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Mr. Humfrey Malins (Woking) (Con): I am following my hon. Friend's argument with great care. The post office is a vital part of any community, and not only rural post offices but urban post offices are under threat, including five post offices in my constituency. Does my hon. Friend, like me, believe that post offices, which are an important social addition to any community, should be preserved?

Michael Fabricant: I agree that post offices should be preserved and that they play a vital part in the fabric of life in our constituencies. Like the National Federation of Sub-Postmasters, however, I "regretfully and reluctantly" accept the need for some closures, which so many people feel are badly handled. Local characteristics are not being taken into account; local communities are not being properly consulted; the long-term planning is inadequate; and a co-ordinated framework has not been implemented.

On 13 January this year, I made those points at the Dispatch Box, and it must be said that the Government acknowledged the problems—again, I welcome that acknowledgement. In a written ministerial statement, the Minister for Energy, E-Commerce and Postal Services stated:

"In particular, the consultation arrangements have been criticised. There has been mounting evidence that in too many cases Post Office Limited has not handled them appropriately, or with sufficient sensitivity."

He went on to announce changes to the consultations, which would:

"make them more inclusive and appropriate to achieve a viable network to serve the public after the programme is concluded."—[Official Report, 5 February 2004; Vol. 417, c. 49WS.]

I thought, "Hooray! The Government are finally getting a grip," but I was just too trusting.

Gregory Barker (Bexhill and Battle) (Con): Does my hon. Friend agree that the issue concerns not only the nature of the closure programme, but the transparency of the process? When my constituents have campaigned to save post offices, they have been unable to get round the Post Office, which will not make available the business case on which the closure of local services is based. My constituents understand that hard economic decisions must sometimes be made, but, given that the Post Office does not reveal what its decisions are based on and offers cash incentives to close post offices, my constituents are sceptical about whether the process is anything more than closure by diktat.

Michael Fabricant: My hon. Friend is renowned for having his finger on the pulse, and he is right to say that the process is not transparent.
 
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Postwatch remains critical. It states that

"there is little evidence of Post Office Limited attempting to mix and match 'leavers' and 'stayers' to produce a smaller but optimised network as envisaged by the Performance and Innovation Unit Report of 2000".

Postwatch issued that statement after the Minister released his written ministerial statement that all things would change. I was gullible to believe that things would change—they have not.

Mr. Mark Field (Cities of London and Westminster) (Con): I agree with my hon. Friend's line of argument on the urban reinvention programme. Does he agree that such decisions too often involve a deal being cut between the Post Office and the long-standing—or, perhaps, short-standing—local postmaster, rather than their being according to community need or finance? As my hon. Friend the Member for Bexhill and Battle (Gregory Barker) says, such a lack of transparency does not make local residents think that the process is being run fairly or firmly.

Michael Fabricant: As ever, my hon. Friend raises an important point. He refers to the compensation programme that is made available to post office operators—postmasters—who give up their post offices. That compensation is very generous and equates to around 30 months of profit, which is more than someone would normally get. The Minister may correct me if I am wrong. That is why Postwatch said that there is no real effort to mix and match to ensure that services are provided to those who need it in a given locality.

Mr. O'Neill rose—

Michael Fabricant: I give way to the right hon. Gentleman.

Mr. O'Neill: I am not right hon.—I may well deserve to be, but that is for others to decide.

I have two points for the hon. Gentleman. First, he made some very serious allegations about the nature of postal deliveries during elections. If those allegations are of any substance, they should have been referred to the Electoral Commission much sooner than today, with the appropriate evidence. If he did so, perhaps he could tell us about its findings.

Secondly, although it is true that compensation is generous and that there are problems in relation to mixing and matching, the hon. Gentleman is not telling the full story. I understand that between one in three and one in four of all applications for early premature closures has been refused—in other words, of the 2,500 to 3,200 applications that have been made, around 800 to 900 have been refused. A substantial number of people who have tried to get out of the postal services for financial reasons have been refused. The hon. Gentleman is not giving the whole picture.

Michael Fabricant: The hon. Gentleman, who is Chairman of the Select Committee on Trade and Industry, should be a Privy Councillor, but sadly he is not.
 
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I tabled a question to the Minister about deliveries to which he gave a full and comprehensive written reply, so I can at least say that the matter is in the public domain if the Electoral Commission wishes to take up the matter.

As regards post office closures, I am merely repeating what Postwatch says. I quote it again:

"there is little evidence of Post Office Limited attempting to mix and match 'leavers' and 'stayers'".

Postwatch was established to watch the Post Office as the guardian of the consumer. I would not make a statement of such importance were it not for the fact that Postwatch has made it.

Postwatch also expresses particular concern about the future of post offices in deprived urban areas where there is nothing in place to discourage sub-postmasters from quitting and taking a generous golden goodbye from Royal Mail, thus creating gaps in the network. That point was echoed by my hon. Friend the Member for Cities of London and Westminster (Mr. Field). Indeed, the compensation offered by Royal Mail is often an encouragement to do just that. I think that Members on both sides of the House remain of the view that consultation remains inadequate.

Let us take a constituency at random. When I was in Leicester, South last week, I learned that 10 post offices are due for closure in the city. More than 15,000 people signed a petition to keep them open. Mrs. Gladys Kenney, who is 86, is very worried about the closure of the West Knighton post office on Aberdale road. Her nearest post office is a 20-minute uphill walk away; and, like many other post office users, she is old and infirm. Why does the Post Office still refuse to take such factors into account? Fortunately, Chris Heaton-Harris, the Conservative parliamentary candidate in Leicester, South, is fighting to keep the post office open. He told me:

"I want to retain the excellent local services provided by the post offices at West Knighton and Boundary Road and I am determined that other possible closures including the Knighton Church Road Post Office just don't happen."

I support him in that fight. Chris has collected thousands of names on a petition, and I hope that the Post Office will listen to him and to other post office users.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): Will the hon. Gentleman give way?

Michael Fabricant: I shall give way to—is she the "right hon." Lady?

Mrs. Dunwoody: No. The hon. Gentleman should know that we Select Committee Chairmen are the foot soldiers of Parliament.

I have listened to the hon. Gentleman carefully but I am not clear about whether he is saying that the Post Office should not offer compensation to someone who runs a business and discovers for various defensible reasons that it is no longer viable or whether he simply suggests that that person should be forced to continue until inevitable bankruptcy.

Michael Fabricant: I am sorry if I have not made myself clear. I shall do so now. As in all things, it is a question of balance. Over-generous compensation that
 
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creates gaps in the network must be wrong, but no compensation at all would be equally wrong. My point—perhaps more important, that of Postwatch—is that the balance should be even to ensure that there are no holes in the network.

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