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Post Office Network

Part of Business of the House – in the House of Commons at 12:24 pm on 14th December 2006.

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Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform) 12:24 pm, 14th December 2006

I thank the Secretary of State for advance sight of his statement, initially in the weekend's papers, then consistently through the media during the course of this week, and finally with the hard text this morning. I apologise to the House on behalf of my hon. Friend the shadow Secretary of State, who is unable to be here today because he has been overseas.

The statement is both disappointing and wrong. It will cause fear and anxiety to people, often the most vulnerable, in every part of the country. It will destroy many good businesses simply because the Government do not have a long-term vision for the future of the post office network. Does not the Secretary of State recognise that if the local post office closes, often the last shop in the village closes as well, and that a van visiting for a couple of hours a week is no replacement for a post office that is open full-time? Of course, the Government have form on this issue. About 4,000 post offices have already closed under this Government; taken with today's statement, that means that in 10 years of Labour Government we will be losing more than one third of the post office network.

The Government's decision on the Post Office card account is welcome. Indeed, it is what Conservative Members have been calling for since the Government announced their intention to scrap it. I am glad that the Government have yet again responded to ideas put forward by Conservative Members and changed their mind on this issue. It is important that the new Post Office card account scheme is genuinely available to existing customers and that the application process should not be unnecessarily complex. However, the Secretary of State said that the contract for the new account may not go to the Post Office. Can he tell the House how many more post offices will have to close if the Post Office does not win this vital contract?

We all owe a huge debt of gratitude to our sub-postmasters and sub-postmistresses, who provide such a fantastic service to their local communities. They tell us that they do not want to depend on subsidy but want to have the opportunity to do more business and to serve their customers—yet that is exactly what the Government are denying them in today's statement, which is based on how many post office closures the Secretary of State thinks that he can get away with, not a real business case or an understanding of what consumers, especially the most vulnerable in our society, want and need. His vision is to have fewer post offices providing fewer services to fewer people.

The statement leaves many questions unanswered. When does the Secretary of State expect to publish a full list of the branches that are to close? Does he expect closures to be made disproportionately in rural areas? How will the process of selecting branches to be closed be carried out? Will the Post Office identify the branches to close, or will it allow sub-postmasters to volunteer for closure? How has the number of 2,500 been reached? Is it true, as reported in the press, that the Post Office wanted to close 7,000 of the 14,000 sub-post office branches? Allan Leighton and Adam Crozier are doing a remarkable job in trying to turn around the Royal Mail, but the Government appear to be determined to make them the fall guys for their own lack of vision.

The Secretary of State says that compensation will be paid where a post office closes. Can he confirm media reports that a sum of up to £70,000 is being considered? Does he anticipate continuing uncompensated closures? Will there be local consultation about possible closures? What will a local community have to prove to avert a closure? Indeed, will it have any say at all? What will the situation be if someone wants to reopen a post office that has been closed as part of this process or wants to open up a new one nearby? Would they be allowed to do so? He says that the annual subsidy will remain in place. Will that be at the same level as now for every year until 2011? Does the figure of £1.7 billion that he announced include compensation to those postmasters who close their post offices, and if not, how much extra will be made available for the compensation package?

We accept that Government and business must deliver their services in the most cost-efficient way, but the Government seem content merely to manage the decline of the post office network when they should be trying to bring new business opportunities to it. They should be announcing that they will allow post offices full access to working with carriers other than the Royal Mail. They should be announcing that they will work with local councils to encourage them to offer more council services through post offices. They should be doing more to give post offices the flexibility to offer a much wider range of business services than they envisage. They should be acting to prevent the Royal Mail from poaching businesses away from sub-post offices by undercutting the prices that they can charge for postage.

While the Government fail to come forward with policies to give post offices a better future, the Prime Minister blames it all on the customer. How can he say that, when it is his Government who have taken away £168 million of business from post offices this year?

The statement is a missed opportunity for the post office network, but worse than that, it is a tragedy for those who depend on it and the communities that will lose a vital piece of their economic and social structure. It brings us no closer to a sustainable post office network; as a result, we are destined to more years of uncertainty, decline and dissatisfaction.