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Ms Hewitt: No, I want to make progress.

I want to underline the point that there is still a view, which I regret that some sub-postmasters share, that the only way to keep post offices viable is somehow to force customers to use them by maintaining an out-of-date order book system that gives those customers no choice at all about where they get their cash. That is not the way forward for our sub-post offices. I am glad that, in its evidence to the Select Committee, Age Concern said:

it may have been referring to the Conservative party—

Nor do we.

That brings me to the second set of issues raised by the hon. Member for Havant and other Opposition Members, about the number of local post offices and the restructuring. We want a viable national network.

Mr. McLoughlin: Will the Secretary of State take this opportunity to apologise to the constituents of those Members who raised cases with the Minister for Energy, E-Commerce and Postal Services the last time that we debated this subject, when we said that the consultation process was a sham? He assured us that it was not. The "Westminster newsletter", which was sent out by the Post Office after he made his announcement on 5 February, referred to new developments, one of which, it said, guaranteed that the Post Office will

The Minister of State's statement included the following provision:

That meant no binding closure on that particular post office. That proves the point that many of us made before 5 February—the whole consultation period was an absolute sham.

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Ms Hewitt: I am not sure whether the hon. Gentleman is complaining that my hon. Friend the Minister responded to the concerns raised in that debate and took full account of all the individual complaints that have been brought to him. As a result of individual complaints, where the process has apparently not been followed as it should have been, he discussed matters with David Mills, the excellent chief executive of Post Office Ltd., and put in place stronger measures to ensure that in every case, and in every part of our country, the consultation process is properly followed and the area plan is finalised only after that consultation has been finished.

Mr. Stephen O'Brien (Eddisbury) (Con): To be absolutely clear, is the Secretary of State saying that she is grateful to Her Majesty's official Opposition for the debate on 13 January, which highlighted issues on which we were supported by Members across the House, not one of whom was in favour of the Government? Do not the Opposition therefore deserve thanks for having prompted the Government to take the right decisions, which then came forth in the Minister of State's statement?

Ms Hewitt: I am congratulating my hon. Friend, who is an excellent Minister, on taking account, as he always does, of constituency issues raised by Members on both sides of the House. I should have thought that the hon. Gentleman would have been less churlish on that point.

Mrs. Patsy Calton (Cheadle) (LD): I thank the Secretary of State for her answer. There is one group with a particular problem—those for whom the network reinvention programme and the so-called consultation and decision-making processes were already under way. It is no comfort to my constituents or those of other hon. Members to find that their consultations were so flawed that matters would be put right in future but that closures would go ahead as was clearly planned from the outset in their constituencies. Why has the Minister failed to put a halt to those processes?

Ms Hewitt: I am sure that that is a point on which my hon. Friend the Minister of State has had discussions or communication with the hon. Lady. If not, I shall ensure that he does so.

Let me stress the need for a planned reorganisation of the post office network. In the previous financial year, Post Office Ltd., not the whole of the Royal Mail, made losses of £194 million before exceptional items. In the year before that, it made losses of £163 million, and the half-year results that have just been reported show significant losses again of £91 million. What has been happening over many years is a process of completely unplanned post office closures. Indeed, the Conservative party presided over 3,500 post office closures during its period in office.

As a result of such unplanned closures, as sub-postmasters gave up the unequal struggle of trying to make a living out of too few customers, we ended up with a pattern of provision that had no basis in rational response to what customers needed. Let me give the House the example of my city, in which one post office branch, in the constituency of my hon. Friend the Member for Leicester, South (Mr. Marshall), has 12

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other post offices within a one mile radius. Indeed, it has 15 others within a radius of 1.1 miles. That is an impossible situation, in which none of the sub-postmasters can make a decent living, none can afford to invest in their shop or post office to make it more attractive to customers, and all are chasing and competing for a hitherto dwindling band of customers. Before the Post Office began its urban reinvention programme, more than 1,000 urban post offices had at least 10 others within one mile. Either we allow that to continue and let the decline go on—which is what the Conservatives were doing, and presumably would still do today—or we face up to difficult decisions and invest to ensure a planned restructuring of the network.

The problem is not unique to the United Kingdom. Customers in developed countries all over the world have been changing their patterns of banking, using the internet more and so on. In Germany, the number of post office branches has been reduced from 30,000 to 13,000 as a consequence of changes in customer behaviour.

Richard Burden: I agree that it is vital for us to plan the changes that are necessary, but does not the way in which Post Office Ltd. is going about a number of the reorganisations fall short of expectations? In south Birmingham, for instance, the closure of 29 out of 90 sub-post offices is being suggested. Is not one of the problems the excessively inflexible view adopted by Post Office Ltd. of the assistance available to Government, which often leads it to maximise its chances of closing post offices and minimise the opportunities to create sustainable businesses? Will my right hon. Friend assure me that in future Post Office Ltd. will be encouraged to look at the opportunities for post office business, and not just the threats?

Ms Hewitt: My hon. Friend makes an important point. I know that he and other south Birmingham Members have been enormously active in engaging in the current consultation on the area plan with Post Office Ltd. and Postwatch, and representing the views of his and others' constituents on what the restructuring should involve. If necessary, I will convey what he has said to David Mills, the chief executive of Post Office Ltd., whose entire vision for the Post Office is based on maximising opportunities for new products and much better, brighter urban post offices, thanks to the programme of restructuring and investment. We have invested a substantial financial commitment to providing compensation for sub-postmasters who are leaving their businesses, as well as investment for those who are staying, to ensure that the remaining post offices are better and more attractive to customers. That is essential.

Mr. Nigel Evans (Ribble Valley) (Con): The Secretary of State makes all the changes sound rather exciting. If she were to lose her seat at the next general election, would she consider opening or taking over a post office and running it? I wonder whether she really understands the pressure that some of our postmasters and postmistresses are under. Would she consider being a postmistress?

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Ms Hewitt: I certainly would, given the example of the wonderful Mrs. Patel, who runs an urban post office in a disadvantaged community in my constituency. Like most successful sub-postmasters, she combines it with a retail outlet. She welcomed "Your Guide", but welcomes much more the opportunity to have an automated teller machine in her shop. She has one of several thousand ATMs that have now been installed, thanks to our investment in sub-post offices. That is helping to bring new customers and more business into her post office. Along with many other sub-postmasters and sub-postmistresses, she provides a great example of entrepreneurial commitment—which is what Labour wants to encourage, even if the hon. Gentleman does not.

Mr. Willetts: I was going to encourage the Secretary of State to consider a job swap. She is clearly keen to be a postmistress, and we would greatly appreciate a Secretary of State who knew something about the business. Would the Secretary of State consider a swap, even just for a week?

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