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8.56 pm

Mrs. Diana Organ (Forest of Dean): The Bill has been long awaited. For years, the Post Office had to put up with Tory dither, delay and indecision coupled with continual

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threats to break it up and privatise it. That remains Tory policy. The Post Office was not allowed to prepare for the challenges ahead. Labour, on the other hand, is keeping its manifesto commitment to modernise the Post Office by giving it commercial freedom within a public sector framework.

The Post Office has welcomed our wide-ranging Bill, as have the Communication Workers Union, the Country Landowners Association and Action with Communities in Rural England. There is much in the Bill that will be welcomed by the 29 million people who use the Post Office every week. For the first time, service provision by a nationwide network and a universal service obligation are being enshrined in law. To ensure that that happens, we are introducing a new regulator and the Postal Services Commission to promote consumer interests.

People in rural areas who are concerned by sub-post office closures will be able to call on the regulator to consider the full impact on customers when there is any future closure proposal. The Postal Services Commission will have to have regard for the interests of the disabled, the chronically sick, pensioners, those on low incomes and those who live in rural areas. The Bill gives the Secretary of State the power to direct the Postal Services Commission to impose a licence condition requiring the provision of free postal services to the blind, thus ensuring the continuity of free articles for the blind. All that is to be welcomed.

For the first time, there will be a right to access, with the Government issuing criteria to ensure that everyone may have reasonable access to Post Office Counters services. Individuals will be able to appeal to the regulator on the provision of postal services in their rural areas.

Together with the 250,000 people who have signed petitions highlighting concern about the future of local rural post offices, I hope that the Bill will deliver a framework to ensure the maintenance of a strong post office network. However, I seek some strengthening of that framework. We need to arrest the continuing decline in the number of rural post offices. We must specify what an acceptable network means, and we must safeguard vulnerable post offices that give much to the local community. We need to fund the network, and, as my right hon. Friend the Secretary of State said, that may mean subsidy.

At present, 43 per cent. of rural parishes have no rural post office. The network in rural areas has reduced from 9,700 in 1994 to 8,900 at present. The Tories let the continual fall in the network go on year in and year out. The Labour Government are addressing decline. We need to build up the network. When, as often happens, a post office is linked to a village shop, it is an essential facility offering access to a vast range of services.

Such post offices are fragile. As the 12th report of the Select Committee on Trade and Industry noted:

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Services such as those suggested in the Select Committee report would greatly strengthen the framework outlined in the Bill. I welcome the comments of my right hon. Friend the Secretary of State suggesting that a possible subsidy may be considered in Committee.

We can overcome the vulnerability of post offices through diversity. In Suffolk, one rural post office is situated in a local pub. In Herefordshire and Worcester, 20 sub-post offices are located in village halls. The range of services could be extended. We should allow rural sub-post offices to become the centre for a wide range of services, financial and otherwise.

Why should not rural sub-post offices offer insurance, in addition to the holiday insurance that they are now allowed to offer customers? They could issue smart payment cards and Quantum cards for electricity, gas and water, and mobile phone prepayment cards. They could issue passport forms, vehicle licence forms, motor tax forms and other local services required in rural areas.

I am glad that we will ensure that people can pick up their benefit in cash across a post office counter. The hon. Member for Buckingham (Mr. Bercow) commented on my earlier concerns, but I am now aware of the Government's commitment to that.

We can allow post offices to become future banking centres for rural areas. There are already agency arrangements with the three major banks. That is important, as 91 per cent. of villages have no banking facility.

The report to the British Bankers Association by Elaine Kempson of the university of Bristol showed that 15 per cent. of rural businesses are more than four miles away from a local branch. That creates particular difficulties for small retailers and the self-employed. Furthermore, 15 per cent. of the rural population have no local branch. That is especially difficult for people who are over 80 or disabled, and for women with young children. The report found that agency arrangements with post offices would be acceptable to those groups. That extra business would bring more footfall into rural post offices, giving them greater strength.

The Horizon project to computerise 18,000 post offices by 2001 will give them modern, on-line IT systems and give the network the capacity to re-introduce banking facilities in the rural areas from which banks have withdrawn them.

With my hon. Friend the Member for Stroud (Mr. Drew), I have written to our hon. Friend the Minister, inviting him to Gloucestershire to meet postmasters and discuss the possibility of running a pilot of the Horizon project, to monitor and evaluate the services that it can deliver and see whether it can effectively provide electronic government.

The Bill will allow the Post Office to borrow up to £75 million at commercial rates in each of the next five years. That will give it a vast amount of investment, which is necessary to allow it to compete on a global and national scale. There will be major new business opportunities as e-commerce expands. More and more consumer purchases are made on the internet.

As we move into the realms of mass food retailing through the internet, with Tesco rolling out a nationwide service, there will be huge opportunities for large-scale nationwide distributors. Only Parcelforce can meet that requirement. It is the only carrier with complete coverage across the UK, but it needs the provisions of the Bill to enable it to enter the future market competitively.

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The Bill will provide a framework for modernisation, allow the Post Office to be competitive and remain a world-class service, and give a better deal to consumers in rural areas.

9.4 pm

Mr. Mike Hancock (Portsmouth, South): First, I offer good wishes and congratulations to the hon. Member for Ceredigion (Mr. Thomas) on his excellent maiden speech. I also pay a generous tribute to his predecessor in that constituency.

I am sorry that I cannot do the same for our colleague, the hon. Member for Putney (Mr. Colman). He painted a depressing picture of the postal service in Putney. The only glimmer of hope was that the 29 million other people who use the service every week have a much better service than the inhabitants of Putney.

However, Putney may be where ministerial mail goes. When it leaves Ministers' offices, it hovers for several months over Putney and then descends on the House of Commons. I hope Ministers will not grab that as yet another excuse for the long delays in replying to letters from hon. Members, although I am sure that some of them will enthusiastically grasp at that excuse to defend the indefensible.

My hon. Friend the Member for Twickenham (Dr. Cable) spelt out his strong reservations as to the financial consequences of the measure. The hon. Member for Forest of Dean (Mrs. Organ) mentioned that the £75 million available for borrowing would permit great scope for modernisation and development. Nothing could be further from the truth. One has only to visit one's main sorting office--if one is lucky enough to have one--to find out that the cost of the technology to speed up sorting runs is more than £1 million. It would cost that amount to get new technology into sorting offices--let alone the development and business opportunities outside.

There are several flaws in the Bill. However, all that we have heard from the Conservative Opposition is that they have not learned any lessons. The only alternative that they offer is privatisation. That is where they were going during the previous Parliament, but they backed off. My predecessor as Member of Parliament for Portsmouth, South resigned from the Conservative Government in disgust at the fact that they had backed away from privatisation, but it did not save him his seat.

It has been pointed out that many Tory Members lost their seats at the last election because they stuck rigidly to the line that the Post Office needed to be privatised and they wanted to carry that out. Today, Conservative Members are harking back to what was seen, even at that time, to be a lost cause. The Conservatives backed off then because the public do not want privatisation.

Consumers have not said that they want the wholesale sell-off of the Post Office. The overwhelming majority of people believe that the Post Office offers an excellent service where it is needed. Deliveries are usually on time, although obviously there are occasions when things go wrong. However, as the representative of a large constituency of 89,000 voters, I receive few complaints about the service. I have nothing but high regard for the job done by postal workers in sometimes difficult circumstances. I am proud to be close to the organisation in my city.

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Much has been said about the plight of rural post offices. I draw the attention of hon. Members, once again, to the plight of the urban post office. The distance between the sea and the northern boundary of my constituency is a little more than two miles; from east to west, the distance is probably less than three miles. More than 100,000 people live in that area--89,000 voters. There are 22 sub-post offices, 15 of which would have an even greater cloud looming over them if the changes in the payment system go ahead, and people take them up as the Government will, I am sure, encourage them to do. Why make changes, if they do not actively encourage people to make use of them?

The problem faced by 15 of those 22 sub-post offices is that 50 per cent. of their trade comes from benefit claims. Many have no alternative; they cannot diversify. They have tried to do so, but some businesses have already gone down the tube because supermarkets have expanded.

Banking was offered to post offices--the installation of cash dispensers. A postmaster came to see me last week with a letter about the 3,000 machines that would be available. He and his family have run a post office in the heart of the area for more than 30 years. He applied for that service, but there was no indication of how the choices would be made. Will there be any weighting in favour of the installation of those machines in sub-post offices? Or will it be as predicted by the sub-postmasters, who all believe that the machines will go to the highest bidder, or the one with the greatest number of customers passing through the door--the local supermarket? It would be very difficult for local post offices to compete with the supermarkets.

The closure of any one of those sub-post offices will pose serious problems for many people whose only active meeting of other people, except for the occasional person who knocks at their door, takes place on the journey to that sub-post office. It does not matter that they are not too far from neighbours, and probably relatives. For many people, that journey to the post office is their trip to the outside world. On the way they may visit the library or pay other bills, but the post office is the main reason that many of them still make a journey out of the home.

It is easy to ignore the situation in an urban population and say that that is not an issue because if the Government close 10 sub-post offices, 12 will remain in that very small area; but people will have to make difficult journeys, sometimes without public transport, across very major roads, in densely populated streets full of cars, which are double parked in most instances. It is a real nightmare. That is why thousands and thousands of people have already signed petitions to save post offices in my constituency and many other urban constituencies.

Tonight we need to hear from the Minister some clarification about the possibility of subsidies. We need to hear who will choose from the 22 post offices in Portsmouth, South those that are seen to be viable and eligible for a subsidy, and we need to know what will happen to those who do not pass the harm test satisfactorily and consequently are not chosen.

The right hon. Member for Hitchin and Harpenden (Mr. Lilley) did not mention the fact that he served in the Government who closed down the Crown offices. I remember that, when I was previously a Member of Parliament, they closed thousands of them throughout

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the country. In Portsmouth, at least half a dozen were closed. We were all told, "Do not worry; jobs will be saved and we shall find alternative locations, or other people will take on those offices." Five of the six are now housing. All six no longer serve as post offices. There was nothing but crocodile tears. We were told, "It will not be a problem. Do not worry. You are over-hyping the argument."

Now the boot is on the other foot. A Labour Government are in power, and they are saying that they intend to do something that appears to threaten the viability of the sub-post office network, whether rural or urban. Answers are expected and needed--not 18 months from now, not when the Bill has passed through the House and the other place, but tonight or very soon after tonight. The livelihood of thousands of people throughout the country is on the line, and so are the understanding and commitment of the people who use those post offices. They want to hear a clear message from the Government tonight.

I do not envy the Minister's task in piloting this very complex Bill through its stages. Some Members have said that the Bill is a step in the right direction. My only fear is that it is a step in the direction in which the Conservatives wanted to take us, and that, if ever they were back, it would open the door to allow them to do what they did more easily the next time than they did it the last time.

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