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House of Commons

Thursday 4 November 2004

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Post Office Closures

1. Mr. David Heyes (Ashton-under-Lyne) (Lab): If she will make a statement on post office closures. [195860]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Post Office Ltd. embarked on a restructuring of its urban network in late 2002 because there was simply no longer enough business to sustain the existing network. The urban reinvention programme will help to ensure a sustainable urban network for the future. The programme is now approaching its final stages, and 95 per cent. of people living in urban areas will still be within a mile of their nearest post office.

Mr. Heyes: I thank my right hon. Friend for that answer, but I wish I could share her optimism about the way in which the post office closure programme is being handled, especially given the predicted threat to Crown offices. I do not believe that franchising is the answer. In the Failsworth area of my constituency, there is a former Crown office that was franchised to the Co-op some years ago. It is now threatened with closure, despite being described by the Post Office as

This is happening simply because the Co-op has decided to get out of the post office business. Does my right hon. Friend agree that the time has come for a decisive ministerial intervention to bring some sanity to the Post Office's incompetent closure programme and to remind the Post Office of its public service obligation?

Ms Hewitt: I am grateful to my hon. Friend for that question, because it gives me the opportunity to stress to every hon. Member that the press coverage earlier this week was completely wrong. There is no proposal or programme to cut a swathe through the directly managed post offices. The only requirement that I have placed on Allan Leighton and his team at the Post Office is that they stop the losses in the directly managed post offices, which are currently amounting to some £71 million a year. That is simply unacceptable. There are 550 directly managed post offices. Fewer than five of
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them are likely to close next year, and that will be because they are simply not viable. Whether the others remain directly managed or whether some become managed through a retail franchise, as others have done in the past, the important issue is that they continue to give the best possible service to customers, and that they bring new customers in to all our post offices by introducing new products and services, as the Post Office is doing.

Mr. Michael Weir (Angus) (SNP): I hear what the Secretary of State says, but, having gone through the post office reinvention programme, which closed many sub-post offices in towns and rural areas, we now hear that the Post Office is even considering closing Crown post offices, whose existence has often been given as the excuse for closing down sub-post offices. Does she not accept that there is a real need for the Government to intervene and get a handle on what is happening to the whole post office network?

Ms Hewitt: The hon. Gentleman should understand that, because of what we have done on rural post offices, we have stopped all rural post office closures, except those that are completely unavoidable because nobody can be found to run the sub-post office in question. I understand very well why people are concerned about urban network closures, because we all value the part that sub-post offices play in our communities. However, we face a choice. Do we simply allow unplanned closures to take place as sub-postmasters retire or give up because they cannot make a living, or do we back our Post Office in a planned reorganisation of the network that will give better service to customers? I believe that we are taking the right approach. This is a planned reorganisation, there is more investment in the post offices and, contrary to the hon. Gentleman's assertion, there are no proposals to close all the directly managed post offices.

Mr. Martin O'Neill (Ochil) (Lab): My right hon. Friend might not yet have had time to read the document that my colleagues and I on the Select Committee on Trade and Industry have issued in response to her comments on our report on the urban reinvention programme. It is not without precedent, but it is not common for Select Committees to comment on a Minister's comments. We did so because we were so concerned by the inadequacy of the response that we received. In respect of implementation, transparency and consultation, the handling of the urban reinvention programme was a bit of a shambles. Frankly, we do not agree that it was effectively and efficiently handled, and we think that there is an unwarranted degree of complacency on the part of the Department.

What is more, we feel that the assessment of the effectiveness of urban reinvention is far too narrow, and the idea that it can be effectively and efficiently carried out only on the basis of the number of closures is not the best criterion to apply. This was the unanimous view of a cross-party Committee that, as I have said, took the rare step of questioning the effectiveness of the Government's response to our report. We would like to think that when the Secretary of State has had time to consider the document, a better response will be forthcoming.

Mr. Speaker: Order. May I appeal to the House for brief questions and brief replies?
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Ms Hewitt: I am grateful to my hon. Friend for the work that he and his fellow Committee members have undertaken. I will read his report very carefully. I have not had time to do so yet, because it was published only half an hour ago; but I have had an opportunity to read the last line of its conclusions, which states

—the effectiveness of urban reinvention, that is—

I entirely endorse that. That is the goal of urban reinvention, and that is the basis on which we are judging the progress that has been made.

As for administration and consultation, following a number of expressions of concern from Members nearly a year ago, on 5 February my hon. Friend the Member for East Ham (Mr. Timms), then the Minister for postal services, announced significant improvements in the consultation process. Moreover, by means of that process Postwatch has ensured that nearly 400 closure proposals have been withdrawn or changed.

Mr. Patrick McLoughlin (West Derbyshire) (Con): How many more post offices are going to close?

Ms Hewitt: That will depend on the outcome of the consultation that is currently taking place in the constituencies that have not yet been part of the process, but I can say that the number is likely to be considerably smaller than the 3,500 figure that was bandied around by the press and Conservative Members some months ago.

Mr. Lindsay Hoyle (Chorley) (Lab): As my right hon. Friend will know, I am a member of the Select Committee chaired by my hon. Friend the Member for Ochil (Mr. O'Neill). We see this as the urban destruction of the post office network. What worries me is the fact that we now have empty shops in Chorley. The appropriate criterion was not used, the figures were massaged, and the whole thing was an absolute disgrace. We were depending on the Crown post office in the town centre becoming a replacement for the benefit of those wishing to travel into town. Can we have a categorical assurance that the Crown post office will remain open, like others elsewhere?

Ms Hewitt: The directly managed Crown post offices are regarded as part of the urban network. They are therefore subject to exactly the same criterion as we set for the Post Office—that 95 per cent. of people living in urban areas must be within a mile of a post office. As for the specific issue of Chorley Crown post office, I will check with David Mills of Post Office Ltd. and write to my hon. Friend.

I cannot accept my hon. Friend's assertion about urban reinvention. I stress that whereas post offices were closing in an unplanned way because sub-postmasters and postmistresses simply could not make a living, there is now a new network. Nine out of 10 customers of post offices that have closed have moved their custom to the nearest branches, and thanks to the new products we are providing—particularly the new banking services—we are increasing the potential customer base. There are
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now 21 million people who can do their banking at the post office. That is the way in which to strengthen our post office network.

Mrs. Patsy Calton (Cheadle) (LD): What advice can the Secretary of State offer my elderly and disabled constituents, and those with mobility problems, who, as a result of the flawed network reinvention process, have either no access to a post office because they cannot reach the top of the hill where the only remaining post office is, or rather worse access?

Ms Hewitt: One of the main factors taken into account by Postwatch as well as the Post Office when they are considering the closure of a branch is access for elderly people, people with disabilities and people without the use of a car. As I have said, nine out of 10 customers of post offices that have closed have moved their custom to the nearest branches that Postwatch and Post Office Ltd. were considering. I sympathise with the hon. Lady's constituents who may be experiencing difficulties, but I am afraid I must advise them that the Liberal Democrats' policy—as announced by their Front-Bench spokesman—is to privatise the Post Office along the lines of the Dutch model. That would hardly improve matters.       

Jonathan Shaw (Chatham and Aylesford) (Lab): On access, will my right hon. Friend look at Greenacres post office in Aylesford, which is subject to closure, and the receiving post office that is about a mile away? Access to it will not be possible for people in wheelchairs, and the Post Office is suggesting that such people ring a bell outside, so that counter staff can deal with their requests on the pavement.

Ms Hewitt: I certainly understand my hon. Friend's concern about the position of his wheelchair-bound constituents. The Under-Secretary with responsibility postal services, my hon. Friend the Member for Bradford, South (Mr. Sutcliffe), and I will ensure that we check exactly what the situation is, and whether it is possible, given the investment that we are putting into the post office network, to deal with the problem. I will write to my hon. Friend on this subject.

Michael Fabricant (Lichfield) (Con): But is the Secretary of State not slightly concerned that she has received no support from any Member in any part of the House? Does she not also accept the view of the National Federation of Sub-Postmasters, which represents 16,000 sub-post offices? It believes that the Government have caused much of the problem by reducing post offices' viability as a result of reducing their footfall. Has she bothered to read its manifesto, and if so, what is she going to adopt from it?

Ms Hewitt: Since becoming Secretary of State, I have stayed in very close touch with the federation, and indeed, my hon. Friend the Under-Secretary met its representatives only last week. The federation itself has been calling for an urban reinvention programme—with compensation for sub-postmasters who have to give up their offices—precisely because so many of its members simply cannot make a living. The fact is that the traditional business of cashing of benefit books at post
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offices has been falling for years, as more and more people shift to banking, using the internet and so on. What we are doing, and which the hon. Gentleman's Government never did, is modernising and investing in our post offices, and ensuring—as the federation and others want—that there are new products, new services and new customers, and therefore a much healthier post office network in future.

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