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14 Jun 2006 : Column 267WH—continued

As I mentioned, Microsoft Entertainment is exploring with British Telecom and others the kind of services that it might be able to bring into people’s
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homes. That will make traditional terrestrial channels look like something from the ark. There is real excitement ahead.

My hon. Friends are right to point out the short-term problems, which are not inconsiderable. However, the potential is such that, by 2012, the argument will not be, “Why did the Government make us all do this?” People will look back and say that this Government were right to have had the foresight to get this done and that the opportunity they created was enormous.

To use my hon. Friend’s term, we have to head bash among ourselves to make sure that the technology that we are encouraging people to have in their homes will match the kind of services in which they will be able to take part. If we have one particular problem, it is this. We begin the process in 2008 and end it in 2012, but the technology going into people’s homes in 2008 will be different by 2012. That is not the Government’s fault. None the less, it would be foolish for them not to recognise the changes and the speed with which the technology is changing.

I say to both my hon. Friends that it is significant that, in Wales, take-up has been high. I recognise what part of the reason for that is. None the less, 80 per cent. of Wales has already made the switch. It is worth recognising that that is probably to do with more than the problem of access to some television stations.

The high take-up in Wales is very good news, but it leaves us with the important issue of the 20 per cent. who will need to convert before Wales switches over in 2009. Although many people are now converting their second and third sets too, many have yet to convert at all. We the Government, the broadcasters, Digital UK, Ofcom—all the organisations involved in providing help—have a great deal to do between now and 2009, and I do not underestimate that. We must encourage people to take up digital TV and understand the barriers to which I have alluded.

As a Government, we remain platform-neutral. How people make the switch is up to them, although I recognise the point made by my hon. Friend the Member for Rhondda: for some people, satellite may be the only option because of where they live.

It is vital that we put out as much information as we can to try to help people. I welcome the national information campaign that Digital UK, the broadcasters’ organisation for switchover, has launched. Between now and switchover, Digital UK will be communicating with every single TV viewing household in the country to help them to prepare for that change.

We must also ensure that nobody is left behind. That is why we are putting together a special assistance scheme, from all the work that we have done, specifically focused on those for whom conversion may be a problem. I reassure my hon. Friend the Member for Wrexham that we do not for one second underestimate issues around low-income households in the UK. However, from the evidence that we have seen, being in that bracket tends not to be the barrier to conversion. Age and disability tend to be—not exclusively, but by and large. For that reason, to make sure that the assistance scheme is appropriately targeted, we have decided to aim it at those groups.

I turn to the specific points raised by my hon. Friend. Extending digital terrestrial television in Wales
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is particularly challenging. The hills and valleys in much of Wales make that difficult to achieve with ground-based transmitters. There are more than 200 transmitters in Wales—a far greater concentration than anywhere else in the UK. At present, only nine carry digital signals, covering about 57 per cent. of the population.

That will all change at switchover, and I should like to make some specific points that I hope will reassure my hon. Friend. First, after switchover, the coverage of freeview services across the UK will greatly increase, reaching the same proportion of the population as analogue signals do today. In Wales, we expect digital terrestrial coverage to go from its present level of about 57 per cent. to about 96.7 per cent. of Welsh homes, a larger percentage increase than in any other part of the UK. Coverage will increase substantially in Wrexham because the Wrexham-Rhos transmitter, to which my hon. Friend alluded and which is currently analogue-only, will be converted to digital. Secondly, people who receive their signals from one of the Welsh transmitters will be able to receive all the public service broadcasting channels in their Welsh versions. Those include S4C, the relevant BBC channels, ITV Wales, Channel 4 and Five.

Thirdly, people who currently have a choice of English or Welsh transmitter should continue to have that choice after switchover, although the Wrekin transmitter, in the ITV Central region, will not convert until 2011. I should make clear that there is no plan to change the boundaries of ITV regions. I recognise that that means that some of my hon. Friend’s constituents, who currently do not have a choice of region even with adjustments to their aerial, will not have it after switchover either. However, all the regional services are available on satellite.

All our experience shows that even viewers who were sceptical about digital TV liked it when they got it. This
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month marks the fifth anniversary of the BBC’s first interactive TV service, which covered the 2001 Wimbledon championships. Last Saturday, digital viewers of England’s match against Paraguay had a variety of interactive options as they watched the game. That is the point about digital TV—it is about creating choice and ensuring that consumers across the UK are able to enjoy the services that broadcasting companies, and many others now entering the ambit of television, will provide them. Analogue television is about viewers being given what they are served by the broadcasters. With digital, the viewer is in control. For example, HomeChoice video on demand, which gives access to vast libraries of material, is already with us. It will grow with initiatives such as Sky’s link-up with Easynet and the BT-freeview hybrid.

Whatever platform we are talking about—digital terrestrial television, cable or satellite—digital will offer a greater choice of channels and services for people at home. FilmFour will soon come to the freeview platform, and will be joined by two new channels from Five. That choice makes freeview by far the strongest digital terrestrial platform in the world, joining Sky, which is already one of the strongest satellite services in the world.

Cable will also make changes. Sky and Telewest currently lead the way with high-definition television, presenting the viewer with another opportunity to enrich their experience. All in all, digital is an exciting venture and a great opportunity for consumers. The Government’s job is to ensure that no one is left behind, that there is no digital divide, that the elderly and disabled are not alienated from the technology and that everyone in the United Kingdom is able to enjoy the digital revolution.

11.30 am

Sitting suspended until half-past Two o’clock.

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Rural Post Offices

2.30 pm

Mr. Alistair Carmichael (Orkney and Shetland) (LD): I want to use the debate to focus our attention on the change that will be coming to the post office network, particularly in rural areas. It is clear to anyone who has a pair of eyes in their head that change will come. When one hears the likes of Adam Crozier and Allan Leighton talk about substantial branch closures possibly being on the cards, it is clear that there will be some sort of change. My concern is that if that change is to come, the process of change should be shaped principally by the people who know best: the people who live in the communities and are most directly affected, and the postmasters and postmistresses who make their living from the provision of post office services in rural areas.

Between March 2000 and March 2006, the number of rural post offices in Scotland fell from 1,285 to 1,128, which represents a decrease of more than 12 per cent. According to a parliamentary answer that I received today, the total number of post offices in Scotland has fallen by 368 in the past eight years, to 1,688 in 2006. Almost one in five of Scotland’s post offices have shut since Labour came to power, and that is in the context of the Government, in recent years, giving substantial sums in direct assistance to the rural post office network. I acknowledge that, and like many rural MPs, I am grateful for that investment.

I am also sure that I am not the only one in the House who has seen the process of attrition at work. In the first instance, there is a cut in hours, which then affects the overall financial viability of the business. Another business opportunity then comes along for the sub-postmaster or sub-postmistress, or they reach retirement. They then move on and nobody can be found to take their place. Thereafter, there is a temporary notice of closure, which is temporary in name only because we know that it means that another post office has been shut and will never open again. Many of us fear that that process will speed up in the months and years ahead. It will do so not only because the Government have failed to provide a coherent long-term policy for the rural post office network, but because so many of their policies are undermining its viability.

It is currently estimated that only one in 10 rural post offices make a profit. In that context, it is astonishing that Ministers have failed to accept the huge damage that removing Post Office card accounts will do. In my constituency alone, 1,700 people choose to collect their benefits in that way. In Scotland, the figure is almost 200,000, and in the UK the corresponding figure is 4.5 million. According to the National Federation of Sub-Postmasters, the accounts bring in, on average, 10 per cent. of the sub-postmaster’s income. The card account contract for post offices from 2003 to 2010 is worth an estimated £1 billion to the network.

The loss of, first, pension books and now Post Office card accounts is not the only way in which Departments have removed business from post offices. Baroness Prosser told the other place that the Government’s plans to set up specialist high-street offices to vet passport applications will “dig into” the £12 million that the Post Office makes from processing
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passports. We are also seeing a concerted attempt to persuade people to pay their vehicle excise duty online.

Most recently, the Post Office has lost the BBC TV licence contract to PayPoint. Once again, that will mean that rural post offices will lose business. It also demonstrates a failure by the Government to think in a joined-up way. The situation in the Northern Isles particularly concerns me, because they have few PayPoint outlets. The outlets are all in Stromness, Kirkwall and Lerwick—the main towns. There are no outlets in the rural parishes or in the outlying islands. I realise that that is not directly the Minister’s responsibility, but it is germane to the debate.

I have been in correspondence with the BBC and was recently told by Pipa Doubtfire, a head of revenue management, which is a glorious title, that customers who currently save stamps but are unable to visit a PayPoint outlet will still be able to use their savings card—that is good news—although they will need to telephone TV Licensing and make payments by debit card.

It is clear that my constituents in the outer isles and the rural parishes will no longer have any means of paying over the counter in a savings scheme such as the one they have had with TV Licensing stamps. We were told that TV Licensing would be writing to those who have paid in that way. The letters were worth waiting for. Two of my constituents in Shetland received letters telling them that their nearest PayPoint outlets were in Tidworth in Wiltshire and in Whitchurch near Winchester. I have no doubt that they are admirable communities, but they lack the important quality of proximity to Shetland. In the interests of helpfulness, I shall send a map or an atlas to TV Licensing to show it exactly where Shetland is.

Julia Goldsworthy (Falmouth and Camborne) (LD): My point is in a similar vein. Letters have recently been sent to people both in my constituency and across the south-west by South West Water encouraging people not to pay their bills at the post office, but to find other easier, more efficient and more convenient ways to pay, such as through PayPoint. That again undermines the services that the Post Office provides, and although it is not the direct responsibility of the Minister, I hope that he will examine that problem.

Mr. Carmichael: My hon. Friend makes a good point. We must also be clear that part of the responsibility for the loss of the TV licensing contract was because of the Post Office itself and the manner in which it failed to compete properly for it.

The Government are always telling us that choice is a great driver and that competition is a great virtue. Why is it that we have simply replaced one monopoly provision with another? If the market and choice are as good as people say, why are not both PayPoint and the Post Office still available? It is clear that PayPoint is not able to cover the full range of services that are necessary.

David Taylor (North-West Leicestershire) (Lab/Co-op): I must declare an interest. I am from the fourth generation of a family that ran a post office in my village for most of the past century, but it has not done so in recent years. Does the hon. Gentleman agree with the following
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in respect of the problems in rural areas? At least urban areas had the urban reinvention programme and people knew where they stood. There was an opportunity to make submissions, although a third of the network was lost. If we are not careful, the benign neglect and under-the-counter approach, if I may pun in that way, will lose us a third of rural post offices and more. That will happen merely because of benign neglect and not standing up to the utility companies and others to ensure that there is adequate business for the post offices on which they can build a continued presence in the rural communities that they have served for a century and more.

Mr. Carmichael: Yes, we are talking about the loss of over-the-counter services, and under-the-counter neglect. That is a good metaphor, but we have probably taken it as far as possible. The hon. Gentleman makes a good point, and it is why I am hoping that the debate will be part of a process whereby we can talk about the issues and see the opportunities that exist. Despite all the gainsayers, I still think that there are tremendous opportunities for business in rural post offices. In many instances, a wee bit more flexibility and imagination is required.

It is necessary to have a bit more short to medium-term certainty in respect of the Post Office. Part of the long-term solution will have to be to establish what, if any, Government assistance will be given to the rural post office network. We know that the current annual £150 million for rural post offices will finish in 2008. My concern is that, not for the first time, the Government are refusing to let post offices know how much longer the vital funding will last. When will the announcement be made? What will the scale and duration of funding be beyond 2008? Will the Minister give us an indication of when we can expect an answer to that?

Mr. Philip Hollobone (Kettering) (Con): I congratulate the hon. Gentleman on securing the debate. Given the threat of the Post Office card accounts going in 2010, is it not the case that until the Government make an announcement on funding for rural post offices, every rural post office in the country will face the threat of closure within the next five years? The situation is as bad as that.

Mr. Carmichael: That is certainly the case and it was ever thus. These businesses have always operated on very tight margins in communities where there is often an expectation that businesses operate on low margins and that the people who operate them have made a lifestyle choice as much as an economic business choice. I agree that there is a need for clarity and strategic thinking in the Department of Trade and Industry about what has been missing and what I hope we will see from here on in.

I am aware of the number of hon. Members present and do not want to take up too much time, but I want to consider a few of the opportunities for changing, improving and expanding post office services. One of the greatest opportunities is in the financial services sector. Currently, only 4 per cent. of villages in the United Kingdom have a bank whereas 60 per cent. have a post office, but only 40 per cent. of current accounts can be accessed over
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post office counters. That is a particular problem in Scotland because neither HBOS—we still fondly call it the Bank of Scotland—nor the Royal Bank of Scotland offer access to their current accounts at post offices. What steps is the Minister taking on that? Is there still an ongoing dialogue between the Department of Trade and Industry and the clearing banks concerned?

The Minister will be aware of research published by Citizens Advice in January this year which shows that many people find it difficult to open the basic bank accounts that are offered at post offices. Has the Minister seen that report and, if so, what action will be taken to help to increase the uptake of those accounts? Citizens Advice recommends that people should be able to open basic bank accounts at post office branches and that all current account holders should be able to withdraw cash over the counter at post offices. Until now, the sticking point has always been the unwillingness of clearing banks to co-operate. Does the Minister agree that if banks are unwilling to reach agreement with Post Office Ltd to allow their customers to withdraw cash from the post office network, Post Office Ltd should consider becoming a member of the Link network, which would allow that to happen? The income generated from that venture could make a significant contribution to sustaining the network of rural post offices, which are a valuable community resource.

Branches could also generate business by acting as mini-depots for parcels that recipients are unable to take delivery of from couriers and delivery companies, of which there is a substantial number outwith the Royal Mail. We all thought that the internet and e-mail would be the death of post offices, but in fact they have had unforeseen and beneficial consequences with the growth of phenomena such as eBay, Amazon and other internet-based companies. In my constituency, a number of mail order companies are operating out of Orkney and Shetland.

The volume of goods bought over the internet is increasing exponentially. It currently accounts for £18 billion of spending in the United Kingdom, or 2.5 per cent. of all household spending. That offers great potential both for Royal Mail in terms of increased deliveries and for post offices if they could act as collection points, interacting with private companies as they have always done hitherto with Royal Mail.

Pete Wishart (Perth and North Perthshire) (SNP): I presume that the hon. Gentleman is coming to the Liberal Democrats’ key policy to part-privatise Royal Mail. Given the success of such privatisations of public services in Scotland, what is the prospect of success with Royal Mail?

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