Postal Services

Part of the debate – in the House of Commons at 4:11 pm on 5 July 2004.

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Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness) 4:11, 5 July 2004

At the end of the urban reinvention programme, at least 95 per cent. of residents in urban areas should live within 1 mile of their nearest post office. That clear criterion has been laid down for the whole programme. The alternative to the managed restructuring that is under way would be an unmanaged, unplanned contraction of the network, with ad hoc closures leaving a very uneven geographical spread of offices and some areas losing all access to post office services. The managed programme to reduce overprovision—difficult though it undoubtedly has been—is far preferable to the alternative of unco-ordinated closures resulting from falling income.

I do not agree with the hon. Member for Lichfield in suggesting that the compensation available has been excessive. A standard formula, based on 28 months' income, has been negotiated with the National Federation of Sub-Postmasters. The 28-month figure for the value of a post office business is of long standing and well understood. We are effectively saying that the compensation is roughly equivalent to what sub-postmasters could have expected if they sold their businesses two, three or four years ago, before the changes of the past few years. That is fair. It is entirely reasonable that people should receive a decent price for their businesses—in many cases, after giving years of valuable service to their local communities. His remarks about excessive payments will cause great offence to the National Federation of Sub-Postmasters and its members.