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Post Office Services

[Relevant documents: The Eleventh Report from the Trade and Industry Committee, Session 1998-99, on the Horizon Project for Automated Payment of Benefits through Post Offices (HC 530), the Twelfth Report, Session 1998-99, on The 1999 Post Office White Paper (HC 94) and the Government's responses thereto (Session 1999-2000, HC 50).]

Mr. Deputy Speaker (Mr. Michael J. Martin): Madam Speaker has selected the amendment in the name of the Prime Minister.

Mr. Anthony Steen (Totnes): On a point of order, Mr. Deputy Speaker. This is a matter that I think that you will be interested in, and concerned about. I attended a debate in Westminster Hall last Wednesday--and a very good debate it was--on the problems of post offices and post office closures, which concern every hon. Member. It was an interesting debate, to which many hon. Members contributed and the Minister responded with a helpful and concerned speech. All present appreciated his promise to look into various issues.

One sitting day later--Thursday was the only other sitting day since then--the Liberal Democrats have chosen to debate the same subject. Madam Speaker is now responsible for two Chambers, whereas before we had just one. Does she have any control over whether both Chambers debate the same subject at the same time, or whether they debate one subject and another--

Mr. Deputy Speaker: Order. That is not a point of order. The House has decided that the issue is so important that it should be debated again.

Mr. Steen rose--

Mr. Deputy Speaker: Order. It was not a point of order. The hon. Gentleman must be fair. He is eating into time that has been allocated to an Opposition party.

7.15 pm

Dr. Vincent Cable (Twickenham): I beg to move,

In reply to the point of order, you stole my opening lines, Mr. Deputy Speaker. I wanted to acknowledge from the outset that the issue has aroused a great deal of interest in the House. We have had a succession of debates, one of which was held last week. There was another in October, prompted by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), and yet another in July. It is right that the issue should be debated frequently. We are all concerned about it. Every constituency has post office branches under threat. Some 28 million people use the post office system every week, through its branches. It is right that as many hon. Members as possible should

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wish to say something about the issue. Some of the Minister's answers in last week's debate were reassuring, but many of them did not answer the key questions. That is why we have initiated the debate today.

The network has gone through a long process of decline. I am sure that the Minister will reinforce that point. The process did not start two years ago. The branch network has been declining for 20 years, with about 200 closures a year. The tempo seems to have increased recently, going up to 230 or 240 closures a year, but we are dealing with a long-term trend.

Everyone concerned has been alarmed by the impact of the compulsory change to automated credit transfer between 2003 and 2005. The Post Office will then lose the £400 million income that it derives from that service. That is important, because it strikes at the basic revenue stream of the post office network.

The implications were spelled out in the answer to a helpful parliamentary question tabled a few weeks ago by the hon. Member for Birmingham, Erdington (Mr. Corbett), who asked for an estimate of the number of branches in each constituency at which benefits account for more than 40 per cent. of business. That would give a rough approximation of the impact of the change and show how many branches might be expected to close. It is just an approximation, but it is the only one that we have. The figures are instructive, pointing to an enormous cull of post office branches, particularly in inner city and rural areas. Some of the examples are striking. All hon. Members should look at the list to see how their constituencies might be affected.

In the constituencies of the Prime Minister, the Home Secretary, the Secretary of State for Northern Ireland and the Secretary of State for Trade and Industry, two thirds of all branches could be expected to disappear, on this estimate. There is no respect for ideology. The leader of the Conservative party would lose 33 branches and the hon. Member for Bolsover (Mr. Skinner) would lose 37. Some of the worst affected constituencies are represented by my hon. Friends. At the top of the hit list is my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), who would lose 38 branches, but several other Liberal Democrat constituencies would lose well over 30, including Montgomeryshire, Orkney and Shetland and Torridge and West Devon. Most of the rural constituencies in Cornwall, Wales and Scotland would lose well over 20 branches. The impact could be substantial.

The figures may be wrong. I shall be interested to hear the Minister's reaction.

Mr. Richard Livsey (Brecon and Radnorshire): My hon. Friend knows that the constituency of Ceredigion has many post offices that are likely to close. It has been estimated that half the post offices in mid-Wales will close. Will that not be a great deprivation for rural people on low incomes?

Dr. Cable: I apologise to my hon. Friend for missing Brecon and Radnor from the list, as it was mentioned. In Ceredigion, 40 branches are at risk--the second highest number in Britain. Before Ministers get out their atlases to find out where this constituency is--presumably they will have to visit it--they will need answers as to why Government policy on plausible assumptions will lead to the loss of roughly two thirds of post office branches.

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There has been some evidence of panic recently, and the Secretary of State came up with a suggested partial remedy--a system of appeals. I would be interested to know what it amounts to. The proposal has been superimposed on another suggestion--made in the White Paper--that the regulator, when one is established, should set some objective, independent benchmark for deciding when post office branches should remain open or closed. It is important that we understand how this mechanism is to work if we are to understand how these closures, if they take place, are to be managed.

I can visualise a situation where 200 branches are closing a year, or four a week, and where we have a meaningful system of appeals on which judgments are made as to the continuation of the branch in question. However, if 40 branches are closing a week, how will the system handle it? If the branches are simply not viable because of the loss of Post Office income, what is the purpose of the appeal? The principle of an appeals system when the system itself is not financially viable raises all sorts of basic questions.

I have doubts as to the capacity of Post Office Counters, as currently structured and motivated, to handle the system. In July, in an Adjournment debate, I raised the case of one of my constituents who had her business effectively expropriated by Post Office Counters, which closed the branch, with no meaningful appeal. She has lost her money. The branch has reopened down the road, with an inferior service. All that has happened, apparently, is that Post Office Counters has pocketed the franchise fee.

As a result of the debate, the criminal investigation branch of the Post Office has been set upon this postmistress. No charges have been pressed, but there has been a great deal of harassment. When her lawyers asked why this had taken place, they were told that my constituent was being taught a lesson for bringing the matter to Parliament. That is the way some people in the Post Office network are operating.

It is not simply a question of allowing appeals against closures. It is necessary also to have a system by which postmasters and postmistresses are given some security of tenure so that they can continue their business. We need a transparent system in which complaints can be measured, and a Post Office Counters regime which is genuinely entrepreneurial and committed to keeping branches open.

I have cited one example that angered me greatly, but many hon. Members will know of cases of small branches being closed down. The branches are then re-advertised on a part-time basis by Post Office Counters, which makes it clear that there is no prospect of the business being continued.

Mr. Archy Kirkwood (Roxburgh and Berwickshire): Does my hon. Friend accept that it is worse than just a question of financial viability? In my constituency, 58 per cent. of sub-postmasters and sub-postmistresses live on site, and have mortgages and loans that are integral parts of their business. If they lose their businesses, they may also lose their homes.

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