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Chris Huhne (Eastleigh) (LD): I am following the case that my hon. Friend is making, particularly in respect of the costs to the Government. It seems to me
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that one cost to the Treasury and the Department for Business, Enterprise and Regulatory Reform has not been estimated at all—the cost of the closure of other parts of businesses that ineluctably fail as well when the Post Office is removed. I refer to associated VAT costs, for example, which is direct revenue lost to the Government. Following a sham consultation, four post offices in my constituency were closed despite a massive protest and more than 1,000 people signing a petition. Does my hon. Friend agree that this so-called consultation has been a fraudulent exercise?

Sarah Teather: I agree entirely. There are many hidden costs of which the Government have taken no account. We have to ask whether saving £45 million is worth all this grief, and whether the Treasury is really saving any money in the long term.

Michael Jabez Foster: Will the hon. Lady give way?

Sarah Teather: I have already given way to the hon. Gentleman. I want to finish my speech, as I know that many other Members want to speak.

We must think about alternative long-term revenue streams for the Post Office. An obvious route that has not been discussed so far is development of the Post Office card account. About five years ago, the Government charged banks with making basic bank accounts available to those who needed them, but it simply has not worked. The best part of 2 million people still do not have access to an account, and the increase in basic bank accounts appears to have stalled. It is obvious from the take-up of the Post Office card account that it has been far more popular than the offers of basic bank accounts. It is also obvious that people want to use their post offices to gain access to their accounts and that some banks have been reluctant to allow them to do so. HSBC, HBOS and the Royal Bank of Scotland, for example, still do not allow people to use post offices for that purpose.

The problem is that there really is not anything in it for banks to offer basic bank accounts to people who are never going to earn very much, and who want to be dealt with face to face. The last thing that the commercial banks want are people who go into branches. They want people who bank by phone and by internet, whereas the Post Office needs footfall. Those are two very different needs.

It is time that the Government gave banks a choice. They should either force them to make their services available through the Post Office so that all can gain access to their basic bank accounts through the network, or give up on banks and develop the Post Office card account into a basic bank account. In either event, we need a universal service obligation on access to a bank account, and the Post Office should play a role in providing it. That could offer a very fruitful revenue stream.

We oppose the closure programme because it will have a devastating and permanent effect on our communities, but petitions alone will not save the network. We need a serious plan of investment— [Interruption]—a serious plan of investment, which the Conservative party— [Interruption.]

Madam Deputy Speaker (Sylvia Heal): Order.

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Sarah Teather: We need a serious plan of investment, which the Conservative party does not have—but neither do the Government, and I hope that they will adopt our policy following the review.

3.22 pm

Richard Burden (Birmingham, Northfield) (Lab): Let me begin by explaining some of the background to my interest in this issue. I was a member of the Trade and Industry Committee during the last Parliament, and was involved in the reports that first pressed Post Office Ltd to consider area plans rather than merely deciding where they wanted to change the network—to look at the broader picture, rather than at individual post offices in isolation—and to examine opportunities for post offices to win new business, as well as the constraints imposed by changing patterns of customer behaviour. When Post Office Ltd adopted the principle of area plans, I was a member of the Committee—again, the Trade and Industry Committee—which suggested that its approach to them should be rather different, and that it should change its methodology.

The review in Birmingham has not happened yet—it is scheduled for June—but when the urban reinvention programme in my constituency was launched in 2004, I submitted to Post Office Ltd a detailed analysis of the problems with its methodology and some of its conclusions. Along with an excellent campaign by local people, that managed to save two of the five post offices that were slated for closure. Last year I submitted evidence to the Department when it was drawing up the framework that led to the network change programme.

I have said all that because the discussions that have taken place, and the reports from the Trade and Industry Committee and its successor, have concerned serious questions that arise when we try to grapple with the issue of how to maintain the viable post office network that is so important to our constituents at a time of massively shifting patterns in customer behaviour and preferences. Such changes will affect the number of people who use post offices and the frequency with which they do so irrespective of the number of post offices, and irrespective of Government policies.

We must ask how much more people use phone lines than they did some years ago—and, in particular, how much they use the internet and other technologies—to gain access to services to which, in some cases, they could have had no access 10 or 15 years ago. We must also ask to what extent they seek to gain access to services that have hitherto been provided by post offices, not simply via technology but via technology outside normal working hours. There are no easy or simple answers to those serious questions.

I do not suggest that Post Office Ltd gets everything right all the time, or even much of the time. The reports that I have mentioned and the campaigns in which I have been involved convince me that there is an awful lot that it needs to learn about how to go about these programmes, and I expect to cross swords with it again in June. I feel, however, that what does the greatest disservice to our constituents is trying to pretend that the issues are simple, or—when it comes to the practical aspects of the campaign—reducing the argument to whether people are for or against post office closures in general. That was not the approach of the hon. Member for Rutland and Melton (Alan Duncan), but I shall be
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interested to see what happens when the debate is reported outside and represented in leaflets. I think that simplicity will find its way straight back in at that point, and that at least one Opposition party—maybe two, maybe more—will try to present the debate and Members’ votes in a way that will reduce it to something simplistic and utterly meaningless.

The hon. and learned Member for Torridge and West Devon (Mr. Cox) nods, so my prediction is probably correct. I hope I am wrong, but I have to say that the Conservative party has form in this regard. Even when I was helping to question the closures in my constituency in 2004, in some cases successfully, leaflets were appearing from the Conservatives claiming that I was supporting the very closures that we managed to beat off. One Conservative leaflet doctored Hansard to back up its claims, which earned the party and the councillor involved a rebuke from Mr. Speaker when it was reported to the House.

We have seen similar action on this occasion. Opposition politicians have claimed that for Ministers to establish a framework for consultation and then use their positions as local Members of Parliament representing their constituents to argue within that framework and take up issues of local concern is somehow illegitimate. That does their constituents a disservice, and reduces the debate to trivia.

Martin Salter: My hon. Friend has much joy to look forward to when the Conservatives get their teeth into the issue in his constituency, but I hope he does not find that his local Conservatives are as mad as mine. They jumped the gun before the network change programme was announced, and started to campaign to save three post offices that were not even in the frame for closure. All they have managed to do is frighten local pensioners. I hope that that does not happen in Birmingham, Northfield.

Richard Burden: Let us hope not, but I am not holding my breath. This is a serious issue, and I hope that Opposition Members will think about doing the right thing by their constituents and mine, and telling the truth about it.

Turning to the situation in Birmingham, and the proposals that are likely to be published in June, I am pleased that criticisms that we made in the Select Committee some years ago have, in theory, been addressed by the Post Office in the access criteria that it has laid down. I say “in theory”, because the evidence is that they have not always been followed through in practice, which is something that Post Office Ltd must address. As a local MP I will only know what the proposals are, and whether there is a problem with the methodology, towards the end of the pre-consultation phase and just before the formal consultation. If and when proposals are produced, and if there is consensus about the methodology and confidence in the way in which Post Office Ltd has drawn up its plan, even if there is disagreement about its substance, the six-week consultation is probably not too bad. In fact, the National Federation of SubPostmasters says that six weeks is probably okay, if the aim is to minimise the period of sub-postmasters’ uncertainty. However, problems will arise if there is not consensus about the methodology and people end up having to argue simultaneously about the methodology and the
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proposals themselves during that same six-week period. My message to Post Office Ltd is that it should be open with stakeholders at an earlier stage, and I do not think that that contradicts the framework that it has laid down. I do not buy all its arguments about commercial confidentiality, and I certainly do not think that they should take precedence over letting the public know the things that they need to know.

Finally, as we approach the publication of proposals on Birmingham, access criteria will apply, as elsewhere, guaranteeing the maximum distances from post offices. That is important, and it is an improvement on existing measures. The problem that we face in Birmingham, however, does not relate to distance. Birmingham’s neighbourhoods are often compact in size, but they are far from compact in population numbers. There is an average of 377.2 people—I do not know where the 0.2 comes from—per square kilometre in England. In Birmingham, the average is 3,649 people per square kilometre. Under the current post office provision, that is 7,088 residents per post office, which has resulted in unacceptable queues in a number of places in my constituency. The people queuing outside in the rain are often old, frail and vulnerable, and if Post Office Ltd further reduces the number of post offices without taking into account population density figures as well as distance, those queues will lengthen. That will hit customers even more, and it will hit the very trade that Post Office Ltd and the Government are trying to protect.

I hope that Post Office Ltd will look at that, and that Ministers will have another word with it about taking those things into account. The framework and the access criteria do not need to change. They are not exhaustive, but they are a guide to what Post Office Ltd should take into account, and population density in urban areas is an important consideration. When Post Office Ltd draws up its plans for Birmingham, it should be open with stakeholders earlier, as there is nothing in the access criteria or the framework that prevents it from doing so. It must rethink the sequencing of involving Postwatch, local government, local MPs and the public. If there is a problem with the methodology, that will have consequences for the extent to which it sticks to the framework.

Barry Gardiner (Brent, North) (Lab): I listened carefully to what my hon. Friend said about the effect on queuing in urban areas. Does he agree that part of the response should involve looking not only at the outlets but at the number of counters available?

Richard Burden: That is a very good point. Post Office Ltd has talked about investing in the network and upgrading it, but the proof of the pudding is in the
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eating. It is not good enough for it just to say that it is going to invest—it has got to look at precisely those things, and a few more besides.

Justine Greening (Putney) (Con): Does the hon. Gentleman accept that the criteria are meaningless, as this is a reverse engineering project, designed to close 2,500 post offices? I can tell him from my experience in my constituency that none of the criteria mean anything, as we are closing perfectly profitable post offices.

Richard Burden: The hon. Lady is running a number of things together, and she is wrong. If she is arguing that there should be no overall target figure—and I would love to be in that situation—that would have financial consequences. That is why I asked her hon. Friend the Member for Rutland and Melton how much subsidy he proposed. He said different things in the course of his contribution: at one stage, he did not give any commitment at all, but at another, he thought the maximum of the subsidy should be that which the Government have provided. There are consequences that flow from that—there is a financial limit, as the Conservative party, too, has accepted—and we cannot avoid numbers. I do not think that the access criteria are meaningless. However, the way in which they are structured does not tackle all situations in all places, so Post Office Ltd needs to be more sensitive.

Justine Greening rose—

Richard Burden: The hon. Lady has had a go, and as many other Members wish to speak, I shall now conclude.

We must be open with stakeholders at an earlier stage, and approach the consultation in that spirit. When proposing change in Birmingham and other urban areas where the reviews have not yet taken place, we must look at population figures as well as distances. We must also bear it in mind that if at the end of the process queues lengthen and those that suffer from that are the old, the frail and the vulnerable, we will not have addressed the issues that we are trying to address. I make that appeal to Post Office Ltd, and I ask Ministers to make it to Post Office Ltd as well.

Deferred Division

Madam Deputy Speaker (Sylvia Heal): I now have to announce the result of the Division deferred on the question relating to the European defence equipment market and the European Defence Agency.

The Ayes were 254 and the Noes were 194, so the Ayes have it.

[The Division List is published at the end of today’s debates.]

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Post Office Closures

Question again proposed.

3.36 pm

Mr. James Paice (South-East Cambridgeshire) (Con): I am grateful to be called so early in the debate. It was clear from the Secretary of State’s response to the speech by my hon. Friend the Member for Rutland and Melton (Alan Duncan) that the Secretary of State does not have full control of what is going on. In answer to my question about the alleged one-for-one policy—that if one post office was saved another had to be added to the hit list—he said it was not happening, yet he then listed a number of areas where it clearly did happen, and a number of my hon. Friends have been openly told by Post Office management that that policy does exist.

Some remarks made by Labour Members, including the Secretary of State, serve to underline the existence of a fundamental gulf between their approach and ours—and I am sorry to say that in this context the views of the Liberal Democrats are shaped in the same mould as those of the Government. There seems to be an all-pervasive attitude that the entire debate must revolve around parties outbidding each other on how much subsidy they will give—how much they are going to guarantee. That is nonsense; that is not what the issue is about. Instead, it is about how we can best use what is available, and I shall offer some ideas on that. I should just add that, like the hon. Member for Birmingham, Northfield (Richard Burden), I do not have any special pleading to make, as I do not yet know the proposals for Cambridgeshire.

The Government’s approach to this matter is marked by four characteristics. There is almost an intention to create confusion about who is responsible: is the Secretary of State driving this, or the Post Office? Whenever a problem arises, it seems that it is automatically the other’s responsibility. There is also a determination to micro-manage this whole process from the centre; as is typical of this Government, there is a refusal to accept that there just might be a better way. Attached to that, there is an aura almost of infallibility: the Government think that they know best, instead of accepting that they may have got this wrong and they have failed to convince anybody of their argument.

My remarks will come entirely from a rural perspective. I do not intend to refer to urban post offices simply because there are none in my constituency and I do not have a depth of knowledge about them. There are some 7,700 rural post offices, and about 65 per cent. of all rural communities have a post office. By comparison, only 10 per cent. of rural communities have a branch of a bank. That is an important distinction, because it shows that in most rural communities the post office is the only local “financial institution”.

Of course, we have to accept that the majority of post offices are loss-making from a purely Post Office perspective—it would be unrealistic to deny that—but we should be looking for solutions. Before coming to that, however, I wish to emphasise the community and social role of a post office. As has been said, it is for many people a gathering place. It is also often combined with a shop and each part of the business gains from the other; attention has rightly been drawn to the amount
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of money people spend in the shop if they have just drawn money from the post office. Post offices are, of course, the outlets for the Post Office card account. I am sure I am not the only hon. Member who has received a lot of letters from people complaining that British Telecom now charges £4.50 when people do not pay their phone bill by direct debit. That demonstrates to me the number of people who still want to do everything by cash. That is another important reason why post offices are important, as is people’s access to their benefits or pensions through them.

We have a policy, as, I believe, does the whole House, of wanting to encourage people to work increasingly from or close to their home to reduce travel. That again provides a need for rural businesses to have access to a convenient post office. Even things such as eBay, which is all-pervasive these days, generate more and more business.

The final point to make on the community and social role relates to the access criteria—the belief that the objective should be that virtually everybody is within 3 miles of a post office. We are talking about that distance as the crow flies, but in many rural areas the real distance may be double that—at least 6 miles, if not more—and it may be down narrow lanes, across motorways and so on. The proposal will certainly lead to far more car usage. A few weeks ago, I asked the Secretary of State a parliamentary question as to what assessment had been made of increased car usage and carbon emissions as a result of the proposals. Unsurprisingly, the answer came back that no such assessment had been made. I simply add that people who do not have a car will face a 2-mile walk—a 4-hour walk there and back—and that making such a journey is a near impossibility for somebody who is elderly and vulnerable.

Bill Wiggin (Leominster) (Con): My hon. Friend is making an excellent speech and is being characteristically generous in giving way. My constituency, like his, has not had the closure announcements yet. Does he agree that if the Tenbury Wells post office were nominated for closure, the nearest post office for people would be in Leysters, which is 3.5 miles away? A bus runs between Tenbury Wells and Leysters, but it does so on the third Wednesday of the month and although it takes only 10 minutes to get to Leysters, one then has to wait five hours before one can go back. Does he agree that that makes the 3-mile criterion, or any of the criteria, completely inappropriate in constituencies such as ours?

Mr. Paice: My hon. Friend makes his point admirably. I am sure that everyone who represents a rural area could recount similar situations.

Dan Rogerson (North Cornwall) (LD) rose—

Mr. Paice: I shall give way to the hon. Gentleman, and that will be my two interventions done.

Dan Rogerson: The hon. Gentleman is making a good point about the social element of what a post office provides, particularly in a rural community. Given that postmasters and postmistresses provide such a valuable service, does he share my concern that the threatening letters that they have received as part of this process show that they have been treated very shabbily indeed?

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