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18 Jan 2007 : Column 904

Post Office

5. Daniel Kawczynski (Shrewsbury and Atcham) (Con): What plans he has to help increase the business opportunities for the Post Office. [116323]

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): The Government have worked closely with Royal Mail and Post Office Ltd to ensure that they can deliver high quality services that customers want. That includes the £500 million investment in Horizon, thus enabling the Post Office to develop its financial service businesses by opening its counters to 20 million bank customers and becoming the UK’s leading provider, for example, of foreign exchange services. The vast majority of post offices are private businesses that can also pursue commercial interests.

Daniel Kawczynski: I thank the Minister for that reply and, for the record, his help over the summer. I also thank Labour party activists in Shrewsbury. We all campaigned to try to save our main post office in Shrewsbury but, regrettably, it closed and has been subsumed by WH Smith. What help will he give rural post offices in my constituency to ensure that they can continue to prosper? They provide an important service to the people in my rural community.

Jim Fitzpatrick: Notwithstanding my discussion with the hon. Gentleman and his constituents about Shrewsbury, I take a different view. The post office is still open. It has moved to different premises, but the services are available. Most customers’ experience of franchise arrangements for main post offices and directly managed branches moving to other premises has been positive. We are trying to maintain the largest national network that we can, including large branches in towns and cities. Although the example of Shrewsbury caused initial concern, I hope that it will prove beneficial to the hon. Gentleman’s community.

Ms Diana R. Johnson (Kingston upon Hull, North) (Lab): Has my hon. Friend considered the opportunities for credit unions to use the post office network?

Jim Fitzpatrick: I can confirm that discussions have taken place between the Post Office and the credit unions national body on greater scope for working together. Regular dialogue will continue. Although working together would have a social role, it is not clear that it would generate much revenue for the Post Office. However, it would obviously increase footfall and ensure that the Post Office was further rooted in most vulnerable communities. Credit unions are on the up and expanding. I hope that they have a positive future with the Post Office.

Peter Luff (Mid-Worcestershire) (Con): When the gas, electricity and telecommunications industries were opened up to competition, it was vital that transmission and distribution networks were made available to competitors. The sub-post office network could and should be the distribution network for the competitors to Royal Mail for packets and parcels. However, I expect that Royal Mail Group would fight
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hard against that. Will the Minister assure me that he will do all in his power to ensure that that valuable new additional source of revenue is opened up to sub-post offices?

Jim Fitzpatrick: The hon. Gentleman makes a fair point and several people have raised the matter. However, it is not clear that such action would generate additional revenue. Royal Mail might well be replaced by competitors so the business would remain the same. The matter is constantly under review. Competitors can apply to Postcomm for a licence to operate. It is Postcomm’s decision under the universal service obligation.

Hugh Bayley (City of York) (Lab): Will my hon. Friend ask the Post Office to consider entering into partnerships with catalogue businesses such as Littlewoods or Argos? Low-income families depend on those businesses, but there is a growing gap between families who are e-enabled and those who are not. Perhaps there could be an internet point in post offices and links with those businesses so that the Post Office can survive.

Jim Fitzpatrick: In his statement on 14 December, my right hon. Friend the Secretary of State announced a three month consultation period until 8 March for representations about spending the £1.7 billion additional money that we will use to support the Post Office’s sustainable network. There are several innovative and new ways in which we can improve the protection arrangements for the Post Office. New ways of doing business are an example of that and we welcome representations from colleagues, as well as outside organisations, about how best to expand the business.

Mr. David Evennett (Bexleyheath and Crayford) (Con): As the Minister knows from our previous questions and discussions, suburban areas such as mine need the post offices as much as rural areas in order to be sustainable communities. Will he consider how he could expand the role of sub-postmasters to provide more products and services, perhaps using private mail services and new markets, to allow post offices to continue as profitable businesses?

Jim Fitzpatrick: As I mentioned a moment ago, the vast majority of the 13,800 post office outlets across the country are privately owned businesses. It is a matter for those business people to determine for themselves whether, for example, they apply for lottery or PayPoint terminals or engage in local partnerships with other franchises. These are opportunities for them to expand their businesses, and many people take advantage of them. Notwithstanding that, because of the nature of the business and the fact that it is not commercially viable at its present size, we are saying that there should be at least 12,000 outlets, and another 500 mobile outlets, and there has to be public subsidy to maintain that.

Susan Kramer (Richmond Park) (LD): The Minister said that his Government are committing an additional £1.7 billion to invest in the post office network over three years. Surely, however, that sum includes money
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for the social network payments—that is, “ticking over” money—and compensation for redundancies and for the cost of closing post offices. Will he now tell us what sum will be left over to invest in new business and in training, equipment and marketing? Or is that amount so token that it has no hope of reinvigorating the post office network?

Jim Fitzpatrick: I would be happy to write to the hon. Lady to give her a complete breakdown of the figures, although I think that we have already given that information in answer to several parliamentary questions over the past few weeks. I must point out, however, that regardless of whether the money is going into compensation payments or social network payments, it is money that the Government are committing to protecting the post office network to ensure that we get it on to a sound financial footing by 2011, and to ensure that we have a national network. It is Government money, regardless of how it is being spent.

Alan Duncan (Rutland and Melton) (Con): This week, it has been reported that several major companies and one major Government Department have switched hundreds of millions of pounds of business away from Royal Mail. Is it not the case that the Government are opening up Royal Mail to greater competition—and demanding that it behave like a private business—while denying it the freedom that it needs to compete effectively? How does the Minister expect it to do well when its competitors are free to compete with it, yet it is not free to compete with them?

Jim Fitzpatrick: We do not accept the hon. Gentleman’s point. Royal Mail has the freedom to compete. We have liberalised the markets to ensure that it is a competitive service industry. It is not consistent for Opposition Members to say that there should be freedom within the market, but then to tell us that the restrictions on Royal Mail are making the business less profitable. Royal Mail has the opportunity and freedom to compete.

Alan Duncan: Perhaps the Minister will write to me to explain how Royal Mail is free to raise capital in the same way as a private sector company. I look forward to hearing his reply. The management of Royal Mail has been pushing the Government to allow it to introduce an employee share ownership scheme. The Government have been considering that proposition for more than a year, but they seem incapable of deciding anything. Will the Minister tell us by what date he will have made a decision on that proposal?

Jim Fitzpatrick: On the hon. Gentleman’s last point, discussions are continuing and I am sorry that I am unable to give him a date at the moment. On his first two points—I apologise, but I think that two different issues are being raised—the freedom to compete is one issue, and Royal Mail has that freedom. The freedom to invest is a matter for the shareholder, in which capacity the Government clearly act on behalf of the taxpayer. My right hon. Friend the Secretary of State made a statement late last year on the freedoms that we
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have given to Royal Mail to use money from its reserves and to raise money to ensure that it can invest in the business.

Mr. Brian Binley (Northampton, South) (Con): The Minister will be aware of the great uncertainty and fear felt by many proprietors of sub-post offices. The cry that I hear is that they are not getting the information that they ought to be getting from the Post Office, and they are certainly not getting advance information about any problems that might affect them. Will the Minister be kind enough to look into those matters and try to speed up the process and make it more efficient? Those people are important to the industry, but they are beginning to think that there is no future for them.

Jim Fitzpatrick: I fairly regularly get letters from right hon. and hon. Members about particular causes for concern in their own local directly managed branch or post office. If the hon. Gentleman would like to write to me about the concerns being expressed by his local sub-postmasters and mistresses, I would be happy to look into the matter and get an answer from Post Office Ltd for him as soon as possible.

Post Office Closures

7. Miss Anne McIntosh (Vale of York) (Con): What representations he has received following his statement announcing post office closures in England. [116325]

The Secretary of State for Trade and Industry (Mr. Alistair Darling): We have received a large number of responses from a wide range of people. There was a debate in the House on the post office network earlier this month.

Miss McIntosh: I thank the Secretary of State both for that answer and for the statement that he made in December. Does he appreciate, however, that North Yorkshire is probably the most rural, as well as the largest, county in England? About 84 per cent. of its population live within a mile of a post office. Will he guarantee that that will still be the case in five years’ time? Will he free sub-post offices from the constraints of their current contract so that they can offer new services and not be so dependent on the subsidy in future?

Mr. Darling: I appreciate the point that the hon. Lady makes about North Yorkshire, but it is not the only rural part of the country. The objective that I set last December was to ensure that there is a national network of about 12,000 offices, and we are prepared to make the money available to support such a network between now and 2011. There will never be a network of anything like that size without public subsidy. About 4,000 branches could be supported on a commercial basis—perhaps 1,000 or so more—but I believe that the Government have an obligation to ensure that there is a national network. That is why we believe that the size of the present network needs to be reduced; otherwise, it will become more and more expensive. We should remember that the Post Office lost £2 million a week last year; this year, it will lose £4 million a week. That is
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why we had to take action. I set out the access criteria in the consultation document published just before Christmas.

Andrew Gwynne (Denton and Reddish) (Lab): Back in 1996, the main Crown post office in my constituency closed when the Co-op took over the franchise. In late 2005, the Co-op terminated that franchise early, leaving us without a main post office for two months. The new post office, 12 months after moving to a new building, is still a building site. Given such experiences, may I urge my right hon. Friend to strengthen the franchising arrangements to ensure that such a sorry tale does not happen again?

Mr. Darling: If the Post Office decides on a pattern of post offices, it is important that it remains in place. If a difficulty arises from a franchisee giving up the business—my hon. Friend alludes to the fact that the vast bulk of such franchisees are individuals in private business and are not part of the Post Office, except in transacting its business—we need to sort that out. Following on from the point about WH Smith made by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), who is no longer in his place, it is important to realise that sharing of businesses offers the best future for many post offices, as that increases the number of people who come through their doors. That is the main problem that confronts the Post Office at present.

Mr. Rob Wilson (Reading, East) (Con): It has been announced that the Royal Mail sorting office in my constituency will close, with the loss of hundreds of jobs. Is the Secretary of State aware that Government policy and the Communication Workers Union are directly responsible for that, as they have blocked attempts by management to modernise and reform operations? As my hon. Friend the Member for Rutland and Melton (Alan Duncan) has said, hundreds of millions of pounds of business have been lost in the past few months alone. Will the Secretary of State now meet the Royal Mail’s senior management and deliver the changes that they need to compete in the private sector and save jobs in my constituency?

Mr. Darling: The hon. Gentleman has already arranged to meet the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), to discuss the specific difficulties at Reading. In relation to his wider point, the Royal Mail is now in competition with a number of other major operators. It will face stiff competition and have to undergo substantial changes. The Royal Mail board is committed to that, and it is important to recognise that change is essential if the Royal Mail is to survive.

David Taylor (North-West Leicestershire) (Lab/Co-op): From discussions with senior Royal Mail executives earlier this week, I understand that about half the projected 2,500 closures will be in urban areas with populations of greater than 10,000, which were reinvented by the earlier urban programme. Under that programme, volunteers were sought, and there were no compulsory redundancies, as it were, on any scale; on this occasion, that will happen. Does not that lead to
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problems, especially if a thriving business is given compulsory redundancy because there are other post offices nearby, whereas a struggling one is allowed to continue? Would not that be perverse?

Mr. Darling: I think that redundancy is unlikely, because most people are not actually employed by the Post Office. We expect about 2,500 branches to close, but as I said in my statement in December, we need to ensure that in each area the Post Office satisfies itself that there is a network that meets the access criteria I have set out. If that means that in some areas there are three post offices and there is business for two, it makes sense to review the position.

As I have said, losses have risen from £2 million every week last year to £4 million this week, and if we do not do anything the figure will go up and up and up. No Government will be in a position to go on supporting those losses. Everyone believes that given the huge changes in the nature of its business, and for all the reasons that we have discussed when we have debated the issue, the Post Office must take the necessary action. We are prepared to support it—we are willing to provide £1.7 billion over the next few years, in addition to other support that we are giving Royal Mail Group—but to say that there must be no change, or that business should not adapt to what its customers want, does not strike me as terribly sensible.

Philip Davies (Shipley) (Con): Bingley post office in my constituency closed before Christmas and a temporary post office was put in its place. According to a parliamentary answer, 99 per cent. of towns the size of Bingley have full post offices. Will the Secretary of State assure my constituents that his announcement before Christmas about post office closures will not stop the Government and Royal Mail doing everything possible to keep a permanent post office in Bingley, in view of the important part that it plays for local people and the support that it gives local businesses with the footfall that it generates?

Mr. Darling: My hon. Friend the Under-Secretary of State tells me that the hon. Gentleman is corresponding with him about the matter. I hope the Post Office can produce a solution that is satisfactory to him and to his constituents.

Bank Holidays

9. Mr. Lindsay Hoyle (Chorley) (Lab): What steps he is taking to increase the number of bank holidays. [116327]

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): The Government have no plans to change the present arrangements. However, because some employers currently include the existing eight bank holidays as part of workers’ statutory 20-day annual leave entitlement, we are committed to making time off for bank holidays additional to that entitlement, which would give about 6 million people an increase in their holiday entitlement from 20 days per year to 28. We are currently consulting on draft legislation.

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Mr. Hoyle: I welcome that, but the Minister ought to be a little more generous and increase the number of public holidays. May I suggest that Veterans day could be one of them? More important, given that St Patrick’s day is rightly treated as a big day, why should not St George’s day be treated in the same way? Why should we allow the extreme right to think that it is their day? St George’s day belongs to all people and all political sides, and it is a day for England to celebrate. Will the Minister consider that, as a good will gesture?

Jim Fitzpatrick: I know that my hon. Friend is a vigorous campaigner for St George’s day, and as a Londoner—note my classic cockney accent—I can assure him that I always celebrate it. However, I must disappoint him by saying that we have no plans to increase the number of bank holidays.

Miss Julie Kirkbride (Bromsgrove) (Con): Much as I agree with the hon. Member for Chorley (Mr. Hoyle), who is my colleague on the Catering Committee, about the appropriateness of making St George’s day a bank holiday—it is my brother’s birthday, so he would be especially happy about it—is not part of the problem with the present regime the fact that bank holidays happen in the spring? There are two in May. Would it not appeal to the tourism industry if we moved one of them to the autumn, so that it could extend its “shoulder” season in both directions and make more money as a result?

Jim Fitzpatrick: The hon. Lady should not really support the idea of a bank holiday on her brother’s birthday as that, too, would fall in the spring. What she says about the calendar is accurate, but, as I told my hon. Friend the Member for Chorley (Mr. Hoyle), we have no plans to change the current arrangements.

Shona McIsaac (Cleethorpes) (Lab): I entirely agree with my hon. Friend the Minister about unscrupulous employers who deny people their full holiday entitlement. I have received many complaints about that from residents of my constituency. What action can they take now, before legislation is introduced, to try to put the matter right?

Jim Fitzpatrick: My hon. Friend makes a valid point: we are now in the early 21st century and many of us found it scandalous when we realised that, having legislated for 20 days of paid annual leave in 1998, some companies were incorporating the existing eight statutory bank holidays into those 20 days. I do not think that there is any support for those companies in any part of the House, and I hope that they will put their house in order before they are forced to do so by legislation. We are consulting on the introduction of those holidays, and we expect to introduce four later this year and four next year. However, that is a matter for consultation, but we look forward to the legislation being introduced in due course.

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