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24 Apr 2007 : Column 228WH—continued


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Mark Williams: Does the hon. Gentleman agree that there is a great opportunity in our village post offices for payment of council tax, rent and parking fines and, particularly in rural areas, for the administration of agricultural movement? The bureaucracies associated with that could be administered in our post offices as well.

Mr. Llwyd: I absolutely agree. There is a need for some creative thinking, and for considering rural issues quite apart from other issues, because they are clearly distinct. There have already been references to distances between post offices and so on.

I should declare an interest. My sister, who is a successful business woman, has opened a sub-post office in a village called Eglwysbach in north Wales. She is marketing local produce—yoghurts, cheeses, meats and so on—and I am pleased to say that she is doing very well. She was at one time a bank manager. She went on the induction course for post office workers and spent a week being advised how to do accounts, which was not difficult for her, although the Post Office way of doing accounts is quite different from everybody else’s, but I shall not go into that now. She says that what she receives from Post Office business does not meet even half of the salary that her assistant is paid.

Let us consider the reality of that situation. My sister has opened a dynamic little business, but that may not be possible for everyone. There is a nice centre of population around her business, but other people might not have that potential. We need to think creatively and to consider the rural context all the time. The comments of the hon. Member for Ceredigion (Mark Williams) about what we could use our rural post office network for were well made. As I have said, I, for one, rely on my village shop, as do many other people.

Mr. Clifton-Brown: On the theme of being creative about what services could be provided in post offices, does the hon. Gentleman agree that if most post offices had a PC or a laptop with access to broadband a huge range of different services such as Government services, online banking and e-mail could be accessed? Does he agree that we should have access criteria not for the closure of post offices, but for Government services in post offices?

Mr. Llwyd: I absolutely agree. Given that we are discussing a necessary and very important service in rural communities, we should be thinking about giving some financial assistance, not from now until kingdom come but to get people on their feet and moving, while we consider various financial packages—the banking and so on. That could easily be done. It is simply a matter of political will and a bit of creative thinking, as the hon. Gentleman has just said.

I know that many other people want to speak, so I shall not delay matters. Suffice it to say that it is crucial to prevent any further closures in the network. I despair when I think how many offices have been lost in north and mid-Wales in the past couple of years. Indeed, since 1998, there have been 331 closures in north and rural Wales, which is a huge number.

I shall end with a point about Crown offices. The Bangor Crown office will be taken over by WH Smith. We heard in an earlier exchange of a fortunate example of one franchise coming to an end and another then
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taking it over. Fine, that is good, but the problem is that large companies are rather fickle about the services that they deliver. If the bottom line—what they get back—is not good enough, that will be an end of it. Will the Minister say whether there is a minimum period for which a franchise must operate? If, for example, WH Smith decided that it wanted to give up the franchise, is there a minimum period for which it would have to operate it? Is there a minimum period for notifying the Department, and what steps would WH Smith have to take for the franchise to be taken over by someone else? What input do the Government have in that? An added problem is that the Crown offices are the hub of the wheel. If the hub is wonky, the whole wheel falls apart.

I have concentrated on rural areas, but I appreciate that urban areas will suffer under the cuts as well. I urge the Government to think creatively—they have quite a good record on e-commerce and so on. They should use their record and experience with e-commerce and give post offices the opportunity to expand and to flourish, which is the way forward. The hon. Member for Cotswold (Mr. Clifton-Brown) has referred to broadband, which is the way forward, and that proposal could be done. Indeed, eBay has been mentioned, and it could assist as well.

In conclusion, I hope that the Government will think carefully about the various proposals put to them during the consultation and that they will come up with some proper, concrete proposals that will ensure that our important sub-post offices flourish in the future and are not further diminished.

Mr. Christopher Chope (in the Chair): Four more people wish to speak. It is up to them how they divide the time. I call Mr. Paterson first.

11.35 am

Mr. Owen Paterson (North Shropshire) (Con): Thank you for calling me, Mr. Chope. I shall be brief, because as you may be able to detect, I am about to lose my voice.

I heartily congratulate the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) on landing another debate on this issue. He is a stalwart on the subject, and I agree with much of what he said.

My views are also well known, as I have spoken on the subject on many occasions. I shall not go over my usual material but would just like to add a few new bits of information that I have obtained since we last debated the matter.

I am the secretary of the all-party group on sub-post offices, whose work I very much enjoy. The group is under the chairmanship of the hon. Member for Vauxhall (Kate Hoey), who, sadly, could not be here today. She left this debate to me, I believe because North Shropshire is more rural than Vauxhall. The group has been busy on the subject during the past couple of years. With the help of the National Federation of Sub-Postmasters, we delivered 4 million signatures to Downing street last year, and that was followed up this year with a week of action. A range of organisations was involved: the Royal National Institute of the Blind, Age Concern, the Countryside Alliance, the National Pensioners Convention, the National Federation of Women’s Institutes, the National Consumer Council and Citizens Advice, just to name a few.


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As the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) said, the issue touches many people and involves an intangible social benefit—I entirely agree with him—that is not costed. The mess is one of the Government’s own making. If they had not ripped out £400 million of income from benefits transactions, and if they had stuck with the last Conservative Government’s plan to use swipe cards, they would have maintained security and avoided fraud but kept the income going through the post offices.

We now have a crazy churn. The Government have to throw in subsidies to compensate for the loss, but because there is so much uncertainty, other services are dropping out. There is nothing more telling than the issue of TV licences, which the hon. Member for Inverness, Nairn, Badenoch and Strathspey raised. I brought it up last autumn in parliamentary questions and in a letter to the director-general of the BBC. The BBC made a sensible commercial decision on the basis of information available to it. In a letter to me, Ms Pipa Doubtfire, the head of revenue management at the BBC, stated:

That was confirmed in a letter of 11 October last year from the director-general of the BBC, who repeated much of what Ms Doubtfire said and made the key point:

The BBC made a completely rational decision.

Mr. Russell Brown: The hon. Gentleman quotes this fine lady, Pipa Doubtfire, but does he not recognise—he has not mentioned it—that the BBC made a commercial decision that saved it some £100 million? Likewise, other contracts have been lost by the Post Office because people are undercutting it. In general, it is PayPoint that is doing that.

Mr. Paterson: I believe that I said twice that the BBC made a sensible commercial decision. It was made under conditions of doubt and uncertainty, and a vicious circle of downward decline in the post office network caused by the brutal withdrawal of the benefits transactions income. I would like a virtuous circle. I would like many more services to go through the network. I entirely agree with the comments of earlier speakers about other Government services that could be put through post offices.

Let me give a classic example. A furious constituent from Market Drayton rang me the other day. He had been clocked for not paying the congestion charge. He knew nothing about it, as he had not been to London in a car for years, and he was very upset. That small example shows that if information on services such as the congestion charge was available across the post office network, which it could be, such charges could be paid. Other services offered by post offices seem to be positively Soviet and stone age—for example, pensioners can only withdraw their winter fuel payments in one lump sum and cannot have an account at the post office
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accumulating interest, which seems to be similar to 1917 Soviet economic thinking. There are many areas where the Government, with imagination, could develop more economic activity, particularly in relation to banking. Why do HSBC, Halifax, Bank of Scotland and the Royal Bank of Scotland Group not offer any access to their current accounts at post offices? What is happening to make the Link service universally accessible in post offices? Those basic banking facilities could be part of the network and would bring in income.

I consider the network to provide opportunity. A couple of months ago, I went to a brilliant new post office in Maesbury that takes up 0.46 per cent. of the space of a brand new post office, which is probably about a third of the desk that you are sitting at, Mr. Chope. However, it generates 25 per cent. of the turnover. It is a brilliant place that has a shop, an off-licence, a bed and breakfast, canoeing and drying-out facilities. However, it also has internet facilities and a place to show a film and is exactly the sort of go-ahead, positive post office that we should be encouraging. In contrast, when the Secretary of State for Trade and Industry last made a statement in the House about this issue he looked miserable and as if the last place that he wanted to be was in the Commons answering questions from ghastly Members of Parliament like myself. Instead of being hounded about the post office, he wanted to get back to Edinburgh. Much as I like the Minister, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick), I think that he would also prefer to be somewhere else this morning. There is no enthusiasm on the part of the Government at all about what they could do to make the post office network more positive.

Jim Fitzpatrick: For the hon. Gentleman’s information, I am supposed to be in a Committee on the Consumers, Estate Agents and Redress Bill. I have left that to come here and tossed a coin to decide which would be the most pleasurable. I am pleased to be here.

Mr. Paterson: I am delighted that the Minister chose this debate as the lesser of the two evils. I will wind up because I know that other hon. Members wish to speak.

There is now a huge amount of uncertainty throughout the country about this issue. Just before Easter, during the recess, I was given a petition from several hundred constituents in St. Martins, which has a big village and a busy post office. As far as I know there is no proposal to close anything in St. Martins, but a group of people had gone to much trouble to obtain signatures and organise people because they were worried about the situation.

The Government are probably right to extend the consultation and I understand that they have had 2,500 replies. Will the Minister say what those replies are and give a clear indication of when he will make an announcement? We have raised this issue endlessly in Adjournment debates, so he should also provide a clear promise that the Government will start to look positively at the network. A virtuous cycle could be created from the vicious cycle that we currently have.

11.42 am

Julia Goldsworthy (Falmouth and Camborne) (LD): I will be brief because I am aware that other hon. Members wish to speak. I congratulate my hon. Friend
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the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) on this debate. I promise the Hansard reporters that there will not be too many place names that will be a struggle to spell, as there have been quite a few already.

I draw hon. Members’ attention to the concerns of sub-postmasters in Cornwall and other isolated rural areas about the potential impact of further post office closures. My perspective is taken from the work that I have done on the Sustainable Communities Bill, which is a private Member’s Bill currently going through Parliament and has been introduced by the hon. Member for Ruislip-Northwood (Mr. Hurd). I will also use the perspective that I have from being on the Liberal Democrats’ Treasury team. I will discuss the impact that post offices could have on local economies and on widening financial inclusion.

I emphasise the almost unquantifiable social value of post offices in many rural communities. I am reminded of the time when I went to Tehidy post office, which is one of my local post offices. There was no particular reason for my visit; I was simply running an errand. The person in front of me in the post office was a gentleman who was probably in his late 70s or early 80s and had not left his house for a year. On being well enough to leave his house for the first time, the highlight of his day was going to the post office and catching up with the local sub-postmaster and the many friends that he knew he would meet there. The importance of such social interaction cannot be underestimated—particularly in Cornwall, where demographics show that we have an older isolated population. People live in villages where there is often no access to rural transport and they cannot physically get to where other services may be provided. Often such people cannot drive a car themselves.

As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey has mentioned, the post office network should be used as a key tool for widening financial inclusion. The Post Office card account is an important area where that could be expanded. Like my hon. Friend, I was incredibly disappointed to see the Treasury’s latest report on financial inclusion, which describes the Post Office card account as a barrier to financial inclusion. That was concerning because it should be recognised that many people who cannot access a post office will be even less likely to be able to access a bank. For such people, the Post Office card account should be regarded as a first step.

Mr. Russell Brown: Is the hon. Lady aware that, at any given time, out of 25 per cent. of Post Office card accounts, which is about 1 million accounts, the total of those accounts is around £600 million to £700 million? The Post Office would dearly love to move people from Post Office card accounts on to other accounts that it operates, in the hope that people would receive interest on those balances.

Julia Goldsworthy: That is a key issue, which needs to be looked at. However, I hope that the hon. Gentleman appreciates that Post Office card accounts should not be viewed as a barrier to inclusion, but as a starting point. It should also be recognised that, for many people, accessing a bank can be difficult, which is the key way described by the Treasury to enter into financial inclusion. Some people may not feel able to access a bank account on the internet and will depend
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on accessing a service locally. Often the main service that they are able to access is the local post office.

I will briefly mention the importance of post offices for local rural economies. Cornwall has more micro-businesses per head of the population than any other part of the country. Particularly in rural areas, accessing a post office is critical for people’s access to cash and to services. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey mentioned new business developments such as eBay, which has resulted in a massive upsurge in the use of post offices. Cornwall is a recipient of European funding through objective 1, which deals with peripherality by broadening access to services and providing broadband. However, unless the Government arm also provides support, that good work will be undermined. It is a frustrating situation because there is potential, but the Government do not recognise that or see the Post Office as a vehicle for providing such services.

The Treasury is happy to send every post office a summary of the pre-Budget report. I was stunned when I went into Penryn post office and found a summary of the pre-Budget report, which would realistically be of interest to very few people. The Treasury sent it to every single post office and asked it to be displayed. The Treasury clearly recognises that post offices are a useful source of information, but is not prepared to offer the financial support to ensure that services are viable. Services are being withdrawn and the Government are not thinking laterally about what other services could be provided. We have heard that benefit payments have been taken away from post offices and things such as the pension credit application form make it incredibly difficult for credit to be paid into anything other than a bank account. On passport offices, Redruth, which is a town in my constituency, is fortunate to be one of two places in Cornwall that has passport interviewing centres. However, it will be impossible for people in the more isolated parts of Cornwall to get there. Why have the Government not realised that rural post offices are the ideal place and have the skills to deliver that service?

Such an approach from the Government also has an impact on commercial services. South West Water no longer allows people to pay their bills at post offices and we have heard about TV licences. The providers of those services have followed the Government’s lead in providing an incredibly broad definition of what constitutes access. On PayPoint, I was in a place called Stithians on a travelling surgery and I spoke to a lady who was irritated that she could no longer pay for her TV licence through her post office. She had been told that her nearest PayPoint was only three miles away in another village called Lanner. However, the fact that there were no direct public transport links between where she was living and the place where the PayPoint would be delivered was never taken into account. I am concerned that the Government are taking a similar approach to that and when they talk about distances from a local post office, they have not looked in the round at how someone would physically cover those distances. Very often, the roads on which people have to travel have no such thing as a pavement, and there are no public transport links. That has been my experience of the closures that have actually happened so far in my constituency.

The fundamental problem is that the people who are best placed to recognise the value of the services that local post offices could and do provide are those in the
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local communities, but the decision-making process and the funding stream are a million miles away from those people. Perhaps the Government could therefore consider devolving responsibility and possibly also funds, so that local authorities and communities can take the decisions.

As has been said, certainty is needed, together with a positive approach, because at the moment the climate of uncertainty is undermining confidence in sub-postmasters even more. A post office in one of my local towns has just closed, and a replacement sub-postmaster could not be found because the axe was known to be hanging over people’s heads. Why would it be commercially rational for anyone to think of taking such a role at present? I hope that the Minister will therefore reassure us that the response to the consultation will be speedy, so that the damaging climate of uncertainty will not be perpetuated.


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