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3 Jun 2008 : Column 244WH—continued

It went on to conclude that

The post office is an important part of the local community and has been maintained through the hard
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work and co-operation of individuals for the sake of everyone in the area. The Government are letting those people down and are undermining a well co-ordinated and important service. A clear erosion of village life is taking place. There is no disabled parking outside Honiton post office, so the nearest parking is 275 yards away and slightly uphill. A taxi fare to Honiton is £15.60 return. Therefore, the change will make life difficult for elderly and disabled residents. The route is a busy main road, which is certainly unsuitable for walking and dangerous to cross, and for many elderly people, walking 3 miles alone is simply not a viable option. Buses run through the village only four times a day and there is no direct bus service to Honiton post office. Paradoxically, if Offwell rural services association had bought or rented a plot on East Devon business park five years ago instead of having the post office beside the village hall, although it would have been much less convenient for the villagers, as it would have been more than 3 miles from Honiton post office, the Offwell post office would probably not be threatened with closure now.

The second post office in east Devon currently threatened with closure is Millwey Rise in Axminster. The post office serves the largest single housing estate in East Devon where there is a higher than average representation of those dependent on some kind of benefit—including those in receipt of state pensions. Millwey Rise also serves several local businesses at the nearby industrial park. In addition, there are plans for significant housing development in the area in the next 10 years. Axminster has been participating in the market and coastal towns initiative and a key issue is that it is one of the few towns in East Devon where expansion is possible and desired by the local community. It makes no logical sense to close down a post office in an area of proposed expansion.

Millwey Rise is a vibrant and growing sub-post office with a sub-postmaster whose entrepreneurial spirit has been recognised by East Devon district council, which has invested approximately £100,000 in the property. The council has also created a free car-parking facility and full disabled access from all directions into the shop, which already meets requirements for the disabled.

The post office and associated shop are the only retail outlets on the estate and the sub-postmaster has recently installed a free automated teller machine that has proved increasingly popular. All that has made an enormous difference for the elderly, disabled and vulnerable residents of the estate who would be unfairly disadvantaged by having to travel further. To reach the next available post office, pedestrians would have to negotiate a busy roundabout and, in places, steeply sloping ground. For those who are unable to use the bus service because of a disability, the cost of a taxi is currently £3.80 in each direction, which is a substantial sum for someone on a low income, such as a single state pension.

In Post Office Ltd’s branch access report for the post office its opening times are incorrectly recorded. In reality, the main post office in Axminster closes earlier on Saturday and does not open as late during the week. If the Millwey Rise post office is lost there will be greater use of cars in the area and more congestion in the town, and businesses will have to transport mail to the sorting office, all at increased expense to them, in addition to the associated environmental costs.

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The third post office in my constituency that is threatened with closure is the Greenway Lane post office in Budleigh Salterton. Budleigh Salterton has a higher than average proportion of people who are of retirement age and 58 per cent. of households contain pensioners. That is significantly higher than the sub-regional average. In addition to its usefulness to the large number of elderly residents in the area the Greenway Lane post office is vital to disabled people. Many constituents say that parking in Budleigh Salterton High street near the post office is often impossible even with a blue badge.

In a recent consultation by Help the Aged more than half of older people said that local post offices are essential to their way of life. Closure of post office branches has a big impact on the lives of the many older people who depend on the services they provide. Those on pensions and benefits are more likely to be financially excluded, and will tend to rely on post offices disproportionately, whether they live in an urban or rural area, yet they are the very people who will suffer most from the proposed closures.

The needs of the elderly and disadvantaged are felt just as keenly in the area surrounding St. Andrew’s Road post office in Exmouth, the fourth post office threatened with closure. Exmouth, East Devon’s largest town, has a higher proportion of people who are of retirement age and 38 per cent. of households are all-pensioner households. That is, again, above the sub-regional average. It is predicted that by 2021 the percentage of those aged 65 and over will increase by a further 20.9 per cent., and that the percentage of those aged between 70 and 74 will increase by 37.9 per cent. In addition, the town has two of the most deprived wards in Devon—Littleham and Town, where St. Andrew’s road is located. They are in the upper quartile of social deprivation in the country, with 46.9 per cent. of households on an annual income of less than £20,000.

St. Andrew’s Road post office has a loyal customer base who do not want that essential service to be taken away from them. Sixty-one per cent. of customers in deprived urban areas say that they use their local post office for access to free community services, and 36 per cent. meet friends there. The post office has convenient roadside parking nearby while there is no direct bus route to the proposed alternative, which is the main, busy post office in Exmouth. At a time of rising fuel costs it simply defies logic to force people to make longer journeys.

In Exmouth alone the Government have rationalised jobcentres, magistrates courts, police custody suites, sub-post offices and NHS dental services. Enough is enough. The Government claim to be aware of the rapidly ageing population; yet in an area such as East Devon where there is, as I have proved, a disproportionately large number of elderly people, it would appear that their interests and needs are being completely overlooked while their way of life is dismantled. We are told that the Government consider the environment. However, owing to the closure programme people in rural areas are being forced into their cars to travel further, because they cannot rely on often inadequate bus services to get to their closest post office. It is simply not enough to tell people where their alternative branch is. Real solutions need to be found to very real problems, and the Government need urgently to restate their commitment to the countryside.

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1.49 pm

The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): I congratulate the hon. Member for East Devon (Mr. Swire) on securing this debate on post office closures. There have of course been a fairly large number of such debates on that subject in Westminster Hall, and I appreciate that it is a difficult issue. I understand that there are 33 post offices in the hon. Gentleman’s constituency, of which four, which he described, are scheduled for closure. He will know—but in case he does not, I shall reiterate—that as a Minister I play no role in decisions relating to individual post offices. The issues that he raised in detail are issues for the Post Office and Postwatch as they deliberate in consultation about how to implement the difficult decision to close some post office branches in the network, including in his constituency.

The reason for the programme goes back a couple of years to a consultation that began in 2006 and an announcement in May last year by the then Secretary of State for Trade and Industry that of the more than 14,000 branches open at the time, some 2,500 would have to close. Why was that decision made? I listened carefully to the hon. Gentleman, but he did not touch on any reasons why our Government might have reached such a difficult decision, so I shall lay them out for him. The post office network loses £500,000 every day that it is open. Those losses are not static; they have more or less doubled in the past few years. The network has lost 4 million customers a week. Again, that is not static but has been increasing.

Mr. Swire: Will the Minister not concede that if the Government withdraw services offered by post offices, it is quite likely that the amount of business that those post offices do will decline?

Mr. McFadden: I do not accept for a moment the charge that the Government have somehow created an evil use of the internet or pioneered direct debit. Those things were wanted by our constituents. I am sure that even in East Devon, people use the internet to pay bills and carry out transactions. They are not being forced to do so by the Government.

The hon. Gentleman mentioned pensioners. He is right that traditionally we have seen the post office as a venue for people to collect their pensions, but eight out of 10 pensioners no longer do so. Among new retirees, that figure is nine out of 10, and it is unlikely to reverse. I hope that he has a long and happy retirement, but I am not sure whether he will collect his pension every week at the local post office.

Other services, such as car tax online, did not even exist a few years ago. Car tax online is now used by 1 million people a month who previously would have gone to the post office to renew their car tax. It is a popular service. The question for Government is not whether to sit in the face of change and say, “We don’t want to put any of these services online”; it is whether we are behind the curve of change, not ahead of it and driving it, as the hon. Gentleman implied in his intervention. In addition, the Post Office faces competition from new outlets. That is why it lost the contract for the BBC TV licence. The decision was taken not by Government but by the BBC.

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Mr. Swire: If one takes what the Minister says to its logical conclusion, eventually there will be no need for a sub-post office network throughout the country. Does he therefore agree with Post Office Ltd, which

Is that his view as well?

Mr. McFadden: The logic of my position is not that there should be no post office network at all. It is that in the face of lifestyle change, which affects how people pay bills and receive benefits; technology, which principally involves the internet and its effect on communication; and competition, it does not make sense to freeze the post office network for ever at its former size.

As Ministers, we must also have regard to the taxpayer and the large amount of public subsidy that goes to the post office network. The hon. Gentleman asked what the Government should do and what our attitude is to the network. To answer directly, our attitude is that we should subsidise the network to maintain it at a significantly higher level than would be the case if it operated purely commercially.

As I said, there were some 14,000 post offices before the closure programme started. If the post office network operated as a purely commercial network, that figure would be just 4,000. We do not believe that we can reduce the post office network to that size. That is why this Government—the first Government to do so—have subsidised the Post Office to such an extent. In fact, by 2011 we will have put between £3.5 billion and £4 billion into the post office network since we came into government. We have invested a significant level of public support because we believe that the post office has a social and community role. However, even with that large level of subsidy and in the face of lifestyle change, in which the whole country is taking part, we cannot keep the network at its current level. That is not just the view of the Government, but of the National Federation of SubPostmasters itself. At the beginning of the closure programme, the NFSP general secretary said that the closures were necessary to ensure the viability of the remaining network.

Mr. Swire: I fully agree with that statement. It is necessary to sustain and to encourage the viability of the remaining network. However, if the Minister was being more positive about the sub-post office network, he might allude to the new developments brought about by the technology to which he refers. They include the real growth in demand caused by internet shopping. The number of post offices providing front-line services for eBay—a place in which people can deposit their things—is growing. If the Minister would allow the Post Office to compete in such areas and to do what it wants to do, he might find that, lo and behold, he has rather a vibrant service on his hands.

Mr. McFadden: I agree that there are possibilities for the Post Office in the future. However, precisely because of the changes that I have been outlining, the answer cannot be to turn back the clock or to force the public to do things that they no longer choose to do—or at least increasing numbers of them. The answer must be new reasons to attract business through the door. Before I move on to the future, I want to remind the hon.
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Gentleman of what his own Opposition spokesman said when this issue was debated by the House in March. He said:

I am glad that on both Front Benches there is a recognition of the impact of some of the technology, lifestyle and competition changes that I have outlined. I appreciate that this is difficult for those branches that are affected, but I would also encourage some sense of perspective about the scale of what is being proposed here. The subsidy that the Government have invested will enable some 7,500 post office branches to stay open that may otherwise be placed under threat. In the area plan covering the hon. Gentleman’s constituency, over 90 per cent. of his constituents will see no change to the post office branch that they currently use, and over 99 per cent. will either see no change or remain within a mile—not as the crow flies but by road—of an alternative post office branch.

Alongside the closures, new outreach services are being introduced. They are a more flexible—sometimes
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more part-time—and low-cost way of delivering post office services, particularly in rural communities. There are some in the plan that cover the hon. Gentleman’s constituency.

In the time that I have left, I want to concentrate on what the hon. Gentleman said on rural-proofing. He made a point that was wider than post office closures. When we started the closure programme, we could have closed those branches that required the largest subsidy per transaction. Those would be in remote rural areas in which the subsidy per transaction is sometimes up to £17 per transaction. Every time someone buys a stamp, there is a taxpayer subsidy of £17. However, because we value the social side of the network, we have used access criteria, which means that 95 per cent. of the total rural population across the UK must be within three miles of a post office branch. That preserves a service which is very far from being commercially viable. Without the access criteria, more rural post offices would close, not fewer. Despite the difficulty for his constituents, the programme has been carried out in a planned way so that we have a stable network in both rural and urban areas in the future.

Question put and agreed to.

Adjourned accordingly at one minute to Two o’clock.

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