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Mrs. Maria Fyfe (Glasgow, Maryhill): One obvious point strikes me. Germany is not similar to the United Kingdom because large parts of the UK are rural, especially the highlands and islands, where populations are small and well spread out. That does not apply to Germany, so it is not just a case of x number of post offices for y number of people.

Mrs. Browning: I cannot explain why that was the answer that was given by someone with expertise on the subject to the Select Committee yesterday, but the point that the hon. Lady seeks to make is important. In the White Paper, the Government have promised that they will set standards on the geographic spread, so that people, wherever they live, can have access to a post office. It will be interesting to hear from the Secretary of State how, if there is a significant drop in revenue, with the attendant post office closures, those standards will be met. How will people be guaranteed access to a post office within a minimum distance if the network is to contract?

Will the Secretary of State guarantee that the present system of paying benefits will be retained until 2003 and that there will be no underhand schemes between now and then to persuade people to take their benefits by automated credit transfer? Clearly, post offices are worried about what will happen to them in 2003, but if, over the next three years, their position is undermined further by a Department of Social Security campaign to persuade more and more people who would not previously have thought of doing so to go for ACT, their concern will be exacerbated.

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Last week, we gave support to the Secretary of State. It was qualified support. We have come back only a week later to raise the issue of the Post Office network because we are extremely concerned about the future of our post offices.

We are not the only ones. I quote from a statement by the National Federation of Sub-Postmasters. It said in June, before the details of the White Paper were known to the House:

it was, of course, referring to the decision to abandon the Horizon project. It goes on to say that local post office closures will result

    "in a loss to those beneficiaries who want to use post office services, including the elderly, infirm and those without transport, people who are comfortable with transacting their business in the post office environment."

I understand that, in his evidence to the Select Committee yesterday, the Secretary of State prayed in aid his experience of small post offices. He said that he would like to use his post office as a bank and perhaps buy a newspaper and a tin of beans at the same time. Whatever solution he comes up with--I hope that he will--to save our post offices, a tin of beans and a newspaper will not make enough difference to make up for a drop in revenue of 30 per cent.

Mr. Chidgey: Or knickers.

Mrs. Browning: Indeed. The Secretary of State knows that he has our support in releasing Royal Mail to participate in the global communications market. Of course, we are disappointed that he has decided to hold on to the shares, but as I have said, we anticipate that that will change.

It is not always recognised that, within what people euphemistically call the Post Office, there are really two distinct entities. One is Royal Mail; the other is the post office network under Post Office Counters. While the Royal Mail is given new opportunities to expand, in the White Paper, one cannot say the same of the post office network, which is primarily a co-operative of independent businesses, dependent on Post Office Counters to negotiate contracts, particularly with the Government.

If the post office network were a company, the White Paper's proposals on it would be described as a downsizing exercise. Both the Opposition and the post offices look to the Secretary of State to identify clearly why they should look forward to 2003 with optimism and hope--not the concern that they clearly feel about the fact that the White Paper threatens at least 50 per cent. of the existing Post Office network. I hope that we can rely on the Secretary of State to give some straight answers to what have been some straight questions.

4.45 pm

The Secretary of State for Trade and Industry (Mr. Stephen Byers): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

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    welcomes the slashing of the EFL which contrasts with the Tory use of it as a variable tax on Post Office users; welcomes for the first time the clear commitment of the Government to a network throughout the United Kingdom of post offices which will be automated; welcomes the fact that for the first time the Universal Service Obligation will be guaranteed in legislation; and notes that the Opposition believes in immediate privatisation of the Post Office, showing they are still an ideologically-driven party, not one intent on improving services to the British public."

I want to use the opportunity of the debate to address the concerns that have been expressed by the hon. Member for Tiverton and Honiton (Mrs. Browning) about the future of the post office network. The Government believe that the measures that result from the White Paper will safeguard the position of the network by putting in place a mechanism that was not there before--and was one of the reasons why 3,500 rural post offices closed during the lifetime of the last Conservative Government. I should also like to explain why we have rejected the benefits payment card.

I am pleased that the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who was responsible for signing the contract on the benefits payment card, is in the Chamber. I hope that he will catch your eye, Mr. Deputy Speaker, because he needs to answer many questions about the difficulties that were created by the contract that he entered into as Secretary of State for Social Security.

The White Paper that we presented to the House last week contains a vision of the Post Office in the 21st century, but it does not address the concerns or needs just of the Post Office itself--it examines the specific needs of the post office network because we value that network. It is the single biggest retail network in the whole of Europe.

Because of that, great strengths attach to the network. We want to build on and enhance those, although not in the old way--the payment of benefits--because, to be honest, that is not where the future of the network lies. It lies in people such as me who are not in receipt of benefits going in, getting cash and spending money on other goods in the post office. I will not be tempted to mention what.

Mr. David Heath (Somerton and Frome): Will the right hon. Gentleman explain what the position is in relation to Crown post offices, particularly those in smaller market towns? A few years ago, we had a disastrous conversion programme. It was stopped about 18 months ago; since then, conversions have not happened. If I read the White Paper correctly, those conversions will restart. Will he assure me that, if that is the case, the consultation will be much more effective than that two or three years ago, when it seems that when the consultation started, everyone said, "No, that is not what we want in the local community", but the Post Office went ahead anyway.

Mr. Byers: The White Paper makes it clear that we expect 15 per cent. of all transactions through the network to be conducted in Crown post offices. I am more than happy to give an assurance that we shall have an effective consultation on that issue, to ensure that local communities and local interests are represented. I also take the point that in the past, under the previous Government, that did not happen.

The previous Government put a hold on further development of the Crown network, whereas we want to give new life to Crown post offices. We believe that,

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by having 15 per cent. of the network's volume going through Crown post offices, we shall be able to do precisely that. When we come to agree the five-year strategic plan with the Post Office--I shall say a little more about that in a moment--that is one of the issues that will have to be addressed before we agree to the plan's detail.

Given that the White Paper touched on some matters that are, politically and commercially, extremely sensitive and controversial, I was pleased that there was a broad welcome for the proposals that it contained. Yesterday, as part of the Post Office's annual report, the Post Office chairman said:

The Post Office chairman, therefore, has said that he welcomes the broad thrust of White Paper. He does so because it brings good news for customers, the Post Office, people who work for the Post Office, and the network.

Mr. Patrick McLoughlin (West Derbyshire): Last week, when the Secretary of State made his statement, I asked him about the payments received by sub-post offices. A few minutes ago, he said that 3,500 sub-post offices have closed in the past 20 years--under the previous Government--which works out at approximately 175 closures annually. Is he aware that in my constituency in the past 18 months, nine rural post offices have closed? Does he agree that one reason why they have closed is that the payment they receive from the Post Office is under ever greater pressure? Will he give an assurance that, as a result of his announcements today, the Post Office will continue to offer reasonable pay rates to those who provide an excellent service to communities in very sparsely populated rural areas--where there is no commercial alternative, and not many activities into which they might diversify?

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