expected to climb, to get to the next nearest post office. Such matters do not seem to have been taken into account, nor has the availability of public transport. The hon. Member for Hove (Ms Barlow) told us about planned huge housing developments that have not been taken into account in the access criteria process.

We have ended up with a process that is setting community against community. If someone argues for the preservation of their post office, they know that another community will take its place on the closure list. We cannot argue the absolute case for preserving a post office because the closure criteria have been wrong or misread. We know that if one is saved, another will have to go. That is what colleagues have found most disturbing and unacceptable.

Another issue throughout the debate is the concept of closing profitable post offices. I think there is a misunderstanding at the heart of that. We were told that the process covered loss-making post offices, but in fact it is about reducing the cost to the Post Office of running the network. We know—the hon. Member for Sittingbourne and Sheppey (Derek Wyatt) raised this—that the way in which sub-postmasters are paid partly relates to the amount of business. The more business they do, the more they cost the Post Office to transact it, and there we have it.

The solution is simple. The system would work beautifully if it were not for the wretched customers using post office services. The easiest solution is to close the busy ones, because that provides the biggest savings in transaction costs, and the network will work smoothly. But that is not what the process should be about. It should be about looking at marginal post offices, and encouraging the busiest and most profitable ones to continue.

My right hon. Friend the Member for North-West Hampshire (Sir George Young) rightly said that the one thing that we should be able to expect in this debate is absolute clarity about how much is being saved with each proposed closure. We could then look to the parish or district council or somewhere else to try to obtain funding, but until we are given those figures, we simply do not know how much will be expected to be raised. Perhaps the Minister will confirm that the post office network is losing £4 million a week—approximately £200 million a year. He said that the Government’s network programme is putting in £160 million, so is it right to assume that we are trying to save £40 million in the process? If that is divided by 2,500, £16,000 per post office will be saved. Are we in the right ball park in saying that?

I hope that as a result of this debate and the concerns that have been expressed, the Minister will instruct the Post Office to explain how much it expects to save from the closure of each post office, so that we can consider how that shortfall can be made up. It is clear that what matters is not the network’s strategy, but geography. If a post office is in the wrong place, it must close. It is almost a Stalinist approach. The Prime Minister has moved from being Stalin to being Mr. Bean, and Postman Pat has become Stalin in his place.

Some postmasters run incredibly successful businesses, and have spent years investing their savings and building up those businesses, but someone can come along and, out of the blue, tell them that they will be closed down simply because they are in the wrong geographical location. We need a better and more thorough way of dealing with the matter, and only the Minister can make that happen.

We are seeing a gradual whittling down of both the Post Office and its parent company, Royal Mail Group. The problem is not just post office closures. We are seeing the end of Sunday collections, the reduction, and in some areas the extinction, of morning deliveries, the end of postbus services throughout the country, and the suggestion that two hours of outreach services are an adequate replacement for a six-day-a-week post office. As the hon. Member for Sittingbourne and Sheppey said, Crown post offices are being moved into inappropriate, unsuitable locations where people with buggies, pushchairs or wheelchairs simply cannot get to the counters.

There is something perverse about a bonus system for Post Office managers— some are extremely able and outstandingly good business people—based on their success in dismantling a much loved national institution rather than on their success in building it up and making it a viable business for the 21st century.

I mentioned W.H. Smith Royal Mail’s management is introducing commercial practices. Is it the hon. Gentleman’s party’s policy to go the whole hog and put it in the private sector?

Something we need to do at an early stage is to separate the Royal Mail and Post Office businesses. There should be much greater clarity about who does what. Some of the decisions are being made because of problems facing Royal Mail, and it is making up the shortfall in its funds by going through the process. That does not mean that Royal Mail should be in the private sector or the public sector, but there is confusion about how those businesses are run at the moment. My hon. Friend and neighbour, the Member for Tunbridge Wells (Greg Clark), brought that up particularly clearly when he described what is happening with the St. John’s road post office.

If someone is building up a business based on internet services, but is finding that that business will be more difficult because the post office he uses is being closed, Royal Mail may go to him and say that it will collect his packages every day, and give him a lower price than what the sub-postmaster would legally have been able to offer because postal prices for him are controlled, but Royal Mail can offer discounts. We could be in the absurd situation of Royal Mail undercutting post offices and offering prices that post offices could not legally offer.

The Government set the framework, put the financial package in place, and chose to spread the social network package more thinly, as my hon. Friend the Member for Beverley and Holderness (Mr. Stuart) said. The Government restricted the offering of new services, set the number of closures and have been responsible for every element of the package that the Post Office has had to put in place—they set the access criteria and everything else. Therefore, people who are unhappy have no one else to blame.

At the end of the day, the Government’s policy is to manage the decline of the post office network, but they have failed to understand the wider nature of the programme. The post office is not only a business; it is part of the social fabric of our communities and of the social network. If someone does not come in to collect their pension, the sub-postmaster will be the first to notice and raise the alarm. The programme has lost sight of the wider value of post offices to too many communities, and they are seen only in terms of their economic role.

The Minister will have seen that there is no support for the programme across the House. We have seen a significant amount of anger in the debate, but that will be doubled if people end up feeling that the consultation programme is just a sham. If at the end of the consultation the Government turn round and say, “We have consulted, we have spent six weeks on it, but we will simply go ahead as we planned and close every single post office on our list,” people will rightly feel that the programme was a sham and it should be exposed as such.

The Post Office cannot halt the programme—only the Minister can. He should go back to the drawing board, think again, create a better long-term vision for the Post Office, and bring more business into the unit, and not simply manage the decline. If he does not do those things, the lasting legacy of his time in office will be the irretrievable loss of services to our communities throughout the country.

Let me begin by acknowledging the strength of feeling on this issue. I have been the Minister responsible for this difficult issue for some months and I can inform hon. and right hon. Members that I am aware of their concerns and those of their constituents. For that reason, it is right, despite the concerns that have been expressed, to debate the matter at length. I thank the hon. Member for Mid-Worcestershire (Peter Luff) and the Select Committee on Trade and Industry for the constructive way in which they have engaged in the debate on what is a difficult issue.

In fact, there has been more than one iteration of the matter. We have had the report, the Government response, another report, a further Government response, and so on. The background to the Committee’s work was not blanket opposition to the Government’s proposals or opposition to the need for any restructuring of the network. The Committee stated:

“Overall, in the face of the loss of so much business, the programme is necessary.”

That view was echoed by George Thomson, the general secretary of the National Federation of SubPostmasters, who said that the closures were “regrettable” but

“necessary to ensure the remaining post offices are able to thrive in the future.”

I shall come to some of the individual points that have been made, but I would like to set out some of the context in which the decision was taken. As has been said, the May announcements were that there would be up to 2,500 post office closures; sub-postmasters leaving the network as part of the programme would be compensated for their service; alongside the closures there would be 500 new outreach services; Government funding for social network will continue to at least 2011; and that there would be new access criteria.

The Minister just said “up to 2,500”, but that figure seems to have become set. Will the Minister clarify that matter? Is it possible that there will be fewer than 2,500 closures?

There has been a lot of talk about the figure in the debate. The figure is derived from our—the Government and the post office network— assessment of the level necessary, with the social network payment, to put the network on a stable footing. As the Chairman of the Committee said, some variance is possible, but 2,500 is around the number that ought to be closed to give the network the level of stability I mentioned.

I urge caution on hon. Members who would say that a particular post office is profitable. There are two factors to take into account when assessing the profitability of a particular post office. First, we must consider the business done in a post office and the payment from the Post Office directly into that branch. Secondly, we must consider the central support costs from the Post Office to a branch. The costs of any particular branch are shared between the branch and the post office network. On that basis, three out of four post offices are not profitable. I therefore urge caution against claiming that particular branches are profitable. As my hon. Friend the Member for Dumfries and Galloway (Mr. Brown) said, busy does not always mean profitable.

I thank the Minister for giving way during an important aspect of his presentation. I have not been made aware that what he said has been presented in evidence or in a context in which we could test it. It is important that a Minister has made such a statement to the House, but given that the closures are in the end to do with individual post offices and businesses, it would be helpful if we had his remarks laid out in evidence. At the moment, we can go on only what the people we meet say, and they are the people who run the businesses.

It would be difficult for an individual sub-postmaster to see the full picture because central costs must also be taken into account. My point is that one must put the two things I mentioned together to make such an assessment. Hon. Members have spoken about individual post offices in their constituencies, but perhaps they would understand if I am reluctant today to comment on those branches—I would like to say something about the broader picture.

I must reflect on what the Minister just said. We might close post offices, but central costs could remain the same. What assurance can the Minister give the House and the Committee that central costs will be reduced at least in proportion to the branch closures? Otherwise, we would spread the same costs among fewer post offices, and the argument for further closures will increase rather than diminish.

The central costs will be reduced as a result of the programme. We shall not have the same central costs for a little under 12,000 branches as we would for the 14,000 we have at the moment.

I would like to make a little progress. I have been asked a lot of questions and I should like to answer them.

The overall record of the branches has been in the public domain for some time, but I shall briefly reiterate it. We have 800 post offices that serve fewer than 16 customers per week. In those offices, the subsidy per transaction is around £17. We have 1,600 offices that serve fewer than 20 customers per day—the subsidy per transaction in those offices is £8. There are around 1,000 sub-post offices in competition with six or more branches within 1 mile, and customer numbers have shrunk by around 4 million per week in recent years. That picture provides a significant challenge for the post office network, and those statistics give some of the background information and reasons why we had to come to our decision.

The other background factor is lifestyle change. My hon. Friend the Member for Dumfries and Galloway referred to people getting their pension paid into a bank account. Some eight out of 10 pensioners now choose to do so, even though the Post Office card account option is open to them. Among new retirees, the figure is nine out of 10. People are making more transactions online. We put the capacity to arrange car tax online recently, and use of the facility increased from around 0.5 million people per month to 1 million per month in the first six months of this year. Almost half of those people use the website outside nine-to-five office hours. There is an attraction in that kind of service being available. I do not believe that any Government should respond to how people do transactions in other spheres of their life by refusing to do so in the public sphere.

Are we driven by accountancy, commercial factors and so on? No, we are not. That is why a subsidy of £150 million is going into the network. We recognise the community value of post offices and the public concern to keep as many as we can, but even with £150 million a year we cannot sustain a network of the current size. I assure hon. Members that the Government do not view this as a purely commercial network. That is why we have introduced that subsidy and guaranteed it over the coming years.

We Conservatives are not suggesting that Ministers should bury their heads in the sand and ignore changes. However, I should like to say, as other hon. Members have, that if the Post Office could run full banking facilities, two thirds of people in rural communities, instead of one in 10 people, would have access to their banks and the Minister would be both living with the modern world and providing the outreach that only the Post Office can do. We are looking to get measures to make the Post Office really work in the 21st century from a Minister who will, hopefully, be visionary in his speech as he goes on.

A number of banks already have an arrangement with the Post Office for banking transactions to be carried out. We work with the Post Office management, which is doing a good job—perhaps a better job than in the past, as the Trade and Industry Committee acknowledges—in coming forward with new commercial ideas.

The broadband service was launched recently and we know about the car insurance and foreign exchange, and so on. Topically, the Post Office has recently launched a secure Christmas prepayment scheme: not for this Christmas, but for next year, in time for Christmas 2008. We have to support those good, imaginative ideas, because the future is not about turning the clock back and stopping all the changes that we have made, with benefits payments, online services, and so on, and reversing them. I do not believe in doing so and I am not sure that any party would propose that. The future has to be about finding new reasons to bring people through the door.

Even after the closures have taken place, we will still have a network that is bigger than all the banks and about three times the size of the five biggest supermarket chains put together. So we will still have something with significant reach throughout the country in both urban and rural communities.

I should like, in the time available to me, to attempt to answer some of the specific questions. The hon. Member for Mid-Worcestershire asked me about state aid approval. I am pleased to tell him that that has been given. The European Commission released a statement today, making it clear that approval has been given on the part of the public funding package for the Post Office that requires state aid approval. The Competition Commissioner, Neelie Kroes said:

“This will enable the network to continue to provide those services”—

that is, Post Office services—

“under the new terms defined by the Government.”

I want to bring the Committee up to date with how the Post Office is dealing with the particularly controversial individual decisions relating to constituencies. As hon. Members know, Postwatch is involved throughout the process from the pre-consultation period. The process already had an appeal mechanism where Postwatch and Post Office Ltd could not agree whether the process had been applied properly in respect of an individual branch. Post Office Ltd announced yesterday that it will add a new stage to that appeal process so that in individual circumstances where Postwatch and Post Office Ltd fail to agree locally, then nationally and subsequently at a senior level, involving the chief executive of Post Office Ltd and the head of Postwatch, an additional level will be added and Allan Leighton, the chairman of Royal Mail Group, will take a view on the final decision. I hope that the fact that the chairman of Royal Mail Group himself will take the final decision gives hon. Members some confidence in respect of particularly controversial decisions where Postwatch and Post Office Ltd cannot agree that the process has been properly followed.

Postwatch will become part of the National Consumer Council in October 2008, but the team working on this issue will carry through to the end of the process. I understand the hon. Gentleman’s point about continuity in this process.

In Kent, 58 post offices are earmarked for closure. Suppose that 20 of those were in this category and were reprieved: what would be the consequences of that? Given that we would fall short of the target by 20, would there then be another set of post offices recommended for closure or would we get away with 38?

I hope that the hon. Gentleman does not mind if I am not drawn into that kind of calculation, because we could go round the room. I stress that this part of the process is for post offices in respect of which Postwatch and Post Office Ltd fail to agree that the process has been properly followed throughout.

I want to talk a little bit about outreach, because hon. Members mentioned it. I have visited the outreach pilot services in the constituency of my hon. Friend the Member for Dumfries and Galloway, who made an important point. I accept that, sometimes, this process will be controversial at the beginning, but there have been a lot of calls in this debate for imaginative thinking. Outreach gives an opportunity for imaginative thinking, whether in respect of shared services with other organisations in a local community, of the kind that have been called for, or a mobile post office. Perhaps services will be more part-time than those currently in place, but all the same it gives an opportunity for a post office service at a time when it is more predictable that it will be busy—some days are busier than others in local communities—and offers the opportunity for a service to continue in some way. I appreciate the concerns about this matter, but alongside the 2,500 closures overall that have been announced, there is a plan for 500 such services throughout the country.

I should like to correct the impression that outreach services are available only in the 38 districts that fall below the national criteria for coverage by the Post Office. That is not so. In fact, under the local plans announced so far, some 99 proposals for outreach services have already been mentioned.

I am glad to hear the Minister say that, but I was told specifically by the Post Office, when I raised the matter in relation to my constituency, that it was happening only in the excepted areas. If that is not so, the Post Office has to make it clear.

As I said, 99 outreach services have already been announced and many of the local area plans that have been announced do not cover areas that include the 38 postcode districts in the country that do not meet the minimum criteria.

I am most grateful to the Minister for giving way to me for a second time. I have tried to explain the problem with the data and the planning in respect of outreach. For instance, the outreach programme is now being governed from Whitchurch in Shropshire. However, that area is not even working under the process at the moment.

Of course, the Cheshire post offices that are negotiating outreach do not want just two hours on a Wednesday afternoon, which is all they are being offered, because nobody is around then. Moreover, they are concerned that they cannot predict more than three months ahead, because there will be a quarterly review of the outreach arrangements. The postmaster in charge of Whitchurch has no incentive whatever to keep the post offices in Cheshire open, because he would love people to travel to Whitchurch in Shropshire, which is not under threat of closure. There is, at the moment, a deep distrust—let alone dysfunction.

I understand what the hon. Gentleman is saying. However, let us reflect on what my hon. Friend the Member for Dumfries and Galloway said. Where this process has been controversial at the beginning and has been introduced, over time it has not just become more accepted, but genuine support has emerged for it.

I would like to answer the question about 12 weeks and six weeks in respect of the consultation, which was not just raised in today’s debate, but pushed quite vociferously by the Trade and Industry Committee. We had to take a view, balancing the uncertainty that hangs over the network during the process with the desire to consult. Before we get to the six-week public consultation process, there is a process through which Post Office Ltd speaks to sub-postmasters in the area, the local authority, Postwatch and so on. Post Office Ltd has indicated to me that, in that process, the plans change on average—I stress that it is on average, not necessarily in every area—by about 15 per cent., so we are talking about roughly one in six proposals.

Again, I urge hon. Members to be cautious if they see a first cut of a proposal for an area before it has gone through that process, because the experience so far is that the pre-consultation phase results in some change to initial plans. That is some evidence that the process is taken seriously by the Post Office. I am referring to the way in which it is engaging with those very important local voices.

The National Federation of SubPostmasters said:

“To minimise distress amongst sub postmasters, it is important that the local consultation process is carried out sensitively and speedily. Prolonging decision making regarding sub post office closures will blight the business as well as creating a stressful environment for sub postmasters”.

We have taken those factors into account. That is how we reached the decision about six weeks.

Let me deal with some of the specific issues raised. The Chairman of the Select Committee, the hon. Member for Mid-Worcestershire, asked whether replies—

I have given way already to the hon. Gentleman. I would like to make progress.

The Chairman of the Select Committee asked whether replies from Post Office Ltd could be placed in the Library. That is a perfectly good idea and we should do that. I hope that I have answered his question about the Postwatch team. My hon. Friend the Member for Hove (Ms Barlow) asked about local economic factors. I would like to assure her that those are taken into account in the process.

The Chairman of the Select Committee asked about the dates of the final decisions next month. I can tell hon. Members that the decisions on Kent are expected to be announced on 6 December; the decisions on the east midlands on 11 December; the decisions on East Yorkshire and north Lincolnshire on 13 December; and the decisions on east Essex and Suffolk also on 13 December.

Several hon. Members have asked whether community organisations or county or parish councils could step in and support post offices under threat. Is that possible?

I would encourage Post Office Ltd to take very seriously any suggestion or proposal such as that, but it will bear in mind not just the individual costs of the branch, but the central network costs. I think that it will want to take both into account if such a proposal is made.

The Post Office is like any other national organisation that has headquarters and branches. It is perfectly feasible to work out these costs; it is not an impossible exercise. Can the Minister assure us that the Post Office will release to local authorities the information that they need to make a relevant bid that means that the Post Office is not out of pocket at the end of the day?

I do not want to give the right hon. Gentleman that assurance, because issues of commercial confidentiality are in play. However, I do think that Post Office Ltd should take seriously and engage seriously with any organisation that thinks that it has a viable proposal.

I hope that I have managed to cover at least some of the issues raised.

Can the Minister explain how anyone can bid to help to run a post office if the Post Office will not release the figures for how much it wants?

I have spoken to Post Office Ltd about the issue of transparency. We should have as much transparency as we can in the debate and I have asked Post Office Ltd to look into the issue. I do not want to be specific today about exactly what it can publish and what it cannot, but I hope that it will look into the issue, because I understand the desire for transparency in the process.

I have answered as many of the points as I can today. I appreciate that this is a difficult process and that it causes concern in local communities, but I believe that it will give us a stable network.

It being fifteen minutes to Six o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.