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Michael Fabricant: Although the Minister assured us that the transition, which will occur from April 2006, to supporting rural post offices will be smooth, until an announcement is made—I noted that he was unable to make an announcement today, despite his being asked to do so—uncertainty will continue to exist, which makes people unwilling to open rural post offices.

Malcolm Bruce: The hon. Gentleman is right. I suspect that we must wait until closer to an election—perhaps a rural by-election—for an announcement, and I confidently expect such an announcement before the next election.

The hon. Gentleman's serious point is that an announcement is needed, but an announcement will not solve the rural network's problem, although it will extend the uncertainty. This is not an argument for withdrawing money from post offices, but both rural and urban post offices want to know about guaranteed public business, access to services such as vehicle licensing and passports, and how long it will take for the private business that the Post Office is bringing on stream to provide viable business plans for individual post offices that make them worth investing in and that give them long-term futures.

No one whom I have met in the post office business is confident. When I talk to postmasters and postmistresses, they say that they are hanging in until
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they retire, until they are told to go or until something happens, and not that they really want to be in the business.

Mr. Weir: I am interested in the hon. Gentleman's comments and broadly agree with them. Like me, he represents a constituency that is partly rural and partly urban. Does he agree that sub-postmasters are trapped in a vicious circle because they do not know the future of the business but are having to go through the reinvention programme in urban areas, which is closing post offices? Does he further agree that in the absence of an overall view, our constituencies' postal provision tends to be haphazard or lopsided?

Malcolm Bruce: That is exactly right. I do not want to identify individual post offices, but I can say that in the past couple of weeks I have spoken to owners in my area and in Leicester. One said, in effect, "I'm just taking the money because it's on offer." Another said, "I don't want to talk about it because I know that the community is not happy and I'm a bit embarrassed." I said, "You shouldn't be embarrassed, because you're looking after your own interests, which is understandable." However, they still would not discuss it.

Another owner said, "A year ago, the Post Office asked me to take voluntary closure, and I decided against it because I was happy to carry on with the business even at that level." She told me that her office was then designated a compulsory closure under the Aberdeen closure programme. She asked me not to fight for it, saying, "If you succeed, given the state of the business now I'll have to close it in six or nine months' time anyway because there will be no business left, and there is no virtue in hanging on to a business that is not viable." However, it was viable 12 months ago. A particular difficulty is that 150 child benefit element payments have been reduced to four. She told me, "I don't just lose the payments. When people came into the shop they bought sweets, newspapers and other things; now, they don't come into the shop at all. We've lost the footprint—as has the Post Office, because people are going to other businesses for banking services." Where can the Post Office get that business from once it has lost it? That is a serious point of concern.

The Post Office's management have ambitious plans. They are bullish about what they can do, and I wish them nothing but joy and success. However, they are moving into a highly competitive area of business where other companies are involved, and we have yet to see how successful they can be. Because of underinvestment, they are having to develop in partnership with private collaborators. Although there is nothing wrong with that in principle, the fact that they have to share the profits to get access to investment reduces the value of the potential benefits involved. In that context, we must recognise that we do not yet have a business plan that delivers results.

Several hon. Members have been to Leicester, South because of the by-election. When I visited that constituency as my party's spokesman on post offices, I was told that four post offices are threatened with closure—three under the urban renewal programme and one because it is under review. Massive petitions are being signed in the community. People said, "We can assure you that we are using these post offices—
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sometimes they bulge at the seams and you can't get near the counter because there are so many people coming and going—but we are told the service is no longer required." When I asked them how they felt, they said, "We feel utterly confused, to be honest. These are busy post offices and we use them, but the Post Office, the Government or whoever say they are not necessary." I assure the Minister that that will register when people vote, because they do not understand why it is happening and can see no benefit.

Another issue is that of the activities of supermarkets that have taken over post offices. It is mentioned in the amendment tabled in my name and that of my hon. Friends. The Post Office contracted for a number of supermarkets to operate post offices in their premises. It seemed like a good idea at the time, but now they tend to say that they can make more money selling beans and would rather not have the post offices. That creates further problems. My information shows that Tesco notified the Post Office of 44 closures after the recent takeover and that Morrisons gave notice of 21 after its takeover of Safeway. That presents genuine difficulties because alternative premises and venues may not be available. The Post Office and the Government have lost control, which was effectively surrendered when the branches were given to the supermarkets. Now that the supermarkets no longer want the branches, there is a huge problem. Who will pay for finding alternative premises? Will the cost be so high that the community will lose the post offices?

Mr. John Lyons (Strathkelvin and Bearsden) (Lab): The hon. Gentleman makes an important point about Safeway, which has been taken over by Morrisons. Post office closures, which were never threatened under any programme, are now taking place effectively as part of Morrisons' policy. That is happening in my constituency.

Malcolm Bruce: The hon. Gentleman makes a good point. If the Post Office's presumption was that a post office was needed in a locality, it should go through a process that is different from simply asking, "Is someone available who is prepared to take it over?" There should be positive action, with some investment if necessary, to replace the post office in a suitable nearby location. I hope that the Minister will deal with that point.

Mr. Russell Brown: I agree with the hon. Gentleman and I know fine well that it appears that Safeway in Dumfries will lose its post office. However, does not that provide a God-given opportunity in Dumfries for the business to be redistributed among the three, possibly four, other sub-post offices within three quarters of a mile of the supermarket site, thereby strengthening their position?

Malcolm Bruce: The hon. Gentleman knows his constituency and his suggestion may be the right answer for it. The decision must be based on local circumstances. If the community accepts it, that is fine. However, I am worried that we are closing so many post offices and it is simply assumed that the business will
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transfer to neighbouring ones, but that will not happen to all of it. In some cases, the long-term business does not exist, so further closures may be in the offing.

Mr. Timms: The hon. Gentleman is making an important point and I am sure that he, like me, welcomes the assurances from Tesco and Morrisons that they will work closely with Post Office Ltd. when they review their stores that currently accommodate post offices. They will not act precipitately. Only Post Office Ltd. can make a proposal for the permanent removal of a post office. Tesco, Morrisons or any other body cannot make such a proposal; there must be a consultation period in accordance with the code of conduct. I believe that we can work through the issues to which the hon. Gentleman rightly draws attention.

Malcolm Bruce: I hope that that is the case. Unsurprisingly, Tesco has asked to see me tomorrow and perhaps I shall get some further information. I do not make an attack on Tesco and Morrisons; I simply draw attention to a problem that should be properly tackled, not realised by default.

I am conscious of the time, but I want briefly to refer to Aberdeen, where the situation has given me cause for concern. I wish to make it clear that the city of Aberdeen is not part of my constituency, but one of the sub-post offices, Bankhead, was in the Gordon constituency before the previous boundary changes and should be in that constituency after the next boundary changes. However, that will not happen because it will be closed. There are 14 other post offices in the city of Aberdeen, and I made a point about that in an intervention, to which the Minister did not respond.

There was a change of administration in the city council last May, when the Liberal Democrats formed an administration with Conservative support. It approached the Post Office early to discuss the possibility of paying council tax through local branches. The Post Office was not prepared even to discuss it, despite the council's indicating that it expected a budget transfer of £100,000 to the small post offices. That is a disturbing attitude by the Post Office. It claims that it is trying to develop business, but when business is on offer it is not even willing to discuss the possibilities.

The same applies to utility payments and other matters for which the Post Office claims to have an ideal network. I was discussing with a credit card company, which I shall not name, its attitude towards its relationship with the Post Office, and it said, "To us, the Post Office's unique selling point in getting us to use its services is that it has a major network, but it is in the process of destroying it, so why should we bother to engage with it?" That is a serious response from a serious business, and if the Minister does not take it seriously, he is really not in touch with what is happening.

The post office network has to settle at a viable size that people will be convinced will stay viable. In spite of Ministers' assurances, people working in the Post Office do not believe that that will be the outcome of the current processes. I think that the Minister is genuine in his belief, and honestly confident that business will come, but many people engaged in the process cannot see it coming through at anything like the speed or volume necessary to sustain the network that we will have by, say, the middle of next year.
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I have mentioned my concern about the situation in Scotland. One of the arguments that has been put to me is that part of the revenue stream will come from people carrying out cash transactions on their own bank account through the Post Office. In Scotland, the Royal Bank of Scotland and the Bank of Scotland have refused to co-operate with that scheme, which affects the vast majority of account holders in Scotland. The only other bank of any significance is the Clydesdale bank, which might be having discussions about it—

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