7. What progress he has made on awarding the DVLA counter services contract; and if he will make a statement. (130588)

On 13 November, I announced that the preferred bidder for the Driver and Vehicle Licensing Agency’s counter services contract was Post Office Ltd. We expect the contract to be awarded before Christmas and it will be operational from April 2013. The contract will achieve savings of between £13 million and £15 million each year. The initial contract will run for seven years.

I am grateful to the Secretary of State for that reply. Does he agree that this decision will provide a great boost for many village post offices, such as those in Hambleton, Monk Fryston and Cawood in my constituency, and will help to preserve their long-term viability?

I am grateful to my hon. Friend, who was one of the leading campaigners trying to ensure that the contract was awarded to the Post Office. I am pleased that it managed to win the contract. It won it in an open competition, which shows that it is able to win contracts from the Government to provide services. The decision is vital for places, including those in my constituency, that rely to a huge extent on their rural post offices.

My right hon. Friend may recall that for a very brief time I was the shadow Department of Trade and Industry spokesman on post offices. The key thing has always been the need for footfall, because without it, as my hon. Friend the Member for Selby and Ainsty (Nigel Adams) said, there is no viability. What increase in footfall does my right hon. Friend estimate will result from this innovative move?

I do remember my hon. Friend’s time as our party’s spokesman on post offices. Indeed, I was the Minister with responsibility for the Post Office at one point in history, so I well appreciate how important post offices are to our rural communities. It is important that they win business, but they have to compete for that business. They have done so very successfully in this case.