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7.20 pm
The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms): I congratulate the hon. Member for Isle of Wight (Mr. Turner) on securing this debate. I thoroughly enjoyed my visit to his constituency last Friday, the weather notwithstanding—it was sunny for a fair part of the day, but wet for the rest. I welcome the opportunity to respond to the issues that he has raised this evening. I fear that I may not be able to cover all of them, but if I cannot respond fully now, I shall write to him.
I can give the hon. Gentleman an assurance that we are firmly committed to maintaining a viable nationwide network of post offices, which are an extremely important focal point for the local community, particularly for people who do not find it easy to get
around. I can also give him an assurance that everybody who wishes to continue to receive their benefits in cash from their local post office can do so. That has been a given in the introduction of direct payment, which is currently under way.Recommendations in the widely welcomed report of the performance and innovation unit in 2000 formed the basis of our policy on the post office network. The Government accepted all the PIU recommendations, including the recommendation that, should the Post Office decide that fewer post offices were needed in some areas, the Government should consider providing funding to ensure that the sub-postmasters affected could be compensated adequately for the loss of their business. I think that that is fair. The hon. Gentleman suggested that it was a misuse of public funding, but I do not think that it is. The value of post office businesses has declined in recent years for a variety of reasons that I shall come on to. Many people who have run those businesses have worked hard for a long time, and we took the view that it was appropriate for them to be compensated fairly if their business closed under the programme. Last November, following parliamentary approval for the funding, Post Office Ltd. initiated its programme for urban post offices.
There are nearly 17,000 post offices around the UK—more than all the banks and building societies in the country put together. Tellingly, there are more than 1,000 urban sub-post offices with at least 10 other post offices within a mile. There is simply not the business to sustain so dense an urban network, and sub-postmasters have been finding it increasingly difficult to earn a reasonable income from their business. The great danger facing the Isle of Wight and elsewhere if nothing had been done was an unmanaged decline in the network, with urban post offices closing haphazardly and serious gaps in the service opening up. However, there is a properly managed process for the Post Office to configure its network to meet the needs of the communities that it serves and fit the level of business going through the network. Two thirds of the urban population live within half a mile of two or more post offices, many of which are struggling. The National Federation of Sub-Postmasters has supported the process because everyone accepts that we need a properly managed reduction in the number of urban post offices so that the network can have the viable and successful future that we all want.
There are many reasons for the decline in post office business, but I remind the hon. Gentleman that the trends that have led to those problems are long-standing in nature. For example, more than 43 per cent. of benefit recipients already choose to access their benefit payments via bank accounts, compared with 26 per cent. in 1996. The traditional business on which post offices have depended in the past has been declining. That is why it is so important that we have been able to invest an enormous amount—£500 million—to equip every single post office in the country, including all those
on the Isle of Wight, with technology to support banking services. That opens up a new market for post offices that can give them the prospect of a successful future. I am very encouraged by some of the changes that we have seen as a result of that investment, and I think that they augur well for the future.The hon. Gentleman was especially concerned about the criteria for including particular offices in the urban reinvention programme, as opposed to rural post offices, which are outside it. Post Office Ltd. analyses an area as either urban or rural on the basis of whether the branch in question is located in a community of more or fewer than 10,000 inhabitants—the figure that he correctly quoted from my letter to him. The Post Office adopted that broad definition in autumn 2000, when the Government placed on it a formal requirement to maintain services and prevent avoidable closures in the rural network. We have seen a dramatic reduction in the number of closures in the rural network as a result.
The Post Office has carried out detailed planning to establish which branches are classified as rural and which are classified as urban. It has developed a sophisticated geographical mapping computer model that measures population in terms of contiguous or very close agglomeration. Where a number of villages or small communities adjoin one another or a larger town and the aggregate population exceeds 10,000, the model reflects that fact and classifies the area as urban. I can well understand that customers using the Gurnard branch think of themselves as a distinct and separate community, but given the concerns expressed about that branch, the Post Office has rechecked its analysis and confirmed its classification of the office as urban on the ground that it is located within the contiguous population area of Cowes. That is consistent with the approach adopted nationally to classify the entire network. In arguing against at least some aspects of the proposals that have been made for urban offices on the Isle of Wight, I do not think that the hon. Gentleman is on strong ground on that particular point. However, he was on stronger ground in making another point, which he may want to take further. I shall return to that point in a moment.
Initially, closure proposals under the Post Office Ltd. programme were focused on single offices known to be most at risk of closure because of poor viability, in order to minimise the possibility of unplanned and unmanaged closures occurring and gaps opening up. However, the company accepted that there was a lot of uncertainty about the future shape of the network and it has now undertaken to produce its proposals on an area-by-area basis using parliamentary constituencies or groupings of constituencies. Postcomm has commended Post Office Ltd. for that response, as has the Select Committee on Trade and Industry. Producing proposals on an area-by-area basis, as has now been done for the Isle of Wight, means that everyone can see what the end point will be and gives a clear view of the level and location of service provision at the end of the programme. I understand that, in order further to minimise uncertainty, Post Office Ltd. will bring the whole programme forward by a year, so it will all be over by December 2004.
Every proposal is subject to public consultation, and the consumer watchdog Postwatch has a very important role. The hon. Gentleman did not mention Postwatch, but it is consulted on every proposal and is monitoring the programme as a whole. I met Postwatch representatives recently to discuss how that is going, and it is working diligently on the matter. Given the new area basis to which I have referred, Post Office Ltd. has agreed with Postwatch to extend the period of public consultation, which was formerly a month for each closure, to six weeks for the area as a whole. It is important that those who are concerned about certain elements of the proposals for the hon. Gentleman's constituency should take them up with Postwatch, which will want to satisfy itself about them. As he knows, the closing date for representations is 2 December, so there is still time to do so.
The hon. Gentleman may have an alternative proposal—perhaps that one of the offices should be retained, while another that is not in the frame for closure should be closed instead. If so, I encourage him to draw it to the attention of Postwatch.
My time is rapidly running out, but I want to make one last point. The hon. Gentleman said that one of the offices proposed for closure is 1.2 miles from the nearest post office. The objective of the programme is to ensure that at least 95 per cent. of the urban population will be within a mile of their nearest post office.
The motion having been made after Seven o'clock, and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.
- Adjourned at twenty-nine minutes to Eight o'clock.
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