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Alan Duncan (Rutland and Melton) (Con):
Last week, we witnessed what can only be described as a rather crude stunt in which the Chancellor reprimanded Ofgem as if it were somehow responsible for higher energy prices and fuel poverty. Is it not the case that, in addition to world commodity prices, the main component of our energy bills increase is the higher price of carbon? Is it not also the case that the main culprit here is not markets, but the Governments failure to adjust
their policy on addressing fuel poverty in a way that actually keeps pace with harsher global conditions? Does the Secretary of State agree with the hon. Member for Barnsley, West and Penistone (Mr. Clapham) that companies are, as he put it, conspiring to keep prices high?
Mr. Hutton: My right hon. Friend the Chancellor has an obvious and perfectly legitimate interest in inflation, and given the significance of energy prices to overall inflation levels, I think that his intervention was entirely proper and appropriate. As he and my hon. Friend the Minister for Energy have said, we need to understand the interaction between wholesale and retail prices, and I think that it was perfectly fair and proper to initiate such an inquiry.
As my right hon. Friend the Chancellor has said, the regulatory arrangement for our energy market is one of the most effective anywhere in the European Union, and the result has been, on average, significantly lower energy prices in the United Kingdom. It is up to the competition authorities, which oversee unfair trading practices, to examine any evidence of criminal or illegal behaviour, and if there is any such behaviour, people should draw attention to it so that proper inquiries can be made.
One of the most effective solutions to fuel poverty is to reduce households fuel bills by helping them to consume less in the first place. Should the Secretary of State not feel ashamedindeed, he referred to this in his earlier answerthat the Energy Bill, which was published last week, contains nothing whatever to promote consumer and household energy efficiency, and will therefore continue and even exacerbate peoples exposure to rising fuel prices in the months and years ahead?
Mr. Hutton: I have a great regard for the hon. Gentleman, but I have never seen him as my tutorial adviser when it comes to energy mattersor, indeed, to any other matter that I could possibly think of. However, I am grateful to him for at least the offer of some sort of support in the future.
As to the wider issue of energy efficiency, the measures that we have taken have benefited more than 2 million households in the United Kingdom. We are doing more than previous Governments to tackle the issue of demand for electricity through energy efficiency measures, and we are seeking to make significant improvements in the work that we are doing.
The hon. Gentleman, along with others, seems to have been affected by the contagion that the only response to the issue is to legislate. That is, perhaps, a lesson with which I can help him out in this two-way exchange of ideas that we are to have. Legislation is not
necessarily the right answer. The Government have the power and the means, and are using them, to help more households to become more energy efficient, and we can do that without any more regulation or legislation.
The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): We are running a new national campaign to raise awareness of the minimum wage. The campaign includes national and regional advertising and an online campaign for young workers, in addition to our targeted enforcement campaigns aimed at the hotel sector. The Government are absolutely determined to ensure full, effective enforcement of the national minimum wage legislation that the House has passed.
Mr. Hamilton: I support the Governments campaign, which I have seen on television and in the press. However, as my right hon. Friend knows, thousands of workers, mostly part-time and female, are still being caught in the middle. Will the campaign include explaining to employers the penalties that they will incur if they are found to be underpaying their workers?
Mr. Hutton: Yes, the campaign will deal with all those issues. It will not just provide information, education and advice, but explain how to make and proceed with a complaint. As my hon. Friend will know, we have acted to increase the penalties for violation of the minimum wage legislation, but although we can and should always seek to improve enforcement, I trust that those of us who have always supported the concept of a national minimum wage will draw some comfort from the fact that this year it will be 20 per cent. higher in real terms than it was at the time of its introduction in 1999, without the negative impact on jobs that all Conservative Members confidently predicted.
Mr. Hutton: No, I am not, and addressing that issue will be part of our campaign. Anyone who is working legally in the United Kingdom is entitled to the full and proper protection of UK legislation, and that should and will apply irrespective of a workers nationality.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I welcome the campaign, and in particular the minimum wage campaign bus, which I believe will come to the west midlands tomorrow. However, does the Secretary of State agree that advertising the minimum wage is one thing, but enforcing it is another? Will he outline just how this bus will help some of the most vulnerable workers get their rights in terms of wages and conditions?
Mr. Hutton: As a former bus driver myself, I am keen to see buses employed in this helpful way, and the point of the bus campaign and service is to make sure that, as my hon. Friend says, we reach parts of the country where we know there are potential problems. The bus can do that; it will tour across the United Kingdom with expert advice available on board to help those who want and need it.
The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): Decisions on six area plan proposals have so far been announced by Post Office Ltd. As a result of information received during the local public consultations, it has to date decided not to proceed with 15 post office closure proposals. Also, a number of changes have been made to initial plans in the pre-consultation phase, which involves Postwatch, sub-postmasters and local authorities.
Tim Loughton: My constituents are awaiting with trepidation the results of the consultation exercise, which threatens seven of my sub-post officeshalf the sub-post offices in my constituency. The Post Office claims that a lot of research went into this exercise, yet it turns out that Postwatch is in the dark and has used out-of-date deprivation figures and erroneous distance figures, and one sub-post office was even put in the wrong county. Given that a very small number of sub-post offices have so far been reprieved out of now more than 230 which have been targeted for closure, what assurances can the Minister give my constituents that this is a genuine listening and consultation exercise, and not another cynical, bulldozing and box-ticking exercise?
Mr. McFadden: The hon. Gentleman has campaigned very vocally for the post offices in his constituency. He will be aware that there is a review process, which involves Postwatch, as to whether Post Office Ltd has not abided by the criteria it has set out. That operates at several levels, and his ultimate course of appeal is to Allan Leighton, chairman of Royal Mail Group, should Postwatch believe that the process has not been carried out properly in his constituency.
Ms Sally Keeble (Northampton, North) (Lab): In addition to issues to do with out-of-date data, some of my constituents are concerned by rumours about the sums involved in redundancy and compensation payments to the people who own the businesses. Will my hon. Friend give an assurance that redundancy or compensation payments for loss of business will not be a factor in decisions on closing post offices, and that the consultation will not be prejudiced by such considerations?
The compensation arrangements in the current post office closure programme are based on those that applied in the urban reinvention programme of several years ago. The Government took the view
that it was right to recognise the long-standing commitment made by sub-postmasters and mistresses in local communities, which is why provision has been made in the package of financial support to the Post Office over the next few years to compensate those who are leaving the network as a result of the programme.
Sarah Teather (Brent, East) (LD): Given that the Government tried to manipulate the timing of the consultation to avoid the local elections, does the Minister think that residents who are concerned about the future of their local post office should consider the forthcoming local and London elections as referendums on post office closures?
Mr. McFadden: The Government abided by the Cabinet Office guidelines on these matters. I can only say to the hon. Lady that from my experience of recent months if anything is true about this programme it is certainly that it has not been carried out in secret.
Derek Wyatt (Sittingbourne and Sheppey) (Lab): May I tell the Minister that two post offices in my constituency, those at Rodmersham and East street, are closing? The process has been a complete sham. I raised this issue in a Westminster Hall debate, when I also mentioned franchising. It is possible to bid for and own a franchise of McDonalds, Starbucks or Kentucky Fried Chicken; is it too late for us to put together local initiatives to bid for profitable post offices that the Post Office wants to close?
Mr. McFadden: The issue of third-party involvement in taking over branches scheduled for closure has been raised in debates. I have encouraged Post Office Ltd to engage properly and seriously with local authorities or others who may be in a position to do so. I must also say to my hon. Friend that if such involvement is to happen, it is fair that Post Office Ltd is able to cover all its costs. Such costs include those relating directly to the branch, central infrastructure costs in support of that branch and what it calculates it can save by closing the branch and, in doing so, supporting a smaller network. One would also have to expect that if local authorities or others were in this position, the Post Office would ask them to commit to take over the branch for a reasonable amount of timeseveral yearsrather than do this and be in the same position in a short time in the future.
Mr. James Gray (North Wiltshire) (Con): Under the consultation process in my constituency, which ends on 31 January, 10 post offices are threatened with closure, which is some 33 per cent. of the total. Post Office Ltd indicated in a recent meeting with me that we could perhaps save one or two if we found some factual error in the consultation process, but I was told, If you save one post office, we will have to close another one because the Government have required us to close a total of 2,500. Therefore, if one is saved, another has to be chopped. Will the Minister take this opportunity to confirm to Post Office Ltd that the requirement is not to close 2,500 post offices, but to close up to 2,500 post offices? In other words, it is possible that some of my 10 post offices might yet be saved.
Mr. McFadden: The hon. Gentleman is right to say that the figure is up to 2,500 post offices. I must tell him that Post Office Ltd also has to bear in mind the fact that the average amount it is saving from closing a branch that has been scheduled for closure is £18,000 per annum per branch, although the figure will vary depending on the individual circumstances of the branch. That is why replacements have been announced where decisions have been made not to proceed with closures. It is possible that Post Office Ltd might not take this approach in every instance, but there is a cost involved in making such a decision. That is why things have happened in the way that the hon. Gentleman set out.
Mr. Mark Todd (South Derbyshire) (Lab): It is nevertheless hard to understand why the consultation in Derbyshire produced no changes in the plans and included the continued closure of the profitable post office in Church Gresley. Its business will now be transferred to another post office, which has no adjacent parking and where people queue in the street at busy times. It does not seem that rational decision making is taking place.
Mr. McFadden: I understand the points that my hon. Friend makes, but I would counsel caution on his description of post offices as profitable. In order to make such a judgment, one has to consider not only the payment to the agent in the branch, but the central infrastructure costs to the Post Office. Such costs include support for the IT system in the post office, for the cash handling and cash holding in the post office, for the provision of forms to access Government business and, possibly, for security. A number of factors must be taken into account, not all of which are included in the payment to the sub-postmaster, so I counsel caution in asserting that his local post office is profitable when all those factors are taken into account.
Peter Luff (Mid-Worcestershire) (Con): As the question put by the hon. Member for South Derbyshire (Mr. Todd) has perfectly illustrated this, it will probably come as no surprise to the Minister to learn that concerns about the adequacy of the consultation process and about the accessibility of sub-post offices and, indeed, Crown offices have been pre-eminent among the concerns expressed by hon. Members in response to the request by the Select Committee on Business, Enterprise and Regulatory Reform, which I chair, for information and feedback on the consultation and the closure process. The Minister will come before the Committee on 5 February to deal with this issue. The Committee might subsequently make urgent recommendationswe are only halfway through the process, so there is time to adjust it. Will he commit to respond rather more rapidly to my Committee about any such recommendations than Governments are obliged to do, to ensure that these concerns are properly addressed?
Of course we take the views of the Select Committee very seriously on this. It has published two reports, or two iterations, on the issue so far. If I may paraphrase their overall view, it is that this is a regrettable but necessary process to reduce the size of the network, asI am surethe Chairman of the Committee will confirm. I can assure him that any
points made in future Select Committee examinations of the process will be taken seriously by me and by the Secretary of State.
Mr. Russell Brown (Dumfries and Galloway) (Lab): My hon. Friend is fully aware that footfall plays a vital role in determining whether a post office is busy. The vast majority of that footfall arises from benefits and pensions. Keeping in mind the fact that the Post Office card account is to be replaced, will he say whether he has yet had, or is in a position to have, discussions with ministerial colleagues in the Department for Work and Pensions about the replacement for that account?
Mr. McFadden: The current Post Office card account contract comes to an end in 2010. The Government have committed to a successor product to it, and legally that has to be put out to tender. A decision will be made later this year. I am sure that the Post Office will bid strongly for that, but the process has to be legal and proper. A decision will be announced later this year.
Sir Peter Tapsell (Louth and Horncastle) (Con): But does the Minister deny that the immediate closure announcement of many more sub-post offices has only been postponed until after the local government elections?
Mr. McFadden: As I said earlier, the Government have abided by Cabinet Office guidelines on this. This programme is taking place over a 15-month period, roughly speaking, and the local election campaign will take three to four weeks. It will not have a massive impact on a programme lasting 15 months.
Charles Hendry (Wealden) (Con): Does the Minister not yet understand why the public feel so disillusioned by this consultation process? The Government have halved the 12-week consultation period recommended by the Cabinet Office; they are using access criteria that result in post offices being closed because of their geography rather than their viability; they are making it difficult for local communities to find other ways to provide funding to keep post offices open; they are setting communities against communities; and people feel that the campaigns that they have mounted have been ignored. Is it not time that the Minister accepted that his process is flawed and is neither taking account of local views and concerns nor delivering the right post office network for the future?
Mr. McFadden: I certainly understand the public concern about the closure of post offices which are valued organisations, but let us remember why it is happening. It is because the number of people using the post office has declined by 4 million a week in recent years. The network is losing several million pounds a week and the difficult decision was taken to reduce the size of the network and to support the remaining network with a subsidy of £150 million a year. I have to point out to the hon. Gentleman that the subsidy committed by his Government was zero.
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