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Sandra Gidley (Romsey) (LD): Does the hon. Gentleman share my concern that some of my proposed closures are close to the Wiltshire border, although we do not yet know what will happen in Wiltshire? There seems to be a divide-and-rule strategy—this is closure by attrition. We are lucky to have a groundswell of feeling in this Chamber, but the Post Office has been very crafty in not providing full information.

Peter Luff: The hon. Lady is absolutely right. In my own case, consultations for Gloucestershire and Oxfordshire will begin very soon, whereas my area has been left until August. When I wrote to the Post Office to object to being included with the black country rather than Gloucestershire, I was told that the consultation could not cross regional boundaries. Actually, Gloucestershire and Oxfordshire are in two different regions for the purposes of Government office definitions. The Post Office really does not seem to know what it is doing, and that worries me. The hon. Lady is absolutely right to be concerned.

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): Will the hon. Gentleman give way?

Peter Luff: Yes, I will give way, but I am looking around and may have to stop giving way soon.

Danny Alexander: I am grateful to the hon. Gentleman for giving way. He referred to the timing of the consultation process. It is planned that the closures in the highlands will be announced at the beginning of January and that the consultation will take place in January, February and March, the three coldest months of the year when there is snow and ice on the roads of the country’s most remote and geographically isolated region. Does the hon. Gentleman think that that is a sensible way of trying to get the public involved and responding to the consultation, or does it sound more like something that has been constructed to stop people getting involved?

Peter Luff: Winter in the highlands and school holidays in Worcestershire sound equally mad to me.

David Lepper: Will the hon. Gentleman give way?

Peter Luff: No, I shall stop giving way for a while now. I have to make some progress, as I have a series of questions to ask.

Sir John Butterfill (in the Chair): Order, May I just say that the hon. Gentleman has given way 15 times, I believe, and that he will not be able to make any progress—nor will the rest of us—if this continues? May I ask people to constrain themselves and to intervene only once, except in dire emergencies?

Peter Luff: That is absolutely right. I did say that I would stop giving way, but I promised before the debate to give way to my hon. Friend the Member for Rayleigh (Mr. Francois). If he still wants me to give way to him, I will happily do so.

Mr. Mark Francois (Rayleigh) (Con): I thank my hon. Friend. I am campaigning to save the Chase post office in Rayleigh. In that context, I replied to the national consultation team both by e-mail and with a hard copy in the post. It is as well that I did, because
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the hard copy that I sent in the post was recently returned to me, unopened and still in the envelope. The envelope is addressed:

which is exactly what we were told to do. Someone has ringed the address and put a question mark beside it. It is a little depressing that even the Royal Mail and the Post Office cannot deliver a reply to consultation on post office closures through their own system. Does my hon. Friend agree that that further undermines the credibility of what is already a creaky consultation exercise?

Peter Luff: I hope that you understand, Sir John, why I was prepared to give way to my hon. Friend. The Post Office has a lot to answer for in that example. You could not make it up.

Five consultation exercises have ended, and the first final closure decisions are due next week. Will the Minister confirm when those decisions will be released? Written questions to the Department on the closure plan are being directed to the Post Office, but those replies are not being put in Hansard, or deposited in the Library. For the sake of an open and transparent process, could such correspondence please be deposited in the Library?

There are questions about the purdah period, and I suspect that some of my colleagues may wish to ask them in a slightly more partisan spirit. I have looked at the Cabinet Office guidelines, and I am puzzled by the decision to suspend the consultation during local elections, which we knew were going to happen when the timetable was arranged.

I am worried—this is a conspiracy theory—that the Post Office might be setting post offices up as Aunt Sallies to focus campaigning activities on one post office and to distract from others. I take an interest in the Hampshire process because my in-laws live in the New Forest, and I have spoken to my hon. Friends the Members for New Forest, East (Dr. Lewis), and for New Forest, West (Mr. Swayne). Coincidentally, they have both expressed regret that other important engagements prevent them from being here today. My hon. Friend the Member for New Forest, East highlighted Bramshaw post office, which I know well. If that closes, people living in the village will have to walk a mile down a dangerous road to Cadnam, which is impossible to do safely and securely. Almost exactly the same is happening in Tiptoe, which is in the constituency of my hon. Friend the Member for New Forest, West. Again, it is an isolated village, and people living there will have an almost impossible walk.

I would not be surprised if the Post Office reprieved those two post offices, and if they were set up to focus opposition, because closing them would be crazy. I know both areas well, particularly Bramshaw, and I hope very much that those post offices remain open. I know exactly the objections that my hon. Friends have made, and they are well founded in fact.

The access criteria and flexibility that underpin the new process—a minimum proportion of the population must live within a given distance from a post office or outreach point—will see reductions in access from current levels. I welcome the Government’s amendment of the
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original access criteria to provide greater flexibility in taking account of public transport—that is not apparent in Bramshaw and Tiptoe—alternative access, local demography, local economic impact, and so on. I also welcome the widening of the coverage from 10 per cent. most deprived areas to 15 per cent., which was a sensible change. The provisions relating to Scotland are broadly welcome to my hon. Friends in Scotland.

My only concern is about the proposed outreach offices, some of which are already working. Does the Minister believe that two hours a week are sufficient for an outreach facility? I am not convinced that that is a meaningful service to offer to a community, however it is offered.

Sandra Gidley: Will the hon. Gentleman give way?

Peter Luff: No, I must plough on, unless an hon. Member who has not intervened does so. I apologise for that. I would love to give way, but other hon. Members want to speak.

Turning to Postwatch, I have expressed concern that the 18-month programme was too demanding for the Post Office. The Committee has repeatedly said that the six-week consultation period is too short. Cabinet Office guidelines should have been followed, and the consultation period should have been 12 weeks to enable local communities and local councils—parish, district, county and unitary—to consider the matter as part of their cycle of meetings. I know that they are involved before the formal consultation begins, but public consideration is now limited to six weeks, which is not enough. Some councils do not meet that often, particularly when their councillors are volunteers—for example, parish councils—who need time to consider these complicated matters. I welcome the 11 weeks of pre-consultation, which is good, but the public consultation is too short.

Postwatch is playing a valuable role in that short period. It looks likely that it will not now be merged with the National Consumer Council during the closure programme period. Will the Minister confirm that Postwatch is reprieved until the end of next year, and that it will continue to make its valuable contribution to consultations on local closure issues?

I would be interested to know what evidence there is to show that the Post Office is listening. I have expressed my concern about Aunt Sallies—that some post offices will be removed from the process and others will be put in—and that is something that the Committee wants to look at carefully. I do not believe that the Post Office’s plan for every closure will be perfect first time round. Evidence of change to the original proposals is important to justify the consultation process.

As I approach the end of my comments, I turn to my most important point. I have discussed the difference between unplanned and uncompensated closures and the planned and compensated ones that are part of this programme. Unplanned closures could leave holes in the new network. The Government’s research in 2000 showed that numerical access criteria, such as that which has been adopted, could see coverage levels maintained if a high proportion of outlets closed. Now that coverage levels are likely to be reduced, the clear implication is that further, unplanned, uncompensated closures could be sustained by the network while meeting the access criteria that the Government have laid down.
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They claim that 12,000 outlets are sustainable, but there is no compulsion to replace post offices that close in future, as long as the access criteria continue to be met. Indeed, the Minister said in this very place this week that access criteria

I emphasise “some” certainty.

I would like to see an update of the performance and innovation unit’s 2000 report on the consequences of those access criteria, but that has not been delivered. Bald assertions that the national network will be maintained are not good enough, and the Committee again calls for a statement on exactly how that will happen. We have pressed the point, but we have still not received a satisfactory response. How small could the network be while still meeting the access criteria?

Kate Hoey (Vauxhall) (Lab): I thank my hon. Friend—he is a friend—for the excellent report that we have in front of us. Did he or any member of his Committee at the end of the process understand the reason for the 2,500 figure? Does his Committee agree that it would have been better to have obtained the criteria and the reasons, and then gone for genuine consultation? Does he agree that it seems to everyone that everything was decided in advance, that that is what will happen whatever we say today, and that 2,500 will be the future for no real reason?

Peter Luff: As always, the hon. Lady makes a powerful and important point, and I can only agree with her.

I shall rush through my remaining questions to give hon. Members a chance to make their contributions. Will the Minister outline progress on Commission approval for the £1.7 billion support package for 2007-11? We welcome the pledge in principle to continue the social network payment beyond 2011, which is now enshrined in Government promises. However, another £750 million in the package has not been properly explained, so will the Minister clarify what the rest of the state aid package is? Can he confirm the view that has been expressed here that the network subsidy scheme will spread the subsidy more thinly, because it now covers urban and rural post offices, whereas it previously covered only rural? A modest request is to ask him whether he will please at least commit to ensure that support will rise in line with inflation during the period that it applies.

Briefly, we do not want a permanently subsidised network; we want a viable network that stands on its own feet, and that is common ground on both sides. The Post Office Ltd business needs more imagination and entrepreneurialism than it has shown so far. To be fair, the new managing director, Alan Cook, is doing precisely that, and I welcome many of his initiatives, such as that on life assurance, and the effective TV advertising campaign, but I am concerned about the inhibitions still being placed on sub-postmasters and what they can do in their own shops.

There are sharp issues concerning Paypoint. Many of my constituents were upset to lose the ability to go to their post office to pay their television licence, for example. There are some difficult issues, and Royal Mail Group has taken a one-sided approach.

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Another important point—the last one before I sit down—is to ask the Minister to bring us up to date with the Post Office card account tendering process. What is going on? We remain disappointed by the apparently limited functionality that the new card will offer. At least the mistakes could be corrected, which was not so with the original Post Office card account. This is a big opportunity to bring big new custom to the Post Office, but that opportunity is not being seized. I hope that the tenders offer some imaginative ideas, and I hope that the Post Office tender will win. We must recognise the risk that it may not do so. The loss of the Post Office card account to the network would be a devastating, perhaps even fatal, blow.

I have raised many questions for the Minister, and I have spoken for far longer than I wanted—I suspect that my speech has lasted as long as I planned, but responses to interventions took up more time. I shall repeat this one question: how big can the network be and still meet the Government’s access criteria? This is the first stage, I fear, of a continuing process by which there will be more and more closures. The Government can hide behind the access criteria and say simply, “We are meeting our criteria and we do not have to plug the gap,” but that would be very serious indeed. The fundamental strength of the network—its size, depth, breadth and reach—gives it a great deal of power in the marketplace. I am grateful to hon. Members for their constructive contributions and I look forward to the rest of the debate.

Several hon. Members rose—

Sir John Butterfill (in the Chair): Order, May I make a plea, yet again, for brevity? I am going to have difficulty accommodating those who have written to me to say that they wish to contribute, let alone all hon. Members who rose.

3 pm

Derek Wyatt (Sittingbourne and Sheppey) (Lab): I congratulate the hon. Member for Mid-Worcestershire (Peter Luff) on the debate.

I go back to this question: how can one close profitable businesses? It makes no sense whatever to me. Perhaps the Minister will reflect in his winding-up speech on whether or why people cannot buy the franchise. My parish council would willingly put up money to buy out the post office. When I looked at franchises such as Starbucks, Costa Coffee, McDonald’s and Kentucky Fried Chicken, I found it extraordinary that one can actually buy a franchise, do a deal and take the risk of its making money. Is there not something wrong with the fact that we cannot do that with post offices in our rural areas or semi-rural areas, such as my village of Rodmersham, whose post office is threatened with closure? So I think that there is another category, which I shall come to in a moment.

What is the real logic of closing profitable post offices when Crown post offices are crammed, even if the 2.5 mile geographical criterion is adhered to? In both Sheerness and Sittingbourne, there is not enough car parking, the queue extends outside of the offices and it can take up to 45 minutes before people are served. Will the Minister say how that is a 21st service? Clearly, it is not.

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The more offices are closed, the bigger others become; they are managed worse, and there is a bigger issue. People will simply say that they cannot be bothered to go to them, and there will be a decline in the take at the main Crown post offices. I urge the Minister to return to thinking about the unclaimed assets from many pension funds and banks in the City that the Treasury is going to take. We want to set up social networks and to go a third way.

There is a third way, and we could lead the process in our own communities: we could ask for money from the social fund and from our parish council precepts and run the post office. Will the Minister say why we cannot do so? I do not see any logic and I cannot understand why the Government want to close down 2,500 profitable offices? It would be a different matter if they were unprofitable or running a deficit, but the three post offices in my constituency make money.

I am also concerned about how contracts are structured with sub-post offices. I believe that the structure makes no commercial sense and that the Post Office has missed a trick. People who run post offices receive a kind of salary, and a percentage for each piece of trade, which is a barmy way in which to run a business. It is not too late for the Government to say, honestly, that they have made a mistake. They could say just before the closures are announced, “Do you know what? There is a better way of organising this,” They could make sub-post offices structures better. That is the main message that I want to send to the Minister.

I am personally sorry about the matter. If the post office in my village closes, it would mean the death of the village. It takes certain things to make a village: a cricket square, a church, a primary school and a post office. When one of those goes, the other three follow. It does not matter which goes first, it would mean the death of the community for 20 or 30 years. That is not what we are here to bring about. We are here to sustain communities, whether they are in semi-urban, semi-rural or rural areas.

There is a serious flaw in the 2.5 mile criterion. We are 2.3 miles from the main Crown post office and serve around 16 villages beyond Rodmersham. Is the Minister going to tell me that people are going to walk those distances? There is no bus service, so people in my village who are in their late 50s, 60s or 70s badly need a post office. They will not use public transport; there is none. The Government would be killing the community of which we feel so proud and which has lasted many hundreds of years.

In conclusion, I plead with the Minister to look at the third way, and to give us the opportunity to buy out the post office and run it ourselves.

Sir John Butterfill (in the Chair): That was an excellent example.

3.5 pm

Mr. Mike Weir (Angus) (SNP): I shall try to be as brief as the hon. Member for Sittingbourne and Sheppey (Derek Wyatt).

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