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I welcome the Minister. It seems that, whenever the Government get themselves into a mess or are on a sticky wicket, they ask the Minister to come and bat. I am afraid that we will see a batting collapse in Government policy that is faster than that of the English in Australia this morning.
I want to talk about a letter that I received from the Office of the Deputy Prime Minister. I had asked a question about how far away post offices are from people, to which the Deputy Prime Minister replied that
99 per cent. of people live within one mile.[Official Report, 1 November 2006; Vol. 451, c. 281.]
When replying to the question you asked on 1st November about the Post Office network, I said that about 99 per cent. of people live within one mile of a Post Office...I apologise that I should have made clear that 99 per cent. of the urban population live within one mile of a Post Office. I understand that 93 per cent. of the population as a whole live within one mile of a Post Office.
I commend the Deputy Prime Minister for quickly correcting what was obviously an inadvertent slip in the House, but it raises an interesting issue. I know that that statement was wrong and he knows that it was wrong, but no one else knows that, because Hansard recorded the answer as the Deputy Prime Minister said it. If he was given wrong information, has the Minister also been given wrong information and have the Governments conclusions about the necessity of rural post offices been based on the wrong statistics?
93 per cent. of the population as a whole live within one mile of a Post Office.
99 per cent. of the urban population live within one mile of a Post Office.
By my calculation, that could mean that only 70 or 80 per cent. of those in rural areas live within one mile of a post office, and I have some specific questions that I would like the Minister to deal with in his response if he can. Does he know the distance that people in rural areas must travel to their post office? If 70 or 80 per cent. of the rural population live within one mile, perhaps the information on which the Government based their policy is based on misinformation. If the Minister has that information, on what date was it based? It may be that 90 per cent. of the urban population live within one mile of a post office. On what date is the information based? Many urban post offices have closed recently.
I am worried that Government policy is being determined on statistics that may not be correct. When the Deputy Prime Minister stood up in the House and gave a statistic in reply to an oral question, he must have got that statistic from his officials, so I am worried that misinformation has been given to Ministers and is leading to incorrect conclusions.
I want briefly to mention how people are affected. For me, it is inconvenient that a post office has closed in my area. In fact, post offices in London road, Bedford road, Avenue road and Newton road have closed, but all I do is to hop in a car and go to Little Irchester. However, what about people in my area who are elderly, vulnerable, such as single mums, or disabled? They cannot do that and their only alternative is to go to the one remaining post office in Rushton, which means that they must queue up, often outside the post office, for service.
The Government may have adopted this policy on the basis of wrong information and they certainly did not realise the consequences. I do not believe for one moment that the Minister came into politics to make the lives of the vulnerable, the disabled and the elderly more difficult. I am sure that that is not the case but, unfortunately, that is what has happened. The whole country is praying and hoping that in the case of rural post offices, Jim really can fix it.
I congratulate the hon. Member for Kettering (Mr. Hollobone) on securing this debate and the hon. Member for Wellingborough (Mr. Bone) on his able assistance. Both hon. Gentlemen have regularly lobbied the Government effectively on this important issue. We acknowledged in previous exchanges the importance of the post office network and gave some reassurance that we would continue to subsidise the rural network and its sustainability, and that there would be a successor to the Post Office card account. Until the House hears the details, there will be a degree of scepticism. That is the nature of politics, but I hope that we shall be able to dispel that scepticism in due course.
Much has been said and written about post offices recently, underlining the need for balanced and constructive debate of the matter. Many scare stories are doing the rounds and it is important for the peace of mind of sub-postmasters and customersour constituentsin all communities that we distinguish between myth and reality.
I will address in writing the specific questions raised by the hon. Member for Kettering. When the Secretary of State has made his statement, there will be a period of consultation, which may be the appropriate time to analyse the evidence upon which we are basing our conclusions. I shall be very happy to have a meeting with the hon. Gentleman and the hon. Member for Wellingborough to discuss the specifics of my response, which I will send in due course.
The myth is that the Government are in some way engaged in systematically removing services from post offices. The reality is that we have invested more than £2 billion since 1999 in the post office network because we know that post offices are an important part of British life, particularly in rural and deprived urban areas. As the Secretary of State said, he will make an announcement before the Christmas recess which will include our proposals to ensure a long-term, stable footing for a continued national post office network.
The rural network is currently supported by the Government's social network payment of £750 million over the five years from 2003 to 2008. There are still more than 14,000 post offices, which is more than eight times the number of Tesco outlets. There are more post offices than bank and building society branches combined. Maintaining a network of that size is hugely expensive and the cost is rising, with Post Office Ltd expecting to lose £4 million every week during the current financial year. The latest figures show that on average fewer than 16 people a week use the 800 smallest rural post offices. Every trip they make effectively gets a subsidy of £17 from the public purse. More than one third of business in the rural network is done in the largest 10 per cent. of branches. There are around 6,500 rural social branches, which lose around £150 million a year. Those rural branches represent 45 per cent. of the network total, but they account for less than 7 per cent. of overall income.
The key challenge in moving forward is how best to address the needs of post offices in rural and deprived urban areas where they can play a key social role. If the network is to survive, it must meet the present and future needs of its customers on a sustainable basis. Both the Government and Post Office Ltd are looking closely at service provision in the context of utilisation levels. Over the past year, Post Office Ltd has been testing new service delivery channels with particular focus on the loss-making rural segment of the network. Those trials are based on a hub-and-spoke or core-and-outreach principle and aim to deliver value-for-money rural post office services that can be tailored to different situations.
In those trials, a core post office is providing services to a number of outreach sites using one or more of the four outreach options being tested. In all pilots, the service hours have been set at a level much more commensurate to the level of business generated in that
community, so that the wastefulness of long opening hours with little or no custom is eliminated. Although opening hours have been reduced, in many cases the range of available services has been extended. Many of our constituents in very rural areas have local access to motor vehicle licensing and passport check-and-send services for the first time. Encouragingly, once people get used to the new means of service delivery, levels of satisfaction with the pilots run very highat about 93 per cent.
We recognise, however, that not all initiatives undertaken, whether by the Government or by the Post Office, have been as successful as we would have wished. Whether we like it or not, post offices are not being used as they once were, and the trend is accelerating. It is important to recognise that declining business at post offices is not a new phenomenon: the size of the network peaked in the mid-1960s, with about 25,000 outlets, but by as early as 1970, the numbers started to decline. The business is going through a sustained period of change, and it needs to adapt to customers changing lifestyles and habits.
As a result of dramatic advances in technology in recent years, we have seen unprecedented changes in the communications and banking industries. People increasingly choose to access services in different ways, using direct debits to pay their bills, hole-in-the-wall machines to get cash, and the telephone and internet for banking or information on Government services.
Much is said during these debates about the social role that many post offices are seen to play. However, it is too often forgotten that the Post Office operates in a commercial marketplace, not in a vacuum. Sub-post offices account for 97 per cent. of the network, and they are private businesses, bought and sold commercially, which usually run alongside an associated retail business. The hon. Member for Kettering made effectively the point about their significance in communities where they provide a range of services.
Mr. Hollobone: I hope that the Minister will take up the invitation to visit Northamptonshire. If he comes to the county, there are two post offices that he could visit: one at Creaton, which I have mentioned, and the other at Guilsborough, where Lieutenant-Colonel and Mrs. Evans have reopened their shop, Seatons, and revived Guilsborough post office. They are rising to the commercial challenge of running a small shop in a rural community. There are sub-postmasters and sub-postmistresses who want to make a real success of their post offices, and the Government must offer them encouragement.
The services that the network provides, including lottery tickets, foreign currency, telephony, bill payments and financial services, are in direct competition with other retailers and providers, and we have helped to equip the Post Office to tackle the changing needs of its customers. Our £2 billion investment in the network included £500 million for the horizon project to bring modern computer systems into every post office in the country, enabling the Post
Office to tap into new markets and to open its counters to potentially 20 million bank customers.
We are supporting the Post Office with efforts to improve the companys profitability and to introduce new products and services. The Post Office is now the UKs number one provider of foreign exchange services, with 12 million transactions last year, and it is also the largest independent provider of travel insurance. The Post Office continues to broaden its range of financial services and other services that the hon. Gentleman described. In March, it launched its instant saver account, a competitive savings account that should prove popular with customers who want to use the post office.
The future of the post office network is a significant cross-cutting issue for the Government, with a number of different Departments delivering services through it. We continue to look for ways in which we can use the network, but it is the duty of a responsible Government to provide services where the public can choose the means of access, and services that offer value for money. For example, the Driver and Vehicle Licensing Agencys online vehicle licensing service was launched only last year, but already it has been used by some 4 million people, and many transactions are carried out outside normal post office opening hours. Choice for and convenience to the customer has been increased, but those issues pose a real challenge to the Post Office.
The Post Office card account is one of about 25 different accounts that can be used to access benefit and pension money over the post office counter. Some 70 per cent. of the 4 million Post Office card account customers also have a bank or building society account; and 8.5 million of the UKs 10.8 million pensioners have their state pensions paid into a bank account. Ninety-eight per cent. of customers making new state pension claims choose direct payment into an account, whether that is a bank account or a Post Office card account.
Discussions between the Government and the Post Office about the Post Office card account continue, and the Secretary of State will make a statement before Christmas on our proposals to ensure that we maintain a national network. Our aim is to ensure that customers are given a range of options for accessing their money at post offices. There has been substantial activity behind the scenes to obtain and assess data on the network and how that feeds into the options for its future shape and sizethe point made by the hon. Member for Wellingborough about the accuracy of the evidence. I am sure that we will return to the issue in due course.
Hon. Members will know of the range of research and reports published over recent months by Postcomm, Postwatch, the Commission for Rural
Communities, the National Federation of Sub-postmasters, the Select Committee on Trade and Industry and others. The findings, conclusions and recommendations from that extensive range of work are being taken into account alongside our own analysis and assessment so that we can inform our thinking on a forward strategy. We do not yet have the answers, but people can rest assured that we are listening and we shall take account of their concerns when reaching our conclusions. We also recognise that we need to take some tough decisions, but because they will be tough, we have been working intensively to ensure that they are right.
I acknowledge the kind invitation to visit lovely Northamptonshire. However, it is unlikely that I shall be able to accept. Having met the executive of the National Association of Sub-postmasters, addressed its rally at Westminster in October, been with its members when they presented the Prime Minister with a 4 million-signature petition, and received voluminous correspondence from individuals, parish councillors and others, on top of the Adjournment debates, Trade and Industry questions and meetings with individual MPs and regional groups, I can assure the hon. Gentleman that I am in no doubt whatever about the seriousness of the issues that we are addressing.
Mr. Bone: I quite understand the Minister, but if he visited Kettering, he could come through my constituency, stop with the wonderful sub-postmaster at Little Irchester, and get one of the very good cups of tea and bacon buns that he prepares. The Minister might not be able to visit, but I was disappointed that the Post Office would not send any representatives to listen to the complaints from my constituents. That was unfortunate.
Jim Fitzpatrick: As a vegetarian, the bacon butty would not be for me. I was disappointed, as the hon. Gentleman was, to hear the news from Australia; but I was even more disappointed that he brought it into the debate.
In closing I want to make it absolutely clear to the hon. Gentlemen present that we know we must provide for the most vulnerable, whether they are in rural communities, suburbs or deprived urban areas. It will be a key consideration of the Secretary of States statement. We recognise how post offices that can never be commercially viable, but which play an important social and economic role, will need continued public funding to ensure service provision. We shall also look to ensure that those services are delivered as efficiently as possible, and where appropriate, that they are more cost-effective.
Sarah McCarthy-Fry (Portsmouth, North) (Lab/Co-op): I am delighted to have secured the opportunity to lay before the Minister the case for Portsmouth naval base to remain the home port for the majority of the British service fleet, and a major centre for warship maintenance, repairs and refits.
The decision by the Ministry of Defence to undertake a major review of Britains naval bases, bringing with it the threat of closure for one of them, understandably sent shockwaves through the Portsmouth community. I and the hon. Member for Portsmouth, South (Mr. Hancock) immediately pledged to do all we could to ensure the survival of Britains premier naval port, and I am heartened by the spirit in which the local council, local industry, trade unions and other MPs in the region, from whatever party, have been working together on behalf of Portsmouth. The issue is much bigger than party politics; it is about our city. Our local paper, The News, immediately launched a campaign that has received massive support from people not just in Portsmouth and the UK but around the world. Such is the affection and esteem in which Portsmouth naval base is held.
Much as I would like him to, I understand that my hon. Friend the Under-Secretary cannot give firm assurances about the future of Portsmouth naval base while the review is ongoing. However, I should like some assurance that the points that I outline today will be taken on board fully before any decision is made. I should make it clear from the outset that I do not intend to make the case for Portsmouth at the expense of the other two naval bases. I was disappointed by the DML Groups decision to go down that route, and I do not believe that it has done the group any favours. Portsmouth does not need to do that. Our case stands up by itself.
There is an historical case to be made for Portsmouth. It has been a centre for naval shipbuilding since 1194, and since then, Portsmouths skilled craftsmen and women have been supporting our naval fleet through times of peace and war. My grandfather was one of them. However, I am realistic enough to know that grateful though we are to those men and women of history, that case is not sufficient on its own to stand up to an up-to-date, rigorous value-for-money inquiry, and quite rightly. In these troubled times, we need maximum resources on the front line and we must ensure that our naval bases are giving cost and battle-effective support to that front line. Therefore, I intend to focus on just two aspects of Portsmouths case: the financial and the military-strategic.
Portsmouth is the home port of 60 per cent. of the surface fleetits ships and its sailors. All major naval operations are mounted by the naval base commander, Portsmouth. The Portsmouth area has the majority of naval training establishments as well as fleet headquarters, a considerable naval manufacturing base including VT Shipbuilding and, in the Defence Science and Technology Laboratory and QinetiQ, world-class defence research and development.
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