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3 pm

Sarah Teather (Brent, East) (LD): The Chamber is full of hon. Members hoping to make speeches about the closure of their local post office, which is why the hon. Member for Rutland and Melton (Alan Duncan) promised to be brief. I am afraid that he failed in that. Being a short speaker is something that he and I normally have in common. I shall endeavour to be shorter.

I doubt that any other issue unifies communities across the country more than that of post office closures, regardless of whether it is in a rural or an urban constituency, whether the area is deprived or wealthy, or whether those affected are young or old. This is, without doubt, one of the most potent political issues of the day. The Liberal Democrats have always been opposed to the Government’s closure project, which is euphemistically called the “network change programme”. However, we are the only party here that has a policy to stop it. I was delighted to read that the Conservatives recognised our strength on this issue. I have here the Conservative campaign manual; I think it is called “Localiser”. The Conservatives warn their candidates, in a big blue bubble, that “the Liberal Democrats campaign extensively on the issue of post office closures. If a post office is threatened with closure in your area it is vital that you quickly mount your own campaign before the Liberal Democrats commandeer the issue.”

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Mr. Burns: Will the hon. Lady give way?

Sarah Teather: Let me get started.

I am sorry that the Conservatives feel we have commandeered the issue, but I find it much easier to campaign on something when we have a policy on it. I would strongly recommend that the Conservatives get one. During this debate, I will have some suggestions for them on saving post offices.

Mr. Burns: From my experience, the only campaigning that the Liberal Democrats did when Chelmsford was facing post office closures was to wait until the sitting MP had done all the work—having meetings with the Post Office, writing and lobbying—then to get their clipboards out and do a high-profile collection of names. That was all.

Sarah Teather: The hon. Gentleman sounds as though he is complaining about the Liberal Democrats commandeering the issue. Of course, it would also help if the Conservatives did not have a record of closing post offices when they were in government. During their final term in office, they closed the equivalent of— [ Interruption. ] Well, I am sure we can indulge hon. Members if they would like us to. During their final term in office, they closed the equivalent of four post offices a week. That amounted to 3,500 during their time in office. However, we have also seen crocodile tears from Labour Ministers and MPs on this issue. I find it difficult to listen to them when they say they are not opposed to the network change programme in principle and that they are opposed only to the closures in their own backyard. More often, they say that the problem is not the total number of closures but the flaws in the consultation process for a particular post office in a particular town.

Mr. Mark Hendrick (Preston) (Lab/Co-op) rose—

Sarah Teather: The hon. Gentleman wishes me to give way, no doubt so that he can complain about a post office closure in his own area.

Mr. Hendrick: No, I do not want to complain. I just want to bring the hon. Lady back to the point about the Liberal Democrats commandeering an issue. Does that include having photographs of Liberal Democrat candidates outside a post office that they said was earmarked for closure, when in fact there was no such plan? That is what happened in the Tulketh by-election in my constituency.

Sarah Teather: I was about to say that I do not have any faith that the Government have a sustainable plan for the post office network. My fear is that this will not be the end of the post office closures; indeed, it might just be the beginning.

Malcolm Bruce: My hon. Friend will have noticed, as I did, that the Secretary of State was unwilling to give way to Liberal Democrat Members, perhaps because he knows that we have a policy on this issue. Does she agree that most people are concerned that this is not a closure policy but a process of attrition? The Secretary of State himself acknowledged that, after the last closure programme, the business of the Post Office
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contracted so sharply that we had to have another closure programme. What guarantee is there that this is not the start of an endless process?

Sarah Teather: I agree with my right hon. Friend. The truth is that the Government are presiding over the managed decline of our post office network. They are choosing to do that because they totally fail to understand the social value of our post offices to the 2 million vulnerable individuals who do not have bank accounts, for example. Those people rely on the post offices to access their benefits. The Government also fail to understand the role of the post office as a social hub for the community, or the economic value of the post office to the surrounding economy.

Those of us who have had post offices closed in our communities know that the death of the post office often spells the end for the shop in which it has been housed. The hon. Member for Rutland and Melton, too, mentioned that. The death of the main shop on a street can often spell the end for the nearby parade of shops as well. In Brent, in my constituency, the post offices are just part of a long line of services facing the chop. The process started with the health centres, as the primary care trusts struggled to scale in their debts. Then police station closures were announced, followed by the closure of job centres. There is a sense that Labour is shutting up shop in our community.

Michael Jabez Foster (Hastings and Rye) (Lab): How would the hon. Lady’s list of proper concerns square with the Lib Dems’ proposal to privatise the Post Office and, presumably, keep just the profitable ones, of which there are only about 4,000?

Sarah Teather: We are not proposing to privatise the Post Office. We are proposing to part-privatise Royal Mail, and to keep the Post Office in the public sector because it has social value.

Geraldine Smith (Morecambe and Lunesdale) (Lab) rose—

Sarah Teather: I will give way again in a moment.

These closures will rip the heart out of the community. They are the places that people value for getting face-to-face advice, with centres on the high street. They provide vital local services. It is as though Labour is shutting up shop in the very heart of our communities. It is not only vulnerable individuals who are affected by post office closures; they also have a huge impact on small businesses, especially those in which people work from home as they often rely on their post office for posting parcels. When I campaign on this issue, I am struck by the fact that it is often young people who are the first to sign a petition. Perhaps that is understandable when we realise that 11 per cent. of all business transacted in post offices comes from small businesses.

The New Economics Foundation carried out some research into what happens when a post office is closed in an urban area. It estimated that the closure of such a post office would lead to a loss of about £270,000 to the local economy. Similarly, in rural economies, it is estimated that every £1 of subsidy makes between £2 and £4 for the local economy.

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Julia Goldsworthy (Falmouth and Camborne) (LD): I am sure my hon. Friend is aware that £6 of every £10 withdrawn from a post office—either from a Post Office card account or by people using the post office to access their bank services—will be spent in the local economy. That money will be spent elsewhere, and lost to the local economy, if the post office closes.

Sarah Teather: My hon. Friend makes an excellent point. I tried to make the point earlier about footfall and the local parade of shops. When we lose the post office, we often lose all the shops in the area.

Geraldine Smith: Is the hon. Lady aware of the relationship between Royal Mail and the Post Office? If Royal Mail were part-privatised, that would put the universal service obligation in jeopardy and rural communities would suffer. People would end up having to go to collect their mail; it would not even be delivered to their door.

Sarah Teather: That is not true at all. I am sure that the Secretary of State will tell everyone that that is not the case when he finally adopts our policy at the end of the review.

Alan Duncan: The real problem with the hon. Lady’s policy is that she wants to get a lump of money from a one-off part-privatisation in order to subsidise a constant flow of need. It is not possible to finance such a flow from a stock of money without having an end point. Her proposal is therefore economically innumerate.

Sarah Teather: We want to finance a lump sum in order to modernise the network and to allow investment in infrastructure, for example. We also propose de-coupling Royal Mail from the Post Office, as I said in an intervention on the Secretary of State, to allow it to work with Royal Mail’s competitors and bring in a new revenue stream. We are also arguing for extra revenue streams, just as the hon. Gentleman is doing. What he lacks, however, is any kind of policy for investment in upgrading the network. I cannot see how he can save 2,500 post offices—or even a little fewer, as I am not quite sure what exactly he claims to be saving—without that further investment. We think we can do that, but we do not think we can do any more than that, so I cannot understand how the hon. Gentleman can seriously think he can save all these post offices without any kind of investment in them. They need that to ensure that they can compete on the high street.

Dr. Murrison: Does the hon. Lady believe that the number of post offices we have now is about right and that they are based in approximately the right place? If not, what is her assessment of how many more post offices we would have in this ideal Liberal Democrat world? How would she determine where they should be and, more importantly, how would she pay for them?

Sarah Teather: I just made a point about investing in the capital and other infrastructure in post offices. It is a bit rich of the hon. Gentleman to be asking me how many post offices there should be in a local area, when he cannot even save the ones that he is proposing to save. [Interruption.] At least we have a policy for investment in the network.

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Simon Hughes: Does my hon. Friend agree that not only do we have a policy for investing some capital at the beginning, but we support the idea that another process for supporting local post offices will be available when the Sustainable Communities Act 2007 comes into force? If, however, the consultation process allowed MPs and the public to know the commercial facts—details of profits and losses—in many cases we would be able to win the argument, but the Post Office never allows us to have the facts that would allow a proper consultation. It keeps moving the goalposts and playing a game with mirrors, so that consultation is a sham.

Sarah Teather: I completely agree with my hon. Friend about the consultation process, which has caused more anger among hon. Members and, indeed, members of the public, than almost anything else—

Bob Spink (Castle Point) (Con) rose—

Annette Brooke (Mid-Dorset and North Poole) (LD) rose—

Sarah Teather: I shall give way in a few moments when I have finished what I am saying. There is a huge sense of frustration that the Post Office is allowing only six weeks, which is not long enough for any community organisations to work together to produce a bid to save post offices—either with or without the Sustainable Communities Bill 2007. It is difficult for councils to intervene and almost impossible for them to intervene earlier because they do not know whether the post offices they wish to work with are going to be closed later under the network change programme. As my hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) said, the goalposts are constantly moving.

Annette Brooke rose—

Bob Spink rose—

Sarah Teather: I shall give way to my hon. Friend first and then to the hon. Gentleman.

Annette Brooke: My hon. Friend rightly raises the issue of consultation. Does she share with me the concerns raised by Purbeck community partnership about the proposal to start the consultation on the network change programme on 15 July and for it to carry on for seven weeks? How can individuals be engaged when, for example, the parish and town councils may not even meet during that period? Surely the Government have some responsibility to arrange proper consultation.

Sarah Teather: It is a common complaint when consultations are arranged over a holiday period as it is difficult for community groups and political representatives to work with people in the community to stop these proposals.

I will give way now to the hon. Member for Castle Point (Bob Spink). Now that he has become independent, I hope that he will support our policies.

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Bob Spink: I am grateful to the hon. Lady, who is at least trying to come forward with some constructive proposals; I welcome that, as we need them. Does she regret the fact, however, that her party did not oppose the EU regulations that prevented the Government from subsidising post offices and thereby keeping them open? It is those EU regulations that have forced the Government to go down the closure route.

Sarah Teather: The hon. Gentleman may be independent, but he is still a Conservative, as he can get Europe into almost anything! There is no evidence that Europe is stopping us subsidising the post office network.

Several hon. Members rose

Sarah Teather: Let me make some progress, as I promised to be a brief speaker and I am failing miserably so far.

All this grief and all this political damage are being caused for what is actually a pretty measly amount of money that the Government are saving—just £45 million. We have to ask whether it really will be a saving when everything else has been taken into account. I provided some figures a few moments ago on how much the closure of post offices costs the local economy in urban areas—about £277,000—but that probably equates to the best part of £50,000 in VAT lost to the Treasury. If we add in other costs to individuals, such as being more isolated or the difficulty of picking up benefits, and if we also add in the cost to the community of losing its high street, and then the environmental impacts of travelling further, probably by car, to access the local post office, we have to ask what we are left with. After all, £45 million is not a lot of money in the grand scheme of Government Budgets. We also have to remember that Royal Mail awarded its own board and chief executive more than £7 million in pay and bonuses last year, and well over £5 million in bonuses and benefits alone.

As one of my hon. Friends asked earlier, is there really any evidence that the closure programme will actually deliver the increased footfall to make the remaining post offices, which the Government are relying on, profitable? Where is the evidence to suggest that it will not simply cause people to change their behaviour and do business in another way? What of the overall cost to the Royal Mail Group when businesses decide to use a competitor?

Mr. Francois: Quite a few references have already been made to the innovative proposals from Conservative-controlled Essex county council to try to ensure that at least a number of the post offices under threat in the county remain open. Does the hon. Lady support in principle that brave attempt by Essex county council, or not?

Sarah Teather: What we want is a sustainable programme, but it is obviously for local councils to decide what they do. Of course the letter placed in the Library by the Secretary of State makes the point that the Government will stop the £150 million subsidy, so councils would then be required to put the extra money in from council tax payers. It is a difficult decision for councils; they need to know that the Government have a long-term plan to ensure sustainability. There are some good
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proposals for councils to work with the Post Office, but I really want something that is sustainable and not just about central Government shifting the blame and the responsibility on to local government, which causes local councils to pick up the costs without any kind of benefit.

The trouble is, as I have already said, that the Government have no long-term plan to save the network. The access criteria they have devised with the Post Office would be met if we had just 7,000 post offices, which raises the spectre of further closures. Of course, the £1.7 billion that the Government boast about investing over five years already includes the £150 million a year that they had already committed—£750 million overall—and the redundancy package for sub-postmasters, which is £70 million plus some extra for central changes, taking it perhaps to £100 million. The Government have not provided the exact figures on that. By the time we have added that and taken into account general losses that the Post Office incurs each week, it is hard to see how much money would be left for real investment to modernise the Post Office.

Additionally, post offices are steadily having every revenue option they have taken away from them, leaving the network with huge uncertainty over the future of the Post Office card account, for example. That is why we must clearly decouple Royal Mail from the post office network, to allow it to develop other business revenues with competitors. I have already mentioned having a parcel depot for other mail delivery companies. There would be all sorts of other options, but not until the brave step of uncoupling Royal Mail from the Post Office has been taken. We urgently need investment in the network. That is why we propose to part-privatise Royal Mail, raising about £2 billion for the Government to invest in upgrading the post office network. Crown post offices, in particular, desperately need investment to allow them to compete on the high street. They need refurbishment and IT investment, and their staff need extra training.

Mr. Edward Davey (Kingston and Surbiton) (LD): Did my hon. Friend notice that when the Secretary of State was trying to suggest that the closures were down to the internet and people not going to post offices, he failed to mention that one of the reasons why people are not going to post offices is that the Government have closed so many of them and another is the decision by the Department for Work and Pensions to bully hundreds of thousands of pensioners to take their pensions into bank accounts, in tandem with the decision of the Department for Culture, Media and Sport to take the business of TV licences away from post offices? Is not the real truth that post office closures have been brought about by the Government and are not the fault of the public?

Sarah Teather: I absolutely agree with my hon. Friend. It is as if the Government were making a deliberate attempt to close post offices down.

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