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14 Jun 2006 : Column 287WH—continued

3.28 pm

Mr. Philip Dunne (Ludlow) (Con): I congratulate the hon. Member for Orkney and Shetland (Mr. Carmichael) on securing this excellent debate, and I agree with many of the points made. I want to make three quick points, but before I do so, I want to say that I regret that the Government report from the DWP, which they told the Select Committee on Monday would be available the night before this debate, will not be available until next week. We have not had the benefit of seeing that report before this important debate. That is a good reason to endorse the comments made by my hon. Friend the Member for North Shropshire (Mr. Paterson) that we must have a proper debate with full information.

On the threat to our post offices, I endorse the comments of my hon. Friend the Member for Torridge and West Devon (Mr. Cox). I, too, have undertaken a survey and visited virtually all the post offices in my constituency. Of those, 86 per cent. said that the withdrawal of the Post Office card account would jeopardise their business, and 14 per cent. said that it might jeopardise the future viability of their business. That is the response from all the post offices in my
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constituency. It is the eighth largest in England and shares a lot of features with those constituencies represented by other hon. Members in the Chamber.

The DWP undertook three pilot studies of alternatives to the POCA. It transpires—not transparently, but as a result of problems raised by my constituents—that one of the pilot areas for the second scheme happens to be in Shropshire. I give the Minister the example of Mrs. Janet Price, who received a number of letters requesting her to cancel her account. She ignored the letters because she did not want to cancel it, and she eventually received a threatening telephone call on a Saturday afternoon from a member of the agency’s staff. When I first heard about that, I found it hard to believe, but it clearly was the case. I have had a letter of apology from the chief executive of the Pension Service, and a letter from the Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington (Mr. Plaskitt).

I raise this issue because I have been accused, as have other hon. Members, of employing scare tactics to claim that post offices are under threat when they are not. That is absolutely not the case. In the letter, which I received last month, the Under-Secretary said:

We have just heard that 2,630 post offices closed in the two years to March 2005. Where is the evidence-base for claims like that? These are not scare stories. The Minister has heard evidence from hon. Members on both sides of the Chamber, and I hope that he will take cognisance of those genuine concerns in his response. I hope also that we will be allowed to have a proper debate on the Floor of the House.

3.31 pm

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): I congratulate my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) on securing the debate. He rightly made it clear that the future of the rural post office network is vital to communities across the length and breadth of the United Kingdom, not least those in the highlands and islands of Scotland, which he and I both represent.

I welcome the Minister to his place. I secured a debate on the future of the rural post office network in this Chamber on 11 January, in which his predecessor described the rural post office network as an “inefficient physical structure”. He showed a lack of commitment to the post office network and a pretty crude financial approach. I very much hope that the Minister will do somewhat better in his response.

Rural post offices are at the heart of our rural communities. As we heard, there were 7,854 of them at the end of March. More than two thirds of villages with a population of 500 to 1,000 people have a post office, and those communities have enormously strong support for their post offices. In the village of Drumnadrochit in my constituency, which has a population of about 1,000, more than 500 people signed a petition to support their local post office. That is half the population of the village.

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My hon. Friend set out some constructive ideas for the Post Office, to which I hope the Minister will respond in similarly positive terms. His ideas shed light on two key questions that the Government must answer: what is their vision for the Post Office, and how will government be joined up to achieve that vision?

Mark Williams (Ceredigion) (LD): Does my hon. Friend appreciate—I am sure that he does—that there are great concerns about funding the rural network post-2008, not least in Wales, where the National Assembly Government are waiting to hear what the Minister has to say? His reluctance to give a statement on future funding is jeopardising the position of many post offices in Wales, not least in my constituency, where we have lost three in the past six months.

Danny Alexander: I am grateful to my hon. Friend for making that point, because I want to discuss that. Ministers have been reluctant to set out their visions for the future. Last week, in response to my question in Prime Minister’s questions, the Prime Minister talked about hundreds of millions of pounds of subsidy and the need to

Yet again he failed to take the opportunity to express his support for post offices and the vital social and economic role that they play. It is that kind of talk that sends a shiver down the spine of rural communities. There are real fears that the Government's vision of rural post offices is of closures, not big improvements. Indeed, the record of recent years is not inspiring. We have heard that the social network payment runs out in 2008. Will the Minister give us a clear indication of when an announcement will be made about that? Post Office Ltd is currently required to prevent unavoidable closures, but that commitment runs out this autumn? What will happen after that?

As we heard, Ministers did not lift a finger to prevent the BBC from taking TV licences away from post offices; likewise, the contract for the new passport offices. A number of hon. Members talked about the Post Office card account being removed in 2010 and gave worrying reports that new customers are already being denied access to them. So the Post Office is not even waiting until 2010 to implement what is a disastrous policy. Will the Minister give us an assurance that guidance will be issued within the DWP to ensure that there are no more incidents such as those quoted by my hon. Friend the Member for Falmouth and Camborne (Julia Goldsworthy) and the hon. Member for Rhondda (Chris Bryant)? Will he tell us what progress has been made through work with the Post Office to develop what might be called a post office card account-plus for 2010 onwards? I hope that all POCA customers can be migrated to such an account automatically, without the hassle of changing accounts and the pressure that the Government have previously applied to people to opt out of post office-based systems.

The DVLA and the supply of vehicle licences in post offices have been mentioned. I understand that the contract for that service is up for renegotiation next year. Will the Minister ensure that the interests of rural
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communities in having such services delivered by post offices are taken into account when that is considered, as they were not taken into account when decisions were made on the TV licence and the POCA? In such cases, each Department behaves as if the involvement of the Post Office is some sort of problem. The case for the use of the post office network to deliver public services should be decided on a cross-Government basis, not piecemeal by Department.

Perhaps the Minister could reflect on the wider social and economic benefits that post offices offer to rural communities. He might be aware of research that shows that for every £1 that the Government spend on rural post offices, £4-worth of benefit is delivered to the rural economy. Supporting rural post offices should be seen as an investment in our rural communities, not derisively referred to as a subsidy, as the Prime Minister did. What estimates has the Minister made about the overall social and economic value of the rural post office network?

To pick up on a point raised by my hon. Friend the Member for Orkney and Shetland, what discussions is the Minister having with the banks to ensure that more bank accounts can be accessed in post offices? Will he press for the Post Office to be allowed to join the Link network, thereby enabling it to offer cash withdrawal services to the entire community? I know that there have been negotiations on this subject for some time, and that there is some resistance within the Link network to allowing the Post Office to join. It is important that the weight of the Government’s efforts are put behind the Post Office in ensuring access to the Link network. That would ensure that when the hon. Member for Rhondda visits the post office and uses his Royal Bank of Scotland card, as I would do myself—I am perhaps ashamed to say that that is my bank, in the context of this debate—we can access cash at the post office rather than being turned away, thereby opening them up to a much wider range of business.

Will the Minister also look imaginatively for new Government services that can be delivered by the post office network? In Fife, documents can be checked for the police in post offices—that has been piloted very successfully—and the idea of post offices providing transport services and selling tickets has been suggested. The Minister will also be aware—indeed, it has been mentioned today—that a number of private companies are following the Government’s lead and taking services away from post offices. South West Water has been mentioned in that respect. I can also report that First Group has decided to withdraw the facility to purchase season tickets for its rail services from post offices as of May this year.

If the Government behave as though they have no responsibility to support the community network that the post office network serves, how can we be surprised if vastly profitable private companies follow their example? A Government vision for the Post Office is vital if it is to deliver services effectively in the future, but it is also vital that the public, particularly people living in rural areas, are directly involved in the debate. Will the Minister assure the House that the Government will engage in a full public consultation so that they have to listen to the views of the communities affected? He could learn a lesson from the direct public
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consultation that my hon. Friend the Member for Orkney and Shetland is undertaking tomorrow and the next day.

The vision can only be achieved if Ministers demonstrate considerably more joined-up Government than they have shown so far. I note that a new Cabinet Committee on Post Offices has been established, under the chairmanship of the Deputy Prime Minister. So, after a torrid few weeks, the Deputy Prime Minister has a chance to redeem himself. On the other hand, he could end up being known as “Two Jags; no post offices.” How often has the Committee met and what progress has it made in persuading individual Departments to recognise and support the wider role played by the rural post office network?

It has been reported that without the business from the POCA and support from the Government, 10,000 post office branches will have to close, most of which will be in rural areas. The Minister has an opportunity to show that the Government have a vision and an approach that can enhance and support this invaluable network for many years to come. I hope that he will do that, because the alternative for our rural communities is too awful to contemplate.

3.39 pm

Charles Hendry (Wealden) (Con): We have had an excellent debate. The passion of Government and Opposition Members and the clarity with which they have spoken have come across clearly, but, above that, there has been the sense of cross-party purpose. The issue affects rural areas in every part of the country, from the north of England to semi-rural Wales, south-west England and the south-east. I hope that the Minister will take that clear message away. I hope that he will talk to the business managers of the House and explain that there should be a debate on the issue in the Chamber, in Government time, so that many more Members have the chance to air their concerns.

Over a number of years, we have witnessed a worrying decline in the size of the post office network. In 1999, there were 18,374 post offices, and as we have heard, today there are 14,400. That is a loss of 20 per cent. of the post office network in just five years. Most of us think in terms of constituencies rather than nationally. In my constituency, we have gone from 43 post offices in 1999 to 28 today. That is a one-third reduction in the level of service. For each and every one of those closures, there is a story of human beings who have lost their businesses, and people who have lost a service and a lifeline in their local community.

However, we have not seen the end of the crisis. It is getting worse. The 7,800 rural post offices account for half the branches in the network, but only 10 per cent. of the business. From a parliamentary question earlier this year, we understand that, on average, each post office in the rural network is visited by 355 customers a week. However, we must recognise that 1,000 of those branches have fewer than 50 customers a week. Those branches are at or beyond the margin of survival, and the pressure on them is growing all the time, rather than easing.

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This year, the post office network will lose £2 million, and that will double next year. The pressure is getting greater because of the policy changes that are coming through. We have heard from Government and Opposition Members about how those changes have been working out, but, with the difference in budget, post office income from Government contracts this year will be £168 million less than last year.

That will get worse with the withdrawal of the Post Office card account. I hope that the Minister agrees that the Department for Work and Pensions must clearly state that it will not, under any circumstances, put improper pressure on people to move from Post Office card accounts to bank accounts. We have heard too many examples for it to be something that is happening by accident. Ministers must confirm that they will send a message to every single agency stating that they should put no pressure on people to move away from the account if they do not wish to do so.

The problems will get worse again through the moves to put the DVLA online, set up a regional network of passport offices and administer the BBC licence fee online or through PayPoint. They are statements of fact, not blame, because as responsible people we all recognise that those organisations have a public duty to reduce the costs of delivering their benefits and services, and to do so as efficiently as possible. However, the Government’s lifeline of £150 million ends in March 2008, so the Minister will understand the huge air of uncertainty surrounding the issue.

The consequences of closure are so great, because as we have heard, in particular from my hon. Friend the Member for North Shropshire (Mr. Paterson), too often the post office is not just a stand-alone post office business, but the last shop in the village and the chemist. It provides a range of other services and many important facilities, and once they go, they are lost for ever.

We must recognise that the decisions that affect the closure of rural post offices are taken not necessarily by the Post Office centrally, but by individual sub-postmasters and sub-postmistresses. They find that they are subsidising a loss-making business, and they decide that they cannot go on doing so. When they consider the value of their property in the centre of a community, they recognise that they can get much more by selling it off as housing rather than by keeping it going as a business. They are human decisions, but they have a huge impact on the community.

A great deal has understandably been made of the comments by Adam Crozier, Post Office chief executive, that he needs only 4,000 post offices to meet his legal service obligations. We must accept that he is not saying what he wants or intends to do; he wants that network size in order to meet a legal obligation passed in an Act of Parliament. We should pay great tribute to the work that he, and Allan Leighton as chairman, have done in turning the Post Office around, but they need to know that, in making the decisions that are right for them as a business, they have the Government’s clear thinking behind them, too.

What has been lacking in this debate is a sense of the Government’s vision, and the Department of Trade and Industry is at the heart of that lack of vision. We are prepared to give the Minister a small exemption, because he is new to his post, but he must come up with some answers soon. We are watching the whole
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network crumble while Ministers simply wash their hands of responsibility for what is going on. We must know what size of post office network the Minister envisages as right for this country in the years to come, and what level of Government subsidy he proposes in order to deliver that network. Many of those businesses will continue to be marginal unless there is Government support.

As the Liberal Democrat spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), said, one of our key considerations must be how we can bring new business into the post office network, enabling it to expand its range of services, rather than watch them constantly shrink. Can post offices become the hub for the first-mile postal delivery services, whereby local businesses would bring their post for onward transmission, not necessarily through Royal Mail, but through other suppliers?

Can post offices become a place of storage for undelivered items? A majority of parcels cannot be delivered because the occupants are not at home at the time of delivery. Rather than returning parcels to a sorting office that is sometimes a long way from the communities to which they are delivered, why could not they go back to the post office? It could then be remunerated for providing that service.

The Government must also provide us with a vision for shops, not just post offices, because they go hand-in-hand. What more can be done to encourage the greater provision of more financial services through post offices? The Government must provide us with some wider thinking and some new ideas that explain how we can create greater opportunities, rather than letting the network slip away. If post offices are going to close, the Minister must also explain how the Government will encourage replacement services such as mobile post offices in our most rural communities.

Above all, what are Ministers doing to replace the Post Office card account? The Minister must communicate to his fellow Ministers in the Department for Work and Pensions that their saying that it is an issue for the Post Office alone is not good enough. Some 1 million of the 4.5 million people who hold the accounts have no other system of banking. They depend on the account, and the Government have an obligation to ensure that, rather than being driven to the banks, which for many is not an option, people who choose to bank in that way can continue to do so.

The Government must set out their vision. The Post Office is under better management than it has been for many years, but it needs to know where it is heading. We cannot wait until 2008 or even shortly before that to hear from Ministers how they intend to secure the network; we must know this year. Until that happens, more and more of our citizens will have to watch as a much-loved and vital community institution withers away.

3.49 pm

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