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15 Oct 2002 : Column 231—continued

Mrs. Cheryl Gillan (Chesham and Amersham): The Minister should know that there are 15 so-called classified urban post offices in my constituency and that I can expect at least five of them to close under the new provisions. What will he say to my constituents in Chesham Bois who have seen the headline, XLast chance to save your post office" in their local newspaper? They are desperate and they have seen no sign that their representations and letters have been taken into consideration at all. What does he say to the elderly and infirm in my constituency who want to go not to a post office one mile down the road but to their local post office? I am sorry, but what he has said so far will not satisfy them.

Mr. Timms: I hope that the hon. Lady will pass on to her constituents the assurances that I am giving to the House. The programme—it has not started yet and it cannot start until the House has given its approval tonight—will not have the characteristics that she describes.

Where a sub-post office closes under the programme, the Government will meet the compensation costs—up to a total of #180 million over the next three years. An additional #30 million will be provided for modernising and adapting those offices that remain. Everyone recognises that many urban sub-post offices are much too dowdy, but the key to improving standards in them will be the increased volume of business that they can expect. However, the grants of between #5,000 and #10,000 for each office expecting to take on a significant number of additional customers—to be matched by the same sum from the sub-postmaster—will be an important boost, too. With the #30 million, this is the first time ever that a Government have undertaken a programme of investment in urban sub-post offices. It is an additional measure on top of the PIU report recommendations that we have accepted.

Several hon. Members rose—

Mr. Timms: I give way to my hon. Friend the Member for Stroud (Mr. Drew).

Mr. David Drew (Stroud): As usual, my hon. Friend has been very generous with his time. May I clarify the position? I know that we are talking about the urban network, but there is some confusion between an urban and a rural sub-post office, and some of the designations have not helped. The problem in my area is that, until we can get the rural subsidy sorted out, the urban programme will appear to run into it. Will he clarify when the money is likely to be forthcoming to ensure that the rural network is properly funded in the short term?

Mr. Timms: My hon. Friend will know that we shall fund the commitment that we have given to ending

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avoidable rural closures. I anticipate that, in just a few weeks, we shall be able to set out exactly what the commitment will entail.

In the process of urban changes that I have described, the Post Office will generally require the receiving offices to improve their facilities and to increase their opening hours.Increasingly, we can expect sub-offices to maintain the same hours as the associated retail business that is alongside, thus greatly improving the service to customers.

Mr. Michael Weir (Angus): Does the Minister not accept that part of the problem is that the Government have adopted a piecemeal approach? Has he read the briefing from the National Federation of Sub-Postmasters? Does he realise that there is great concern about the salary that sub-postmasters will be paid in the future, the whole mail system and the universal bank? Until those concerns are dealt with all at once, we will not resolve the problem properly. Does this programme not come too soon in the process?

Mr. Timms: I do not know whether the hon. Gentleman has read the briefing paper from the National Federation of Sub-Postmasters, but one of the points that it stresses is the urgency of getting on with things. I do not agree that there should be longer delay.

The properly managed programme that the Post Office proposes is far preferable to the alternative of unmanaged closures resulting from falling income. At the end of the programme, more than 95 per cent. of people in urban areas will still be within a mile of a post office, and the majority within half a mile. Without the programme to which the House is being asked to agree, more and more urban sub-postmasters would simply shut down, even without any prospect of compensation, causing much greater disruption to customers.

Mrs. Louise Ellman (Liverpool, Riverside): What assurance can my hon. Friend give to the people in severely deprived areas in my constituency who are served by 23 post offices and sub-post offices? Does he consider that the balance of funding in the programme is reasonable between compensating sub-postmasters for closing post offices and supporting post offices to remain open?

Mr. Timms: Yes, I do. One of the points that I shall come on to make is that my right hon. Friend the Deputy Prime Minister is developing a separate scheme—we shall announce the details shortly—to support specifically post offices in the most disadvantaged areas, the 10 per cent. most deprived urban wards. I assure my hon. Friend that I shall say more about that in a moment.

Mr. Mark Field (Cities of London and Westminster): Will the Minister give way?

Mr. Timms: I need to make progress.

The programme will follow the code of practice that was agreed last year between Consignia and the consumer watchdog, Postwatch. For every proposed closure, merger or relocation, there will be an independent consultation process lasting at least a

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calendar month and extended to allow for bank holidays. The consultation will be conducted by Post Office Ltd., closely involving Postwatch, and it will include writing on day one to the local Member of Parliament. To ensure that the needs of all customers have been properly considered—the elderly, disabled people, those on low incomes and others—Post Office Ltd. will, in developing its proposals, take account of factors such as the accessibility and viability of the remaining post offices, transport links, opening hours and numbers of counter positions.

At the start of the programme, all the closures will be in response to requests from postmasters who have said that they wish their businesses to close. However, it is possible that, towards the end of the three-year programme, there may need to be a small number of involuntary, but compensated, closures to finalise the shape of the urban network.

To come to the specific point raised by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman), there are more than 1,800 urban sub-post offices in the United Kingdom in the 10 per cent. most disadvantaged wards in the Indices of Deprivation 2000. I want to make it clear that, other than in the most exceptional circumstances, the scope of the programme will not extend to any post offices in urban deprived areas that are more than half a mile from the next post office. Very often, they are the last retail outlet of any kind in the area. The Government intend to improve and support post offices in those areas by means of a separate scheme to provide funding for investment and improvement to post office branches that would otherwise risk closure. My right hon. Friend the Deputy Prime Minister will shortly announce full details of that. The devolved Administrations in Scotland and Wales are developing equivalent schemes. The merits of such a scheme are also being considered in Northern Ireland.

Mr. David Lepper (Brighton, Pavilion): Can my hon. Friend confirm whether the scheme that he describes for post offices in the most deprived areas will be funded separately from the package that we are considering? Will it extend to re-establishing post offices in those deprived areas from which they have vanished?

Mr. Timms: That scheme will be in addition to the programme that I am describing and its funding will be separate. As I said, my right hon. Friend will set out the details shortly, but I understand that the intention is to focus on existing businesses, especially if a sub-post office has a linked retail business, and to improve the viability of the whole business.

Mr. Christopher Chope (Christchurch): Will the Minister give way?

Mr. Timms: I want to make a little progress.

Let me emphasise that there is no predetermined list of post offices that will close. No arithmetical formula is being applied to determine the number of closures in an area. Closures will be determined by the present density of offices in close proximity to each other, by current and future business volumes, by the preferences of individual proprietors—a critical consideration—and by the public consultation process that will take on every proposal.

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In some cases it might be concluded that, although a sub-postmaster has said that he wants to close a post office, that is not the best option given the position and prospects of neighbouring offices. If he still wants to close the business, it will need to be on the basis of a commercial sale of the business. One consequence of the programme should be a revival of the commercial market for sub-post offices, which has declined over the past few years.

Mr. Chope: Does that mean that the Government are reneging on their promise positively to support the role of post offices as Government general practitioners?

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