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Mrs. Calton: I should like to draw attention to the report of the performance and innovation unit of 2000. It states:

Richard Burden: The hon. Lady has a point. I presume that she, like me, welcomes the fact that the Government commissioned the PIU to examine the future of the Post Office. The report, which I believe the Liberal Democrats supported, made several important points. I believe that distance-based criteria are overly inflexible. My point is that, even according to those criteria, Post Office Ltd. has not met the targets that it is required to meet.

Mrs. Calton: Perhaps I did not make my point clearly enough. Everything that flowed from the PIU report was supposed to be carried out, but it is clear that Post Office Ltd. has not followed the guidance that the report offered.

Richard Burden: It would be fair to say that some of the actions taken by Post Office Ltd. have been consistent with the PIU report, but not others. My point is that, even where the recommendations were followed, there has been severe doubt about the extent to which they have.

Why does Post Office Ltd. get it wrong? There is not too much fundamentally wrong with what the Government have requested, so why does the organisation seem to get things so wrong? One reason is the consultation procedure. I tabled an early-day motion last year on the subject and the Minister for Energy, E-Commerce and Postal Services guaranteed what Post Office Ltd. would be required to do: to consult local communities throughout the process of change, not just at the end of it. That has not happened.

Area plans are constructed on the basis of discussion between Post Office Ltd. and local sub-postmasters. Communities and local authorities are not involved in drawing up the plans: they have their say only at the end of the process, when the plan is published. That is a fundamental flaw, because we could avoid many of the problems if we asked the experts—effectively, the people who live in or represent the area—at an early stage. I certainly welcome the fact that the leader of Birmingham city council, Sir Albert Bore, made that point very clearly to the Post Office in his response to the plan to close 29 sub-post offices in the area.

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Another problem is that only the threats not the opportunities for business are considered. It is right for the Government to provide compensation for sub-postmasters where they are losing their business and the post office is simply not viable. However, as I said earlier, the Post Office's approach to the problem is so inflexible that it effectively forces a local sub-postmaster to quit the business and get out, because it makes more financial sense for the sub-postmaster to do that than to sell the business to another business person who might have a sustainable plan to keep it going. I believe that that is not only wrong but uneconomic.

That position arose in my constituency, and I shall use mythical figures to illustrate the point. If a business is worth about £50,000 on the market, it is possible for the sub-postmaster to be offered £70,000 in compensation to get rid of the business, yet another business person could be willing to take it over on the basis of a viable business plan. In those circumstances, the sub-postmaster would have to be mad to sell to the new business person for £50,000 when he could receive £70,000 for shutting the branch down. The Government should know that that is how the Post Office is operating the plan, which I do not believe conforms to the spirit of what was agreed. I ask the Government to encourage Post Office Ltd. to be more flexible and to examine how it might be possible to save public money and sustain viable businesses on that basis.

Andrew Selous: To illustrate the hon. Gentleman's very good point further, does he share my upset on learning from Postwatch that the Post Office has been instructed to reject other sources of funds that might have been available to keep a post office going? The concern was that there was a danger of establishing a precedent that might keep post offices in business. Does that not reinforce his point?

Richard Burden: The problem is the approach of Post Office Ltd., which is not in keeping with the spirit of what was agreed with the Government. A closure of a sub-post office is properly a matter for Government intervention, the use of Government funds and so forth. The improvement of the funds of certain receiving branches may also be relevant. Post Office Ltd. regards someone knowing that a sub-postmaster wants to leave a business but believing that he, instead, can make a go of it as a matter only of a transaction between the sub-postmaster who is getting out and the new business person who wants to come in. It acts in a wholly hands-off way in that respect, which can lead to the crazy position described by the hon. Gentleman, whereby potential sources of funds are effectively ignored by Post Office Ltd.

Mr. Weir: Is the situation not rather worse? Under the Post Office procedure, no one knows before the closure announcement is made that the business may be up for sale. That might be for good, confidential reasons, but by the time it becomes public knowledge that a post office may be going, it is too late for anyone to make an offer to take over the business.

Richard Burden: The hon. Gentleman makes a fair point, which underlines the fact that the consultation should be structured differently. If Post Office Ltd.

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recognises the need for change in a particular area because not all the post offices are sustainable, it should be prepared to sit down and work out who wants to stay and who wants to go, and to decide the right pattern of post office provision. Perhaps in one area all the sub-post offices should be closed and another one opened. It is theoretically possible that they are all in the wrong place to serve local people. If there were a willingness properly to plan the needs of an area, those problems could be tackled, but the way in which Post Office Ltd. goes about it means that that does not happen.

Furthermore the Post Office approach undermines the laudable objectives that the Secretary of State mentioned earlier. She and the Government should be applauded for their searching and ambition to open up new business for the Post Office. They should also be applauded for their investment in making the Horizon project work more effectively. They are right to say that the Post Office should be trying to find new business, provide outlets on the high street for clearing banks, look towards the possibilities for insurance and so forth. All that is right but difficult to reconcile with the strictures that Post Office Ltd. has put on itself in carrying out the urban reinvention programme.

I therefore ask my right hon. Friends to talk to Mr. Mills and his colleagues again to remind them that they are supposed to be reinventing the network on the basis of a vision, not simply implementing closures. I know that Ministers do not want the latter. They want a reinvented and sustainable network, but I have to say that Post Office Ltd. is not living up to that vision at present. That explains why there is a major campaign in my area of Birmingham against what Post Office Ltd. is proposing. I am pleased to say that the local paper, the Birmingham Evening Mail, is spearheading the campaign very effectively.

David Cairns (Greenock and Inverclyde) (Lab): It is why my hon. Friend is making his speech.

Richard Burden: Indeed; it is why I am speaking in the debate. Some of my right hon. and hon. Friends in the area have tabled an early-day motion to ask Post Office Ltd. to think again. The only Birmingham Labour Member who has not signed the motion is the Minister for the Arts, my right hon. Friend the Member for Birmingham, Yardley (Estelle Morris), who has told me that she supports it and is on record as a supporter of it, but as a Minister is unable to sign it. There is unanimity among Birmingham Labour MPs that Post Office Ltd. should think again.

Concern about the proposals crosses the political divide in Birmingham, so it is with some regret that I must report that the leader of the Liberal Democrats on the city council has taken the opportunity to spread what I have to call untruths about what I and other Labour Members have been doing. He has alleged that we voted for the closures in south Birmingham, on 13 January this year and on 20 October 2002. However, the calendar shows that the latter date was a Sunday. As far as I know, Parliament does not sit on a Sunday: if that vote took place, I missed it.

There may be differences of view about the urban reinvention programme, the handling of the Post Office card account and the compensation issue, and it is right

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to debate them, both in the House and elsewhere. However, people are worried about the loss of local post offices and have real fears about what the future holds. They expect local politicians to join together to represent their interests. It is not acceptable, therefore, to spread untrue allegations about members of other parties, when in fact we are all on the same side.

If the leader of the Liberal Democrats on Birmingham city council acts as he has previously, I expect that a leaflet will be distributed in the next few days saying that, when I vote against the Conservative motion and in favour of the Government amendment tonight, that means that I have once again voted for post office closures. As the House knows, post office closures are not voted on in the House, so no hon. Member of any party can vote either for or against such closures.

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