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Mr. Darling: The hon. Gentleman might have received my statement an hour or so ago, but he clearly did not read it. I hope that he got the formal response some time before that, but if he had read it, he would
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have seen that I agree with him that we should encourage councils to consider whether they can provide services through post offices. Because they will be involved in these proposals at an early stage, they will have ample opportunity to consider that.

I said last December, and I repeated today, that we want to see a successor to the Post Office card account. Indeed, my right hon. Friend the Secretary of State for Work and Pensions has published the public invitation to tender for that new card today. In relation to the other financial services, I mentioned foreign exchange, which is a hugely successful business in post offices. I also mentioned the announcement today between the Post Office and BT—I heard the hon. Gentleman scoffing at that before he stood up to speak—which will mean that the post office network will be able to sell access to a new product: Post Office broadband. That will give people another reason to go into post offices. BT recognises the value of having a shop-front up and down the country.

Those are examples of how the Post Office, whose new chief executive is determined to open up new opportunities, is going out to find new business. The value of having a national network is that there can be national agreements to provide travel insurance, broadband services and so on, which individual postmasters could never negotiate on their own. That is something that the National Federation of SubPostmasters supports.

As I said earlier, the Post Office will make roughly 50 to 60 area proposals. The whole objective is to ensure that the right post offices are in the right place for each area. At the moment, part of the problem is that two post offices can compete for a small amount of business in the same area. Any other business would organise itself so as to maximise opportunities for business, and that is what the Post Office will do.

Yes, it is five months since I published my proposals, but it is absolutely astonishing that, in that time, the hon. Gentleman has not come up with a coherent position on behalf of the Conservatives. He has no answers to the problems. Everyone knows that the Post Office has a problem as a result of people changing their habits, having their benefits paid into a bank or building society account, or renewing their tax discs online. Something had to be done about that. We are prepared to do it and, above all, we are prepared to make money available. The hon. Gentleman’s real problem is that he knows full well that he cannot promise any such additional expenditure, because the Conservatives’ economic policy would require him to cut public expenditure. That is why he cannot match what we are proposing today.

Susan Kramer (Richmond Park) (LD): I thank the Secretary of State for giving me advance sight of his statement today. I regret that the consultation process has not led to a fundamental rethink. The Liberal Democrats have a fully funded rescue strategy for the Post Office— [ Interruption. ] It is most unfortunate that the consultation proposed by the Secretary of State remains brief and unwieldy. Will he at least agree to delay the abolition of Postwatch so that full and proper support can be available for constituents attempting to deal with the crisis that will confront them?

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The Secretary of State has provided the number of voluntary closures, but will he confirm that I have read correctly that a post office that has closed voluntarily will not be re-opened unless it is required by the criteria? That would be incredibly bad news for many communities.

Government business is absolutely key to the survival of the Post Office. Can the Secretary of State give a commitment that no more Government business will be withdrawn from the Post Office? If not, what further losses does he estimate?

On new business, is my reading correct that Royal Mail’s restriction on other delivery companies working with the Post Office will continue and has the Secretary of State’s support? If not, that would remove many such new opportunities for post offices.

The Post Office card account—POCA—goes out to tender today, but will the Secretary of State confirm that there is no absolute certainty that the tender will be won by the Post Office? If it is not won by the Post Office, what contingency plan is in place?

Will the Secretary of State confirm that there is no consultation on the closure of Crown post offices and their transfer to WH Smith, but only on what type of facilities will be available in WH Smith? Does he agree that that is outrageous? Will he please use his influence to make sure that a consultation does take place?

How many small communities will lose their one remaining shop, which, essentially, survives only because of co-location with the post office? Has the Secretary of State done that work, and can he tell us the results?

What work is the Secretary of State doing with the Department for Communities and Local Government on attracting local council activity into post offices, given that, as I understand it, he has now abandoned the “Your Guide” pilot, which was his main thrust for ensuring that that process took place?

Mr. Darling: First, the hon. Lady criticised the Post Office’s decision to enter into a deal with WH Smith in relation to 70 Crown post offices, which means that those post offices will stay open. She contradicted herself a few moments later by saying that it was important that rural post offices had other businesses co-located with them, to get additional business. Surely we should do everything possible to get more people through the front door of post offices. I would have thought that the proposal for 70 Crown post offices to go into WH Smith would be welcomed, as more people are likely to use those post offices, and they will stay open.

On the hon. Lady’s point about access, which was also raised by the Conservative spokesman, the purpose of national criteria is to ensure that urban and rural areas have reasonable access to a post office. Therefore, if a post office closes, and the access criteria are no longer met, the Post Office will be required to open a new post office to take its place. I am trying to ensure that there is a coherent national network, which will have the opportunity to compete for Government or other business as well as providing services.

The hon. Lady asked me to promise not to abolish Postwatch and to delay its transfer into the National Consumer Council. I am happy to tell her that I will do
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everything to ensure that Postwatch can discharge the functions that I want it to discharge. She might, however, want to have a word with her predecessor as trade and industry spokesman, as he called for the abolition of Postwatch, because, he said, it was useless. Now she is calling for it to be maintained. I suppose that that typifies the Liberal Democrats’ problems.

We do have to put the Post Office card account out to tender—the hon. Lady and the Liberal Democrats are good Europeans, and they would surely agree with the European requirement that such things must be put out to tender. Neither I nor my right hon. Friend the Secretary of State for Work and Pensions can simply award the contract to the person we want. A fair competition must take place.

Lastly, whatever else the Liberal Democrats have, they do not have a coherent public spending programme that would allow them to finance the Post Office. It is disingenuous of the hon. Lady to suggest that she has such a programme.

Several hon. Members rose

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I have other important business to protect. Equally, I am aware that interest in this subject is widespread among hon. Members. May I therefore appeal for brevity in all hon. Members’ contributions?

Mr. David S. Borrow (South Ribble) (Lab): If the proposals go through, many people will be concerned that if the same pressures continue on the post office network, we will back here in another five years considering the need for more public expenditure to meet the access criteria. Will my right hon. Friend guarantee that, should further pressures continue on the post office network, the access criteria laid out today will be kept, and additional public expenditure will be found to ensure that the network is maintained in the future?

Mr. Darling: First, the access criteria are important because they provide reasonable access, and I hope that those criteria will endure. Secondly, in relation to public expenditure, as I told the House, were there no public financing, about 4,000 post offices would be left. That is not likely to be acceptable to anyone in the House, so I made clear in my statement that the need for public support is likely to continue for some foreseeable time.

Peter Luff (Mid-Worcestershire) (Con): Although there are things to welcome in the Secretary of State’s statement today, especially the improved access criteria, does he understand the disappointment that will be felt by the Trade and Industry Select Committee, which I chair? He has effectively rejected the majority of our recommendations by offering only a patchy response to improved entrepreneurial innovation for the network, not clarifying the future of Postwatch, diluting the social network payment, offering no safeguards on unplanned closures, sticking to a very short consultation period for local plans, and not addressing the shortcomings of the Post Office card account. I
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suppose that I should at least welcome the downgrading of Crown post offices—such as Worcester’s Foregate street office, which will move to the first floor of WH Smith—because their total inaccessibility will mean that some offices in Worcester have a lot more custom.

Mr. Darling: I do not agree with the hon. Gentleman. I have attempted to deal with many of the suggestions in the Select Committee on Trade and Industry’s report, which was quite helpful. I know that the Committee wants a longer consultation period, but I am mindful of the fact that postmasters, who have had a period of uncertainty, want to know where they stand, and understandably so. I have set out a process that allows for those matters to be considered, even after the consultation process ends.

In relation to unplanned closures, nobody can legislate against a postmaster or postmistress giving up their business. We should remember that the vast bulk of such shops are owned as private businesses. The access criteria mean, however, that if a post office closed, and the criteria were no longer fulfilled, the Post Office would have to open a new post office in its place. That is the assurance that the hon. Gentleman and his Committee sought.

In relation to other measures, such as the Post Office card account, people were understandably concerned a few months ago that we were not going to replace it. We have done so, and as I explained to the House today, there are signs that the Post Office will now aggressively pursue business, which I wish that it had done in years gone by. That is the best protection for the future.

Mr. Lindsay Hoyle (Chorley) (Lab): Given my right hon. Friend’s announcement, this is a very sad day for post office users. He ought to realise the deep concern across the United Kingdom about the announcement. On average, four post offices across each constituency will close. That is bad, because the post office network is a lifeline to many pensioners. The language that he uses is about allowing the Post Office to pursue further work. Cannot we instruct and persuade Government Departments and even the BBC to use the Post Office rather than other shops? Chorley building society is meeting the Post Office tomorrow to see how it can help, and whether it can franchise the building society into post offices, to keep the post office network going in Chorley. Can he use that as a good example?

Mr. Darling: That illustrates how, with a suitable degree of enterprise, the Post Office can attract new business. I ask my hon. Friend to reflect, when he has the opportunity to do so, on the problem that the Post Office has been losing business for a long time. It is not open to a Government to say to people, for example, “No, you can’t have your pension paid into your current account,” or, “No, you can’t renew your licence from the comfort of your own home.” As with so much else in the world, things are moving, and we must respond to that. The option of doing nothing makes no sense whatever.

Mr. Nicholas Soames (Mid-Sussex) (Con): I welcome the decision of the Post office to retain the Crown post
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office in Haywards Heath. First, in examining proposals, will the Secretary of State consider adding to the demands on the Post Office those of demography? In my constituency, the age profile is getting older and older, and post offices are greatly valued by elderly people, and young families. Secondly, as the Government dismantle the social infrastructure in the south-east, such as accident and emergency departments, while imposing bigger and bigger unwanted developments in places such as East Grinstead, will they make sure that there are sufficient post offices to cope with the demands of young families and elderly people in the future?

Mr. Darling: As I have said, the Post Office needs to show a degree of flexibility, and to give reasons for its decisions to show that it has considered the issues. One issue that it will consider is how often post offices are used, which is a problem not just in the hon. Gentleman’s constituency but elsewhere. I want to encourage people to use their local post offices, but, as the hon. Gentleman knows, eight out of 10 pensioners are now having their money paid into bank and building society accounts. I hope that other factors will encourage people to visit their local post offices, because that will help to keep them open.

Tony Lloyd (Manchester, Central) (Lab): People in my own city will strongly welcome the commitment to a role for the local authority. The Post Office does not have a good reputation for dealing properly with groups such as local authorities. In Manchester we have tried to engage in meaningful dialogue with the aim of keeping viable businesses open while also ensuring that post offices are part of the regeneration and community infrastructure of the city, but the Post Office has not been a good partner so far. Will the Secretary of State guarantee that, in the course of consultation, it will now act as that good partner?

Mr. Darling: I understand my hon. Friend’s point. I know that Alan Cook, the chief executive of the Post Office, is mindful of the fact that in some parts of the country there could be much more co-operation, and I will draw his attention to what my hon. Friend has said about Manchester.

Mike Penning (Hemel Hempstead) (Con): I agree with the hon. Member for Crawley that this is a very sad day for our constituents across the country. [Hon. Members: “Chorley?” “Mid-Sussex?”] It is a sad day for both Crawley and Chorley, but I apologise to the hon. Member for Chorley (Mr. Hoyle). In any event, we all agree that this is a sad day for our constituents.

The consultation period is very short. Will the Secretary of State have another look at what the Select Committee says about how long it should be? Will he also ensure that when negotiations on the closure of sub-post offices take place, sub-postmasters are not gagged as they were last time? On that occasion a penalty clause prevented them from defending the post offices they represented, because if they had done so they would have lost their money.

Mr. Darling: The hon. Gentleman asked about the consultation period. As I said earlier, the National Federation of SubPostmasters has itself pointed out
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that the longer uncertainty continues the more difficult things become for their businesses, and I must take account of that.

It is very easy to say “This is all too difficult: let us do nothing”, but I do not think that is an option. Whichever party is in government, we must deal with a real problem. We must ensure that we put the national framework for the Post Office on a proper footing. But—as I told the Conservative spokesman, the hon. Member for Rutland and Melton (Alan Duncan)—the difference is that this Labour Government have, and are prepared to make available, the money to support that framework.

Charlotte Atkins (Staffordshire, Moorlands) (Lab): Companies such as BT and Severn Trent impose a surcharge of £4.50 a quarter on those who make payments through post offices rather than by direct debit. Is that not a real disincentive, particularly for elderly people who would otherwise be reluctant to pay by direct debit? What can the Secretary of State do to encourage such companies to reverse their decisions, and increase business at local post offices rather than reducing it?

Mr. Darling: I take my hon. Friend’s point, but those are commercial arrangements between companies and the Post Office. It is not open to the Government to tell power companies, for example, what rates they should charge. However, we are all acutely aware that, especially in the case of people on low incomes, every penny matters. I shall have more to say about that when I announce the White Paper on energy next week.

Jo Swinson (East Dunbartonshire) (LD): Many of my constituents are deeply concerned about the plan to move Kirkintilloch post office to WH Smith. Given that communities have lost out in the past when Tesco and Morrisons suddenly decided to close many post offices in their stores, would it not be far better to invest in a post office network that would increase the profitability of branches than to hive them off to a large chain where the threat of mass closures will always hang over them?

Mr. Darling: The Post Office is entering into a long-term commitment with WH Smith. I know that there was great concern when Morrisons, in particular, abandoned the policy pursued by Safeway and effectively evicted the post offices, but WH Smith sees their services as complementary to the goods that it sells. The main objective must surely be to keep as many post offices open as possible. As I said earlier, the Crown post offices lost £70 million last year alone, and the Post Office must do something about that.

The Liberal Democrats—who do the same in other contexts—cannot say that they want more to be done to persuade people to walk through the front door of the post office, and then object every time a proposal comes along that would cause more customers to walk through that front door. To my mind, joint ventures and collaboration that make more people go into post offices must be a good thing.

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