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House of Lords Hansard
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18 October 2006
Volume 685

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asked Her Majesty’s Government:

What plans they have for the future of the post office network; and what assessment they have made of the impact of those plans on the livelihood of sub-postmasters.

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My Lords, the Government have made an unprecedented investment of more than £2 billion since 1999 to help the post office network adapt to the changing needs of customers. But there are further challenges facing the network and the Government are working closely with Post Office Ltd and sub-postmasters to meet them and to provide a long-term, sustainable basis for a national post office network.

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My Lords, I thank my noble friend for that reply. Is he aware that today more than 3,000 sub-postmasters have held a rally, are lobbying Parliament and have presented the largest petition in history, containing more than 4 million signatures, at 10 Downing Street? They have done so because they are very concerned about the future of the Post Office card, about the subsidy to the Post Office coming to an end in 2008, and about the loss of TV licence and vehicle excise licence business. Can my noble friend assure these hard-working men and women that they have a future? Can he tell us what the Government have in mind to preserve rural post offices?

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My Lords, we are indeed aware of the rally. It is important to realise that the sub-postmasters themselves have said that in its present form the network is unsustainable. We are working with them and with Post Office Ltd to produce a network which is sustainable in the future, and we will make an announcement before Christmas.

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My Lords, will the Minister take this opportunity to confirm in one of the Houses of Parliament the comment by the Secretary of State this morning on “Today” that it is accepted by Her Majesty's Government that a subsidy will be required to the post ofice network after 2008? Will he also indicate that when the Government make their Statement to both Houses with regard to the future of the post office network, postponing or abandoning the cancellation of the Post Office card account in 2010 will be on the agenda? Bearing in mind that there are more than 13,000 post offices but Royal Mail’s view is that only 4,000 are required to deliver a proper Royal Mail service, will the Government consider allowing altering the terms of post office licences so that they can deal with mail other than that of the Royal Mail?

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My Lords, the Government recognise the social and economic role that the post office plays, particularly in urban deprived areas and rural areas. We also recognise that there will be post offices that will never be commercially viable but which play an important social and economic role and will require public subsidy in the future. I confirm that no decision has yet been taken about POCA or the replacement after 2010.

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My Lords, will the Minister bear it in mind that it is not just a question of the livelihood of the sub-postmasters and postmistresses? So many thousands of elderly people, particularly in villages, have had their own post office closed a year or two back and now the one in the next village might be closed, and it will be so difficult for them to manage. The fact that post offices cannot now do so many things has surely contributed to their financial difficulties.

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My Lords, as I said, we are very well aware of the social and economic role played by post offices. This is particularly important for elderly people, and we will bear that in mind when looking at this question.

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My Lords, I declare an interest as a member of the Post Office Superannuation Fund. Does the Minister agree—I will tell him if he does not—that in my time as chairman of the Post Office, the Government provided 60 per of its business and that if they go ahead with all their plans, they will be providing 10 per cent? Does he agree with the chairman of the Postal Services Commission that the voice of the public should be heard and that as part of the Government’s belated attempt to introduce some joined-up thinking, there will be consultation with users of post offices to find out what they want, rather than decisions being taken for them without consultation?

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My Lords, the issue of government services gained through the Post Office is key. It is not about one government department trying to get a slightly better service and putting a burden on another one. There are very striking differences in cost between the services provided by the Post Office and other means. For example, it costs nearly £1 to make a payment into a Post Office card account, compared with 1p into a bank account. We have to decide whether this is the best and most effective way of meeting our social obligations. We are of course consulting users throughout the process.

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My Lords, does the Minister agree that the further closure of post offices in rural areas will hit low-income families, pensioners and the unemployed the hardest? What action will the Government take to ensure that the Post Office enters into partnerships with village halls, pubs and churches so that a local service is provided in those areas where it is most needed?

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My Lords, we are very aware that this is not simply a question of bricks and mortar, but one about service to people. That is why we have been pushing the Post Office to look at other ways in which to deliver the same services, such as mobile post vans, delivering more post office services directly to people’s houses and hosting post offices at other businesses, such as pubs, community centres and town halls. As I say, this is not just bricks and mortar but a question of delivering a social service to people, and we are very aware of that point.

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My Lords, will my noble friend consider the “hub and spoke” system that is being thought about, which would answer the problem to which the noble Baroness, Lady Knight, alludes, by ensuring that services in rural areas are provided, albeit on a weekly rather than a daily basis?

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My Lords, the methods that I referred to were, in fact, all on a hub and spoke basis. We have to look very seriously at those kinds of operations, because it is a startling fact that on average fewer than 16 people a week use the 800 smallest rural offices, at a loss of £17 per visit to the taxpayer. We have to consider whether that is a sustainable position and whether there might be more creative ways in which to deal with this social obligation.

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My Lords—

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My Lords, I am sorry but we are well into the 16th minute.