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Mr. Nigel Waterson (Eastbourne) (Con): This has been a very useful debate, and it has given us an opportunity to highlight problems with post offices in Leicester, South, Birmingham, Hodge Hill and across the country. It is perhaps depressingly reassuring that the problems described by the hon. Member for Angus (Mr. Weir) are exactly the same as those that we have encountered in Eastbourne, on the south coast.

The facts about the Post Office are dismal and incontestable. In total, there have been more than 1,200 closures under the so-called urban reinvention scheme. On that basis, I suppose that the blitz could have been called the urban reinvention scheme in its day. We have heard about the problems in terms of rural closures, particularly from the hon. Member for Gordon (Malcolm Bruce). We believe that something might happen after 2006, but the Government do not quite know what.

We have also heard about the failure to meet targets. Four targets were missed in 2001–02 and 12 were missed in 2002–03, and there was a spectacular failure to hit any of the 15 targets for last year. As the Postwatch press release said,

My hon. Friend the Member for Rayleigh (Mr. Francois) graphically described the effect of missing those targets on real people in his constituency. We have also heard about the senior management and in particular about Mr. Adam Crozier, formerly of the Football Association. His apparent inability to get the ball into the back of the net makes him the David Beckham of the postal world.

In the short time that is available, I want to concentrate on the way in which those problems affect the most vulnerable in our society—the elderly and the disabled. Closures are obviously a problem for them, and I also want to mention direct payments, the botched introduction of PIN pads and the exceptions service.

We have heard about closure numbers, but each statistic conceals a real problem for a real community—a community that will be that bit poorer because its local post office has closed. In my constituency, which was one of the first to be subjected to the area plan approach, five post offices were closed, including the main post office. The word "flawed" is one whose application to the so-called consultation I would entirely endorse. As far as I am concerned, the entire process was a complete farce from start to finish. Despite hundreds of letters, thousands of signatures on petitions and a well-attended
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public meeting in my local town hall, none of what was said made any difference at all. The process was wholly bogus. Indeed, it is so clear that that is the case that no less a person than the Minister for Energy, E-Commerce and Postal Services had to issue not a three, five or 10-point action plan on consultation, but a 12-point plan, closing the stable door firmly after the horse was long gone. Touching on what my hon. Friend the Member for West Chelmsford (Mr. Burns) said about closures, all too often the Government have stuffed sub-postmasters' mouths with gold and gone ahead and closed their offices anyway on that basis.

On direct payment, there are, in theory, three options for customers. What the Government have tried to do from the start, however, is have an extremely uneven playing field in terms of the Post Office card account. Indeed, at an early stage, when I was doing the same Front-Bench job as my hon. Friend the Member for Lichfield (Michael Fabricant), it emerged from a leaked civil servant document that the phrase "actively managed choice" was being used. That was the way in which the Government and the Post Office were trying to bully older people into going for a particular one of the options.

We have heard about the seven, eight or maybe even 20-stage process that is needed simply to open a Post Office card account. With the massive understatement for which the Post Office is quite well known, it said in its briefing for this debate:

I wonder why. Let me give the example of a lady from Southampton who wrote to me. I received her letter only today in my role as a shadow Minister. She says:

She first applied on 20 December last year. No wonder Age Concern has said:

Citizens Advice and the National Consumer Council have expressed similar concerns. The National Federation of Sub-Postmasters says:

The exceptions service is designed to help people who are elderly, disabled or housebound and need a special service after the new arrangements are finally in place. We are told—I hope that the Minister will confirm this—that the full details are expected to be in place by October this year. We are told that cheque payments will start in October, and that until that time, affected customers will continue to use their order books. It would be interesting to know what projections the Department is making as to the number
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of people who will take up the option, although Ministers are, of course, keen to make it clear that it is not an option. With his usual ability to calm people's fears, the Minister for Pensions said:

I have to say that that is not quite the advice that people were seeking. The Select Committee on Trade and Industry had this to say:

It is also clear that there was a failure to listen in advance to advice from organisations such as the Royal National Institute of the Blind about the design of the PIN pads, which have had to be redesigned. The hon. Member for Dumfries (Mr. Brown) made some very pertinent comments about that issue and about security in general. An apology was eventually prompted from the Secretary of State for Trade and Industry, who said:

Finally, it seems to me that there is an enormous paradox at the heart of the policy of both the Government and the Post Office senior management. On the one hand, they want to streamline and modernise the Post Office, restore profitability and extend the range of services. Indeed, the hon. Member for Ochil (Mr. O'Neill), the Chairman of the Trade and Industry Committee, dealt in some detail with the issue of why the Post Office had been so slow to look at other services that it could be selling and at issues such as e-mail, which it could have been getting into at an early stage.

The Post Office wants to extend its range of services and invest £125 million in a link-up with the Bank of Ireland to provide financial services. That is fine and good, but paradoxically it is shutting the very retail outlets that would help it to sell those new services, alienating existing and previously loyal customers and making life exceptionally difficult for elderly, vulnerable or disabled people, by adding to their worries. In no other area of Government is the gap between spin and reality so painfully wide; I urge my hon. Friends to support the motion.

6.50 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): This is the third Opposition day debate on post offices this year. If as much concern and energy had been invested in the post office network when Conservative Members were in a position to do something about it, 3,670 post offices might not have closed during their term in office. No Conservative Back Benchers were present in the Chamber—let alone contributed—for much of their own Opposition day debate.

The hon. Member for Lichfield (Michael Fabricant) opened the debate by generously accepting that the Government care about the vulnerable, the elderly and small businesses that run local post offices. I confirm that we care, which is why we are investing £2 billion in the post office network, and why we are spending £10 billion a year more on pensioner incomes.
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People listening to this debate will find it hard to resist the suspicion that the Conservative party's newly discovered concern for post offices in Leicester, South and Birmingham, Hodge Hill is nothing but opportunism. [Interruption.] "Absolutely" says the Conservative Whip. The Government believe that the post office network is essential to local communities, whether they are in Leicester, South or Birmingham, Hodge Hill, and, working with the Royal Mail board, we are determined to do everything that we can to ensure that Post Office and Royal Mail customers receive efficient and high quality services, which is why we are committed to a post office network containing bigger, brighter and more welcoming outlets that provide people with the goods and services that they want. We want customers to return again and again through choice, and not because they are tied to a post office in order to collect their benefit.

Following years of neglect, which the previous Administration ignored, the Government have grasped the nettle to secure the future of Royal Mail and a viable network of post offices. Radical change is required if the   post office network is to remain relevant in a modern society. As my hon. Friend the Minister for Energy, E-Commerce and Postal Services pointed out in his opening remarks, we are investing substantial sums to support the transformation of the entire network. For example, £500 million of Government support for one of the UK's largest IT projects has resulted in the computerisation of every post office, which allows the Post Office to continue to make benefit and pension payments in cash and provides it with a vital opportunity to widen its customer base by increasing its range of banking products, which is key to its future.

The heart of the Post Office's problem is that it has been locked into a shrinking customer base, because its income has been heavily dependent on benefit payments. I should like the House to compare the situation in 2001–02 with that five years previously, excluding benefit recipients who access money through a bank account. Even before the move to the direct payment of benefits and pensions, retirement pensions and widow's benefit paid by order books and giros decreased by more than 1 million from just more than 6 million to less than 5 million, although the total number of pension recipients increased by more than 1 million. Child benefits paid in that way dropped from just less than 5 million to less than 4 million, and incapacity benefit payments decreased from more than 2.5 million to less than 1 million.

The drop in benefit transactions at post offices involves more than people switching to bank accounts, and I will not apologise for one such reason: our record on job creation and getting people off jobseeker's allowance and income support has resulted in the best employment figures for 30 years. I will not apologise for that record, but hon. Members know that it has implications for Post Office income, and post offices must therefore find an alternative future, which we are helping them to do.

My hon. Friend the Member for Dumfries (Mr. Brown) reminded us that sentimentality, of which we have heard much from Conservative Members this afternoon, will not be enough to secure the Post Office's
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future. The Government want to implement the vision in the performance and innovation unit report of a thriving network, and the task is to continue to serve existing customers excellently, to attract new customers and to give the post office network access to expanding banking markets, rather than, as in the past, dwindling markets.

We have heard much about the promotion of the Post Office card account, and I doubt whether the few remaining minutes will provide an opportunity to respond to every point. The Government remain committed to ensuring that those who want to can continue to collect their benefits and pensions at post offices free of charge after the move to direct payment. Last year's successful launch of universal banking services, which not only the industry, but many of the voluntary organisations to which my hon. Friend the Minister for Energy, E-Commerce and Postal Services referred in his opening remarks welcomed, has allowed us to keep that promise.

Customers have three account choices under the new arrangements for benefit payments. They decide whether they want their benefit to be paid into a current bank account, a basic bank account or a Post Office card account. Choice is important, and the customer should decide which of those accounts is most appropriate to their circumstances. In the debate, we heard that a post office card is not necessarily appropriate for jobseekers, but it may be appropriate for other groups.

The Government have always accepted that some people cannot open an account, including, for example, some homeless people or those with an illness, infirmity or disability—others may also be in that position for short periods of time. That is why my officials and I met customer representative groups last year, including the National Association of Citizens Advice Bureaux, Help the Aged, Age Concern and Mind, to ensure that the cheque-based system was designed to meet the concerns raised in this debate by my hon. Friend the Member for Dumfries and other hon. Members. The system is designed to avoid many of the fraud problems that we encounter under the current system—for example, 100 pensioners have their pension books stolen each week, which creates heartache.

The heart of the Post Office's problems is that it has been locked into a shrinking customer base. Its task is to continue to serve those customers excellently, to attract new customers and to access expanding banking markets, rather than dwindling markets, as in the past. On top of the step changes in new banking services, other initiatives, including accepting debit and credit card payments, telephone services and a major advertising campaign for travel insurance and bureau de change services, contribute to making post offices places that customers want to visit. The Government want people to use the post office because they wish to, and not because they are forced to.

The evidence clearly shows that the Post Office cannot prosper or even survive if it stands still, and the challenge is to adapt to meet the changing demands of customers and society. The Government are determined to make sure that the Post Office has that future and that it continues to provide the highest quality of service to its customers and to be the heart of local communities.
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We are making that investment. The Conservatives have made the investment of three Opposition day debates this year, but from the point of view of the people who work in the Royal Mail on behalf of the customers who depend so much on post office services, this will look like yet more of that party's crocodile tears. I commend our amendment to the House.

Question put, That the original words stand part of the Question:—

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