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Post Office Network

Volume 518: debated on Thursday 18 November 2010

The Government set out their policy for the future of the post office network in a statement entitled “Securing the Post Office Network in the Digital Age” published on 9 November. Copies of the statement are available in the Libraries of the House and are accessible on the Department for Business, Innovation and Skills website.

I am sure that the whole House will welcome the arrangements between the Royal Bank of Scotland and the Post Office to enhance the capability of post offices, the vast majority of which, of course, are run by individuals as part of a wider business. What further plans does my hon. Friend have to enhance the post office network, rather than close it, as the Labour party did when in government?

My hon. Friend is right to welcome the deal between RBS and the post office network. It means that nearly 80% of current accounts from the bank can now be accessed through the network, and we hope that that will be increased in due course. That is just one of the many policies set out in our policy framework so that we can ensure that the post office network does not suffer the major closure programmes we saw under the Labour party. I am sure that he will welcome the statement we made.

Does the Minister understand people’s concern that he has not chosen to go ahead with a separate Post Office bank? Will he say how he intends to ensure that small sub-post offices in villages will be able to offer a wider range of services to our constituents?

We looked in some detail at the case for a state-backed Post Office bank. The cost of a banking licence would have been in the realms of the amount of money we are putting into the post office network to modernise it and to prevent a closure programme. I am sure that the hon. Lady welcomes the £1.34 billion of investment in the post office network. That, along with the policies we set out in our policy statement to get more Government revenue through the post office network, and to tie up arrangements with banks such as RBS and the post office network, is the surest way to ensure that the post offices in the villages she talked about have a long-term viable future.

The Government are keen to promote closer working between post offices and credit unions. Will the Minister seek ways to facilitate robust back-office arrangements between the two, which would be a good and cost-effective way of improving financial inclusion?

I think the hon. Gentleman is quite right to point to the important role that credit unions can play and the potential for work between them and the post office network. As we said in our statement, there are already initiatives and pilots to see whether there is room for expanding the role of partnership work between the post office network and credit unions. I look forward to seeing the results of those pilots. The points made about a longer-term relationship are well made, and we are certainly looking at that.

There is real disappointment in small rural communities such as the ones that I serve at the Government’s announcement on the Post Office bank. What reassurance can the Minister give me that services through small local post offices will be maintained, or preferably improved?

I am not sure whether the hon. Gentleman has read our Post Office policy statement. I would have thought that he welcomed the fact that the measures we are taking are encouraging banks such as RBS to make their accounts available through the post office network in the towns and villages that he represents. I think that there is a much more positive future than under the previous Government and that is implicit in his question.