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Madam Deputy Speaker (Sylvia Heal): I have to inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.
4.50 pm
The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms) : I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
- "congratulates the Government for its commitment to modernise and invest in the national network of post offices while keeping them easily accessible to all customers; notes that the choice of account for customers into which they wish their benefits paid is entirely a matter for the customer concerned and congratulates the Government on ensuring that all the necessary information is available to customers to make an informed choice; applauds the Government's £2 billion investment in the Post Office network and its success in reducing the rate of rural post office closures; notes the Post Office's commitment to ensuring that 95 per cent. of the urban population live within a mile of a post office, and the majority within half a mile, and that honourable Members are consulted on proposed closures as part of an agreed process between the Post Office and Postwatch; further notes that 3,500 post offices closed under the previous administration; and condemns those who seek to undermine confidence in Britain's postal services."
The starting point for the policy that we have adopted for the post office network is the performance and innovation unit 2000 report, which was mentioned by the hon. Gentleman and was widely welcomed in the House, not just on the Government Benches, as squaring up honestly to the big challenges that the post office network faces, having been utterly neglected by the previous Government. The report made 24 recommendations, all of which we accepted for the future.
Malcolm Bruce (Gordon) (LD): I am slightly surprised that the Minister explained his presence at the Dispatch Box in terms of the fact that he is Minister for Postal Services. I have no disrespect for that job or his role, but surely this is such an important subject that one would expect the Secretary of State to be present. Is there no good reason for her not being here, other than the fact that she has delegated to the Minister?
Mr. Timms: I am the Minister responsible for policy on the postal services. That is why I am responding, entirely appropriately, to the debate. It certainly is an important issue, and one that the Secretary of State and I are closely engaged in. I notice, by the way, that the Conservative party does not have a member of the shadow Cabinet present for trade and industry business at all now. There is some puzzlement among my colleagues about that. However, it is quite appropriate that I am the Minister responding to the debate.
Mr. Stephen O'Brien: Having known the Minister since our university days, I have come to respect the fact that he is a genuinely intelligent person, so I am surprised at his comments. With a shadow Chancellor and shadow Secretary of State for Economic Affairs, we are showing in opposition how joined-up Government is possible for the whole of business and economic affairs. That is how we organise our team.
Mr. Timms: Indeed. I should be delighted if the shadow Secretary of State for Economic Affairs were present, but he is not. Given that the hon. Member for Eddisbury queried the absence of my right hon. Friend the Secretary of State, it is appropriate to draw attention to the fact that his right hon. Friend is not present. It is also a mystery to the director general of the CBI, who had a rather embarrassing exchange with the leader of the Conservative party on that very point.
Let us return to the matter in hand. The PIU report pointed out, rightly, that our network of post offices has not kept pace with the changing needs of its customers, that too often in all our constituencies post offices have become rather dingy, particularly through a chronic lack of investment under the previous Government, and that the organisation had not taken advantage of its
highly trusted status as a provider of financial services. It was losing business. It faces an enormous challenge. In the last financial year, Post Office Ltd., which is the part of the organisation dealing with the network, lost £194 million. The year before, it lost £163 million, and it has reported a loss of £91 million for this first half-year. With declining profitability in the network as a whole, the ability of sub-postmasters to sell on their businesses—the way in which sub-postmasters have been able to move on in the past—has also taken a severe knock. Decisive action is needed to ensure that we maintain a sustainable countrywide network for the future. That is the reason for our action.
Llew Smith (Blaenau Gwent) (Lab): My constituency has some of the lowest incomes, highest unemployment levels, worst health problems and highest disability levels in the country, as well as poor public transport, a low level of private car ownership and an ageing population. My constituents are just the type of people who depend on their post office. The Secretary of State and the Under-Secretary of State for Wales have criticised the consultation process that is taking place in respect of the closures in Blaenau Gwent and have argued that our case to withdraw the closure programme there is unanswerable. Does the Minister support them in that?
Mr. Timms: I am aware that my right hon. Friend the Secretary of State for Wales has made some remarks on that process and I understand that the Post Office is responding. As I shall describe in a moment, there are features of the process that the Post Office has introduced that reflect the particular needs of disadvantaged areas such as those that my hon. Friend and I represent.
The network has been contracting since the 1960s. The previous Government presided over 3,500 post office closures—a statistic that was strangely absent from the speech of the hon. Member for Eddisbury—in rural and urban areas. There have been reductions in post office usage for all sorts of reasons, and the complete absence of investment in the Post Office on the part of the previous Government was very significant. However, there have also been other reasons. Dramatic improvements in technology, greater mobility and changes in shopping and financial habits all mean that people have simply not been using the post office as they used to, and custom has been sharply reduced.
Lembit Öpik (Montgomeryshire) (LD): Does the Minister not accept that many of the changes that he has mentioned are not appropriate to describe what has been happening in rural areas? Rural life has remained much the same. Rural people depend very much on post offices, but they see that service disappearing for reasons entirely outside their control.
Mr. Timms: I do not agree with the hon. Gentleman. It is not the case that life in rural areas is not changing. There have been changes during the past 20 years. For example, car usage has increased and people have become more willing to travel further to the shops in the past couple of decades. Those changes and many others have had a direct impact on the post office network.
Jim Knight: I support those comments about changes in rural life. My constituency has a very high level of
second home ownership, and in some rural communities, 50 per cent. of the population does not live in the local area much of the time. That has contributed to the closure of rural services such as post offices. I welcome the Government's commitment to keeping those services open—saving post offices on Portland, for example—while some in Weymouth are closing, as the hon. Member for Eddisbury has described.
Mr. Timms: My hon. Friend is absolutely right to draw attention to the importance that we have attached to maintaining rural post offices. I shall mention our action on that issue in a moment.
I need to draw the House's attention to a couple of facts. Before the switch to making benefit payments by direct credit started last year, more than 50 per cent. of benefit recipients were already receiving their cash directly into their bank accounts rather than by order books, compared with only 26 per cent. in 1996. In that short period, the proportion had doubled. Some 62 per cent. of all new child benefit recipients and 59 per cent. of all new pensioners already received their benefits directly into their bank accounts before any of the changes of the past eight or nine months. There are far fewer recipients of jobseeker's allowance now than in the past. All those changes pose big challenges to the post office network, which must be addressed, not ducked.
Mr. Roger Williams (Brecon and Radnorshire) (LD): Does the Minister agree that many problems arise in relation to the definition of what is an urban and what is a rural post office? For example, many of the old mining communities, which have been defined as urban although they are rural villages, need the support and help that rural post offices are promised.
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