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My final comments are on local communities and local authorities. As I said in my opening words, post offices provide many valuable services, particularly for the elderly or less able. Many of these services are now available online. Perhaps, instead of subsidising local post offices, local authorities and others can think laterally and provide facilities and training in IT for these people. In the Countryside Agency, we used to have lots of buses full of computers and trainers to go round the countryside to villages, training pupils who were virtually all over 65. Some of them were even over 90—and very successful they were, too. As for accessing other services lost with post offices, the spread of ATM cash machines would be good for rural areas. Local government support for the formation of parish car clubs would be as good a solution as any towards ensuring that the rural elderly get access to modern services and company.

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That brings me to the loss of the social benefits of post offices. Parish councils, PCCs, village hall committees and other voluntary organisations should think hard about other ways in which to achieve the benefits that are being lost with the post office, if they are losing their post office. How can they help old Mrs Smith and young Master Jones to meet as often as possible in circumstances comfortable for them both?

I am as great a supporter as anyone of our village post offices and have worked hard over the years to devise ways of retaining them, but I am afraid that in many cases the milk is now spilt. I agree with the noble Lord, Lord Whitty, that we now have to be imaginative about keeping the benefits of a village post office, rather than the post office itself. I hope as many as possible of our rural post offices survive but, for many villages, I am afraid that it is time to move on.

12.51 pm

Lord Hanningfield: My Lords, I thank my noble friend Lady Byford for raising this issue today. I shall speak as much as leader of Essex County Council as I shall as a Member of this House—and fortunate to be able to speak here as a member of it.

I hope that I can live up to my billing. Several noble Lords have referred to what we are trying to do in Essex, and I shall try to explain it. I feel a bit like Mary Tudor, in that she said that she would die with “Calais” engraved on her heart; I think that I shall probably die with “post offices” engraved on my heart. It is an issue that has dominated my work and thinking in the past few months.

In Essex, we have lost a lot of post offices over the years—admittedly, under both Conservative and Labour Governments—and 300,000 people have seen the closure of a branch within one mile of their home in the past few years. So when it was announced before Christmas that we would have the first tranche of another 30 post offices closed and that there was the possibility—as will be announced later this year—of another 30 or 40 branches being closed, in Essex County Council we began to think, “Enough is enough”.

In Essex we spend nearly £500 million a year on care for the elderly. A lot of that work is done in a preventive way, in day centres and community centres. All sorts of things are done to keep elderly people more active and involved in the community. What keeps them more involved in a community very often is a post office, where they can go and spend a bit of money but also talk to colleagues and other people in the community. I have lost both my parents in the past few years, but I know that in their last few years they went out shopping every single day, to do something. They did not want to sit at home getting things from the internet; they wanted to go out and about. That is what a lot of elderly people want.

In a post office, we have a community asset. It is something like a library or a community centre. In Essex when these potential closures were announced at the end of last year, we thought that we had to do something different about it. As I say, we spend £500 million a year on the elderly. Spending a very small

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fraction of that—about £500,000 a year—on the retention of post offices in our county seems a very worthwhile social thing to do.

Over the past few months, we have examined how we might do this. I have spent a lot of time on it personally but, obviously, we have used offices of the county council to understand more and see how this might happen. We have had ups and downs in working with Post Office Ltd. We had a lot of help initially but, months after we were supposed to get it, we have not had the financial information about the post offices that we were promised, even after signing a non-disclosure document saying that we would not release any of that information. Furthermore, we still do not really understand the rationale behind the closure of the offices. It seems often to have been done on a geographical basis rather than on the economics of a particular post office. Now that I know quite a lot about it, it seems that the Post Office has decided that it wants to close so many offices and that it does not really have detailed information about particular ones. The losses are often not taking place in those post offices; it is the overheads of the national network that are the problem, not the individual offices. I believe that a lot of those offices could be saved and retained with very little expenditure. Often they are a small shop and they could carry on with very small subsidies. It would not cost a lot to keep some of these post offices going.

I am disappointed, because although I have discussed the matter with the Minister—the Secretary of State himself originates from Essex—and I have had quite a lot of co-operation from the Government on this they just have not moved fast enough. I am disappointed that the Post Office board discussed the issue only this week, four months after we raised it. We have been inundated by requests from other local authorities asking advice on how they might do it; the Welsh Assembly contacted us and asked how it could be done in Wales. I was speaking to a very senior official at the Post Office last week, who told me that it now had 200 local authorities following Essex’s example and wanting to get involved in supporting post offices in local communities. We have set an example that others might follow.

I now just want it to happen. For example, there is a branch in West Clacton, in Essex. Some 20,000 people live in West Clacton—it is a profitable branch, in a town, but it is being closed because there is a bus stop there and it has been said that people can get on a bus and go to another place. But the community is fairly elderly, and I want to see that branch reopen again in the next few weeks.

I have talked to the Post Office, which said that Essex County Council might sign a contract with it to provide postal services in our county. I hope, with the co-operation of the Post Office, that I can in the next few weeks reopen that West Clacton branch and the Little Hallingbury branch. I should like to make certain that in the next few months we reopen around 20 or more of the branches that have been closed and prevent other branches being closed in future. There is a real future for local post offices, but I believe that they will be—and probably should be—part of a local government network of services. We will do what we can in our community.

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12.58 pm

Lord Clarke of Hampstead: My Lords, I join all those who have complimented the noble Baroness, Lady Byford, on obtaining this debate. In the past eight years she and I have shared a number of criticisms of the Post Office—and I honestly wish that we had such a champion on this side of the House supporting the Post Office as she is on the other side, as she demonstrates every time she speaks on the subject.

It is timely that we have had this debate. The citizens of our country have witnessed the deterioration over a number of years of the postal service, certainly since the ill conceived and destructive Postal Services Act 2000. This debate could be of great value to those who will be conducting the independent review of postal competition. The announcement has been made that the review has been welcomed by the Post Office and the unions within the postal industry. I have no doubt that in some parts of the United Kingdom people still enjoy the reliable service that was once the norm in all parts of the country. It is very hard to find such people, but I am sure that they exist somewhere.

The call for a review of the Royal Mail and the Post Office as contained in this Motion is necessary, and we should take the opportunity today to expose what has gone wrong. Perhaps for once the Government will listen. I declare my usual interest, although I shall not go through it all because I would use up the six minutes that I am allowed. I started with the Post Office this month 62 years ago, at the age of 14. Through that period I have served in many ways in the Post Office, through public service, in my union and latterly as a trustee of postal pension funds. I hasten to add that in those days they were in surplus—a very large surplus.

I hope that noble Lords will understand that speaking like this is a painful experience. As a lifelong supporter of my party and socialism, I find it very difficult to publicly criticise those who were elected to do what I thought was our duty. Unless we do something, it is going to go further downhill, so we have to speak out.

The White Paper contains the objectives of the Government. Six minutes does not allow me to go through them all. I am sure that noble Lords will understand when I say that the objectives make very sad reading today. No. 1 is:

Does anybody believe that that has happened? Does anybody believe that our Government have provided that in this period of eight years? Another is:

which has now been replaced by another innocuous group called Postwatch. I welcome the comments of my noble friend Lord Whitty about absorbing that into his area of responsibility, because in my view Postwatch does not represent anybody except the nice people who sit around the table.

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We rejoiced when it was announced that at last we were going to get commercial freedom. It would be the end of external finance limits; we were going to be allowed to borrow, to invest and to have joint ventures with other organisations. We were all very happy about it, but some of us had a little suspicion that things were not going to be all that they said they were. I do not have time to read out those things, but does anybody think that it has got better? How many of you go to a pillar box and see that there is no tablet showing when the next collection will be or when the last collection was? The chief executive of the Royal Mail assured me almost two years ago that all the tablets would be replaced in pillar boxes. He should have a look around St Albans and various other parts to see that people have no idea whether the box has been emptied. It is a simple thing; it is a management thing; and it is time that it was done.

The chairman of the Post Office is called Leighton. On Monday of this week he was appointed as full-time chairman of Loblaw. The press release accurately describes him as having a reputation as a union tamer and says how he can go around unions and go straight to the workforce. He has developed this reputation for forging direct relationships with postal workers. The press release makes an interesting point. It states:

If he is going to spend 100 per cent of his time with Loblaw, what is he going to do for the Post Office? My direct question to the Minister is: is he going to be given his P45 and got rid of now? It will not affect him very much because as vice-chairman of Loblaw he was paid $1 million last year and has options on 371,839 shares. Mr Leighton does not need our or the Government’s charity. But we need a person who will come in and have the Post Office and public service at heart, and we want somebody who will discover what is needed.

A lot of comments have been made about the various initiatives we have had. I support them and I wish the noble Lord, Lord Hanningfield, every success in trying to maintain the service that he is valiantly trying to get through his county council. I hope that it can be replicated. There will be problems with it. That is why I say that we must use this period of consultation to get the best for the future.

I am sorry that has been a disjointed speech. I spent about three hours on it last night, but six minutes is not enough. I end by thanking the noble Baroness, Lady Byford, for giving us this opportunity and by asking your Lordships to be firm and to tell this Government of ours that they have a public duty to provide an efficient postal service.

1.04 pm

The Duke of Montrose: My Lords, it is a great privilege to be able to follow somebody who speaks on post offices with the passion and experience of the noble Lord, Lord Clarke of Hampstead. I thank my noble friend Lady Byford for providing us with the opportunity to look at the subject which is vital to so many of our communities.

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Those of us who live in rural situations have particular cause to be grateful to the efforts of the Post Office to maintain a universal service. That has become more and more essential, as the right reverend Prelate the Bishop of Newcastle pointed out, as the drive continues for the diversification of rural businesses and alternative uses for redundant buildings. I declare an interest as a farmer and as an operator of a couple of rural-based industries.

We have all been made aware of the huge financial shortfall that the present operation engenders. Obviously that must be examined regularly. I wonder whether the Government ever envisaged that the future operation of a universal service would be totally economic. What level of savings is anticipated if the current network change is carried out in full?

We are obviously entering a new age in which the Government are increasingly hoping to communicate and to deal with their population by internet means. They have enthusiastically switched the main issue of state payments and benefits and the issue of TV licences and road vehicle licences to an online basis, happily calculating to themselves the great savings in expense and administration. But that does not come without cost. As the Countryside Alliance has informed us, it has meant the withdrawal of £168 million of government services from the Post Office in 2006 alone.

The Government take some recognition of their responsibility, as mentioned by my kinsman, the noble Lord, Lord Cameron, by providing £150 million a year to their social network payment but appear not to recognise that this was directed only at the rural network to compensate for the losses brought about in 2006 and will now have to cover the urban deprived network and the urban non-commercial post offices. Do the Government have in place a plan to review this subvention in view of the increased coverage that will be demanded?

Over and above the role of the Post Office in providing a community focus—I speak as a farmer—access to a secure postal service is very important. Many of the levels of interchange with government take place online, but I wonder whether Members of the House are aware of the paperwork that is still involved in applying for government support? Critical deadlines are imposed and very serious penalties are attached to a failure to meet these, and if you do not drive the 50 or 60 miles to your local government office, the only acceptable valid proof is sending the items by registered post. I do not know if this is a realistic charge, but at £4 to £5 a time, it is quite an imposition.

Furthermore, the EU and the British Government are now insisting on detailed traceability for livestock. That involves an immense amount of physical records. Every four-legged bovine that you see in the country has been registered and has received a passport, which has to be done within a strict time limit. This passport has almost as much detail on it as the one that you or I possess, but without a photograph. Every movement is then registered, and at the end of its life the passport has to be sent back to the British Cattle Movement Service. Every movement of sheep has to be accompanied

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by a document which eventually has to be submitted to the sheep traceability office. Sooner or later somebody comes around—I have had such an experience—to check that every piece of paper is in its proper place and that it has been fully complied with.

The Post Office is a national service, but, very properly, Scotland has been allowed to administer the review in its own way. The consultation and closure process has been divided into six regions. Three of these have already completed the process. Ninety closures are now firmly identified, with more to come. The criteria employed make some allowance for sparsity but, in the Scottish context, to measure provision by the criteria of three miles as the crow flies can be hugely misleading. I hope that when considering individual closures, the distance on the ground will be the vital measure. I gather that some consideration is being given to this in the Western Isles because of the dispersed nature of their settlements.

Finally, I return to the finances of the Post Office. I am much of a novice in looking at this issue, but I gather that one of the burdens carried by the Post Office is the shortfall in its pensions. I would be interested to hear from the Minister whether some of that shortfall can be attributed to the period before the break-up of the original Post Office and whether the current body is actually trying to cope with a millstone that has been around its neck for rather a long time. That is an element of the burdens that the Post Office carries that does not, at present, help to reach out to the population as a whole.

1.10 pm

Lord Hoyle: My Lords, like other noble Lords, I thank the noble Baroness, Lady Byford, for this debate. It is essential that we have it. So much has been said about the Post Office, rural post offices and the closures. It is true that the post office is very often the fabric of the society in a village. However, I go along with my noble friend Lord Whitty in saying that we are very often not looking at the wider aspects of the village and village life. There is certainly a need for joined-up government. There is a catalogue of services that have been removed from rural post offices. In 2005-06, government business worth £168 million was removed from the Post Office system.

We must also recognise that the viability of many rural post offices is difficult. It would be wrong if we did not face that: 56 per cent of them are just not viable. The question is how we begin to make them viable. Many of them serve fewer than 70 customers per week; 800 of them serve only five customers a day. Those communities deserve a decent service, and we must look at ways of providing it if it is not there. I welcome the remarks about using churches, church halls and, in particular, pubs, as well as having mobile vans in communities at certain times for people to have access to the service. We must move forward. At the same time, we must ensure that post offices are not deprived of services. I have never understood why we are talking about taking the card service away from the Post Office. We should instead be developing the Post Office as a bank. That is one way of moving forward.

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I shall join the noble Lord, Lord Dearing, and other noble Lords in talking about the universal postal service. It would be wrong if we did not mention this now because it is under threat and if we are not very careful it will be the subject of our next debate. The universal postal service is the fabric of our society. The fact that the Post Office delivers to 20 million addresses is part and parcel of it. Although we are rightly debating the closures, we must debate that as well. The noble Lord, Lord Dearing, picked on the real reason, which is that companies have been allowed to cherry-pick the bulk business, the profitable side; 40 per cent of it has gone and that amount is increasing. In this country, we have introduced competition faster than anywhere else in Europe. Our major competitors are from Europe where they are more relaxed and competition is not even beginning to bite; for instance, in the Netherlands and in Germany.

What is the problem? The real problem is Postcomm and the restrictions it places on the Post Office. Let us talk about access headroom—I know it is a technical term, but it is easy to understand. It means that the Post Office must have a set margin between the price it charges its retail customers and the amount it charges its competitors. It is obvious that that is nonsense and cannot continue. I turn to my noble friend as I have to declare an interest as a member of Unite, which represents managers in the Post Office. We suffered redundancies. Cuts worth £1.5 billion have taken place in the Post Office, which led to 50,000 redundancies, and we know that there are cuts worth another £1.5 billion yet to come, with further losses at the Post Office. However, that will not put it back on track.

Postcomm is the problem. It has two obligations: the first is to promote competition, which it is doing, as the noble Lord, Lord Dearing, pointed out; its second and primary obligation is to ensure that the universal service continues. That is what it is failing to do. It is failing to do it because of the restrictions that have been placed on the Post Office. They benefit its competitors, but we know what is happening to society. We are talking about post office closures now, but in future we will not be talking about them but about the universal service and our ability to post a letter and have it delivered. Even though some of the efficiency has gone, 94 per cent of letters are still delivered the next day, and even in remote parts of the island delivery is guaranteed in a minimum of three days. All that will be lost to us unless something is done. I ask my noble friend to pay some attention to that when she replies. I hope we will get some answers from her about what may happen.

The big thing is that an independent review is taking place. Representations have been made not only by the Royal Mail but also by the unions. Unless what we are saying today is listened to, the next debate will be not about post office closures but about the universal service, which we cannot afford to lose.

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