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Mr. Pond: I am a little puzzled. I might have missed something, because I have been in this job only since June, but did pensioners previously get their housing benefit paid into their pension book?

Mr. Webb: No, they did not. What a crushing intervention. However, I presume that the whole point of this new integrated system is to give people a single point of access. It is about bringing benefit recipients into the mainstream; it is financial literacy, a one-stop shop. Instead, we find that people will receive one of the principal benefits, which they use to pay their rent and council tax, in the form of giros, when they have to have a plastic card for other payments. Presumably, the Government want this system to be put in place or they would not be having contractual negotiations. If they think that the scheme is an irrelevant waste of time, why are they having contractual negotiations on it? They cannot have it both ways.

When the hon. Member for Havant (Mr. Willetts) quoted from an internal memorandum, which he was quite right to do, the Secretary of State responded by saying that the Government were pushing people away from Post Office card accounts to ensure that they were job-ready, which meant that they needed a proper bank account. However, there is no suggestion in the memorandum that that is remotely what has been going on. The memorandum says:

not to help to serve clients—

Will what? Undermine claimants? No. It will

That is nothing to do with serving the public. It is to do with saving money, and the Government should come clean about it.

My hon. Friend the Member for Argyll and Bute (Mr. Reid) has already said that the situation in Scotland is very different, and that none of the major banks there

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will allow customers to access mainstream bank accounts at post offices. The Secretary of State's rather glib reply was that basic bank accounts in Scotland could be accessed through a post office. That is great. People have to open a different bank account—one with rather limited features—if they want to get their money from a post office. That is totally unsatisfactory.

When I asked why it is that people will be unable to pay wages into these accounts, I was told that they are not really regarded as proper accounts. But if the point is to support the post office network, these accounts should surely be made as good as, not as limited as, possible. So I hope that the Minister will recognise in his response that people want these accounts to be proper accounts that are accessible at post offices.

We have heard about the position of people with disabilities, whom the Government seem to have treated as an afterthought. They have rushed out this proposal, and the idea that a PIN pad with nine keys constitutes new technology is astonishing. These issues must have been dealt with before; why were the Government so slow to take them on board?

We have heard a little about the important issue of the exceptions service, and I hope that the Minister is listening at this point. The service will be available from October 2004, we are told, and so far as we can tell it will provide people with a cheque. From April 2005, when the use of order books ceases, anybody who has not replied will presumably be on the exceptions service, so they will be sent a cheque in the post. Into where can they pay that cheque? Presumably, they will be able to pay it into a post office; otherwise, the system would be absurd. So instead of being sent a giro that specifies their name and the amount, which they take to a post office, they will get a cheque that specifies their name and the amount, which they will take to a post office.

What is the point in generating an entirely new system when a perfectly good one already exists that people know and trust? I genuinely cannot fathom this one. Spot the difference between a cheque received in the post that specifies one's name and the amount, and an order book that contains the same information. Why is one system better than the other? I really cannot understand the difference. The millions of people who probably have not responded will want to know what their position will be after April 2005.

The consequence of the Government pushing people into using such accounts and away from post offices is that the latter have suffered. Indeed, 1,000 post offices have closed in the past three years. This is a long-term phenomenon that has existed under Governments of both of the two largest parties. However, even though the rural post office network has supposedly been bolstered, 74 rural post offices have closed in the year to September 2003—a figure that is net of the number that have opened. Indeed, the problem is getting worse. So as has been said, the promise that people's money can be paid into a post office is not worth the paper it is written on if the post offices are not there.

We have heard about the so-called consultation process. It has been acknowledged that it is a shambles, and I shall cite one example from my own constituency. One of the two post offices in the town of Thornbury came up for closure. All the local residents objected and

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everyone pointed out that the idea would not work, but the Post Office ignored them and shut it. The one remaining post office has people queuing outside the door, and the health and safety people are worried because they cannot fit in the staff needed to deal with all the customers. That does not sound to me like a town that cannot support two post offices, but did the Post Office listen? Of course it did not. I am not convinced that the new, so-called consultation process will be any different from the old one. Frankly, we know what the Government and the Post Office want to achieve, and if an individual post office gets in the way consultation will not make a blind bit of difference. If they are determined to shut it, they will shut it anyway. There has to be an alternative vision, which must be a positive one.

Andrew Selous: Does the hon. Gentleman share Postwatch's concern that some senior Post Office managers are on commission in terms of the number of post offices that are closed in their areas? Is he aware of that development?

Mr. Webb: If that is so it is truly shocking, because it rather suggests that a careful, case-by-case assessment of the merits of individual post offices is not the issue. No one is suggesting that the entire system should be set in stone, but the idea that managers should be rewarded for closing as many post offices as possible as fast as possible is totally unacceptable. It makes a mockery of the suggestion that serious attention is being paid to consulting the public.

There can be, and has to be, a positive future for the post office network, but the key point is that it needs time to adjust. The Government are denying it that time by forcing the pace of transferral to payment into bank accounts. We recognise that people's views change and that, over time, there will be a gradual increase in the number who use bank accounts, with fewer using giros. If that gradual process were allowed to continue, post offices would have time to adjust to taking on the new services about which the Secretary of State has talked. Post offices could give people access to banking services in any case; there is no need to introduce direct payment, or to take away pensioners' right to payment by giro. The two elements are quite separate. We need to boost the post office network, to respect people's choices and to have genuine consultation. So far, the Government have failed to deliver on any of those fronts.

2.45 pm

Richard Burden (Birmingham, Northfield) (Lab): At the end of February, Post Office Ltd. announced the proposed closure of 29 of the 90 sub-post offices in the south Birmingham area. Five of the 14 post offices in Birmingham, Northfield were among those slated for closure—in other words, 35 per cent. of all the local post offices in my constituency.

I do not dispute the fact that we need to recognise that Post Office Ltd. is going through a period of change. Its trade and the pressures to which it is subjected are massively different from those that existed 20 years ago. Not all post offices are sustainable, and as Conservative Members know, 3,500 unplanned closures occurred under the previous Government. So the current Government are right to require Post Office Ltd. to plan for the future. It needs to assess what is sustainable and

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to maintain those post offices that are sustainable, but it also needs to consider the available opportunities rather than simply focusing on the threats facing individual post offices.

Such an assessment is what the urban reinvention programme was supposed to be about, and we members of the Select Committee were certainly assured that the area plans were supposed not only to look at post offices in isolation, but to consider the needs of entire communities and how the post office service should fit into them. I have difficulty in relating that vision to the slating for closure of 29 of the 90 sub-post offices in south Birmingham.

A number of problems have led to the way in which Post Office Ltd. is currently behaving. It uses a modelling system called Netspec to produce its area plans. Netspec has some strengths, but it is important to put it on the record that Postwatch has said that Netspec has been

but says that

I credit Postwatch for the way in which it has represented local views and acted as a watchdog over Post Office Ltd. In doing so, it has cast considerable doubt over the way in which Post Office Ltd. has used its modelling system.

Post Office Ltd. has got the demographic characteristics of my constituency wrong, and has not checked its facts properly. It said that there was virtually no rented housing in one particular area, but it had looked behind the post office in question because of the ward in which was located, rather than across the road to the houses in front of it—presumably because they are in a different local government ward. That side of the road is stacked to the rafters with high-rise blocks of flats, and it is also a large council estate.

Under the terms that Post Office Ltd. has agreed with the Government, it is also required to look properly at deprivation. In planning its changes, it is supposed to consider the 10 per cent. most deprived wards in the country, and the 20 per cent. of wards that contain pockets of severe deprivation. I do not believe that it has looked at the issue of deprivation in my area with sufficient rigour, and I have no reason to think that the situation is different anywhere else. It certainly has not considered the issue of pockets of deprivation. Members on both sides of the House will understand that the word "pocket" is something of a misnomer. The pockets of deprivation in each ward in south Birmingham probably consist of thousands of people, because the wards are very big. There is no sign that Post Office Ltd. is looking at the issue of deprivation sufficiently clearly.

As a result of all this, Post Office Ltd. is not meeting the targets that it is required to meet, at least in the case of south Birmingham. It has promised that more than 95 per cent. of customers should be within a mile of a post office, and that most customers should be within half a mile of one following a closure. The calculation is made

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not on the basis of where the customers are—I recognise that that can, for all sorts of technical reasons, be quite difficult—but on the basis of the distance between the closing post office and the so-called receiving branch. According to the figures, there is no receiving branch within half a mile of the closing branch in my constituency—not one, but most should be within that distance. About 60 per cent. of the receiving branches are a mile or more away from the closing branches. The required targets have simply not been met.

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