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Mr. Michael Weir (Angus) (SNP): I was interested to hear what the Minister had to say about financial services. He will be aware that none of the major Scottish banks is offering such services. Will he join others in the House in calling for the major Scottish banks to join in, which could be very useful for rural post offices?

Mr. Timms: The hon. Gentleman may have been absent when that point was dealt with earlier.

Mr. Andrew Dismore (Hendon) (Lab): May I take my hon. Friend back to his definition of a deprived area? Being a London MP, as I am, he will know of pockets of deprivation that are smaller than those he mentioned, but none the less areas of extreme deprivation. In that context, can he look into the closure of Grahame Park post office in my constituency? Grahame Park serves the most deprived part of my constituency where many people are on benefit, many have disabilities and there are many lone parents. There is a day centre that caters particularly for people with disabilities. Public transport links are poor and car ownership is low. At the same time, the estate is about to be regenerated and there will be a significant increase in the population over the next few years. It seems completely daft to close the post office when there is no alternative facility nearby and it is a deprived area. Something should be done about it.

Mr. Timms: I am sure that my hon. Friend will make that case to the Post Office and to Postwatch, which would both be interested and keen to hear his views.

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A couple of years ago, many people were seriously concerned about financial inclusion, and I believe that that is still a major issue in the present discussion. I therefore particularly welcome the recognition made in a recent citizens advice publication on financial inclusion:

That is absolutely right, and the recent changes have taken us many vital steps forward.

Mr. Brian Jenkins (Tamworth) (Lab) rose—

Mr. Timms: I shall give way one last time, to my hon. Friend.

Mr. Jenkins: The Minister must be aware that in my constituency, the two most vulnerable areas are having their post offices shut. What causes us most concern is the fact that in the south-east of Tamworth, all the post offices are proposed for closure. The new proposed post office does not accord with the Minister's criterion of the majority of the local population living within half a mile of it. In fact, just 20 per cent. are within half a mile. Is that the majority? We have had a commitment from the Post Office and the Minister saying that the majority of the population will live within a certain distance of post offices. Is that a commitment, a guarantee, a wish, or is it merely a platitude?

Mr. Timms: The commitment is that, nationally, 95 per cent. of the urban population will be within a mile of their post office—most within half a mile. That will certainly be the consequence of the programme that applies to the country. My hon. Friend has written to me about particular issues in Tamworth. I know that my officials have been in discussion with the Post Office about them, and I am sure that my hon. Friend has been in discussion with the Post Office and Postwatch as well.

Mr. Mark Francois (Rayleigh) (Con) rose—

Mr. Timms: I shall not give way again.

The Post Office faces a wide range of challenges in making sure that the network can remain viable and sustainable. I share the concern of hon. Members about ensuring the network's future. We need to ensure that it can prosper on the basis of today's and future needs, not those of 20 or 30 years ago. That is where our policies are leading, and I commend them to the House.

5.28 pm

Malcolm Bruce (Gordon) (LD): I commend the Minister for his brave defence of the Government's policies and I acknowledge that he is a thoughtful, intelligent and assiduous Minister, but he must know that he is in a big hole and that his Secretary of State has abandoned him in it. The explanation that she is not here because he is here is totally inadequate. The Post Office is, after all, the only significant business that the Government still own, and the right hon. Member for Leicester, West (Ms Hewitt) is the Secretary of State

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responsible for it. The fact that she is not here is reprehensible, and I hope that she will take note that the House is less than pleased about her absence.

Mr. Francois: The hon. Gentleman will be aware that the House last debated these issues on 11 December 2003. That was also a heated debate. Today's Minister was not present then, and deputising for him was the Under-Secretary of State for Trade and Industry, the hon. Member for Bradford, South (Mr. Sutcliffe). Hon. Members raised important constituency points that night, and that Minister undertook to respond to our points in writing. Most of us are still waiting for those letters, myself included. Does the hon. Gentleman agree that if Ministers agree to write to Members, they should keep their word, or does he think that the letters are lost in the post?

Malcolm Bruce: The hon. Gentleman will be aware that the Department of Trade and Industry is struggling—it has only 10,000 civil servants, so obviously it does not have the staff. [Hon. Members: "One for each post office."] So far—and falling. The figures will probably cross over in about six months.

The Government maintain that they are investing £2 billion in the post office network, but I would like clarification of at least some of that figure. The reality is that it includes, for example, £450 million over three years for maintaining the rural post office network. We recognise and welcome that investment, but the idea was that that would happen while a solution was created to the problem of providing income for those post offices. If we have not done that at the end of three years, such money will be not an investment but simply a maintained expenditure, which will not change the situation at all.

Of course, we are also using such money to pay postmasters and postmistresses to leave the Post Office. And according to the Library, approximately £800 million is not specified at all, and is believed to be debt write-off and dividends forgone. Most of us do not really regard that as real money. It certainly does not constitute investment—it simply covers the losses. Indeed, if £2 billion were really being invested in the post office network in this short period, the Government ought to be commended, and we would expect as a result a super-modern, efficient and streamlined Post Office with a dynamic range of services, run by confident people with high morale. This debate clearly shows that no one except the Minister believes that that is the outcome we are currently heading for.

We all acknowledge that change is necessary, and indeed, it was taking place. No one denies that the process of transferring payments to bank accounts, for example, which was ongoing and undertaken out of choice, would have led to a decline in income for post offices. But the point is that the Department for Work and Pensions has accelerated that process, thereby creating a problem for the DTI. It has been wrestling to find solutions, but so far it has come up with no convincing answers. The small but significant—and by no means cheap—experiment of "Your Guide" enjoyed fairly widespread support, but it has been abandoned, presumably because the Government are not prepared

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to make the investment. On the one hand the Government claim to be investing, but when such an opportunity presents itself, the resources needed to make the project work are not available. In that climate, it is hardly surprising that when those who run sub-post offices are given the chance, they are taking the money and running, especially as it is better than the figure they could realise on the market.

A high proportion of closures are taking place in rural areas, even though the policy there is not to close. In fact, the situation in such areas is almost worse. Although income is guaranteed, people can see business dwindling week by week, and they can envisage that in three years' time, income will stop and the business will have no value. So when somebody wants to retire, it is almost impossible to tempt a member of the community to take over the service. I can quote constituency examples, as can all other Members. A post office at Pitcaple—it serves my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith)—with more than 100 customers closed two years ago. The Post Office said that it was more than happy for it to continue, but two years later it said that the premises were unsuitable, despite the fact that a local shop offered to take it over. It subsequently said that it could find nobody else to run it. That post office still has not reopened.

In respect of the one town in my constituency that qualifies for urban renewal, it was a case of, "Hands up who wants to close their post office? Here's the money: go." Of course, the other two post offices were very happy to vote for that, because the business was shared among them. That is part of the problem.

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