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Mr. Michael Weir (Angus): The Minister has named the gentlemen from Asda and HSBC who joined the board of Consignia, but does he accept that much of the post office network is made up of small sub-post offices, and those gentlemen do not necessarily have the business experience to get them up and running and keep them going?

Mr. Alexander: I shall try to answer that general question with a specific answer. In one of my first conversations with David Mills after his appointment as CEO of Post Office Counters Ltd., he drew a clear parallel between the present availability and range of products in sub-post offices and those in an equivalent banking facility. To sustain the margin for sub-postmasters in rural communities, which often have small outlets, we must ensure that the margin is appropriate for the number of products stocked in the institution. To that extent, exactly the expertise and leadership that David Mills has brought to bear within the bank could be of direct relevance to some of the individual sub-post offices about which the hon. Gentleman expresses concern.

I would make a further point, however. It is a matter of regret that, over time, relations between individual sub-postmasters and the management of Post Office Counters Ltd. have not been as fruitful and co-operative as they might have been. Among other things, I hope that David Mills will rise to the challenge of ensuring that there is confidence throughout the network of sub-post offices that someone in Consignia is batting for them and arguing the case for the network. That is why the Secretary of State ensured not only that, for the first time, we appointed a chief executive to the network, but that he had a place on the main board of Consignia.

Geraldine Smith (Morecambe and Lunesdale): My hon. Friend rightly holds strong views on the management of the Post Office, and he wants to ensure that it is very good. Does he have any views on the postal regulator, Postcomm? Have the Government responded to Postcomm's consultation, or do they feel that the consultation has nothing to do with them?

Mr. Alexander: When I was before the Select Committee on Trade and Industry recently, I narrated precisely the arrangements that were established as a result of the Postal Services Act 2000. One of the elements of that package, which, I remind the House, was supported by the Liberal Democrats and the Conservatives as well as Labour Members, and recommended by the Trade and Industry Committee in a previous report, was that greater commercial freedom be given to the Post Office. Consistent with that greater commercial freedom was the recognition of the need for a regulator to balance the new public policy framework that was set down.

I note in passing that at the time of the passage of the 2000 Act, the Communication Workers Union urged the Government to establish "as independent as possible"

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a regulator at the time that the new framework for postal services markets was established. It is therefore entirely appropriate that, consistent with my responsibilities in e-commerce where I have an informal but continuous dialogue with Oftel and its director general, David Edmonds, I meet the chairman of Postcomm regularly and informally.

On the other hand, it would be unwise of the Government to get themselves into the position of trying to second-guess the challenge that Postcomm faces. Let me make that challenge clear. In the Postal Services Act, we set down two principal responsibilities for the regulator: first, to maintain the universal service obligation, and thereafter to introduce competition to assist consumers, cognisant of that primary duty to uphold the universal service obligation.

Geraldine Smith: Will my hon. Friend give way?

Mr. Alexander: If my hon. Friend will allow me to answer her question in my own terms, I will give way to her afterwards, if she thinks that that will be helpful.

I emphasise the fact that in my discussions with the regulator I have made it clear that the Government consider the regulator to be obliged to uphold its responsibilities, in particular in connection with the universal service obligation. On the other hand, Postcomm's deliberations are based on a wide range of information: representations have been received from the CWU and from Consignia itself. It is therefore essential that a clear evidential basis be established for the decisions that Postcomm ultimately reaches, and we have been keen to communicate to Postcomm the importance of a fruitful dialogue between itself and the company from which many of its figures are drawn. On that basis, there are grounds to be optimistic that a fruitful dialogue is now taking place between Consignia, not least about the volume of market that Postcomm is contemplating opening up, and that Postcomm is fully cognisant of its responsibilities, consistent with its duties set down in the Postal Services Act.

I emphasise that the proposals outlined by Postcomm at the end of January were precisely that—proposals—and that further discussions have since taken place between all of the interested parties.

Geraldine Smith: All the universal service obligation demands of the postal service is that there is one delivery and one collection each day. Will the Minister make it clear that he expects the service provided by the Post Office to be far greater than that? Currently, there are several collections a day from urban post offices, and two deliveries a day in urban areas. Is the basic one delivery and one collection a day all that the Minister is demanding through the universal service obligation?

Mr. Alexander: The obligation under which Consignia operates is set down in the licence granted by the regulator Postcomm. However, in my conversations with Consignia I have consistently made it clear that, given that competition is starting to come to its business, it is vital that it offer outstanding service to its customers. It is precisely the sort of innovation in services to customers

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that is now being discussed that will give Consignia advantages. Based on the universal service that is currently enjoyed, there is considerable scope—given appropriate management who have the capacity to recognise the opportunity—to tailor services to the needs of individual customers. That is why it is essential that in the network and in Consignia itself there is leadership that is capable of driving forward that agenda and realising the full potential of the company that I described at the beginning of my speech.

Mr. Page: Will the Minister give way?

Mr. Weir: Will the Minister give way?

Mr. Alexander: I have been generous in giving way so far, and consistent with my obligations to the hon. Member for Twickenham, I should make some progress.

The hon. Gentleman specifically mentioned the "your guide" pilot. As he said, the Post Office has been piloting the concept of post offices as government general practitioners in Leicester and Rutland. The aim is to test the concept of the post office acting as a one-stop, first-shop facility providing advice and access to transactions within a range of public and voluntary sector organisations. The Government invested £25 million in that major pilot, which ran from July last year until March this year.

During the pilot, the post offices concentrated on a number of limited key services to their core customers, which included advice, information, transactions in broad areas of retirement, seeking work and local information. The service includes advice and information on pensions, other benefits, job vacancies, local transport, interface with local government and many more services besides.

The Leicester and Rutland pilot takes forward the recommendation in the performance and innovation unit report. The outcome of the pilot is now being fully evaluated by the Post Office with those organisations participating in the pilot and by the Government. The evaluation is examining the extent to which the "your guide" concept can deliver services that citizens really want and need, and the extent to which "your guide" can provide value for money for Government Departments and other organisations using it as a channel to offer their services directly to the public. That includes examining the extent to which those organisations achieve efficiency savings and the extent to which "your guide" services can improve the ability of Government Departments to meet their service objectives.

The evaluation process has included gathering data, manually and electronically, the conduct of surveys within and beyond the pilot area, and the gathering of qualitative data via focus groups, discussion groups and feedback sessions involving the public, sub-postmasters and stakeholder organisations, including central and local government.

All the evidence has been drawn together by a central evaluation team, which includes members of the office of the e-envoy. As the Minister responsible, along with my right hon. Friend the Secretary of State, for UK Online, I fear that there may be some confusion in the mind of the hon. Member for Twickenham as to the role that those services can provide. We are confident that there is at least potential to draw on the expertise of the e-envoy's

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office in exactly this type of service provision online in evaluating the "your guide" pilot. I simply do not recognise the kind of conspiracy that the hon. Gentleman seems to be suggesting in drawing from within Government exactly the expertise that we need to make effective the evaluation that is being carried out.

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