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Mike Gapes (Ilford, South) (Lab/Co-op):
In 1997, my hon. Friends colleague, now the Minister for Trade, intervened to save Ilford Crown post office, which was under threat from the plans of the then Conservative Government. Will my hon. Friend look closely at the bad announcement made last week by the Post Office that it intends to close the Crown post office in Ilford,
and 70 others, and hand them over to WH Smith? That will not be good for my constituents, who at present can get a bus to the Crown post office; elderly people will have to walk long distances to the Exchange shopping centre.
Jim Fitzpatrick: I am sorry to hear my hon. Friends reaction to the announcement from Post Office Ltd and WH Smith about the 70 franchise arrangements that will protect and save services for his constituents. Experience and the results of mystery shopper and MORI surveys on pilot schemes run by Post Office Ltd and WH Smith have been exceptionally high. I think that when my hon. Friend sees the arrangements in place, he and his constituents will also welcome the improvements in services. The vast majority of the 14,500 existing post offices and sub-post offices are run on a franchise or sub-postmaster basis, which ensures that the services can be protected for the future.
Mr. Tim Boswell (Daventry) (Con): Conversely to what the hon. Member for Ilford, South (Mike Gapes) describes, the Crown post office in Daventry has not yet had an agent nominated for its forthcoming management, and there is a strong local rumour that it will shut altogether. Only this week, we have heard that rural sub-postmasters face similar pressures, being cut off at the knees and unable to deliver their services. Does the Minister at least agree that one of the great strengths of the Post Office is that it is a universal service? Long may it remain so.
Jim Fitzpatrick: Obviously, I am happy to agree. The Post Office provides an unrivalled service to our constituents right across the country, whether in urban or rural areas. That is why the Government have spent £2 billion since 1999 and why we intend to spend a further £1.7 billion between now and 2011 to make sure that the service, when it is restructured, will be on a sound financial basis for the future.
Mr. Christopher Fraser (South-West Norfolk) (Con): A postmaster in my constituency has told me that it would be rash to spend money on new stock or repairs while the office is under the threat of closure, and that he needs to know where he stands as soon as possible. Will the Minister report back at the earliest opportunity on the outcome of the Post Office consultation, and does he accept that rural post offices are finding it extremely difficult to conduct their business in the climate of uncertainty they face?
The hon. Gentleman makes an important point. The uncertainty needs to be dealt with as soon as possible, and my right hon. Friend the Secretary of State will make an announcement to the House fairly shortly, which will, I hope, put greater certainty into the arena. The hon. Member for Daventry (Mr. Boswell) referred to rumour and speculation about closures, which we can understand, and where we can, we kill off such speculation, about which a number of Members have written to us. We refer such matters to Post Office Ltd, which is able to give certainty in particular areas where there are clearly no plans affecting major centres. The important thing is for my right hon. Friend to make his announcement, and then for Post Office Ltd and Postwatch to get on with the implementation
of restructuring. We know that sub-postmasters across the country have been waiting a considerable time for that, which is why we want to expedite it.
The Minister for Industry and the Regions (Margaret Hodge): The Government estimate that the total administrative burden on businesses, charities and the voluntary sector in England derived from EU legislation is approximately £6.3 billion. This estimate excludes the costs of EU administrative burdens on financial services, which are not available in this format.
Philip Davies: Gunter Verheugen, the EU Commissioner, has said that the cost of EU regulations on EU businesses amounts to €600 billion, but the European Commission has said that the benefits to EU businesses of the single market amount to less than €200 billion. With the regulations costing three times as much as the benefits and with 90 per cent. of British businesses not getting any real benefit from the single market but facing all the costs of the regulations, is it not increasingly clear that British businesses would be better off out of the European Union?
Margaret Hodge: This is a welcome day: all sorts of Jekyll and Hyde Tory policies are being announced by Conservative Back Benchers. I am delighted to hear a confirmation of what we all believe to be the view of most Conservativesthat they want to withdraw from Europe, with a massive cost to jobs, prosperity and the growth of the UK economy.
The hon. Gentleman attributed a figure to Gunter Verheugen, but I think that that figure alluded to another set of figures. The figure of £6.3 billion is an estimate accepted both by ourselves and by the Commission. I am sure that the hon. Gentleman will be delighted to know that, as a result of the work being done by the UK together with the Netherlands and Denmark, we have encouraged the European Commission and the EU to look for a reduction of administrative burdens of 25 per cent. by 2012. That mirrors the ambition that we have in the UK, and it will mean more effective use of EU resources and regulations to support growth not just in the UK economy, but in Europe for the global economy.
I think that we expected that response. What work has the DTI undertaken with the Treasury
to address the problems with business taxation that were identified by the Tax Reform Commission last year when it said that
the whole tone of tax administration is becoming less friendly to business; and the system is increasingly complex, unstable and distorting?
Mr. Darling: No, I think that the Budget this year introduced a number of sensible reforms, particularly the decisions to reduce the mainstream corporation tax rate and the personal income tax rate. Those are very welcome reforms. The hon. Gentleman does have a good point about the administration of tax. That is why Sir David Varney, the former chairman of Her Majestys Revenue and Customs, has been working to introduce a new system that will provide more certainty for business taxpayers. When businesses, for example, decide on a course of action, an acquisition, a development or so on, they can seek advice and have clarity as to how Revenue and Customs will treat their tax position. I think that that has been widely welcomed.
The Minister for Industry and the Regions (Margaret Hodge): I chaired the inaugural meeting of the small business forum, which comprises representatives from small business bodies and small businesses, on Tuesday.
Mr. Bellingham: I am glad to hear that the Minister did that. Does she agree with the calculation from the British Chambers of Commerce that the average British company now has to spend nearly £14,000 a year on implementing Euro-regulations? Is that not a staggering figure and an appalling waste of management time, especially in the small firms sector? Management time should be creating wealth. Is it not also a dreadful indictment of this Governments record on small business? Is it not any wonder that small business men and women are now deserting this Government and coming over to the Tories?
I am sorry that Conservative Members do not like to be held to account. As far as small business is concerned, I will put the hon. Member
for North-West Norfolk (Mr. Bellingham) right. We now have 4.3 million small businesses in the UK. That is 600,000 more than we had when we came into government 10 years ago. The start-up rate is faster than ever, the growth rate is greater than ever, the sustainability is better than ever, and the productivity gap between small businesses in the UK and elsewhere in the world is reducing. That is a success story and he does ill to the small business sector by pretending otherwise. That is why most small businesses support Labour.
Miss McIntosh: I welcome the Secretary of State to the Dispatch Box and thank him for that reply. I was pleased when he made his statement to the House recognising the value of rural post offices and the contribution that they make to village life, particularly in rural areas such as the Vale of York. Does he share my concern at the widespread belief that the Government consultation process will lead to widespread closures of rural post offices? We have lost our banks, so the post office has a particular role to play in village life and is a lifeline. Will he therefore join me in encouraging people who live in rural areas to spend between £5 and £10 each week in their local post office and to use that post office, and will he back Conservative plans to allow more council work to be done through rural post offices?
Mr. Darling: On that last point, the hon. Lady will recall that when I made my statement to the House last December I said that one of the things that I wanted to do was to encourage more local authorities to use post offices if they could. Some local authorities are good at that; some are bad. The bad ones are spread across all political parties, so I do not think that she can enjoy any satisfaction in that respect.
In relation to the hon. Ladys point about rural post offices, yes, they are important. I said in December that maintaining a national network is important, and we intend to do that. However, we must have regard to the fact that the Post Office was losing £2 million every week the year before last and that it is losing £4 million every week this year. We have to do something about that. I agree with her that the best way of saving any post office is to encourage people to use it. Sometimes there is a gap between the number of people who say they support the local post office and the number who
actually go into it. I want to see a national network maintained and the proposals that I will make to the House shortly will, I hope, ensure that we do that.
Mr. David Heath (Somerton and Frome) (LD): I have about 120 villages in my constituency. Many of them are not at all looking forward to the statement, because they feel a great deal of trepidation about the small post offices in Somerset. The problem of settlement in my area is that we have a large number of villages that are geographically quite close, but quite distant by road and without any public transport. Will that be recognised in the Secretary of States proposals? The post offices are serving distinct communities and serving them very well indeed.
Mr. Darling: One of the things on which we consulted was the criteria for the location of post offices. I will be making a statement on that shortly. It is important to take account not only of natural barriers, such as mountains and rivers, but of the practical difficulties that sometimes arise. However, it would be wrongI am quite sure that the hon. Gentleman has not done this regarding his constituencyto suggest that the present situation can continue without any change. We need to make changes. The National Federation of Sub-Postmasters itself has said that the present network is unsustainable and many postmasters say that changes that would maintain a smaller but perhaps more viable network could be the best possible future for the post office network.
Mr. Andrew Robathan (Blaby) (Con): Does the Secretary of State recall the grandiosely titled urban network reinvention programme of 2002, which was a long-winded euphemism for closing down about one in three urban post offices? This consultation is about closing down rural post offices. Why do not the Government get a real policy and set post offices and sub-postmasters free to work on their own without all the restrictions that are put on them? At the same time, they should give post offices proper Government business, as used to be the caseI recall that the Secretary of State had something to do with the Department for Work and Pensions at one stageand allow individual post offices to flourish. At the moment, post offices are closing throughout the country, and many more will close after the statement.
Mr. Darling: Yes, it is the case that over a number of yearsthis process started under the Conservative Governmentpeople have been choosing to have benefits, pensions, child benefit and so on paid into their bank accounts. People should have that choice and the hon. Gentlemans suggestion that somehow all the changes can be reversed simply misleads people.
It is the case, too, that a number of urban post offices have closed over the past few years. I said in December that I thought that we needed to take a further 2,500 post offices out of the network through closure. However, they will not be exclusively rural post offices. We need to ensure that we have a national network with access criteria that guarantee that people have reasonable access to a post office. Most members of the public realise that the big problem facing post offices is the fact that over a number of years, fewer and fewer people have been going into them. The business level has thus fallen, so we need to address that. Unlike the Conservative party,
we have public money available to support the network. The £1.7 billion that has been put into the post office network over the past few years has represented an important commitment, given that a national network is important to us all.
Peter Luff (Mid-Worcestershire) (Con): The Secretary of State isI hope like meoften a very reasonable man. In that spirit of reasonableness, may I say that I was glad that the Government delayed their decision on the consultation on the future of the post office network until after Easter, and thus, perforce, after the local government elections, which has given the Department a proper opportunity to consider the large number of responses that it received? However, that has had the unintended consequence that the Governments response to the Trade and Industry Committees report Stamp of Approval? is technically overdue. I commend the report to hon. Members and urge the Secretary of State to ensure that when he responds to the consultationI presume that he will make a statement to the House next week or the week afterthe response to the report is published at the same time, rather than a few weeks later, which I think is the Departments intention.
Mr. Darling: I will have a look at that. As the House knows, the Government are not able to make an announcement in respect of the Post Office or anything else until the election period has finished. As I indicated earlier, I hope to make a statement fairly soon. I think that the Select Committees report was a good report. I hope that several of the hon. Gentlemans colleagues who have asked questions today will have a good read of it before I make my statement, because it makes a lot of sensible points and recognises that we need to make changes. The present situation is unsustainable, so reform is absolutely necessary.
Sir Nicholas Winterton (Macclesfield) (Con): Does the right hon. Gentleman accept that given the social importance of rural post offices, especially to the elderly, the infirm, the handicapped and those without their own transport, the House should get together to determine a way in which the political parties, which are all interested in the matter, and the Post Office can agree a policy that would meet the concerns of most hon. Members, especially those who represent rural areas? Is this not an issue that might generate cross-party consultation and discussion?
Mr. Darling: I agree with the hon. Gentleman, but his words might fall on stony ground. I understand the temptation for Opposition parties to say, when there are post office closures, that it would not have happened if their party was in government, but most of us realise that successive Governments have wrestled with the difficult problem. There is less business going through the doors of post offices. We need to ensure that there is a national network. The hon. Gentleman makes a good point about the importance of post offices, particularly in rural areas, but also in urban areas; they provide a good service.
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