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Westminster Hall

Tuesday 9 December 2003

[Mr. Edward O'Hara in the Chair]

Post Office Closures (Wales)

Motion made, and Question proposed, That the sitting be now adjourned.—[Margaret Moran.]

9.30 am

Llew Smith (Blaenau Gwent) (Lab): My constituency has some of the worst deprivation problems in any part of Wales and many parts of the United Kingdom. We have the highest incidence of disability and some of the worst health problems, including heart disease, respiratory disease, cancer, emphysema, pneumoconiosis and so on—you name it, we have it in abundance. We have among the lowest incomes and the highest unemployment, as well as one of the lowest levels of car ownership in any of the valleys throughout south Wales, combined with poor public transport. Where there is public transport, it almost invariably does not cater for disabled people, whom we have in abundance in our community. We have an ageing population, but also a considerable number of lone parents. In recent years, we have seen the collapse of the manufacturing industry; prior to that, the policies pursued under Tory Administrations during the Thatcher years wiped out the coal industry. Disadvantaged groups of people are particularly dependent on a vibrant post office service. It is reasonable to assume that the Post Office, working in conjunction with the Government, could find ways to strengthen the service to meet the demands of such people, but instead of a process of reinvigorating the service in our communities, it has embarked on a mass closure programme.

It is almost impossible to discuss the matter with the Post Office, even during periods of consultation. Mr. Barrett, who is responsible for the closure programme, says that we do not understand because we are simple folk, but that the Post Office is not in the business of closing post offices. He says that the Post Office has drawn up a network reinvention plan. I do not know what berk thought up that description, but if it is a network reinvention programme it is an insult to the people in my community. I anticipate that when senior citizens go to what was their local post office and see that the doors and shutters are closed, they will protest at the closure, but the Post Office will accuse them of being stupid and of little intelligence, and Mr. Barrett will proclaim that the post office has not closed, but has become part of the network reinvention plan.

The Post Office is telling people in my community that they have nothing to worry or complain about. I suspect that it wants to be thanked for its initiative and for devastating the postal service in my community, but, thankfully, the people in my community are more intelligent than that. They know better and they have the courage and good sense to raise their voices in protest, as they did yesterday at a demonstration when Mr. Barrett visited the Welsh Assembly, and as they will

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this afternoon when Mr. Barrett is dragged into my valley to meet the local authority. He will receive a traditional valley welcome—a welcome in the hillsides—when he visits Ebbw Vale and its local authority this afternoon. People are coming out in their hundreds and thousands to express their discontent and opposition at public meetings, demonstrations and in letters. You name it, local people have done it.

Mr. Wayne David (Caerphilly) (Lab): Has Mr. Barrett or another senior representative of the Post Office taken the trouble to go to all the post offices that the Post Office wants to close in Ebbw Vale?

Llew Smith : When we were demonstrating at the Welsh Assembly yesterday, one constituent had a placard stating: "We seek him here, we seek him there, we seek Mr. Barrett everywhere." This is a serious point: even during a period of consultation the only way in which we can have discussions with Mr. Barrett is to seek him out. If the consultation were real, he would show respect to the community by visiting it and becoming involved in dialogue with it. The answer to my hon. Friend's question is no, Mr. Barrett has not visited my community or spoken to the people in it.

Mr. Barrett wants us to believe that there has been consultation, but that is another insult to our intelligence, because when he did visit the constituency, he came to speak to postmasters and postmistresses. After those discussions and negotiations, a closure programme and redundancy package for those postmasters and postmistresses was agreed. If Mr. Barrett was serious about consultation, he would not have met the postmasters and postmistresses first and agreed a redundancy package. He would have gone into the community, consulted people and got involved in public meetings and dialogue and, after listening to people's concerns and ideas about the future of post offices, he would have gone back, drawn up plans and then discussed those plans, the future of the post offices, redundancies and so on. However, that has not happened. The reverse has happened.

Mr. Barrett is the person responsible, but he refuses to take part in public meetings, which is a vital part of the consultation process. We have had public meetings that hundreds of people have attended. There was one at the school in Willowtown a couple of nights ago: the school hall was full and people were queueing along the corridors to get into the meeting. That is just one of many examples highlighting local people's concern about the closures.

We are a few days from the end of the so-called consultation period, but I saw Mr. Barrett for the first time on Sunday, when he addressed the nation and said that the people of Blaenau Gwent and elsewhere had nothing to fear. That is an insult. People have been trying to get their ideas over but have been unable to meet Mr. Barrett. The first time they saw him was via the television screen on Sunday. Yesterday, he came to the Welsh Assembly, and busloads of people came from my community to express their concern. When he turned up, he and his representatives asked me in which committee room the meeting was being held, because he wanted to read out a statement to representatives of the

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local community. I told him that he would not be in any committee room or making any statement to the representatives because busloads of people were heading south and he was expected to become involved in a dialogue. After much argument, he said that he would read out his statement and listen to questions and then think about them when drawing up his final plan. I said that that was not good enough because people had come to the Assembly and they, unlike him, had shown an interest in the post offices, so he must not only listen to people's concerns but address them and do so now. Eventually he did that, because he realised that the occasion was a public relations disaster. We were using his tactics—broadcasting to the nation and expressing our concern about the closures and the tactics of those responsible for the consultation document.

The local community had the good sense to realise that the occasion had nothing to do with consultation but was mere spin. It was a public relations stunt, a sop to appease local people and to give them the impression that their views were important and will be listened to and responded to positively. I, as the Member of Parliament for Blaenau Gwent, am not the only one to express concern about the consultation. The Under-Secretary of State for Wales, whose Islwyn constituency neighbours mine, put out a press statement some weeks ago, and I had a conversation with him this morning in which he declared that the consultation process in his constituency was a sham and a fraud. When local people tried to meet Mr. Barrett to propose alternatives to the closure programme in Islwyn, he refused to meet them, which is surely unsatisfactory.

People recognise that the closure programme in Blaenau Gwent is the first stage and that more closures will follow. If anyone is in any doubt, they should read the Post Office statement:

Yesterday, I spoke to my hon. Friend the Member for Wrexham (Ian Lucas), who told me about his community's experience. In that case, the Post Office tabled a consultation document proposing closures while saying, "Not to worry—although this particular post office is closing, there is another one down the road that local people can use." The Post Office then closed not only the first post office, but the alternative post office as well. What happened in Wrexham will almost certainly happen in Blaenau Gwent.

The Post Office plans to close seven post offices—one in Tredegar and six in Ebbw Vale. On top of the problems that I have mentioned, Ebbw Vale has been devastated by the closure of the steel giant Corus. With the knock-on effect of those job losses, some 1,500 jobs have gone in that small town—and not any old jobs: by the standards of working people in Blaenau Gwent, they were good, well paid jobs in a plant where the trade unions had a positive involvement. Tredegar was also devastated by the closure of the steel plant. Both Ebbw Vale and Tredegar have been hit by further closures, including the other two main manufacturing companies in the community, Bosal and Faurechia. By

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the standards of Blaenau Gwent, those companies paid good money and provided the kind of jobs that we need in our community. To make matters worse, six of the seven post office closures are in Communities First areas, where there is the greatest deprivation. We have not replaced the jobs lost with similar jobs. Those communities have not recovered from the closure of the coal industry. Too many low-paid, part-time, non-union, unskilled, soul-destroying jobs have been created in my constituency in recent years. While the Government are trying to reinvigorate and save the communities of Blaenau Gwent, the Post Office is delivering us a body blow—indeed, it is delivering us seven body blows.

The Post Office has not shown us the respect of bothering to carry out research into the closures. It has invented public transport: for example, Mr. Barrett says that Willowtown post office is served by excellent public transport and that he knows, because he has been there, that there is a bus stop outside the post office. I have been there, and there is no public transport—there has been no public transport for the past 16 years. In order to con people and the Government into supporting its plans, the Post Office has invented public transport. In addition, the Post Office's plans, which are based on a map, give the impression that Blaenau Gwent is flat. I have not got a PhD in geography—we are humble folk—but I know that the community is not flat. The community is based on valleys because the area is mountainous. When I read the report, I was reminded of how the ambulance service drew up plans to change its service in Blaenau Gwent when in reality it wanted to close one ambulance station. Its plans, too, were based on a map. We had to remind the service that although A was three miles away from B, there was a mountain in between them. It could not comprehend that and neither can the Post Office.

In Blaenau Gwent, as in other parts of Wales and the United Kingdom, if the post office closes, the local shop closes because the two are linked. In communities such as Cefn Golau, if the shop closes there is no other facility because the estate is on the side of a mountain. The tragedy is that the council, which works in conjunction with the Assembly and the Government, is trying to reinvigorate those communities to give them hope for a better tomorrow, but the only facility on the estate, a post office linked to a shop, is obviously going to close. The Post Office does not take that into account.

The Post Office also fails to take into account the lack of public transport to travel to alternative post offices. It does not consider how often services run, what facilities there are for the disabled, the cost of public transport, the low level of car ownership in Blaenau Gwent, the cost of using an alternative taxi service, deprivation in the area and the difficulties many people would have in travelling to an alternative post office. The topography of the area is difficult because it is mountainous, and Mr. Barrett should know that the area is not flat. People who are disabled or suffering from poor health will be worst affected. The age of the population is also important.

We must remember that the post office is not like any other shop. In every public meeting we hold, a senior citizen always gets up and reminds us that the post office is not just a shop. It is a community meeting place that

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offers the only opportunity that some senior citizens get each week to communicate with someone else. That is sad, but it is a fact of life. When people go to the post office, they are not just going to buy a stamp or to collect their benefit; they go to meet friends and to share news, gossip, ideas and many other things. When a post office closes, it is more like a school closing than a shop closing, because the heart of the community goes with it. While we are trying to defend our communities, the Post Office is helping to devastate them with its plans. The Post Office's policy contradicts the Government's policy to increase community cohesion and to decrease social inclusion. Closing a post office denies senior citizens and others their meeting place.

Linked to that is a point that a home carer made to me in a public meeting. Home carers have a particularly important role in our community because of the age of the population and the incidence of disability and health problems. I was told that when carers visit a client they are allocated perhaps 30 minutes to carry out, or to attempt to carry out, the tasks necessary to ensure that that person has a little dignity in their life. If the local post office closes, carers will be expected to go to an alternative one, perhaps a mile down the road, to pick up the benefits or stamps needed, and by the time they return, their allocated time will be gone. The real reason for a home carer going to a home to see a client will then not be fulfilled. Carers will be forced to spend the time carrying out tasks that are vital to the people concerned, but that do not come within the carers' remit.

We must recognise—this is the point that I am trying to convey—that the Post Office is not simply a commercial organisation. It is a service. Places such as Blaenau Gwent, which are particularly deprived, have traditionally been more dependent than most on public services. The Communication Workers Union has made several proposals that I support because they would help the situation and help to prevent the closure programme. The proposals include one that

It seems crazy that people can open bank accounts over the counter, but cannot open Post Office card accounts over the counter. The linked complaint that we hear is that in order to have benefits paid in the post office, people have to ring a number, but almost invariably that number does not work, or it takes a lifetime for the call to be answered. Again, that acts as a disincentive to having a vibrant post office service. The CWU says:

The union demands that

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Everyone in our community has opposed the closure programme: the community and borough council, I as a Member of Parliament, Peter Law as the Assembly Member, 100 per cent. of the local population and 100 per cent. of the organisations that make up the communities of Blaenau Gwent. Yesterday we met the Secretary of State for Wales and the Under-Secretary of State for Wales. Both have stated, privately and publicly, on the television, in the newspapers and on the radio, that the case for withdrawing the closure programme in Blaenau Gwent is "unanswerable". They have demanded that the consultation period, which is due to finish in a few days, be extended. As I have said, it has been a sham.

Mr. David : My hon. Friend has referred to the excellent co-operation between him and Peter Law, the Assembly Member for Blaenau Gwent. Can my hon. Friend say whether the Welsh Assembly Government have considered the situation in Blaenau Gwent and come forward with any suggestions to improve matters?

Llew Smith : I believe that there was a debate in the Assembly about a week ago. I do not think that any kind of policy statement was agreed on, but I do not know of any Assembly Member who supports the closure programme. I suspect that we have 100 per cent. support across the political parties. However, we do not want to make this a party political issue.

The only organisation with which we have problems is Postwatch. Postwatch rang me on Friday, asking me to return the call, which I did. The Postwatch representative—I think that it was Dr. Kelly Cryer—asked me whether I would like a briefing on the closure programme. I said, "Look, I don't want to be nasty; it's Friday, so let's be nice to one another. I do not wish to sound arrogant, but I am an expert on this subject, and the people whom I have the privilege to represent are even greater experts than I. We don't need a briefing paper; what we want is support." I asked Postwatch, as a body that represents the customers, what it had done, adding that I assumed that it had registered its objections to the closure programme. The representative said, "Well, no, Mr. Smith, what we are doing is conducting research". Postwatch, which is supposed to represent the customer, is still doing research even though the consultation is due to close in a few days' time. When 100 per cent. of customers oppose the closure and all the representatives from the community council to the Secretary of State oppose the closure, what have we got from Postwatch, the body that is supposed to represent customers? It is still carrying out research. I said, "Don't bother; I have got all the research and I will continue talking", but I do not think that Postwatch was particularly impressed. I had another meeting with its chairman, but things repeated themselves. Postwatch must do its job of representing the customers. If it does not, the Government should examine its role and consider abolishing it and replacing it with a body that really represents the customers.

Mr. Bill Wiggin (Leominster) (Con): I congratulate the hon. Gentleman on gaining this debate, which is

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extremely important. As he is an expert, can he give us his opinion on why the Post Office, which was making £50 million a year profit, has during the past six and a half years moved towards this closure programme? What does he think has changed?

Llew Smith : I do not know whether that was meant to be a party-political point, but anyone who knows me knows that I do not always toe the party line. When the Government are right, I say so and vote accordingly; when they are wrong, I say so and vote accordingly. The first thing that I recognise is that post offices were closing prior to any plans from the Government. I also admit—I have said this already—that some of what the Government have done has not helped the situation. In fact, the reverse has been the case. I have no problem with telling the Government that they are wrong in certain instances. However, the problem we are discussing is the result not only of Government policy but of Post Office management. We have a Post Office management that is treating our community with utter disdain, that refuses to come to consult the community over one of our essential services, and that either does not understand the service or, if it does, treats it with disdain.

The community, like my speech today, has come to the end of the line. We shall continue to voice our protest. This afternoon at 2 o'clock, or half-past, there will be a demonstration outside the council offices in Blaenau Gwent. I am sure that our friends in radio and television will ensure that that message gets across to the people of Wales prior to the demonstration.

9.58 am

Hywel Williams (Caernarfon) (PC): I congratulate the hon. Member for Blaenau Gwent (Llew Smith) on securing the debate and pay tribute to his concern for his constituents and for the standard of public services in Blaenau Gwent and throughout Wales. I assure him that there is cross-party support for him and his constituents on this matter.

As we know, the hon. Gentleman's constituency suffers from intense poverty and has seen a succession of proposed post office closures. I salute the community's response of pulling together to oppose the proposals, and the eminently reasonable proposals put forward by the Communication Workers Union.

Without doubt, lack of access to good services is a major component of poverty. Securing good access is a major step in poverty relief and, hopefully, poverty eradication. That is clearly the case in rural areas, such as the one that I represent. The hon. Gentleman might not be the biggest fan of the National Assembly for Wales, but I am sure that he will join me in valuing the Assembly's commissioning of the Welsh index of multiple deprivation, which measures poverty in a much more sensitive way and includes access to services as one of its indices. As a consequence of that, the National Assembly for Wales has identified certain wards in rural areas—especially in my constituency and others in the north and west—which were previously disregarded, as

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being in poverty. Access to services was one of the reasons why those wards were so identified. I hope that the change in the indices used to identify poor areas is a spur to Government action. I know that it has been to some extent in Wales, and one would hope that it might be a spur to the Post Office as well.

However, that index could be revisited in a creative manner to respond in a more sophisticated way to the geography and the social organisation of communities in the valleys. We should consider what is defined as "urban". Currently that definition applies to communities of more than 10,000 people. A post office might be just a mile away up the valley, but that valley might contain a series of villages that are physically joined, but are separate in social terms and in relation to ease of access—for example, as the hon. Gentleman has pointed out, they may be separate in terms of access by public transport. That might not be apparent to a manager sitting in an office many miles away, poring over a map.

I shall give the House an example of such geographical genius. About three years ago, when the Welsh Affairs Committee was taking evidence on social exclusion in Wales, we had a submission from one of the major banks explaining that there was a branch only four miles away from the branch that it intended to close. Indeed, as the crow flies it was four miles away, but people are not crows. In order to get to that branch, people would have had either to travel many miles down the valley—by public transport if they could find it—and many miles up the other valley, or climb over the mountain. Managers examining maps many miles away are not the greatest experts on the social organisation of valley communities.

Therefore, I ask the Minister what considerations are taken into account when a post office is scheduled for closure. Is it a purely commercial decision, or do the Government—a socialist Government—ensure that social considerations play a part? What consideration has been given to the effect of Government policies? The hon. Member for Blaenau Gwent has already noted the effect of benefit payments. Are such considerations taken into account or is the decision taken by the Post Office a purely commercial one? On the evidence that I have seen in my constituency and elsewhere, the Post Office seems to be operating on a purely commercial basis.

Lembit Öpik (Montgomeryshire) (LD): Is the hon. Gentleman aware that 13 million people use their local post offices to collect their pensions or benefits each year? That figure has decreased from 18 million in 2000, so 5 million customers have already been lost.

Hywel Williams : That is a highly significant fact. I am aware of the difficulties that some people face—or think that they face—in ensuring that payment is made over the counter. My colleagues in Scotland in the Scottish National party have led strong campaigns to ensure that such services are retained if that is at all possible.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe) : Is it not the case that people can still claim their benefits over the counter in the post office?

Hywel Williams : In my experience, from talking to my constituents, the least simple method of acquiring

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benefits these days seems to be having those benefits paid in cash over the counter. It might be a debate for another time, but some people think that it is extremely difficult to access that sort of service and they are encouraged to find other ways of accessing it.

To return to my point about commercial considerations, I would say that it is inappropriate for only such considerations to be taken into account when local post offices close. Local communities have a responsibility in that regard. How should we respond to closures? We should oppose them to the best of our ability. The people of Blaenau Gwent are clearly taking their future into their own hands and I salute them for doing that.

In my constituency, Caernarfon, very few rural post offices have closed, and none at all have closed recently. I know that local community councils and the country council in my area have done their best to ensure that that continues in the future, but we need to offer practical alternatives. In my constituency, successful local small businesses have grown around the post office due to the resourcefulness of local people. There is a post office in my constituency, the West End post office in Pwllheli, where two young people have been able to acquire sufficient capital and have shown great enterprise and vigour. They have become a vital part of the local community by dint of their very hard work.

I also draw the House's attention to the long tradition we have in Wales of co-operative enterprises. The village hall in Mynytho in my constituency was built during the darkest days of the economic depression and saluted by the poet Robert Williams Parry, even though it was built during a period of poverty. If I could beg your indulgence for a moment, Mr. O'Hara, I shall quote a brief stanza:

That translates as:

It was built at a time when the community was on its knees, but its spirit was unbroken. That is an example of the community pulling together in the most difficult of circumstances.

There are other notable examples in my constituency and in the village of Llanfrothen, which is in the constituency of my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Llwyd). I draw the attention of the House to Antur Aelhaearn, which was set up as a village co-operative in the 1970s. A producer co-op that, as far as I can tell, was set up without any significant state aid, it was promoted by a local GP and provided employment and important social regeneration to the dispersed local area of Llanaelhaearn. More recently—perhaps this is more appropriate to the debate—in the village of Llithfaen a local co-op has purchased the village shop and post office and has gone on to purchase the village pub. Llithfaen has one of the few co-operatively owned village pubs in the UK—certainly in Wales—and very

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good it is too. I encourage everyone to visit if they are in the area. That has been an example to the Welsh Affairs Committee, which came up to Llanfrothen and had a look at the community co-op and found it very instructive.

We have also had visits from people from south Wales. Recently, we were visited by local people from the Rhondda who were thinking of regenerating their own community and wanted to know how they could set up such co-ops in relation to their own post office and the village shop. There are positive alternatives: Welsh communities are pulling together and working with other Welsh communities. I finish by asking the Minister what steps the Government take to promote such vital community enterprises when a local post office is threatened with closure. Do we have to depend on the vision and hard work of a few local people? The Government have a responsibility.

10.8 am

Mr. Wayne David (Caerphilly) (Lab): I begin by congratulating my hon. Friend the Member for Blaenau Gwent (Llew Smith) on securing the debate. The issue is one of tremendous importance to people throughout the length and breadth of Wales. My hon. Friend has highlighted the situation in Ebbw Vale and its surrounding area, but there is also great concern in many other communities, north and south. In Llanelli, a closure programme has caused tremendous concern to local people. At this time, consultations on closures are taking place in such places as Bangor, Wrexham, Rhyl, Cwmbran, Newport, Pontypool and Abergavenny.

In my constituency of Caerphilly a post office in the small community of Rudry has closed. Rudry is a very small village, which is relatively prosperous, but its post office was a vital part of a small, relatively isolated community. Many elderly people have great difficulty in travelling to another post office, whether it is in Caerphilly, Newport or wherever, and undoubtedly the closure has undermined the quality of life of people in that small hamlet. Again in my constituency, there is concern about the post office in Ystrad Mynach, which was temporarily closed. Fortunately, because of the local postmaster's acumen and pressure from local people, it has reopened, and I am glad that that community service continues. None the less, there is tremendous concern the length and breadth of my constituency that perhaps we are seeing just the tip of the iceberg, that things will get progressively worse and that more post offices will close in the next few months and years.

I have been in contact and have had long discussions with Mrs. Ehrenzeller, who is the postmistress of my local post office in Trethomas. She has written to me at length about her view of the situation. She has pointed out that Trethomas is a fairly typical south Wales former mining village. It is a small community with an ageing population, and people are concerned about the breakdown of community spirit and the increase in antisocial behaviour. As my hon. Friend said, post offices are a vital part of the community in such villages. Elderly people especially like to pop out to meet their friends, have a chat and socialise. Irreparable harm would be caused to the area if the post office were to close. Also, let us not forget that there is, inevitably, a knock-on effect if a post office closes. Not only are jobs

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lost in the post office itself but other businesses go to the wall. In Trethomas, as Mrs. Ehrenzeller has pointed out, the butcher up the road would close, as would the betting shop and the newsagent. In other words, the heart of a small community would be decimated. We are considering not only post office closures but the well-being of small communities everywhere.

Post offices undoubtedly face several serious problems, but I am told that part of the difficulty that they all face is the move towards direct benefit payments. On average, 40 per cent. of a post office's income comes from benefit payments and the transactions around them. There is a great deal of concern that a change promoted by the Government as part of their modernisation process is causing real difficulty for postmasters and postmistresses. In Trethomas, Mrs. Ehrenzeller said that she is not against change and that she recognises that modernisation must happen. Her concern is that post offices are not operating on a level playing field and that preference is given to banks and building societies rather than to individuals opening a Post Office card account. She would like assurances from the Minister that that is not the case and that, for example, when her customers ring the Post Office call centre for advice on which account they should have, objective information will be given to them about what would be best for them, rather than there being some hidden agenda to encourage investments via banks and building societies.

On that point, I would appreciate the Minister's assurance that there is in fact a level playing field and that if people wish to continue to receive payments in the way that they have always received them, or if they wish to open a Post Office card account, every facility will be provided for that to happen.

Mr. Sutcliffe : Let me answer that point, as there may not be time at the end of the debate. More than 1.5 million people have opened Post Office card accounts, and the Government believe that that number will increase. I assure my hon. Friend that the Government are assisting with Post Office card accounts.

Mr. David : I thank my hon. Friend for that assurance. It is important that that message is conveyed to the country, because there is a great deal of concern and some misapprehension. I welcome his assurance and shall certainly do my bit to ensure that the message comes across clearly.

In conclusion, the future of post offices is absolutely vital. The people who run post offices and their customers raise current cases with me, but there is also concern about the future—concern that is expressed by elderly people in particular. It is important that clear guidelines are issued to the Post Office to ensure that it does things properly, that any consultation is proper consultation and that every effort is made to ensure that such a vital part of our communities is sustained. We must also ensure that there is close co-ordination with the devolved institutions that are in play in Scotland and in Wales so that they are able to work with central Government to ensure that post offices continue to operate for the benefit of our constituents.

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10.16 am

Lembit Öpik (Montgomeryshire) (LD): Back in 1909, the Liberal party and that great Welshman, David Lloyd George, introduced pensions to the British public. Therefore, I feel that my party has a particular duty as guardian of the interests of the elderly and of the methods by which they get their pensions and other benefit payments. It is for that reason that Welsh Liberal Democrats are especially concerned about the threat to post office outlets across Wales and, indeed, the United Kingdom. It seems that the restructuring programme will result in 2,000 to 3,000 post office branch closures in the UK during the next three years. As has already been mentioned, the in Wales Post Office proposes to close 154 sub-post offices out of a network of 440 branches, or one in three outlets. That is a really shocking cut in this important service.

The number of post office branches has been declining for some time. In 2001–02, 74 per cent. of closures took place in rural areas—four times as many as in urban areas. The Cabinet Office performance and innovation unit estimated that only 40 per cent. of rural branches generated enough income to break even, and that 56 per cent. of rural post offices were serving fewer than 70 customers a week, but that is the language of the accountant, not the language of a caring Government. The fact that the post office is often the only service left in rural settlements gives it a special, even unique, place in community life in rural Wales. Post offices often keep the last village outlet open—in fact, 80 per cent. of rural post offices run alongside a shop. The social support that they provide to the community and to vulnerable groups cannot be compared with the behaviour and the responsibilities of many other outlets. The hon. Member for Blaenau Gwent (Llew Smith) made that very point. My colleague Jenny Randerson, the Assembly Member for Cardiff Central, said in a debate on 8 October 2003 in the Welsh Assembly that the matter is of very serious concern. Welsh Liberal Democrats certainly take it seriously. The hon. Gentleman and I belong to different parties, but, as he rightly said, this is a far more important matter than simply an opportunity to have a pop at the Government. For that reason, we all implore the Minister to think again about whether the Government's strategy is right.

We must remember that the Post Office remains a company that is wholly owned by the Government. It has not been privatised, but it is treated as though it has been. If they wanted to, the Government could halt the closure process tomorrow simply by treating the Post Office not only as a commercial operation but as a service to the public. That service provides not only stamps and parcels, but pensions and benefit payments to some of the most vulnerable people in society. It is not only in rural areas but across all of Wales and the UK that post offices and their staff provide a kind of unofficial community centre for regular clients. For example, staff in urban areas also check on elderly people who fail to collect their pensions. I am sure that there are examples from all constituencies of a postmaster or a member of post office staff who has literally saved the life of one of their customers.

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The Government have changed payment methods for pensions and benefits under the banner of modernisation. That is not the main focus of our debate, but it is clearly connected. In so changing, or modernising, the payment method the Government have taken many steps to discourage people from collecting their money from the post office. All the Government literature insists on promoting bank accounts rather than post office accounts. People who are concerned about the high-pressure tactics that may be applied by banks have come to me, and I, too, am concerned that many new bank customers are on limited incomes and do not feel comfortable about the change. In Wales, a higher than average number of people still collect their pensions and benefits directly from the post office, and those people will be badly hit by post office closures.

Mr. Sutcliffe : The hon. Gentleman will accept that people can still claim their benefits over the post office counter. That has not changed in the sense that people still have that option.

Lembit Öpik : I will talk about the Minister later, so I do not want to dwell on that point at the moment. I will have some kind words for him as an individual later.

The Post Office proclaims that 95 per cent. of people will still live within one mile of a post office. However, the other 5 per cent. consists of hundreds of thousands of people around the country, many thousands in Wales alone. A mile is a long way for a pensioner. My mother is not blessed with great mobility and she lives in the countryside; to expect her to travel a considerable distance would be an unreasonable burden. My party accepts that change is needed and that people may find it more convenient to have their pensions paid into their bank account, but that is not the issue. The issue for us is the sheer scale of the destruction of the post office network in Wales. We think that that is the unacceptable difficulty in the strategy that the Government are allowing to be implemented.

The Minister said that members of the public can still have benefits paid to them across the counter. Here come the kind words: I have a lot of respect for the Minister and I do not hold him personally responsible for the Government's misguided approach to post office closures. I see him as the potential solution to the problem, because if there is one Minister who is willing genuinely to listen in the big conversation that the Government have started, it is he. The difficulty for me is not the Minister who is present here today, but the fact that I have not heard any Minister assure us that the big conversation involves listening as well as talking. The Minister has a chance to prove that we can be optimistic about the big conversation by responding in his winding-up speech to the many requests for a more open approach towards dialogue when it comes to closures.

On payment methods, the Minister is technically correct about people still being able to get money across the counter, but let us be honest: the Government certainly have not made the process of applying for the Post Office card account particularly easy. The process involves eight steps and requires the customer to make a telephone call to the Department for Work and

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Pensions, fill in two different forms and make two trips to the post office branch. The Post Office agrees that the process involves more steps than opening an ordinary bank account and says that the procedure was set down by the Department for Work and Pensions. It says that a simpler system could be established, involving opening a card account in one transaction at a post office, but that has not been instituted, so the complexity remains for many people, who will be naturally put off by having to take all those steps.

My next point is still more worrying. Others Members may have received a letter from the Communication Workers Union with a copy of a Department for Work and Pensions document that it has obtained. That document explicitly states the Government's true concerns . It states that in the past, due to political and commercial constraints, many "soft" messages were issued, but that the Government are now making it clear that they want nine out of 10 customers to have payments paid into bank accounts, for which the cost is 1p, rather than Post Office card accounts, for which the cost is at least 30 times greater. The document goes on to list a number of messages that emphasise that Post Office card accounts are not the best option for customers. A person does not have to be a genius to appreciate the consequence of the pressure to move to the accounts. Money will be taken out of the direct incomes of post offices and that will make it much more difficult for them to sustain their economic viability. In fact, the move to direct payments will mean that many post offices could lose up to 40 per cent. of their income. Post Office Ltd. will no longer receive more than £400 million of income annually from the Benefits Agency—some of which is used for sub-postmaters' salaries and for the costs of central support.

It is not only that Post Office card accounts are not the best option for customers—they are not even the best option for Government, because they incur costs for every Post Office card account opened, although, admittedly, the lower the take-up, the lower the cost. Paying benefits into a Post Office card account costs 30 times more than paying them into a bank account. However, if the Government's motivation involves taking the social consequences of closures into account, they should recognise that the money that goes into post offices and is used for the salaries of post office staff is in a sense a social payment and a benefit to the whole community. It seems, however, that the Government's true motivation for not promoting the Post Office card account is to reduce Government expenditure, rather than the desire to meet the basic financial needs of benefits recipients and to take account of the social consequences of closures.

My party is also concerned about the consultation process. We heard a brief, but dramatic, history from the hon. Member for Blaenau Gwent, whom I congratulate on having secured the debate. He illustrated how hard it has been for Assembly Members and Westminster MPs to become involved in the process. Many have discovered to their horror that the consultation is not about whether a branch is to be closed, because that decision has already been made, but about the details of the closure. That is completely inappropriate and disrespectful to the democratic institutions of our country. In addition, the process

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involves sub-postmasters volunteering their branches for closure in return for a slice of compensation. We cannot blame people for making economic decisions. Again, we return to the point that the Government have the alternative of employing a different strategy, one that takes accounts of social consequences.

The Government deny the problem. The Secretary of State for Wales, in his capacity as Leader of the House of Commons, said that

However, in its first annual report on the network, Postcomm, the industry regulator, said that in 2000–01 there was a faster rate of decline in the number of post offices than ever before. In the 1990s, under Conservative Governments, approximately 200 UK post offices per year closed; in 1999–2000, under the Labour Government, there were 380 closures; and in the first nine months alone of 2000–01, there were 434 closures. Closures in Wales closely mirror the national picture. In March 1999 there were 1,501 Welsh post offices, and by March 2000 there were 1,459, and so it goes on. That is a rate of 50 post office closures in Wales every six months. I challenge the Minister to give an assurance that he acknowledges that the rate of closures has increased in the past few years.

On the promotion of Post Office card accounts and other services intended to generate income for post offices, as set out in the performance and innovation unit's report "Counter Revolution", the Government say that they are promoting those things, but they are not. My plea to the Minister is to recognise that, in the face of such cross-party concern on this issue, perhaps some alarm bells should be ringing. Perhaps the Government should be listening and pick up on the fact that, although we have had words of reassurance from the Secretary of State for Wales and others, that reassurance falls on stony ground at the point at which customers see their services decreasing.

I ask the Government to recognise that even the Assembly has been trying to stave off some of the impact of the financial pressures that are causing closures, and I ask them to be sympathetic to the need to support the economic drive to support post offices. More fundamentally, I appeal to the Minister to take heed of campaigns—such as the one in my area, which involves the County Times & Express newspapers—that aim to protect the use of pension books and other methods that local people regard as a genuinely effective way of ensuring that people go into their local post offices. Will the Minister indicate that he is willing to listen to the concerns of County Times & Express readers and the organisers of such campaigns about the importance of ensuring that the services that remain are sufficient to ensure that post offices remain open? We have heard much about the big conversation, but true conversation is a dialogue. The voice of local people in rural areas says no to closures. I know that the people of Wales do not feel comfortable about the closure rate of local post offices, and its acceleration. I will wait to see whether the Government really are listening, and, in that context, I look forward to the Minister's reply.

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10.29 am

Mr. Bill Wiggin (Leominster) (Con): The Government's move to direct payments of benefits and pensions in their automated credit transfer policy has resulted in a loss of £400 million to total Post Office income. The Government's threat to the financial viability of our post offices has been backed up with failing and unhelpful subsidy programmes. They are providing £350 million over three years, but the Post Office is losing £400 million a year.

Rural post offices are most important, as they comprise 70 per cent. of the post office network in Wales. They play an important role in each small community, as residents depend on them for not only stamps and letters, but pensions and benefits. It is also a place where they can pick up shopping at the same time. The proposed closure of the Blaenau Gwent post office will massively affect the ageing population and the high numbers of disabled people and young mothers. There are poor or non-existent levels of public transport, and low levels of car ownership in the area, so many people will have to spend money on taxi fares simply to collect their pensions or benefits. Post offices in rural communities such as those in Wales serve multiple purposes and are a central force in the community.

The payment of pensions and benefits is a necessary post office function, making up 40 per cent. of branch income, but the Government have taken that away. Their response to the large income gap is insufficient, and it has a minimal impact on post office regeneration and survival.

Mr. Sutcliffe : Will the hon. Gentleman give way?

Mr. Wiggin : If the Minister is going to tell me that it is the people's fault, I will happily give way.

Mr. Sutcliffe : I will certainly not do that. I am sorry to intervene so early in the hon. Gentleman's speech, but I wanted an answer to the question of whether he is against people being able to choose to have their benefits paid into the bank.

Mr. Wiggin : I do not believe that the Minister noticed that I was careful to point out that the level of subsidy provided by the Government in their sticking-plaster solution to the problem is inadequate. It is not a question of customer choice, and that is why I challenged him when he sought to intervene. He did not answer that question, but perhaps he will think about it and include it in his winding-up speech.

On 15 November, the Government announced the Post office development fund, which is a £150 million-a-year package of subsidies for rural post offices up to 2006. The Welsh Assembly made £2.5 million available for the fund until 2005. That was to sweeten the bitter pill of the announcement by the Post Office at the start of the year that 150 out of 1,355 post office branches across Wales will be closed over the next three years. The fund, which was to help the most isolated and deprived rural post offices in Wales, has been suspended by the Welsh Assembly until next year, in what the Labour party claims is a period of reflection.

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Post offices could have applied for grants of up to £50,000 for refurbishment, investment and staff security in order to secure their business viability. The Assembly has put the grants on hold until January. That means that many post offices that have applied for grants will not receive a decision until the new year and receipt of the money will take months longer. Glyn Davies, AM, said:

Even if £450 million is to be spent over the next three years, it does not explain how those businesses are to be made viable in the longer term. My hon. Friend the Member for South Suffolk (Mr. Yeo) said:

Let us not forget the Government's 2000 rural White Paper "Our Countryside: The Future—A Fair Deal for Rural England", which promised to prevent any avoidable closures of rural post offices. In the following year, there was the fastest rate of decline in the number of post offices ever seen, with four times more closures in rural areas than urban areas. Rural post offices in Wales and across the UK are closing because they are hit hardest by a 40 per cent. loss in their income through the loss of revenue from paying pensions and benefits, but if we consider urban branches in Wales, we see that, despite the promises, the rot has set in there too. For urban branches, the Government have set aside £30 million for the reinvention of urban networks to make them "bigger, brighter, better". However, set aside is the operative phrase, as only £1 million of the £30 million earmarked for "bigger, brighter, better" has been committed, and we are currently halfway through the scheme. It is a closure programme, not a reinvention programme.

In theory, following public consultation with Postwatch, the Post Office makes a commercial judgment about the offices with the best and worst prospects. Using a device called brokering, the idea is to optimise coverage and access to branches with the best commercial future. It helps to decide between volunteering closures and those that must stay open for coverage, or those that must close because they are too weak. In practice, there is no brokering mechanism in place; instead, post offices that are volunteering to shut are driving the closure programme. The programme is not as strategic as it should be, and that concerns Postwatch. The problem is that the Post Office is immediately closing those post offices whose sub-postmasters go voluntarily and receive compensation, whereas often that branch is not the one that needs to close. There needs to be proper consultation, in which sub-postmasters who are not going voluntarily but who are in a weak office move into branches that are voluntarily closing but are more socially and financially viable.

The Post Office is cutting corners in order to achieve as many closures as possible without proper consultation. A programme generated by those volunteering to close at the taxpayer's expense is compromising consumer needs that are based on an optimised network. The concept of reinvention is

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instead a straight closure programme. That unsatisfactory flaw has seriously threatened the credibility of the so-called reinvention programme. It is neither open nor fair, and the consultation process is unacceptable. In order to remedy the credibility of the Government's bodged closure programme, we suggest that they do not automatically allow sub-postmasters who go voluntarily to determine that their branch will close. Some offices that volunteer for closure should be kept open to ensure proper coverage. It is vital to introduce a proper brokering mechanism. The Post Office must engage in earlier consultation with politicians and local authorities in order to act upon their concerns.

The Government's contradictory aims, statements and actions highlight the true extent of their threat to post offices in Wales and across the UK. The Government's response to the Trade and Industry Committee's 11th report on "People, Pensions and Post Offices: the impact of 'Direct Payment' on post offices and their customers"—I note that there is to be a debate on that subject on Thursday—states that they believe that the Department for Work and Pensions is providing sufficient information about Post Office card accounts and that there is no evidence that customers are being put off from applying for Post Office card accounts. If that is the case, why does a recently published Department for Work and Pensions document entitled "Direct Payments" boldly emphasise that Post Office card accounts are

Why does that document clearly state that its aim is to get nine out of 10 new claimants immediately on to direct payments in order to meet business case requirements? It completely contradicts the Government's response and it is exactly what they promised they would not do. The hon. Member for Montgomeryshire (Lembit Öpik) mentioned that in his speech.

The Department for Work and Pensions document underlines the significant difference between the Government's declared position on direct payments in relation to post office closures, and the reality of the implementation of policy by the Department. I believe that it reflects the Government's decision bluntly to ignore the fact that accounts at post offices generate essential income for sub-postmasters. It is ironic that the Labour party accuses Conservative Governments of having threatened rural post offices, given that its compulsory automated credit transfer policy introduced in April 2003 has dramatically increased the closure of sub-post offices.

Between March and September, 37 post offices were closed in Wales. Closures involved 25 urban and 18 rural post offices. Across the whole of the UK within the same six-month period, 547 post offices were closed, with 484 closures under the urban reinvention programme. The Government's policy is failing. They are throwing subsidies at it to hide their mistakes, but the truth is that their policy presents a clear threat to the survival of post offices in Wales.

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10.38 am

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Gerry Sutcliffe) : I congratulate my hon. Friend the Member for Blaenau Gwent (Llew Smith) on securing the debate on the post office network in Wales. He has described the issues that affect the post offices throughout Wales and the importance that communities attach to access to post office services. The issues that have been raised are relevant to every Member of Parliament, and I welcome the opportunity to respond to the points that he and other hon. Members have raised.

I congratulate the hon. Members for Caernarfon (Hywel Williams), for Montgomeryshire (Lembit Öpik), and for Leominster (Mr. Wiggin) and my hon. Friend the Member for Caerphilly (Mr. David) on their contributions to what is an important debate, judging by the strength of feeling that it generates. I acknowledge the work done in his community by my hon. Friend the Member for Blaenau Gwent. He is solidly behind his constituents and I shall deal with his concerns in my speech.

I assure my hon. Friend that the Government are committed to maintaining a viable nationwide network of post offices. We fully recognise their importance as a focal point for local communities, particularly for elderly and less mobile customers. I am also pleased to reassure hon. Members that we are committed to ensuring that benefits recipients can continue to collect their entitlement in cash from the post office if they wish. I shall come on to specific points about the post office branches in my hon. Friend's constituency in a moment, but I wish first to explain that the recommendations of the performance and innovation unit's 2000 report form the basis of the Government's policy for the post office network.

The performance and innovation unit's report was an in-depth study of the state of the Post Office and made 24 recommendations on how the network can be sustained. It was widely welcomed, particularly by the National Federation of Sub-Postmasters and the consumer watchdog, Postwatch. We accepted all the recommendations that were made, which included that, if the Post Office decided that fewer offices were needed in some urban areas, the Government should consider providing funding to ensure that those sub-postmasters who were affected could be compensated adequately for the loss of their business. Last November, following parliamentary approval of the funding, Post Office Ltd. initiated its urban network reinvention programme.

Many hon. Members voted in support of the Government's funding of the Post Office's programme under the terms currently proposed by the company, which is to close the seven urban offices to which my hon. Friend referred. He has been diligent in representing the views of his constituents and those who will be most affected by the closures if they go ahead. However, it is important for hon. Members to recognise the difficult conditions that the Post Office faces. We shall need to work constructively with the company to ensure that we can achieve the aim of ensuring a viable network for the future. In the past financial year, Post Office Ltd. made losses of £194 million before exceptionals; in the preceding year, losses were £163 million. The Post Office has again reported significant

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losses of £91 million in its recently published half-year results. During the years of Conservative Government, 3,500 post offices were closed, so it was increasingly necessary to take decisive and urgent action.

At present, the network of post offices is made up of 16,500 branches, which is more than all the banks and building societies in the country put together. More than 1,000 urban sub-post offices have at least 10 other post offices within a mile. Sub-postmasters have been finding it increasingly difficult to earn a reasonable income from their businesses and have been leaving the network. Without rationalisation of parts of the network to improve its sustainability, there will be an unmanaged decline as individual postmasters continue to shut down and leave. That would bring on the real prospect of serious gaps in provision opening up, which would be much more damaging to the interests of communities and to the viability of the network as a whole than the current managed process.

My hon. Friend the Member for Blaenau Gwent referred to Mr. Dave Barrett, who, I must put on the record, is the Post Office area manager for Wales and has responsibility for decisions and closures. He leads a team of staff who draw up the proposals. He has visited local communities, but I accept the point raised by my hon. Friend about his ability to speak to Mr. Barrett.

Llew Smith : Mr. Barrett addressed a demonstration yesterday. He was asked whether he had visited each post office in Blaenau Gwent, to which he replied, "Definitely, yes." Another constituent asked, "Well, if you visited the community and each and every one of the post offices, can you tell me the position in Garnlydan?". Mr. Barrett replied, "Ah, I haven't visited there." Some of the people on the demonstration were angry, but I said that we must thank Mr. Barrett because at least he admitted that he is a liar.

Mr. Sutcliffe : I note the points raised by my hon. Friend. Clearly, the matter is of concern and I shall return to it in my speech.

A serious contraction in the customer base has affected Post Office Ltd. and the financial standing of the business of the individual sub-postmaster and sub-postmistress. The company has been slow to develop new income streams and offices have become over-dependent on making benefit payments. More than 43 per cent. of benefit recipients already choose to access their benefit payments via bank accounts rather than by order books, compared with 26 per cent. in 1996.

It is essential for the post office network to adapt to changing lifestyles, changes in people's preferences and new ways of doing business. With profitability in the network as a whole declining, the ability of sub-postmasters to sell on their businesses—the way in which people have moved on in the past—has taken a severe knock. Without a managed programme, there is a great danger that haphazard closures brought about by sub-postmasters choosing to leave, or by Post Office Ltd. not being able to attract a suitable replacement when a sub-postmaster had left, would continue.

Lembit Öpik : I am sure that the Minister will come to my more detailed points later, but he said that it is important that the Post Office adapts to people's

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preferences. Unquestionably, one of those preferences is to maintain the pension book. Is he saying that, being sympathetic to that wish, post offices should be allowed to maintain them?

Mr. Sutcliffe : I said that people should have such a choice and continue to do so. That has been set out in the various announcements made by the Government through the Department for Work and Pensions and the Department of Trade and Industry.

I turn now to the urban reinvention programme. Initially, closure proposals under the Post Office Ltd. urban reinvention 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 closures occurring. The company accepted that there was much uncertainty about the future shape of the network and has now undertaken to produce its proposals on an area-by-area basis, using each parliamentary constituency or geographical groupings of them. In its recently published report on the post office network, the regulator, Postcomm, commended Post Office Ltd. for its constructive response and welcomed the more co-ordinated approach, as did the Trade and Industry Committee, whose report we shall be discussing on the Floor of the House on Thursday.

Producing an area-wide plan of post office provision in the constituency of my hon. Friend the Member for Blaenau Gwent brings the benefit of giving a clear view of the level and location of service provision at the end of the urban reinvention programme in a given area. We will know what the position is, but I take note of the points raised by my hon. Friend, especially his comments about consultation. It is vital that the views of Members of Parliament and local authorities about the wider plans are taken into account. That is important in ensuring that the offices in my hon. Friend's constituency are sustainable and are in the right locations for his constituents. In addition, such a process helps to reassure sub-postmasters about their prospects and should therefore help guard against further unplanned closures. I understand that, to minimise further uncertainty, Post Office Ltd. will also bring the programme forward by a year with the aim of completing all public consultations by the end of December.

I recognise what my hon. Friend said about the comments of my right hon. Friend the Secretary of State for Wales and my hon. Friend the Under-Secretary of State for Wales. I am concerned that no frank consultation is taking place, so I shall speak to my right hon. Friend about his remarks and give any support that I can to ensure that full and proper consultation takes place.

Llew Smith : I assume that the Minister is aware that the time in which to take such action is limited, given that the consultation process ends in a few days. Until now, there has not been any consultation or dialogue.

Mr. Sutcliffe : That contradicts my information. I understand the answerable case to which my hon. Friend referred. However, for my right hon. Friend the Secretary of State for Wales to be so clear about his views, he must have concerns, given that he received representations from my hon. Friend and others

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yesterday. There must be some doubt about the detail of the consultation process. If that cannot be completed within the time limit, which I understand is 16 December, I expect an extension to be made. I am sure that my right hon. Friend will make recommendations based on the information that he received yesterday.

It is important to note that, in accordance with the code of practice on branch closures, every proposal is supposed to be subject to public consultation. The consumer watchdog, Postwatch, has a key role in the process. My hon. Friend the Member for Blaenau Gwent was critical of the role of Postwatch, but it is looking at the situation nationally and will be making representations to Post Office Ltd. at the end of consultation period. That is why we are considering the research and Postwatch's views in respect of the consumer and how it should respond to the plans of Post Office Ltd.

Llew Smith : I accept that Postwatch has to carry out the necessary research, but the people in the community have the information. When I said that I was an expert and that people in the community are even greater experts, I meant not to sound arrogant, but to reflect the fact that we are part of the community. While we expect Postwatch to do the research, we must realise that the consultation comes to an end in a few days and that the research will not be completed because there will have been no opportunity to respond to local people. There is a time problem.

Mr. Sutcliffe : I understand that, but there will be an opportunity for Postwatch to respond on a national basis to the national closure programme and to have a view about that. Within the consultation period, Postwatch managed to get Post Office Ltd. to extend the consultation period from four weeks to six weeks. I support the way in which my hon. Friend has addressed the consultation process. I acknowledge that he does not believe that it has been a frank process, but the fact that he is supporting his community and that other colleagues are raising issues in the way that they are means that the concerns that people have raised should get across to Postwatch and Post Office Ltd.

I acknowledge my hon. Friend's description of his constituency and of the wider problems facing it. He knows about the plans for the offices in his constituency because he is heavily involved in that, but I am sure that he will forgive me for not naming each of those offices—[Hon. Members: "Go on!"] I am forced to have a crack at naming them: Badmington grove, Beaufort hill, Cefn Golau, Garnlydan, Rassau, Waunlwyd and Willowtown. As my hon. Friend said, these proposals have generated great local interest, as is evidenced by the public demonstrations outside the Ebbw Vale office last Thursday and yesterday and by the petition that I understand was presented to the local Post Office area manager.

The Post Office says that it entered into public consultation on its proposals for my hon. Friend's constituency on 5 November, with a closing date for representations on 16 December. The Government do not normally play a role in such decision-making processes. It has been the policy of successive

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Governments that decisions relating to individual branches are operational matters for Post Office Ltd. However, I will tell the Secretary of State about my hon. Friend's concerns. During the consultation, important points were raised by my hon. Friend, the customers who use the offices concerned, and Postwatch. They will have to be given due consideration by the management of Post Office Ltd. before decisions are made.

It is important to note that once decisions on the proposals have been reached, Post Office Ltd. has no intention of returning to my hon. Friend's constituency with any further proposals. The company maintains that if the proposed changes go ahead, it will have fulfilled its objectives by ensuring that there is the right level of service in the area for the level of custom. Those decisions are an operational matter for Post Office Ltd.

Llew Smith : If I heard the Minister correctly, Post Office Ltd. does not intend to return to my constituency and bring about another closure programme. That is diametrically opposed to its warning in its consultation document. I do not think that Mr. Barrett has read that document—although I pay him the compliment of saying that he can probably read—but I have read it, I know what it says, and I have repeated its comments.

Mr. Sutcliffe : I acknowledge my hon. Friend's point. The point that I am making is that Post Office Ltd. is saying that if its proposals go through, it will not come back for a second bite. It is clear that my hon. Friend does not agree with that, and that he will pursue the consultation in the way that has been outlined today.

Mr. Wiggin : Will the Minister say what the time scale will be?

Mr. Sutcliffe : That is difficult. Yesterday, my right hon. Friend the Secretary of State for Wales met a delegation from the constituency of my hon. Friend the Member for Blaenau Gwent, who stridently stated that there is an unanswerable case for these offices not to be closed. Therefore, I expect that it would be difficult to get through the necessary frank discussions by December 16—which is the current time scale—as it is now 9 December. However, I cannot second-guess what my right hon. Friend will say to me, or how he will pass his message on to me, as a result of yesterday's meeting. I will wait to hear his comments. I have had an informal chat with my hon. Friend the Under-Secretary of State for Wales, who has described concerns about his own constituency with regard to the proposals.

These decisions are best left as operational matters for the Post Office. It would be neither practical nor appropriate for the Government to become involved in the process itself. It is important that Postwatch acts as an effective customer champion in this programme. The Government have ensured that Postwatch receives sufficient funding to carry out its important role in examining each proposal and monitoring the programme.

An additional element of the urban reinvention programme is the £30 million that the Government have provided for modernisation and for adapting those

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offices which remain in the network. The key to improving standards in those offices will be the increased volume of business that they can expect, but the grants of up to £10,000 for each office that expects 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. I understand that if the current proposals for the offices in the Blaenau Gwent constituency go ahead, there will be an investment of more than £30,000 in the offices that are expected to receive an increase in custom as a consequence of a nearby closure. The Post Office will generally require the receiving offices to improve their facilities and to extend their opening hours so that, increasingly, sub-post offices will maintain the same hours as the associated retail businesses that run alongside them, thereby improving their service to customers. I should make the point that that is the first ever programme of Government investment in urban sub-post offices and that it is an additional measure to those recommended in the performance and innovation unit's report, which started the whole process.

In agreeing to fund compensation payments to sub-postmasters whose offices are closed under the urban reinvention programme, we have asked Post Office Ltd. to ensure that after the programme 95 per cent. of the urban population will still be within a mile of their nearest post office. We have also asked the company to ensure that, except in exceptional circumstances, its urban reinvention proposals do not include offices in the most deprived 10 per cent. of urban wards where there is no other post office within half a mile. That may affect my hon. Friend's constituency.

In accordance with another of the recommendations of the performance and innovation unit's report, the Government have made available support for post offices in the most deprived urban areas that are at risk of closure. In England, a £15 million deprived urban post office fund operates in the most deprived urban areas and is administered by the neighbourhood renewal unit of the Office of the Deputy Prime Minister.

In November 2002, the Welsh Assembly announced an equivalent scheme with the aim of supporting a viable post office network across Wales. The Welsh Assembly scheme is structured more flexibly in its coverage to accommodate some of the particular considerations to which my hon. Friend the Member for Blaenau Gwent has referred in order to include isolated offices as well as those in deprived urban areas, but the support that is available takes the same form as that introduced for England by the Office of the Deputy Prime Minister. Some £2.5 million has been allocated to provide for grants of up to £50,000 to develop and improve post office and associated retail facilities. I understand that under this scheme a grant of just over £28,000 has been awarded to the Llanhilleth post office in my hon. Friend's constituency. The grant will be used to improve and renovate the shop frontage, including a ramp allowing for disabled access, the refurbishment of the post office area and the installation of a new security counter.

I am aware that I have not answered every question that has been raised. Hon. Members made detailed comments, and I will write to them to ensure that their

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points are properly addressed. However, given the time that remains, it is important to reflect on what my hon. Friend has said about the position in his constituency and in Wales. I acknowledge and take note of the views of the Welsh Assembly. Post offices are important to our communities for the reasons that I have described. I would like to make sure that appropriate consultation takes place—that people fully understand the reasons behind the post office proposals and that they are included fully in any consultation that takes place. It is important that the Government make sure that people have the right to choose whether they want benefits to be paid across the counter or into their bank accounts, and it is important that Members of Parliament who make representations on behalf of their constituents are fully involved in the consultation process. If that does not happen, Post Office Ltd. will have made a mistake. I hope that Post Office Ltd. and Postwatch will examine our debate and ensure that they learn from the exceptional contributions that have been made by hon. Members who feel that the post office network needs to be sustainable and viable and that it must meet the needs of local communities.

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