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10 Mar 2003 : Column 138—continued

Tom Brake: To what degree does the Minister think elected Members, councillors and the local community should be involved in the formulation of those decisions?

Mr. Timms: I will come to that precise point, if the hon. Gentleman bears with me. It is a requirement of the process that the Post Office has established that all the parties he mentions be consulted—indeed, Members of Parliament will be written to at the start of the consultation process. It is important that that takes place.

Initially, the programme is to focus primarily on smaller urban offices where sub-postmasters are under the greatest pressure. Many sub-postmasters want to close their business and receive fair compensation, as the package offers. That is our starting point. I am almost certain that in the constituency cases that the hon. Gentlemen highlighted, the starting point of the process has been that the postmasters have wanted to close their office.

The Government will meet the costs of compensation to a total of £180 million over the next three years. We are providing a further £30 million for modernising and adapting the offices that remain. The key to improving standards in the remaining offices will be the increased volume of business that they can expect, but the grants of up to £10,000 for each office expecting to take on a significant number of additional customers—which must be matched by the same sum from the postmaster—will also provide an important boost. This is the first time that the Government have undertaken a

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programme of investment in urban sub-post offices. The measure is additional to the PIU report recommendations, which in general were warmly welcomed.

As part of the package, the Post Office will generally require the receiving offices to improve their facilities and extend their opening hours. To an increasing extent, we will be able to expect sub-post offices to maintain the same hours as the associated retail businesses, and to improve their service to customers. Thus the quality of service that people can expect from their local post office will be improved.

The properly managed programme on which the Post Office has embarked is far preferable to the alternative of unmanaged closures resulting from falling income, which would cause much greater disruption to customers. At the end of the programme, more than 95 per cent. of people living in urban areas will still be within a mile of a post office. I think that the hon. Member for Sutton and Cheam mentioned half a mile, but one mile is the measurement used—and the majority will still be within half a mile.

The hon. Gentleman has talked about the other post offices close to Oldfields road. The programme that is being taken forward will follow the code of practice agreed 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 calendar month, which will be extended to allow for Bank holidays. The consultation will be conducted by Post Office Ltd., but will closely involve Postwatch. To pick up the point made by the hon. Member for Carshalton and Wallington (Mr. Brake), I can add that it will include the local Member of Parliament, who will be written to at the beginning of the process. To ensure that the needs of all customers, including the elderly, disabled people, those on low incomes and others, have been properly considered, Post Office Ltd. will, in developing its proposals, take account of factors such as accessibility, viability of the remaining post offices, transport links—where the bus stops are—opening hours and numbers of counter positions.

The hon. Member for Sutton and Cheam asked me whether I could provide the entire list of post offices that are being considered for closure. I cannot do that because there is no predetermined list of post offices that will be considered. No arithmetical formula is being applied to determine the number of closures in an area. The closures in an area will be determined by the present density of offices in close proximity to one another, current and future business volumes, the preferences of individual sub-postmasters—an important consideration—and the public consultation process, which will take place in respect of every proposal, whether it is for closure, merger or relocation.

In some cases, a sub-postmaster may have indicated a wish to close. However, taking account of the position and prospects of neighbouring offices, it will be concluded that closure of that particular office is not acceptable. If the sub-postmaster still wishes to leave, that will need to be on the basis of a commercial sale of

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the business. One of the consequences of the programme should be a revival of the commercial market for sub-post offices, which has declined in recent years.

Proposals on the future of any individual office will not be taken in isolation but will be drawn up in the context of other offices nearby. The Post Office wants to continue to provide services in convenient locations readily accessible to its customers, which will have the capacity to deal with future levels of demand and will provide improvements. Improving the quality of what is provided at local post offices is an important objective of the programme.

At the start of the programme—the stage that we are in at the moment—all the closures will be in response to requests from those running sub-post offices. 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. We are not at that stage yet.

More than 1,800 urban sub-post offices in the UK are in the 10 per cent. most disadvantaged wards in the indices of deprivation 2000. I want to make it clear that, other than in exceptional circumstances, the scope of the urban reinvention programme will not extend to any post office in one of those deprived urban areas that are more than half a mile from the next post office. They are often the last retail outlet of any sort in the area. We want to improve and sustain post offices in deprived urban districts by means of a separate scheme to provide funding for investment and improvement to post office branches that are at risk of closure.

The Office of the Deputy Prime Minister announced at the end of last year the details of a £15 million scheme for England to support core post office services and the development of associated retail facilities in those areas. The compensation being paid under the Post Office's programme will be based on terms agreed between Post Office Ltd. and the National Federation of Sub-Postmasters. The payment will be equivalent to 28 months of the remuneration of an outgoing sub-postmaster, but based on the best annual remuneration for a financial year since 1999. That is based on long-standing arrangements through the joint discretionary fund. Payments are subject to certain conditions, such as a requirement that sub-postmasters at closing branches offer active support for customers transferring to surrounding branches that remain open.

The hon. Gentleman asked about the move to automated credit transfer of benefit payments. I expect that to start on schedule in April, as we always said it would. Over two years, there will be a carefully managed programme of transition from current arrangements, which are essentially based on ration books, to a system based entirely on ACT for benefit payments. We are committed to making sure that people will continue to be able to collect their benefits in cash from the post office if they wish. There will be post office access to a range of bank accounts. Customers will have three account options when deciding how they want to be paid: an existing standard bank or building society account if that account is with one of the banks or building societies that has a commercial agreement with the Post Office; a bank or building society basic account for those who are new to banking and just want to pay money in, get cash out, and perhaps pay bills automatically; and the Post Office card account, which

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is a much simpler account just for the receipt of benefit and pension and tax credit payments. The card account is more limited than the others, but is undoubtedly the account of choice for a significant number of benefit recipients.

Good progress continues to be made on universal banking services, which are on track, as I said, for delivery in April. An investment of £0.5 billion has been required from the Government to put in place the technology platform to support universal banking. On that platform, the Post Office will be able to build a range of banking services which, we hope, will attract many new customers to their local post office, and so build for sub-postmasters, the people running post offices, and Post Office Ltd., the company running the post office network, a successful and attractive commercial future that will assure the long-term well-being of post offices. In the long term, because of the

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Government's substantial investment in improving the technology, there is a good future, but we need to make short-term changes to ensure that the configuration of post offices in urban areas is commensurate with current business levels.

Mr. Burstow: Could the Minister ensure after today's debate that I get a reply to the points that I made in the Christmas Adjournment debate on the introduction of PIN numbers and their use when someone is ill?

Mr. Timms: I apologise for the fact that the hon. Gentleman has not received a letter yet, and shall certainly make sure that he receives one from me addressing the points that he made in that debate.

Question put and agreed to.


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