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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 Edward Davey Edward Davey Shadow Minister without Portfolio, Liberal Democrat Spokesperson (without Portfolio) 12:24 pm, 14th December 2006

May I thank the Secretary of State for his statement but tell him how angry he has made millions of people throughout the country, including pensioners, whom the Government bullied into moving their pensions into bank accounts? Does he realise that he is sounding the death knell for thousands of local shops, rural businesses and communities?

The Government are trying to blame the public for post office losses but will the Secretary of State tell us the value of Government business withdrawn by Ministers from post offices since 1997? Post offices used to get 60 per cent. of their income from Government business; soon it will be only 10 per cent. Surely that proves that post offices losses were made in Whitehall.

The Secretary of State told us how generous the Government were to keep a subsidy for the Post Office. Will he confirm the results of a Treasury study that shows that, for every pound of subsidy for post offices, the rural economy benefits from between £2 and £4? Has any new study been undertaken of the high economic and social returns from the subsidy? Will he publish those studies?

The Secretary of State waxed lyrical about his proposed innovations to keep some limited postal services in remoter places. Why are his ideas so weak? How can we be sure that the policy will bring the new services and products that the Post Office needs? Why is he keeping Post Office Ltd under the control of the Royal Mail Group? He says that there are plans for new parcel pick-up services linked to mail order companies. That is great if it happens. However, does he not realise that Royal Mail Group puts restrictions in its contracts with post offices that are designed to benefit Royal Mail at the expense of sub-postmasters? Will he stop that?

There is a huge hole in the heart of the statement—the Secretary of State's failure to say anything about the future of Royal Mail. Will he confirm that its financial future is grim and that, on top of a massive pensions deficit, Royal Mail is losing huge amounts of business to private competitors? Will he therefore explain why he has failed yet again to make a final decision on the draft Royal Mail package that was produced more than seven months ago? Is not the truth that he will not stand up to pressure from the unions and Labour Back Benchers, and that he rejected the idea of an employee share ownership trust, which Liberal Democrats and Royal Mail management proposed, because of how it would look for the Chancellor when he needs some votes? Is not his failure to make the tough decision to sell shares in Royal Mail the genuine reason why he cannot offer the freedoms and the £2 billion investment fund for post offices that we propose, for which there is a hard-nosed economic and social case?

The statement and the Government give us the worst of all possible worlds. The Government are betraying our post offices, the Royal Mail and local communities throughout the country.