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Mr. Paterson: The hon. Lady makes an important point. The all-party group holds endless meetings and we realise that individual units of Government make decisions in isolation, without consideration of the impact on the huge national network that we are discussing. The decision about the BBC was a classic. Action was
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taken strictly in the interests of the BBC and according to its remit, but there was no co-ordination with the Department of Trade and Industry or the Department for Work and Pensions. We need a Minister—it may be the Under-Secretary—to get a complete grip on the Post Office.

Kate Hoey: I agree. I presume that the Under-Secretary would claim that that is exactly what “miscellaneous 33”, or whatever it is called, which meets under the chairmanship of the Deputy Prime Minister—I believe that he is still Deputy Prime Minister—is meant to be doing. However, the hon. Gentleman is right. One Department was acting totally against the interests of another. The Department for Culture, Media and Sport should have got more involved.

Chris Bryant: I urge my hon. Friend to disagree slightly with the hon. Member for North Shropshire (Mr. Paterson). The decision that they have discussed was not in the BBC’s interests. Sub-postmasters and sub-postmistresses have often explained to young people how they can pay £2 this week and £2 the next so that they can cover their licence fee. There are reports that only 30 per cent. of those who had a licence this time last year have one now. Many people in constituencies such as mine and that of my hon. Friend will go to court over the matter.

Kate Hoey: The BBC will probably regret what it has done. There is a general feeling that it does not care about ordinary people and what they want.

Mr. Bellingham: The hon. Lady is my London Member of Parliament and she has been assiduous in pursuing the issue that we are discussing. Does she agree that it is a pity that the Under-Secretary did not answer the question that the hon. Member for Cannock Chase (Dr. Wright) and I posed when we asked what discussions were held with the BBC, what pressure was applied and what information the BBC gave? Surely some dialogue took place between different Departments.

Kate Hoey: Perhaps I shall leave my hon. Friend the Under-Secretary to send a little note to his colleague who will reply to the debate.

The Driver and Vehicle Licensing Agency is a Government service. Why was not it allowed at least to state on the relevant form that applications can be made in a post office? The Post Office staff in the House are kind, knowledgeable and helpful about where one has not put one’s “x”, ticked a box or got the right picture. It is sad that the DVLA has not told people that they can continue to use the Post Office. Will the Under-Secretary clarify whether licences can still be renewed in post offices? Is it simply a case of people not knowing that they can do that?

Ministers have tried to tell us that the Post Office card account was never meant to last for ever and that the contract was always intended to be short term. The problem is that people simply do not believe that. None of the 400 hon. Members who signed early-day motion 1531 believed that the contract was temporary and that it would end in 2010. When the Secretary of State for Health was Secretary of State for Trade and Industry in 2002, she said:

There was not much of a sense in 2002 that the contract would end in 2010.

Greg Mulholland (Leeds, North-West) (LD): Does the hon. Lady agree that, regardless of whether a definite decision was made to end the Post Office card account in 2010, all the distress that the announcement of winding up the contract has caused could have been avoided had the Post Office been allowed to develop an alternative solution before we went through the process? Consequently, we are expecting thousands of people to lobby us on Wednesday.

Kate Hoey: The Post Office can develop however many new solutions and cards that it likes, provided that there is still a card that a pensioner or anyone else on benefit can use to get their cash out. Many people do not want all the extra frills. It was amazing to see a quote from the Government saying that

Never mind getting interest, many of my constituents cannot even make do with what they are getting out of the account each week. The idea that they should somehow be using it as a bank account that can earn them interest is just nonsense. Most people use the Post Office card account as a way of budgeting the income that they rely on, and we must continue to ensure that they can do that.

The National Federation of Sub-Postmasters is the only body that represents all the sub-postmasters, of whom there are about 14,500 in the United Kingdom. We must ensure that that network is valued and retained.

Mr. Peter Atkinson (Hexham) (Con): There is a wider issue attached to this problem. In many rural areas, the local village shop depends for its survival on the income from the post office salary. As that declines, the viability of the shop declines. The hon. Lady will be aware that, in many constituencies, village shops are worth less than private houses. There is therefore a temptation to seek to close the shop and to turn it into a private house.

Kate Hoey: All of us here realise the value of the rural post office. There are new and interesting methods of delivering those services in rural and urban areas, but it will make a huge difference if the post offices do not have the basic back-up of the Post Office card account. I do not think that this Government, or any other Government, would want to go down in history for taking the decision to destroy huge swathes of the post office network.

Will the Minister give the House a commitment that, whatever happens, there will be a card that can be used by pensioners and other people on benefits to get their
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cash? It should not be part of a bank account, as many pensioners want nothing to do with bank accounts. They do not want to be involved with anything that might cost them money. For example, some pensioners find it difficult that, to get cheaper telephone bills, they have to pay them by standing order. They do not even want to do that. There are many reasons why older people, in particular, and many others, choose not to have a bank account, and they should not be forced to have one.

Will the Government make a commitment to undertake a thorough assessment of the social and economic roles played by post offices in all our communities, in both rural and urban areas? Will they also make a commitment that, where a post office might not survive through normal commercial means, they will find a way of retaining it through public subsidy?

Mark Williams (Ceredigion) (LD): The hon. Lady and I share a common analysis of the importance of the village post office to the wider community. It would be easy for us to become poetic about that, but does she agree that the ramifications of losing those post offices in the wider rural community would be immense? In Wales, there is a fund that guaranteed 106 post offices, but its future is in jeopardy. We are awaiting an early decision by the Minister on the future of the social network fund. Would the hon. Lady welcome such a decision sooner rather than later?

Kate Hoey: I am going to come to that point briefly in a moment. Clearly, everyone realises the crucial importance of post offices in rural areas.

Even if they have not done so in the past, will the Government from now on make a statement to all parts of government that, wherever possible, they should give preference to the post office network for the distribution of all information on government services? Will they also encourage all local authorities to offer their council services through that network? We should all encourage our own local authorities in that regard.

I am also pleading for a statement to be made sooner rather than later on exactly what protection is to be given to rural and urban post offices. We cannot afford to wait much longer for such a statement. I appreciate that this debate might be slightly untimely, in that the Minister might be going to make certain decisions fairly soon. However, I hope that, given the scale of the support for the Post Office card account, it will be his No. 1 priority to ensure that it stays, whatever else may happen to the post office network.

6.5 pm

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I congratulate the hon. Member for Vauxhall (Kate Hoey), who chairs the all-party group on sub-post offices, on making a strong case for an urgent decision by the Government on the social role that they envisage for post offices in urban and rural areas. Post offices still have a vital role to play, and if we lose that network, we will not be able to recreate it.

The hon. Lady also strongly reinforced the point about the Post Office card account and the need to ensure that there is a basic card account that satisfies the wishes of those who only want such an account. We
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do not need a one-size-fits-all arrangement in which the Government decree, “Thou shalt have a bank account, with all the bells and whistles”, because that would involve accepting all the risks if things went wrong. Some people liked their old giro cheques and did not really want to change to the card account. However, they accepted that account because it at least offered the guarantee that it could not be overdrawn and did not carry the risk of bank charges or any other extra costs.

The hon. Lady mentioned that it might be difficult for the Minister to come up with any concrete answers at this stage, but the Government said that they would have some concrete answers by the autumn. I know that the Minister has been advised that the autumn will carry on until 12 December—or even 21 December—but it would be helpful to get the answers earlier than that. Many people do not realise that most sub-post offices are small businesses run by private individuals making investment decisions, and that they need to know the framework in which they are operating. They therefore need to know the Government’s mind on these matters, when so much now depends on Government decisions. Postcomm has also challenged the Government to recognise that.

Last week, it was a matter of concern to hon. Members when the Leader of the House stated at business questions that the collapse of the postal market was a problem for the Post Office. Actually, the postal market is doing quite well at the moment. He talked about the internet and e-mail, but internet trading is resulting in the postage of a lot more packages and parcels. One of the social inclusion issues that is possibly not being properly addressed is the future role of the Post Office in receiving parcels and handling the postage of items for special delivery. The universal service obligation appears to require only about 4,000 post offices. A great deal of the debate about the future of the rural post office network has been about access to benefits and to the means to pay bills. However, if those other services are not there to support the post office, and the post office closes, the access to the postal network, to commercial transactions and to cash for small businesses will also go. The wider benefits of maintaining the network are therefore extremely important.

The most disappointing aspect of the way in which the BBC made its recent decision is that it did not take all its licence payers into consideration. It has said that PayPoint is a replacement for the post office for those who still want to pay for their television licence in person. However, it has not taken into consideration how sparse the PayPoint network is in rural areas. Its decision has therefore greatly restricted access for licence payers in those areas. The BBC should have used its imagination to work with the Post Office to develop a rural product that would allow people to continue to access the same service in rural areas to which it believes its urban licence payers are entitled. The BBC needs to look again at that decision.

Mr. Paterson: I referred earlier to a letter from the director-general of the BBC. One of the reasons that he gave for the switch was that PayPoint could guarantee 15,000 outlets, rising to 17,000 in 2007. He also said that the Post Office could give no assurances on how many of its branches would remain open. That relates
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to the hon. Gentleman’s first point: we are in a vicious cycle at the moment, and the longer the uncertainty continues, the more pernicious the decisions will be. People have to make rational decisions and plan ahead.

Sir Robert Smith: The outside world needs to know what is going to happen, and that is why we need to know the mind of the Government on this matter. Some hints were given today at Department for Work and Pensions questions that a slightly more flexible approach might be taken towards card accounts. We have been here before, however, and people do not want to have a replacement product dangled in front of them, or to be put under pressure to access that replacement.

Active forces such as changing lifestyles are one thing, but if the Department for Work and Pensions continues to drive people away from the post office, and if the Government actively intervene and accelerate the process, it is far more difficult for people to plan. We therefore need to consider a planning horizon that allows the BBC, for example, to understand that there is a commitment to a rural network. As the hon. Member for Vauxhall also said, if the Government embrace that network, the message must go out about the importance of using it.

Paul Holmes (Chesterfield) (LD): I have listened carefully to my hon. Friend’s speech, and have agreed with every word. He has just referred to the rural network, but he referred in his opening comments to the importance of the urban and rural network. Clearly, if a village, which has no shop or bank, loses its post office, it has lost everything. The same, however, applies in many urban areas. In my urban constituency, Chesterfield, whether in a large housing estate or the former pit villages of Poolsbrook and Duckmanton, residents who lose their post office and are told that they can catch the bus to Chesterfield or Staveley town centre might not actually have a good bus service, as privatised bus services often leave such areas stranded. Therefore, the post office network is just as important in urban areas as rural ones.

Sir Robert Smith: My hon. Friend makes an important point. As I represent a large rural constituency, I am focusing on the rural network, but my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) made it clear that the urban network also needs to be recognised for its social as well as its commercial role.

On the universal service and Royal Mail, the Minister talked about the importance of delivering such a service and he took an intervention on whether other mail users should subsidise that service. As my hon. Friend the Member for Kingston and Surbiton said, we need to monitor whether, as competition bites, the Royal Mail understands and defines the universal service more carefully and delivers to that basic minimum. We have already talked about how 4,000 sub-post offices would comply with the requirement for access points to the delivery network. Postcomm, the regulator, is now beginning to realise that it must consult on whether the current universal service obligation on collection and delivery is being observed in spirit as well as in practice. As competition bites, and as Royal Mail starts to look at efficiencies, it might
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start to consider how its product can still meet the universal service obligation even though the collections and deliveries are the wrong way round for the user.

Mr. Weir: On that point, is the hon. Gentleman aware of the concerns raised by Postwatch in Scotland about the apparent tightening of the exceptions policy with regard to delivery in many rural areas, which could lead to a loss of service for many people?

Sir Robert Smith: I am certainly aware of Postwatch’s concerns. Postcomm is consulting on changing the wording of the exceptions policy. In all such processes, it is extremely important that the universal service is not watered down to make the service more cost-effective or, I suppose, more efficient for the majority. The universal service is about what everyone in the country can expect to be delivered to them. Therefore, its protection must be at the heart of how Royal Mail is treated by both the regulator and the Government. I urge the Government to take on board the point about ensuring that that service can be delivered and is not watered down. If collection comes before delivery in a particular area, there is no way to turn mail around on the same day. The protection of that universal service is vital and requires effective funding of Royal Mail and a recognition of how much Royal Mail has done to try to address the challenges of competition, how much the work force have done, and how much the work force deserve to be awarded and recognised for what they have done. A trustee share ownership scheme, in which shares are owned for the benefit of the work force and cannot be distributed outside that scheme, seems an excellent way of thanking the work force for what they have achieved and rewarding them further as the company continues to build and take on competition.

Michael Connarty: As secretary of the liaison committee for the Communication Workers Union, I am always wary of politicians who tell me what the workers want. The workers tell me that they want decent wages, decent conditions and more guaranteed employment, and they lobbied the Liberal conference to withdraw last year’s conference motion talking about selling off shares, as they know that it is a halfway house to privatisation, just as happened with BT. Why does the hon. Gentleman not listen to the workers in their organised association?

Sir Robert Smith: I have listened to some workers who have come to me and said that they would like such a share scheme so that they can take part in the success of the company in which they are working and investing. Individuals are entitled to their views, and it is important that those are taken into account in the debate. It is not necessary to have one collective view; people are entitled to individual views.

At this time of transition, I urge the Government to ensure that decisions made on the future of the Post Office will enable a viable, socially supported rural and urban network to continue to be accessible. It is an empty and hollow promise from the Government that people will still be able to collect their pensions and benefits from a post office if there is no post office that is accessible to them.

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