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We now come to the main business, the Opposition day debate on post office closures. I have to tell the House that Mr. Speaker has selected the amendment standing in the name of the Prime Minister and has placed a 12-minute limit on Back-Bench speeches.
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I beg to move,
That this House
regrets the proposal to close up to 2,500 post offices;
recognises the vital role post offices play in local communities;
notes the concern and unpopularity amongst the general public of closing such a large portion of the network;
has concerns that the access criteria laid down for the closures consultation do not adequately take into account local geographical factors and public transport networks;
is concerned that the consultation period is only for six weeks rather than three months, as recommended by Cabinet Office guidelines;
believes that post offices must move with the times in the services they offer and that options for business expansion and developing business opportunities with local authorities should be explored further;
and calls upon the Secretary of State for Business, Enterprise and Regulatory Reform to instruct Post Office Limited to suspend the compulsory closure of sub-post offices while these issues are re-assessed.
This matter affects both sides of the House in equal measure. I was concerned a moment ago that only two Labour Back Benchers were sitting in the Chamber but I see that the numbers are now swelling. I shall try to keep my remarks to a minimum, because I know that Members from all parties want to speak.
We are entering a critical phase of the Government's closure programme. Half of the country's constituencies have now gone through the process of consultation and as a result approximately 1,120 post offices are already destined to close. The network change is well on its way, yet the chorus of dissent that surrounded the then Secretary of State, now the Chancellor, when in 2006 he published his proposals for the most radical programme of cuts in the Post Office's history has not faded away, as his successor will have hoped. In fact, the more people encounter the process at first hand, the more they realise that it is not just unfair, but in many respects illogical; not just badly thought-through, but in some cases even avoidable.
I have hardly got off first base, but I will. If I may, I will set the scene and then give way to a series of interventions from Members from both sides of the House so that I do not end up taking 40 minutes. The quicker I get through this, the better it will be for allowing everybody to have the chance to say what they want to.
I agree with what the Secretary of State has said on numerous occasions: we have to face the facts about the future of postal services in this country. The debate has not been convened whimsically. We understand that the Post Office is haemorrhaging around £4 million a week; that the development of online mail has eviscerated part of the Post Office's traditional customer base; and that in this difficult business climate, uncertain times lie ahead.
Although the closure of post offices is one of the most emotional political issues, we in the Opposition do not lead with our heads. Let me make it clear that we fully expect the network to shrink in size. We have never given a guarantee that no post offices will close, because such a guarantee is not ours to give.
I thank the hon. Gentleman for giving way. I thought that he might have been giving the Government too much of a defence in respect of the problems facing the Post Office. The effect of online ordering has been to increase the amount of delivery work undertaken by post offices. People order goods online, but delivering those goods is a new business opportunity for Royal Mail, with post offices as collection points.
The hon. Gentleman is potentially right, but we must distinguish between the post office network and Royal Mail, as it is the latter that makes those deliveries. That is an important distinction, and it must be admitted that the internet has displaced much of the revenue-earning activity previously enjoyed by post offices.
I give way to my right hon. and learned Friend the Member for Devizes.
I am very grateful to my hon. Friend. He was talking about the process by which the decision about closures was made. One post office to be closed in my constituency is in an area where a significant new housing programme is about to begin. The alternative post office is already notorious for being overcrowded and incapable of being expanded. Does that not suggest that the consultation process was a farce, and that what we are seeing is a lottery in order to meet a Government target?
My hon. Friend said that the consultation process was unfair, but is it not also fraudulent? In my area, we have been told that all that will happen if we succeed in persuading the Post Office to keep open one of the post offices that are threatened with closure in the Cherwell district is that it will simply go ahead and close another office in the district. It is clear that the Government are determined, come what may, to close all the post offices in Cherwell, however good the arguments against doing so may be. The consultation process is therefore wholly fraudulent.
My hon. Friend makes a crucial point. It is something that I want to expand on, ever so briefly, in a few minutes. If I may put it this way, we are involved in a game of pass the parcel. All hon. Members have in their constituencies post offices that are due to be shut, but if they succeed in keeping one office open, another one elsewhere will be closed. Therefore, what might appear to be a local success for one hon. Member becomes a local difficulty for another. That is one of the main problems that we face.
The hon. Gentleman will be aware that the Business, Enterprise and Regulatory Reform Committee has reported on post office closures. I put in a very detailed draft of evidence, including nine recommendations for changing the closure programme. However, 50 other hon. Members from both sides of the House also put forward evidence, and they included Front Benchers from the Conservative party. If the hon. Gentleman feels so strongly about this matter, why did he not offer any evidence to the Select Committee?
Because I think that it is improper for a Front Bencher to try to pre-empt and influence a Select Committee in that way. The proper way for me to speak about these matters is at the Dispatch Box in the House of Commons. That is what I am doing now, on a day when the hon. Gentleman has the opportunity to vote with the Opposition.
My hon. Friend is wholly right about displaced closures, but the problem is worse than he suggests. In my constituency, the county council is negotiating about taking over the post office at Laverstock on the edge of Salisbury, but despite that, the Post Office is insisting on closing it on
The hon. Gentleman will be aware that the Business, Enterprise and Regulatory Reform Committee—what used to be the Trade and Industry Committee—has looked into the matter quite deeply. The Committee is chaired by his colleague Peter Luff. It looked at the cost of haphazard closures, and reluctantly accepted that the Government's plan was the only way forward. Alan Duncan knows full well what the Committee recommended, and it looks a little sneaky to have this debate today, at a time when the Select Committee is away and the Chairman has no opportunity to reply. Is he afraid that some Conservative Back Benchers might have been persuaded by the Committee Chairman?
Much more sneaky is the fact that the hon. Gentleman is trying to hide behind the supposed conclusions of the Select Committee—which I think are not as he described—when he has signed the early-day motion in the name of my hon. Friend Mr. Evans. The wording of that early-day motion is exactly the same as the motion under consideration today, so he can have no option but to vote with us—along with the 35 other Labour Members who have echoed, word for word, what we are calling for in this debate.
I was not one of those who signed the early-day motion that the hon. Gentleman has mentioned, but is there not an element of hypocrisy in his approach? The previous Tory Government closed 3,542 post office branches. Why did they do that?
Order. Before the hon. Gentleman responds, I advise the House that the word "sneaky" is just about allowable, as is the right hon. Lady's use of the word "hypocrisy". However, we must be extremely careful about the words that we use. I know that hon. Members care very strongly about these matters, but we should nevertheless choose our words with care.
Thank you, Mr. Deputy Speaker. I think that the right hon. Lady should be aware of her own words. She said:
"I do not understand what the, so called, public consultation was for...I want Post Office Ltd to explain how this can amount to a meaningful public consultation, when they have ignored the views of 2,203 people."
We are seeing a picture of inconsistency, but my purpose today is not to keep on pointing out the inconsistency between what Labour Members say at a local level and how they might vote tonight; rather, I want to urge them to vote with us so that they can prove that they are honest and consistent.
Is my hon. Friend aware that one concern for people in constituencies such as mine in West Dorset is that the Post Office has absolutely refused to enter into discussions about how we might provide the voluntary effort that would cut its costs and keep the services open? Is that not an extraordinary state of affairs?
My right hon. Friend is right, but only half right. The Post Office has declined to embrace both voluntary efforts and legitimate commercial efforts. Even worse, it is discriminating against the commercial options that post offices and shops should be allowed to enjoy.
I thank the hon. Gentleman for giving way. As a member of the BERR Committee, I should point out that we said that we reluctantly accepted that there would have to be some closures, but not necessarily those planned by the Government. In both our original report and the recent follow-up to it, we have questioned where the figure of 2,600 closures came from, and asked why that round figure was chosen.
Does my hon. Friend agree that the Government and the Post Office have carried out the consultation process in an extremely underhand way? The process has been different in different areas of the country, and there have been attempts to gag the sub-postmasters and sub-postmistresses involved. The Government and the Post Office have tried to prevent any shops that might subsequently be set up when a post office is closed from selling the same products for a year afterwards. That will make it very difficult for a village shop without a post office to carry on trading. Are not all such tactics underhand?
I am very grateful to my hon. Friend the shadow Secretary of State, as he is being very patient and indulgent. There is serious anger many sub-postmasters in North-West Norfolk, who say that it is an outrage and a disgrace to be told that they will not get any redundancy pay if they carry on offering services for the lottery, the payment of utility bills, private courier services and so on. Does he agree that that is a disgraceful restraint of trade?
I thank the hon. Gentleman, who will be pleased to know that I plan to make some fairly harsh criticisms of the fundamental flaws in the consultation process.
I was attracted to the wording of the motion, but the hon. Gentleman has acknowledged that the post office network is losing a substantial amount of money. If I am to be tempted to vote for the motion, will he give an undertaking on behalf of his party to put £1.7 billion of investment into the network so that it can be sustained in a good old socialist fashion up to 2011?
I will not do that, and furthermore I do not need to do that to win the argument today, because the whole purpose of what we say is that we should give an opportunity for the money that is being spent to go a lot further, and give a lot of branches the opportunity to continue to exist; at the moment they are being bulldozed into submission.
On a point of order, Mr. Deputy Speaker. A few moments ago, an hon. Member suggested that the Select Committee on Business, Enterprise and Regulatory Reform indicated that it supported the Government's closure of 2,500 post offices. I have before me a press notice issued by the Select Committee. It says clearly:
"This is not a report about the principle of closing 2,500 sub post offices as that is settled government policy and one on which we have commented previously. It is a report about how the process is being managed and the implications for communities."
That is not the same as the Committee saying that it supports the closures.
Order. That is not, strictly speaking, a point of order for the Chair. It is more a matter that would normally be raised in the course of debate.
I will read out the recommendation in the report. It says quite clearly:
"We do not think it is satisfactory simply to accept that the network may continue to shrink in an unplanned way between now and 2011; Post Office Ltd should be obliged to use its best endeavours to keep the network at a minimum of 11,500 fixed outlets."
That is the report.
The hon. Gentleman likes to portray himself as the saviour of the post office network, but he does not have a plan for investing in upgrading the network. He was just asked a clear question about his plans for investment. He has a series of proposals, supposedly aimed at increasing revenue, but nothing on increasing the investment in modernising the post office network. How can he justify claiming that he can save all those post offices?
The investment in the post office network is, to a large extent, already made by private individuals who take a risk and invest in their own company—the family business—so the hon. Lady's question is misdirected. Much more pertinent is the question of what those businesses can be allowed to do to enable them to expand and have a prospect of survival, rather than annihilation. We would like them to be able to take on more tasks, so that they can expand the business that they can undertake. Sub-postmasters are entrepreneurs. They want to develop new services and they want to survive on business, rather than on subsidy.
Sub-postmasters should be able to develop more financial services; they should be able to take on local council work; they should be able to take on Government services; and they should be able to do a lot of things that the Post Office currently forbids them to do. Let me briefly say why we think that the current activity forced on the Post Office by the Government is flawed.
No. I will move on, as I said I would.
First, there are the flawed access criteria. They are simple, linear, as-the-crow-flies measures. There is no appreciation in them of hills, crossroads and main roads that have to be crossed. There is no proper appreciation of the nature of a community built around the use of a post office. Furthermore, a lot of the census figures and population figures that the Post Office is using are completely out of date and unrelated to the effective market catchment area of the post offices that are threatened with closure.
Many in this House think that the consultation is a sham. They know that the 2,500 figure has been picked out of the air. The Post Office is ramming through the closures, and if a Member of Parliament succeeds in keeping one post office open, another one will shut. Absurdly, someone who phoned up the Post Office and asked, "Excuse me, why is my village post office closing?" was told, "Because the postmaster wants to retire." "That is not true," said the caller; "I know it; I am the postmaster." What is more, community is being pitted against community, because when a post office in one village is saved, another is shut elsewhere.
As for the post offices that are told to close, there appears to be no rationale for distinguishing between the ones that the Secretary of State always cites as having only 20 transactions a week, and those that are far more active and very popular, and which are run alongside a profitable shop and are basically viable businesses that are being forced to close for no rational economic reason whatever.
We are calling for a freeze on the consultation. If the Government doubt whether that is possible, let us point out that, to a limited extent, they have done it already; they suddenly realised that their plans cut across the campaigning period for a local election and, indeed, a mayoral election, in which their own candidate even threatened judicial review because he is so against the policy of the Government whom he is once again pretending to support. The idea that there cannot be a freeze is absurd. There has been a semi-freeze already, and we think that there should be a suspension so that all the new ingredients that have become clear over the past few months can be factored into a revised programme that could perhaps, on the same money, allow many of those post offices that are currently being forced to shut to stay open.
The hon. Gentleman talks about maintaining viable post offices, but in fact only 4,000 post offices in this country are profitable—a word that he previously used. How many of the other 10,000 would he subsidise, and how many of them would be expendable under his plan?
I congratulate my hon. Friend on the way in which he is making his case. Is he concerned that the 2,500 post offices are just the tip of the iceberg, as a number of other post offices have been closed on a temporary basis, including the one in Heath End in my constituency? Is that not just another political trick? The Government are trying to keep the number of those post offices out of the 2,500, but those post offices are also condemned.
I would like the hon. Gentleman to return to the point that he started to make, but failed to finish, in reply to the question by my hon. Friend Michael Jabez Foster. He started to explain that he thought that a particular number of post offices would make for a viable network, but he rapidly moved on. Will he today commit himself to a figure, and will he say what additional expenditure and commitment the Government should make to ensure that the number is reached? Before he quotes back at us some of the proper representations that we have made in our constituencies, let me ask him to answer the question.
I shall make a few more points; I promised I would not take up too much time, but this has been a shared performance. However, the clock is ticking away. Let me come on to something that I think is enormously important, both for urban and rural communities, namely the link between the post office and the shop. In many post offices, and most of those threatened with closure, there is an alliance with a shop that is part of the same business, and is on the same premises. A shop is an essential part of any community. It is its focal point, its hub. We are not just talking about the end of the opportunity to go and buy some stamps and post a letter; more often than not, the closure of the shop is in harness, in tandem, or in parallel with the closure of the post office.
Perhaps I can give my hon. Friend some more ammunition. In Bicknoller in my constituency, we have a voluntary shop and post office. Every single volunteer goes there because they want to, and the postmaster gives everything that he earns back to the post office, yet it is still being shut. When I asked the Post Office why, it said, "It needs to be shut; you haven't got enough people," even though everything goes back into that shop to keep it going. Does not my hon. Friend find that ridiculous?
The post office network and shops are private enterprises. Families have risked money and borrowed—often against their only residence—to start and run a business. Many who have started to do that only recently, having taken a risk in good faith so that their shop can go hand in hand with the post office, are finding that the rug has been pulled from beneath them, that the shop and the post office will go, and that they may not be able to meet their debts.
I shall give way to hon. Gentlemen in a moment. I want to make a couple of important points first.
I am extremely concerned, as are hon. Members in all parts of the House, about the way that the compensation is working. It is all very well to offer a postmaster compensation in the hope that he will not face financial adversity, should the post office shut, but that compensation attaches only to the post office. As I have already said, many of those enterprises run in parallel with a shop. What is deeply pernicious is the way in which the Post Office is setting terms and conditions on the compensation in a way which, as well as closing the post office, will also destroy the shop.
What the Post Office is doing, which I think amounts to a restraint of the trade of shopkeepers, is saying that if they take the money for closing down the post office counter, they will be prohibited thereafter from doing certain things in the shop. They will not be allowed to sell lottery tickets. They will not be allowed to conduct certain transactions which, in the eyes of the Post Office, might technically compete with it. They will not, for instance, be able to install a PayPoint terminal, which is a revenue-earning service for the shop, but competes with the Post Office. So in offering compensation, the Post Office is effectively putting a restrictive covenant on trade that could be enjoyed by the shop. [Interruption.] Rob Marris says, "Standard business practice". If he thinks it is standard to be so irresponsible, let me tell him that I do not.
It is standard business practice. I know that as a lawyer working in employment law. There are restrictive covenants in all kinds of contracts with respect to the activities that an individual may and may not undertake. People sign up to that. It is a financial transaction. Furthermore, as the hon. Gentleman knows, it is a financial transaction with those restrictions which is supported by the National Federation of SubPostmasters.
If the hon. Gentleman really thinks that the future viability of the Post Office will be undermined and destroyed by village shops being able to get someone to pay a bill at their counter, the advice that he might have given to business in the past does not bear scrutiny.
Does my hon. Friend agree that there may be something else that we are in danger of losing—the post office branch as a social safety net? There are those who are alone and possibly elderly, who come into the post office regularly for benefits or pensions. If they do not come in one week, perhaps the only person who will notice is the sub-postmaster or sub-postmistress. If the branch is no longer open, who does my hon. Friend think will fulfil that role?
I shall make progress and then give Labour Members a final chance to chip in. I am conscious of the clock. The House can tell that I have been racing through my remarks as quickly as possible. I want to give hon. Members a chance to speak, but I shall point out aspects that matter particularly to Labour Members.
There was an early-day motion at the beginning of the year signed by 35 Members from the Labour Benches. It is pretty well word for word the motion before the House today. The only respect in which I have heard that it is thought to be different is the use of the word "instruct" in the context of instructing the Post Office to suspend its consultation. That is dancing on the head of a pin. It would be intellectually dishonest of any Member to think that that gives them a let-out clause.
The Government, through the shareholder executive, owns the Post Office. They instructed the compulsory closure programme to start in the first place, so they can equally instruct the Post Office to suspend it. As I said earlier, in part at least because of the local elections, they have already done just that. So the insinuation of the word "instruct" is no excuse for those hon. Members who have signed the early-day motion not to vote with us tonight.
Furthermore, we know that hon. Members, including Ministers and Cabinet Ministers, are campaigning in their own constituencies. I entirely accept that there are occasions when the Government—even the Government of their own colour—do something and hon. Members want to make a stand for their constituents, but what we are seeing are not just a few scattered examples of an hon. Member saying, "I must defend the interests of my constituents"; we are seeing a wholesale operation across the entire map, with almost every Member doing that. Thus, wholesale activity makes a mockery of what should be collective responsibility. Collective action has driven through collective responsibility.
Of even deeper concern is the fact that the Secretary of State revealed in an interview
"that he might campaign against Post Office closures in his own back yard."
"'I want to see what the detailed proposals are'"— he happens to be in charge of them, but never mind—
Fair enough, except for this: when everyone is doing it, it is not just representing our constituents; it is collectively denying the entire policy of the Government.
There is a more perturbing point. As we all know, if a Member succeeds in keeping one post office open, under the current plans another one will shut. We can but ask whether a Secretary of State who is in charge of the shareholder executive that owns the Post Office might perhaps have more clout in those negotiations than a mere Back Bencher. If the Secretary of State can keep one or two post offices open in his constituency, where does that leave his colleagues in a neighbouring constituency?
A few moments ago, if I understood the hon. Gentleman correctly, he was arguing for more predictability in the framework in which shopkeepers operate, depending on whether or not they have a post office. Part of that predictability relates to the level of subsidy that they can expect from the Government. What level of subsidy for the sub-post office network is the hon. Gentleman suggesting?
Yes, but it affects every constituency. That is why it is pertinent for me to point out that 90 Members on the Government Benches have been campaigning in their constituency against post office closures. That is about a quarter of the parliamentary Labour party, and includes seven Cabinet Ministers. It will be interesting to see how they vote tonight.
I cannot give any polite logical explanation for the perceptive observations of my hon. Friend.
The Secretary of State knows that our arguments are valid. He is very uncomfortable about the closure programme that has been forced on the Post Office. He knows, because he will have heard it every day from right hon. and hon. Members on the Labour Benches, that there is deep unhappiness across the entire House about the way that is progressing. He has a reputation in the Government. As shadow Secretary of State for Business, Enterprise and Regulatory Reform, I think that occasionally he speaks a lot of sense. However, the problem that he faces when he speaks that sense is that it is not necessarily popular with his Prime Minister—the very man whom he once described as someone who would make a "bloomin' awful" Prime Minister— [Interruption.] I translate for the sake of decency.
Today, however, we learned something else, and the finger of suspicion points at the Secretary of State. We are told that somewhere in Downing street, someone—thought to be a member of the Cabinet—is a poet, a bard. Given the flavour of the language, it can be but one person. The four lines published on the website of The Spectator today are clearly the Secretary of State's:
"At Downing Street upon the stair,
I met a man who wasn't Blair,
He wasn't Blair again today,
Oh how I wish he'd go away."
Today is an opportunity for the Secretary of State to enjoy a massive political revival. He could make himself one of the most popular and rational men in the Government by instructing the Post Office to suspend the closure programme and give much hope to the many hard-working postmasters whose enterprise, hard work and service to their communities deserve better than they are getting from the Government.
I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
"recognises the vital social and economic role of post offices, in particular in rural and deprived urban communities;
notes the decline in post office customer numbers in recent years and the financial losses of £174 million incurred by the network in 2007;
further recognises the effect of changes such as direct debit facilities and increased use of the internet for payment and communication;
commends the Government's action to support the post office network with investment of up to £1.7 billion up until 2011, including an annual subsidy of £150 million;
further notes that this subsidy did not exist under the last government and that without it thousands more post offices would be under threat;
and urges the Government to continue working with Post Office Limited to ensure a viable and sustainable network for the future.".
Perhaps I can reassure Alan Duncan. The poetry that he has just quoted is not mine. I say that for one simple reason: I would write better poetry. Those are absolutely not my words. I do not mind my own quotations being attributed to me, but I fundamentally resent words that are not mine being attributed to me.
Right at the beginning, I should like to acknowledge the important economic and social contribution that post offices make in all our constituencies. They play an obviously important role in cities, towns and villages right across the country. It is perfectly right and proper that hon. Members on both sides of the House should today have the opportunity to express our appreciation for the work that thousands of sub-postmasters do day in, day out.
I shall in a minute. I shall give way to as many hon. Members as I can, but I ask for the House's indulgence for a few minutes so that I can begin to make my argument; I suspect that that is all I shall be able to do this afternoon.
Having acknowledged the importance of post offices, I should say that, like my hon. Friend Mr. Clapham, I believe that we should acknowledge one other inescapable fact, however difficult it is. The role of post offices is changing, first as a result of technology and much greater use of the internet, and secondly because of different patterns of consumer behaviour. Both those factors have combined to reduce substantially the numbers of people using their local sub-post offices and to increase substantially the losses being incurred by the Post Office. We have a responsibility to address the reality of those changes.
I hear what the Secretary of State is saying. However, he has to accept that we have a ludicrous situation in south Essex, particularly in my constituency. Post offices that are profitable and serving an expanding population are being closed. Essex county council has put £1.5 million on the table with a view to trying to allow a number of those post offices to continue in service for the benefit of the local community. Will the Secretary of State at least delay the decommissioning of those branches to give the council the time it requires to explore that possibility further?
I am grateful to the hon. Gentleman for raising that issue about Essex; I want to say something specifically about the Essex proposal later. I hope that he will allow me to do that in my own time.
Let me finish my point. Many hon. Members on both sides of the House will be interested in exploring whether the proposal opens up a new opportunity. I hope that it does. Obviously, the discussions need to continue. I shall come later to the detail of the proposition, but it might be helpful if I make it clear now—I was going to do so later—that today I have written to the chief executive of the Post Office about these matters. I have placed a copy of the letter in the Library so that hon. Members can refer to it if they choose.
In Lancashire, the consultation process finished two and a half weeks ago. When I received a letter from Opposition Front Benchers, I was tempted to consider voting with them today. However, I have read the Opposition motion. Does the Secretary of State agree that if we approve it, we will simply delay the whole process? In the absence of any new money, the same number of post offices will close in the end as are scheduled to close now.
I am grateful for that point. In a few minutes, I want to come to the substance of the motion.
I shall give way in a moment. I want to come to the substance of the Opposition motion. As my hon. Friend the Member for South Ribble has rightly identified, there is a significant problem with the proposition that we should simply postpone making decisions. The hon. Member for Rutland and Melton has made it clear—this is important for my hon. Friends, who I am sure heard what he said—that he is not prepared to match the subsidy that we propose to invest in the Post Office. Somehow, he believes that that will allow the subsidy to go further, but of course it will not—it will mean a significant diminution in the effectiveness of the subsidy that is going in.
I am grateful to the right hon. Gentleman for giving way; he and I share an interest in some of the post offices scheduled for closure, including Greenodd post office. Does he agree that this should not simply be a case of pushing the issue off into the far future? There is a perfectly good framework that we could use to suspend the process and give local communities the chance to make decisions that affect their lives. I am thinking of the Sustainable Communities Act 2007, which comes into force as of this September/October. We have the ridiculous situation in which the Government would write to local authorities such as South Lakeland asking what they could do to make communities more sustainable. The response would be, "Well, we would have said that our post offices should be kept open—but you've shut them."
We have not prevented local authorities from making arguments about how there could be a sustainable future for the local sub-post office network in my or the hon. Gentleman's constituency, for example. I do not accept that there is a legal conflict between the process now under way and the future legislation to which he has referred. We are not preventing local authorities from making any contribution to the debate about a sustainable future.
Will the Secretary of State confirm that three quarters of post office branches are not profitable and that many more would close if there were not £150 million a year of public subsidy? Has he noticed that the Government's amendment explicitly supports that subsidy, whereas the Opposition motion does not? Will he issue a challenge to the Opposition, at least when they come to vote on the substantive motion, to support the Government amendment and the public subsidy to the Post Office?
My hon. Friend must have had a sneak preview of my speech, because I am going to make that point soon. It is an important issue for my hon. Friends to consider during this debate. They are being invited to support a Conservative motion that might will the ends but does not provide the means. I have a lot of respect for the hon. Member for Rutland and Melton, but he has to be able to stand in this place and say that he is willing to make the investment in sustaining the network for which he now claims to be the champion. He has completely failed to do that.
The hon. Gentleman was specifically invited to comment on the issue at the beginning of the debate; we will have to check the record in Hansard. He will have to deal with what I am sure will be in Hansard tomorrow. He was specifically asked by my hon. Friend Martin Salter to say whether he would commit to the £1.7 billion. We all heard him say clearly that he was not going to do that.
I should like to reassure my right hon. Friend that I have no intention whatever of voting for the Conservative amendment, which comes from a party that when in government had absolutely no compunction about closing post offices, schools, hospitals, mines and heavy industry. However, there is real concern in my constituency about the proposal to close three highly efficient and consistently well-used post offices. I entirely accept that the usage of post offices has changed, but the people who use them most consistently and will be most severely affected if they are closed include the elderly, the disabled and single parents with small children. Is it not possible for the Post Office to put forward a proper cost-benefit analysis of what it is proposing as regards closures so that the consultation is genuine?
I have a great deal of respect for my hon. Friend, who, like all other Members of this House, is perfectly entitled to put her argument to the Post Office, which has the responsibility for making these decisions in individual areas. Ministers are not making decisions about which particular sub-post office should or should not stay open. I am grateful to her for acknowledging that there has to be change in the network. My advice to her—I am sure that she does not need it from me—is that if strong arguments can be put, they should be. The Post Office has a responsibility—
When I have dealt with my hon. Friend's point. When she has made those arguments, as I am sure she will, the Post Office, working together with Postwatch, will have to address them seriously. We acknowledge the substance of her point; that is why we are making £150 million-worth of subsidy available to support a much more extensive network than would have been supported if we were simply considering these issues on the basis of profit or loss—which post offices were making a profit and which were not. That is not part of the access criteria. We are trying to explain how the new network will work, how it can be sustainable and how it can address the concerns that my hon. Friend and others have raised.
I am grateful to the Secretary of State for giving way; he is being very generous. Given that seven Cabinet Ministers are campaigning with faint protest against the closure of post offices in their own constituencies, will he give an undertaking to the House that there will be no special access arrangements for Government Ministers visiting either him, other Ministers or officials in his Department, and that there will be equal access for all Members of this House campaigning against post office closures?
I am happy to give the hon. Gentleman and the House that assurance. The ministerial code makes it very clear, and rightly so—this has never been contested across the House—that Members of Parliament, even when they are Ministers, are perfectly entitled, as Members of Parliament, to make representations, in this case not to Ministers but to the Post Office, which is making decisions on closures. It would be an outrage if they were not able to do that. Of course, if any right hon. or hon. Member wants to come and discuss this issue with me, I am always available to have such discussions. There will be no special access—that would be quite wrong—and I can assure the hon. Gentleman that no one has sought such special access.
Rightly, many Members have made specific representations on behalf of individual post offices, and progress has been made in some cases. Does my right hon. Friend think it significant that although the Opposition motion makes no commitment on additional moneys, Alan Duncan seems to have hinted at the same number of closures taking place? Will my right hon. Friend expand on the implications of that dichotomy and the contradiction whereby the Conservatives want the same level of closures without committing to provide the same amount of money? That sends out false hope to many of our constituents who will have been misled by the Conservative motion.
I would very much like the opportunity to do that, and if I can make some progress I will do so.
I will give way to the hon. Gentleman and then make some progress.
The decision has been taken that the post office network needs to be reduced. The consultation is about the details of that in every local area and how it can be most sensibly dealt with. That is a decision of the Government, and that is why the Post Office is now conducting the consultation.
As my hon. Friend Mr. Evennett says, there is a widespread view that this whole consultation process is a complete farce and a sham. What advice should I give to the postmaster at the Minley estate in Farnborough in my constituency? The Post Office says that the footfall in his branch is 591, yet he has conducted a survey that shows a 50 per cent. increase, without encouraging people to come in to make up the numbers. Is the Secretary of State saying that this consultation is going to make no difference whatsoever or that the Government are going to listen and look again at the figures, because this will apply to constituencies across the country, not only in rural areas, but in urban areas?
I would regard it as the duty of the Post Office to look seriously at arguments such as the hon. Gentleman's. If there is evidence that the figures are wrong or inaccurate, there is an opportunity in the consultation process—this is why it is happening—to make those arguments and for those representations to be taken into account. Postwatch is there to ensure, as a neutral umpire, that the process is being undertaken fairly. [ Interruption. ] Hon. Gentlemen who are scoffing at Postwatch need to be very clear about what lies behind that scoffing. Postwatch is a neutral, independent observer. If Mr. Francois, whom I heard scoffing—I do not think he would deny that it was him—would like to give the House evidence to suggest that Postwatch is in any way acting unfairly or improperly, I would like to see it now.
Postwatch is going to form part of a new, invigorated national consumer council. [ Laughter. ] Let me remind the hon. Member for Rayleigh, in case he has forgotten, that his Front Benchers have supported that policy. I do not understand the mirth that he is concocting; it is nothing other than a concoction. This debate does not need ridiculous rhetoric and phoney arguments of the type that he is putting forward. We should have a debate about the reality, not the bogus truth and distortions that he and others are bringing to this debate.
Will the Secretary of State accept that there is genuine concern about the validity of the consultation process? The Southern Daily Echo is a politically impartial newspaper but nevertheless felt it necessary to publish a leader entitled "Post Office plan was a farce from the beginning", pointing out:
"In many ways it would have been better if those in authority had simply announced their targets and then closed the book. All that this exercise has achieved is to deepen the anger amongst so many communities who now feel doubly cheated over this issue."
One of the MPs whom the article quoted in support of that view was Mr. Denham, the Secretary of State's Cabinet colleague, who is protesting about the ridiculous closure of a post office in his constituency, where the alternative, as he points out, is at the top of the steepest hill in that constituency.
I am sure that there is such a thing as a genuinely independent newspaper. I personally have not read one, but I am sure that the hon. Gentleman has found one. I do not think that his argument is the same as that of the hon. Member for Rutland and Melton—that we should have just closed the post offices without any consultation. Today's argument is about the consultation process.
I am not going to give way for the moment.
I accept, of course, that people have expressed criticism of the consultation process, and they are perfectly entitled to do that, but my job is to try to ensure—we have tried very hard to do this—that people have the opportunity to pose a counter-argument. However, we have made the decision, which I am inviting the House to support, that the post office network will need to reduce in size. The hon. Member for Rutland and Melton has acknowledged that there needs to be a reduced network; the question for us today is how we can best manage that.
If the hon. Gentleman wants to raise the same point, then I have already dealt with it, although he might not like the way that I did so. If he has a different point, we will come to that later.
I will give way to the hon. Gentleman, and then I really would like to make progress. So far, I have got to page one of my speech. I do not want to intimidate the House, but I have 28 pages left to deliver.
I am grateful to the Secretary of State for giving way, albeit with reluctance. The serious point is that the consultation concerns which post offices to close, and my hon. Friend Alan Duncan made the crucial point that if, as a result of consultation, local pressure and new figures, it is decided not to close a post office, the policy that the Secretary of State is pursuing means that somewhere that is not on the original hit list will go on it. Will he explain to the House how that can be justified, and how the notion of the consultation being genuine can be correct if we are talking about such a trade-off? If it is possible to prove that a specific post office has a justified future and is viable, surely that should be the end of the matter.
I accept that that is an important point. I was going to deal with it later, but I shall try to deal with it now. The criticism that the hon. Gentleman has made of the one-for-one rule is not true. We argued that up to 2,500 sub-post offices need to close, but we have never said that precisely 2,500 post offices must close.
No, that is not what the Post Office is saying. Let me try to deal with the point by referring to what is actually happening: 14 area plans have been signed off for closure and in six of those areas, there was no one-for-one replacement requirement, but in the other eight there was. That is the point that I am trying to argue. There is no absolute rule of one in, one out; that is not how the Post Office is seeking to deal with the issue.
I thank my right hon. Friend for giving way; he is being very generous with his time. I share concerns about the consultation process, but does he share my anger about the fact that Tory-controlled Swindon borough council has not taken part in the consultation exercise, and did not attend any of the meetings held by Postwatch or the Post Office? The Conservatives in Swindon are now jumping on the bandwagon, but have made no representations to the Post Office or to Postwatch about the closures in my constituency.
I am surprised that that is the case, given the arguments that the Conservative party has been trying to deploy in this debate. It is obviously for Conservative councillors in my hon. Friend's constituency to explain themselves. In this place, Conservatives foam at the mouth about the injustice of post office closures, but when they are asked to contribute to the debate on how we can sustain the post office network, they make no contribution at all.
No, I will not give way to the hon. Gentleman now. If he will allow me, I would like to make progress with my speech. I have been speaking for 20 minutes and, as I said, I am still on page one.
It is precisely because we want to support the network, and ensure that it can continue to play the role we want it to, that the Government, on behalf of the taxpayer, are investing unprecedented resources in the post office network. The sum of £1.7 billion was referred to, and it is true that that is going in until 2011, including a new annual subsidy of £150 million a year, which will help to keep open thousands of non-commercial branches that it would be impossible to sustain were it not for this intervention.
It is worth reminding ourselves—the facts can sometimes be difficult and uncomfortable—that no Government funding or subsidy was provided at all during the period from 1979 to 1997, a period in which 3,500 sub-post offices closed. No effort was made by Conservative Ministers at any time in those 18 years to keep those sub-post offices open. Believe it or not, there are still a few hon. Gentlemen here who were Members in the House at that time, and we should hear from them at some point about the attitude they took in their constituencies when those sub-post offices were closing.
May I cite to the Secretary of State some figures pertinent to what he just said? From 1993 to 1994, the Post Office was in profit by £25 million; from 1995 to 1996, it was in profit by £35 million; and in 1996-97, it was in profit by £34 million. It was only with the arrival of his Government—this was not, I am sure, cause and effect—that it plunged into deficit.
I am not disputing the hon. Gentleman's figures about profit, but that is not the argument. The argument is that 3,500 sub-post offices closed and the Conservative Government made no effort to keep any of them open. If he wants to contest that fact, let him come back to the Dispatch Box and describe the actions— they always speak louder than words—that the Conservative Government took to keep the network at its existing size. They took no such action.
One other rather inconvenient truth for the hon. Gentleman is that the use of the internet poses the greatest challenge to the post office network. Every month, 1 million people renew their car tax licences online. They used to do that in sub-post offices—that is true. It was certainly true in the 1980s and the 1990s, because we did not have the internet.
No, I will not.
Let us be clear about this, because we need to hear it from the hon. Member for Rutland and Melton. Is his argument that he would go back to a time when people could not renew their tax discs online?
The hon. Gentleman shakes his head because we know that is what he is going to say. But that is why post offices have lost so much business. It is complete pie in the sky— [ Interruption. ] He knows that. I do not remember him making that argument in his speech.
Post Office Ltd needs to compete for business. All that the Conservatives are saying is that they would delay the closure of 2,500 post offices, and all that would do is delay the inevitable. Prices would be dragged down in bidding for competition and business, and sub-postmasters and postmistresses would be paid less for transactions. It would destabilise the whole system.
No, I will not give way for a while now.
The hon. Member for Rutland and Melton asked why the Post Office imposes restrictions on what sub-post offices can do and went through a long list of them, as did one of his hon. Friends. He might be interested to hear what Mr. Thomson, general secretary of the National Federation of SubPostmasters, said during the recent Select Committee inquiry in response to a question from my hon. Friend the Member for Barnsley, West and Penistone. He was asked why all these unreasonable restrictions were in place, and he said:
"I make it absolutely clear, there are no restrictions on what existing sub-postmasters can do."
We have dealt with that canard as well. If the Post Office operated—[Hon. Members: "Wrong quote."] It is not the wrong quote; it was made only a few weeks ago. [ Interruption. ] It is entirely relevant because the hon. Gentleman argued that, if all the unreasonable restrictions could be lifted, somehow all these businesses could suddenly move from making losses to making profits. That is exactly the hon. Gentleman's point, and it is entirely wrong.
The hon. Gentleman made specific reference to the lottery as well. It is important to recognise what the general secretary of the National Federation of SubPostmasters had to say on that, too. He said that choices had been put in the way of existing sub-postmasters and went through the four main ones, but on the lottery he said:
"If you think about it, if a sub-postmaster, for example, was earning £5,000 a year on the Lottery commission and he just wanted to move that Lottery to the retail side"— on which there is no restriction—
"so he is going to keep it, why would the Government possibly want to use taxpayers' money to give someone compensation for something they are continuing to do?"
That makes absolutely no sense.
With great respect to the hon. Gentleman, I am going to make progress.
If the Post Office operated on a purely commercial basis, with no external subsidy, it is estimated that up to four times as many branches would have to stop trading. However, we do not believe that the Post Office should be operated purely as a commercial service. That is why we have committed such a large public subsidy and why we are working with Post Office Ltd to secure a more stable network for the future. George Thomson, general secretary of the National Federation of SubPostmasters, also recognised that. He said recently that,
"although regrettable"— and it is regrettable—
"we believe that these closures are necessary to ensure the remaining post offices are able to thrive in the future."
We believe that changes are necessary, but we also aim to give people new reasons to use the Post Office and provide a range of services that make it a local provider of choice.
Let us remember that, even after the closure programme is over, the Post Office will still have a bigger network than all the banks put together. It will be some three times bigger than the top five supermarket chains combined. It will still have an unparalleled reach into every community—every corner of the UK—and continue to fill an important social and economic role through the post offices in the urban and rural communities that they serve.
The Post Office has been rising to the challenge of innovation and developing new products, contrary to what the hon. Member for Rutland and Melton said. For example, it is the biggest provider of foreign exchange in the country and a major provider of car insurance. It has launched a new broadband service in partnership with British Telecom, whereby people can pay in cash if they want. It is introducing some 4,000 free-to-use cash machines, often in the most deprived areas.
Not for the moment.
The Post Office has begun to exploit the great potential offered by internet shopping and mail order through the Local Collect service, which allows customers to collect deliveries at their local post office. It has introduced a new secure Christmas pre-payment scheme for savers from this Christmas onwards. The Post Office must travel that road of new services and new reasons to go to post offices, all built on a brand that people can genuinely trust.
The network must also fulfil its customers' modern-day demands. That is the basis for the decisions that we have made, after careful consideration, about the best way of sustaining a substantial network of sub-post offices. It will remain a substantial network in the light of the significant changes in the way in which the public—our constituents—use those services.
The current difficulties that the post office network faces have rightly been the subject of many debates. It is undeniable—no one has sought to dispute the facts, because they cannot—that the Post Office made losses of approximately £3.5 million a week, every week, last year, with 4 million fewer people a week visiting post offices compared with just two years ago. That is a drop of nearly 20 per cent. in customers—again, our constituents—who use sub-post offices.
No undertaking could afford to ignore the consequences of changes of that magnitude. As my right hon. Friend the Prime Minister said today, 800 post offices have fewer than 16 customers a week, and each transaction costs the taxpayer—all of us—£17 in public subsidy. In urban areas, some 1,000 sub-post offices compete for business with at least six other post offices within a mile of them. That is happening at a time when the number of customers is falling. [Interruption.] Opposition Members say from a sedentary position that we are keeping some of those sub-post offices open. We are—that is the precise point of the access criteria and the subsidy. We recognise the social role of post offices and we have to strike the right balance. [Interruption.] If the hon. Member for Rutland and Melton is asking why we are not closing them—
Apparently, he is not saying that, though he was hinting at it. The point of our actions is to keep those sub-post offices open, despite the losses that they are making, to ensure that his constituents and rural areas get a proper service. [Interruption.] He says that we should stop going on about the losses.
Order. Interjections from sedentary positions make it difficult, not only for the House to know what is happening, but, more particularly, for the Official Report to understand what is going on. If hon. Members want to intervene, it would be helpful if they stood up and did it in the normal way.
Let me take the Secretary of State back to his comments about the parcel collection service. Does he accept that decoupling Royal Mail from the Post Office would allow the Post Office to work with competitors and increase and expand the capacity for that, which could provide a new revenue stream for the Post Office?
As the hon. Lady knows, the regulator has already made such a proposal, which will have to be carefully considered. It is a matter for the review that we have set up under Richard Hooper, who will examine all the consequences of proposals that people have made. However, today is not the time to deal with that specific proposal. The innovation that is under way in the Post Office confirms that we should support it in its pursuit of new business. We are doing that in parallel with the other difficult decisions that must be made now if we want the network to have a sustainable future. With great respect to the hon. Lady and the Liberal Democrat party, when one has been out of government for 100 years, one can make a series of decisions that have no consequences. Someone else will always pay for them and, worse, because we are considering Liberal Democrat economics, one can spend the same pound several times over. I have great respect for the hon. Lady but, in the real world, those are not genuine choices that Governments can make.
I am one of those who was here when the Conservative party was in government. I want to ask two questions. First, how many sub-post office closures during that period were voluntary, in that the postmaster or postmistress retired and no one could be found to replace them? I do not know whether the Secretary of State has that figure, but it is relevant if he levels complaints about the Conservatives when they were in office. Secondly, I have just renewed my passport and driving licence at a post office in the Palace of Westminster. Will the Secretary of State give an assurance that the proposals— [Interruption.]
Order. That is enough of an intervention. The Secretary of State has indicated that he wants to make progress. Many hon. Members are trying to catch my eye. I appreciate that it is important to debate such matters but, unless we have fewer interventions or more progress, many hon. Members will not catch my eye and will be disappointed.
I apologise, Mr. Deputy Speaker. Will the Secretary of State seriously consider the proposition by Essex county council and other organisations to save post offices, because they believe that they can put money in, which will enable the post offices to stay open?
Yes, I want the Post Office to consider the proposal from Essex county council seriously. I have made that clear, as has my hon. Friend the Minister for Employment Relations and Postal Affairs. It is also clear and transparent in the letter to which I referred earlier. The letter is in the Library and the hon. Gentleman can read it at his leisure.
I, too, use the sub-post office here regularly. Indeed, I renewed my car tax here rather than online. I suspect that the hon. Gentleman and I share one thing in common: perhaps we are not the greatest internet users.
I must now take into account other Members' desire to contribute to the debate and I will make a little more progress.
We are invited to support or reject the motion, which asks the Government to instruct the Post Office to suspend the closure programme. My strong view is that it is a cocktail of false hopes, flawed economics and opportunism of the highest order. That is especially true, given the record of previous Conservative Governments in office. Postponing those difficult decisions would be wrong. It would result in more uncertainty for those sub-postmasters who are ready to accept the compensation deal on offer and leave the network with much of its original investment intact. The proposals would also
"threaten the stability of those offices which will make up the new 11,500-strong post office network".
Those are not my words, but the views of the National Federation of SubPostmasters, and it is right that we should give them serious consideration.
Postponing sensible decisions is rarely a sensible course of action to take. Additional resources—taxpayers' money—would need to be found. The Opposition have given no indication today or in the past of where those additional resources would come from. We can all conclude, therefore, that their proposal is another unfunded and uncosted spending commitment, which forms part of a growing list of unfunded and uncosted spending commitments.
The network needs to change if it is to adapt to changing demand. We do not believe that it can continue as it is. If we fail to act now, I am afraid that matters will only get worse. The underlying fundamentals have to be confronted and addressed. That is what we are trying to do, in a way that supports the economic and social role of the network, while giving it a long-term sustainable platform on which to build for the future.
I should like to reinforce my right hon. Friend's point. The difficulty with the Conservatives' motion is that it simply calls for a moratorium, because they do not have a policy. They are not fit for government and they do not want to take tough decisions. Some of them do not even seem to understand a sub-post office's measure of profitability or otherwise and look at it only through the eyes of the sub-postmaster or sub-postmistress. The Conservatives do not look at central costs—for IT, IT support, cash handling, delivery, security and so on—when assessing whether a post office is profitable. One cannot look at only one sub-post office, however; one must also look at how much it takes out of central financing. However, the Conservatives do not understand the financing, yet they claim that they are pro-business.
I agree strongly with my hon. Friend. We have to be clear: all the costs that he referred to are met by the Post Office, not by the sub-postmasters, and it is entirely appropriate that we should take those costs into account.
On the question of the Essex scheme, would the Secretary of State be prepared to try to persuade the Post Office briefly to delay the decommissioning of post offices, so that Essex has more time to put its scheme into place and ensure that it is a success?
I understand that the Post Office has already agreed to do that in some cases in Essex. I hope that the hon. Gentleman will find that the Post Office is open to a proper exploration of what Essex county council's proposal could look like and what it would mean. I want to discuss the Essex proposal in a minute, because it is an issue of genuine importance, not just in Essex, but for the future course of the consultations.
No, I am not going to give way.
A number of points have been made about the access criteria, and so on, which I should like briefly to deal with. The access criteria that we have set down will ensure for the first time—it is important that hon. Members appreciate that—that almost all the urban population of the UK, that is 95 per cent., will be within 1 mile of their nearest Post Office outlet and that 95 per cent. of the rural population will be within 3 miles. This is the first time that such a safeguard has been provided for vulnerable consumers throughout the UK, particularly in deprived urban areas and remote areas. The additional requirement for Post Office Ltd to take account of factors such as the availability of public transport, local demographics and the impact on local economies when developing its area plans means that the criteria are more robust and should help to ensure an accessible network.
I am grateful to my right hon. Friend for giving way on that very point. Will he warn people—especially people such as Nicola Turner, the Liberal Democrat councillor in my area—to be careful not simply to stick a pin in the map and simplistically say, "I'm putting a circle of three miles around each post office," before coming up with a figure for how many post offices will be closed? If we look at things in that way and do not look at the entire picture and at all the criteria, we will leave people feeling unnecessarily vulnerable and that their post offices will be closed, when that is entirely not the case.
Let me reassure my hon. Friend that she really has no reason to worry about the Liberal Democrats in her constituency. She should also know that it is not the Liberal Democrats who are designing the consultation in her area. However, I am sure that her points are entirely appropriate.
There is a proper appeals process, as part of the consultation exercise that we have put in place, which has three stages. In the most difficult cases, the Royal Mail chairman, Allan Leighton, will review the issues and make the final decision.
Although I entirely endorse my right hon. Friend's views on the opportunistic activities of the Tories, may I tell him that the post office that serves the most deprived ward in my constituency is now threatened with closure? What a lot of local people find most disturbing is that when other closures were pushed through, during previous consultations, they were assured that things would be all right, because they could always go to the Crowndale road post office. However, that is the one that it is proposed for closure.
Obviously I do not know the precise details of the consultation in my right hon. Friend's constituency, but I urge him—I am sure he will not need urging from me—to make those arguments to the Post Office, because they are perfectly credible and strong arguments. As I have said, the Post Office is under an obligation to take them into account and to justify the proposals that it is making.
There is one other important factor that we should all try to reflect on in this debate, as we come to making up our minds about which way to cast our votes. In the 23 area plans that have been published to date, on average, 90 per cent. of customers will see no change to the post office that they currently use and 99 per cent. will either see no change at all or be within one mile by road of an alternative branch. That is the reality of what we propose. I hope that hon. Members in all parts of the House will take that into consideration.
I want to turn briefly to Essex county council, which has been raised on a number of occasions. Some hon. Members have already raised the interest of local authorities in taking over the services provided by some existing sub-post offices, and I am sure that others will raise it later. Where a local authority makes serious proposals to maintain a service where branches are scheduled for closure, I would encourage Post Office Ltd fully to explore all those avenues.
It is clear that Post Office Ltd will want to ensure that all relevant costs are covered—my hon. Friend Rob Marris made an important intervention on that point—that there is a commitment for several years and that there will not be a damaging impact on post offices in the area that are not currently scheduled for closure. Councils will need to account to local taxpayers for expenditure on a network that is currently loss making. Ultimately, it is for Post Office Ltd and any local authority to discuss and agree the details of those arrangements, and to ensure that those rules are compatible with EU rules on state aid.
As I have said, I have today written to Post Office Ltd, the Local Government Association and the National Federation of SubPostmasters to set out the Government's position. I have placed a copy of that letter in the Library.
I have already given way to hon. Gentleman once on this point. I now intend to conclude my remarks.
If there is a way forward that might allow more sub-post offices to remain open, while retaining a sustainable network, I am sure that the Post Office will want to look closely at how any such proposals could work in practice.
There is much more that I could say; fortunately for many hon. Members, they will not have to hear me say it. There are many arguments that I could deploy if I had the right amount of time. I hope that my hon. Friends will understand what we are trying to do and the way we are setting about doing it. As I said at the beginning of my speech, I appreciate and understand the concerns that have been raised today. All of us understand the importance of such issues. Post office closures have been happening for many years and, as we know, thousands closed under the previous Conservative Government. However, what we have tried to do in the current process is manage the reduction in the size of the network, ensure reasonable access criteria for our constituents, introduce new access services in some areas and give Post Office Ltd some financial certainty, which it desperately needs.
We have made a significant financial investment in the future of the network, to allow it to adapt to the changing society that it seeks to serve. I believe that it can do so. Our responsibility is to ensure that the network has a sustainable future. For this to happen, there needs to be change. I do not believe that there is any serious, credible alternative option on the table today, and the Opposition have certainly not presented one.
For all those reasons, I ask my hon. Friends to support the Government's amendment and to reject the cynical opportunism that is so manifestly reflected in the motion that has been tabled by the Leader of the Opposition.
The Chamber is full of hon. Members hoping to make speeches about the closure of their local post office, which is why Alan Duncan promised to be brief. I am afraid that he failed in that. Being a short speaker is something that he and I normally have in common. I shall endeavour to be shorter.
I doubt that any other issue unifies communities across the country more than that of post office closures, regardless of whether it is in a rural or an urban constituency, whether the area is deprived or wealthy, or whether those affected are young or old. This is, without doubt, one of the most potent political issues of the day. The Liberal Democrats have always been opposed to the Government's closure project, which is euphemistically called the "network change programme". However, we are the only party here that has a policy to stop it. I was delighted to read that the Conservatives recognised our strength on this issue. I have here the Conservative campaign manual; I think it is called "Localiser". The Conservatives warn their candidates, in a big blue bubble, that "the Liberal Democrats campaign extensively on the issue of post office closures. If a post office is threatened with closure in your area it is vital that you quickly mount your own campaign before the Liberal Democrats commandeer the issue."
Let me get started.
I am sorry that the Conservatives feel we have commandeered the issue, but I find it much easier to campaign on something when we have a policy on it. I would strongly recommend that the Conservatives get one. During this debate, I will have some suggestions for them on saving post offices.
From my experience, the only campaigning that the Liberal Democrats did when Chelmsford was facing post office closures was to wait until the sitting MP had done all the work—having meetings with the Post Office, writing and lobbying—then to get their clipboards out and do a high-profile collection of names. That was all.
The hon. Gentleman sounds as though he is complaining about the Liberal Democrats commandeering the issue. Of course, it would also help if the Conservatives did not have a record of closing post offices when they were in government. During their final term in office, they closed the equivalent of— [ Interruption. ] Well, I am sure we can indulge hon. Members if they would like us to. During their final term in office, they closed the equivalent of four post offices a week. That amounted to 3,500 during their time in office. However, we have also seen crocodile tears from Labour Ministers and MPs on this issue. I find it difficult to listen to them when they say they are not opposed to the network change programme in principle and that they are opposed only to the closures in their own backyard. More often, they say that the problem is not the total number of closures but the flaws in the consultation process for a particular post office in a particular town.
No, I do not want to complain. I just want to bring the hon. Lady back to the point about the Liberal Democrats commandeering an issue. Does that include having photographs of Liberal Democrat candidates outside a post office that they said was earmarked for closure, when in fact there was no such plan? That is what happened in the Tulketh by-election in my constituency.
I was about to say that I do not have any faith that the Government have a sustainable plan for the post office network. My fear is that this will not be the end of the post office closures; indeed, it might just be the beginning.
My hon. Friend will have noticed, as I did, that the Secretary of State was unwilling to give way to Liberal Democrat Members, perhaps because he knows that we have a policy on this issue. Does she agree that most people are concerned that this is not a closure policy but a process of attrition? The Secretary of State himself acknowledged that, after the last closure programme, the business of the Post Office contracted so sharply that we had to have another closure programme. What guarantee is there that this is not the start of an endless process?
I agree with my right hon. Friend. The truth is that the Government are presiding over the managed decline of our post office network. They are choosing to do that because they totally fail to understand the social value of our post offices to the 2 million vulnerable individuals who do not have bank accounts, for example. Those people rely on the post offices to access their benefits. The Government also fail to understand the role of the post office as a social hub for the community, or the economic value of the post office to the surrounding economy.
Those of us who have had post offices closed in our communities know that the death of the post office often spells the end for the shop in which it has been housed. The hon. Member for Rutland and Melton, too, mentioned that. The death of the main shop on a street can often spell the end for the nearby parade of shops as well. In Brent, in my constituency, the post offices are just part of a long line of services facing the chop. The process started with the health centres, as the primary care trusts struggled to scale in their debts. Then police station closures were announced, followed by the closure of job centres. There is a sense that Labour is shutting up shop in our community.
We are not proposing to privatise the Post Office. We are proposing to part-privatise Royal Mail, and to keep the Post Office in the public sector because it has social value.
I will give way again in a moment.
These closures will rip the heart out of the community. They are the places that people value for getting face-to-face advice, with centres on the high street. They provide vital local services. It is as though Labour is shutting up shop in the very heart of our communities. It is not only vulnerable individuals who are affected by post office closures; they also have a huge impact on small businesses, especially those in which people work from home as they often rely on their post office for posting parcels. When I campaign on this issue, I am struck by the fact that it is often young people who are the first to sign a petition. Perhaps that is understandable when we realise that 11 per cent. of all business transacted in post offices comes from small businesses.
The New Economics Foundation carried out some research into what happens when a post office is closed in an urban area. It estimated that the closure of such a post office would lead to a loss of about £270,000 to the local economy. Similarly, in rural economies, it is estimated that every £1 of subsidy makes between £2 and £4 for the local economy.
I am sure my hon. Friend is aware that £6 of every £10 withdrawn from a post office—either from a Post Office card account or by people using the post office to access their bank services—will be spent in the local economy. That money will be spent elsewhere, and lost to the local economy, if the post office closes.
My hon. Friend makes an excellent point. I tried to make the point earlier about footfall and the local parade of shops. When we lose the post office, we often lose all the shops in the area.
Is the hon. Lady aware of the relationship between Royal Mail and the Post Office? If Royal Mail were part-privatised, that would put the universal service obligation in jeopardy and rural communities would suffer. People would end up having to go to collect their mail; it would not even be delivered to their door.
That is not true at all. I am sure that the Secretary of State will tell everyone that that is not the case when he finally adopts our policy at the end of the review.
The real problem with the hon. Lady's policy is that she wants to get a lump of money from a one-off part-privatisation in order to subsidise a constant flow of need. It is not possible to finance such a flow from a stock of money without having an end point. Her proposal is therefore economically innumerate.
We want to finance a lump sum in order to modernise the network and to allow investment in infrastructure, for example. We also propose de-coupling Royal Mail from the Post Office, as I said in an intervention on the Secretary of State, to allow it to work with Royal Mail's competitors and bring in a new revenue stream. We are also arguing for extra revenue streams, just as the hon. Gentleman is doing. What he lacks, however, is any kind of policy for investment in upgrading the network. I cannot see how he can save 2,500 post offices—or even a little fewer, as I am not quite sure what exactly he claims to be saving—without that further investment. We think we can do that, but we do not think we can do any more than that, so I cannot understand how the hon. Gentleman can seriously think he can save all these post offices without any kind of investment in them. They need that to ensure that they can compete on the high street.
Does the hon. Lady believe that the number of post offices we have now is about right and that they are based in approximately the right place? If not, what is her assessment of how many more post offices we would have in this ideal Liberal Democrat world? How would she determine where they should be and, more importantly, how would she pay for them?
I just made a point about investing in the capital and other infrastructure in post offices. It is a bit rich of the hon. Gentleman to be asking me how many post offices there should be in a local area, when he cannot even save the ones that he is proposing to save. [Interruption.] At least we have a policy for investment in the network.
Does my hon. Friend agree that not only do we have a policy for investing some capital at the beginning, but we support the idea that another process for supporting local post offices will be available when the Sustainable Communities Act 2007 comes into force? If, however, the consultation process allowed MPs and the public to know the commercial facts—details of profits and losses—in many cases we would be able to win the argument, but the Post Office never allows us to have the facts that would allow a proper consultation. It keeps moving the goalposts and playing a game with mirrors, so that consultation is a sham.
I completely agree with my hon. Friend about the consultation process, which has caused more anger among hon. Members and, indeed, members of the public, than almost anything else—
I shall give way in a few moments when I have finished what I am saying. There is a huge sense of frustration that the Post Office is allowing only six weeks, which is not long enough for any community organisations to work together to produce a bid to save post offices—either with or without the Sustainable Communities Bill 2007. It is difficult for councils to intervene and almost impossible for them to intervene earlier because they do not know whether the post offices they wish to work with are going to be closed later under the network change programme. As my hon. Friend Simon Hughes said, the goalposts are constantly moving.
My hon. Friend rightly raises the issue of consultation. Does she share with me the concerns raised by Purbeck community partnership about the proposal to start the consultation on the network change programme on
It is a common complaint when consultations are arranged over a holiday period as it is difficult for community groups and political representatives to work with people in the community to stop these proposals.
I am grateful to the hon. Lady, who is at least trying to come forward with some constructive proposals; I welcome that, as we need them. Does she regret the fact, however, that her party did not oppose the EU regulations that prevented the Government from subsidising post offices and thereby keeping them open? It is those EU regulations that have forced the Government to go down the closure route.
The hon. Gentleman may be independent, but he is still a Conservative, as he can get Europe into almost anything! There is no evidence that Europe is stopping us subsidising the post office network.
Let me make some progress, as I promised to be a brief speaker and I am failing miserably so far.
All this grief and all this political damage are being caused for what is actually a pretty measly amount of money that the Government are saving—just £45 million. We have to ask whether it really will be a saving when everything else has been taken into account. I provided some figures a few moments ago on how much the closure of post offices costs the local economy in urban areas—about £277,000—but that probably equates to the best part of £50,000 in VAT lost to the Treasury. If we add in other costs to individuals, such as being more isolated or the difficulty of picking up benefits, and if we also add in the cost to the community of losing its high street, and then the environmental impacts of travelling further, probably by car, to access the local post office, we have to ask what we are left with. After all, £45 million is not a lot of money in the grand scheme of Government Budgets. We also have to remember that Royal Mail awarded its own board and chief executive more than £7 million in pay and bonuses last year, and well over £5 million in bonuses and benefits alone.
As one of my hon. Friends asked earlier, is there really any evidence that the closure programme will actually deliver the increased footfall to make the remaining post offices, which the Government are relying on, profitable? Where is the evidence to suggest that it will not simply cause people to change their behaviour and do business in another way? What of the overall cost to the Royal Mail Group when businesses decide to use a competitor?
Quite a few references have already been made to the innovative proposals from Conservative-controlled Essex county council to try to ensure that at least a number of the post offices under threat in the county remain open. Does the hon. Lady support in principle that brave attempt by Essex county council, or not?
What we want is a sustainable programme, but it is obviously for local councils to decide what they do. Of course the letter placed in the Library by the Secretary of State makes the point that the Government will stop the £150 million subsidy, so councils would then be required to put the extra money in from council tax payers. It is a difficult decision for councils; they need to know that the Government have a long-term plan to ensure sustainability. There are some good proposals for councils to work with the Post Office, but I really want something that is sustainable and not just about central Government shifting the blame and the responsibility on to local government, which causes local councils to pick up the costs without any kind of benefit.
The trouble is, as I have already said, that the Government have no long-term plan to save the network. The access criteria they have devised with the Post Office would be met if we had just 7,000 post offices, which raises the spectre of further closures. Of course, the £1.7 billion that the Government boast about investing over five years already includes the £150 million a year that they had already committed—£750 million overall—and the redundancy package for sub-postmasters, which is £70 million plus some extra for central changes, taking it perhaps to £100 million. The Government have not provided the exact figures on that. By the time we have added that and taken into account general losses that the Post Office incurs each week, it is hard to see how much money would be left for real investment to modernise the Post Office.
Additionally, post offices are steadily having every revenue option they have taken away from them, leaving the network with huge uncertainty over the future of the Post Office card account, for example. That is why we must clearly decouple Royal Mail from the post office network, to allow it to develop other business revenues with competitors. I have already mentioned having a parcel depot for other mail delivery companies. There would be all sorts of other options, but not until the brave step of uncoupling Royal Mail from the Post Office has been taken. We urgently need investment in the network. That is why we propose to part-privatise Royal Mail, raising about £2 billion for the Government to invest in upgrading the post office network. Crown post offices, in particular, desperately need investment to allow them to compete on the high street. They need refurbishment and IT investment, and their staff need extra training.
Did my hon. Friend notice that when the Secretary of State was trying to suggest that the closures were down to the internet and people not going to post offices, he failed to mention that one of the reasons why people are not going to post offices is that the Government have closed so many of them and another is the decision by the Department for Work and Pensions to bully hundreds of thousands of pensioners to take their pensions into bank accounts, in tandem with the decision of the Department for Culture, Media and Sport to take the business of TV licences away from post offices? Is not the real truth that post office closures have been brought about by the Government and are not the fault of the public?
I absolutely agree with my hon. Friend. It is as if the Government were making a deliberate attempt to close post offices down.
I am following the case that my hon. Friend is making, particularly in respect of the costs to the Government. It seems to me that one cost to the Treasury and the Department for Business, Enterprise and Regulatory Reform has not been estimated at all—the cost of the closure of other parts of businesses that ineluctably fail as well when the Post Office is removed. I refer to associated VAT costs, for example, which is direct revenue lost to the Government. Following a sham consultation, four post offices in my constituency were closed despite a massive protest and more than 1,000 people signing a petition. Does my hon. Friend agree that this so-called consultation has been a fraudulent exercise?
I agree entirely. There are many hidden costs of which the Government have taken no account. We have to ask whether saving £45 million is worth all this grief, and whether the Treasury is really saving any money in the long term.
I have already given way to the hon. Gentleman. I want to finish my speech, as I know that many other Members want to speak.
We must think about alternative long-term revenue streams for the Post Office. An obvious route that has not been discussed so far is development of the Post Office card account. About five years ago, the Government charged banks with making basic bank accounts available to those who needed them, but it simply has not worked. The best part of 2 million people still do not have access to an account, and the increase in basic bank accounts appears to have stalled. It is obvious from the take-up of the Post Office card account that it has been far more popular than the offers of basic bank accounts. It is also obvious that people want to use their post offices to gain access to their accounts and that some banks have been reluctant to allow them to do so. HSBC, HBOS and the Royal Bank of Scotland, for example, still do not allow people to use post offices for that purpose.
The problem is that there really is not anything in it for banks to offer basic bank accounts to people who are never going to earn very much, and who want to be dealt with face to face. The last thing that the commercial banks want are people who go into branches. They want people who bank by phone and by internet, whereas the Post Office needs footfall. Those are two very different needs.
It is time that the Government gave banks a choice. They should either force them to make their services available through the Post Office so that all can gain access to their basic bank accounts through the network, or give up on banks and develop the Post Office card account into a basic bank account. In either event, we need a universal service obligation on access to a bank account, and the Post Office should play a role in providing it. That could offer a very fruitful revenue stream.
We oppose the closure programme because it will have a devastating and permanent effect on our communities, but petitions alone will not save the network. We need a serious plan of investment— [Interruption]—a serious plan of investment, which the Conservative party— [Interruption.]
We need a serious plan of investment, which the Conservative party does not have—but neither do the Government, and I hope that they will adopt our policy following the review.
Let me begin by explaining some of the background to my interest in this issue. I was a member of the Trade and Industry Committee during the last Parliament, and was involved in the reports that first pressed Post Office Ltd to consider area plans rather than merely deciding where they wanted to change the network—to look at the broader picture, rather than at individual post offices in isolation—and to examine opportunities for post offices to win new business, as well as the constraints imposed by changing patterns of customer behaviour. When Post Office Ltd adopted the principle of area plans, I was a member of the Committee—again, the Trade and Industry Committee—which suggested that its approach to them should be rather different, and that it should change its methodology.
The review in Birmingham has not happened yet—it is scheduled for June—but when the urban reinvention programme in my constituency was launched in 2004, I submitted to Post Office Ltd a detailed analysis of the problems with its methodology and some of its conclusions. Along with an excellent campaign by local people, that managed to save two of the five post offices that were slated for closure. Last year I submitted evidence to the Department when it was drawing up the framework that led to the network change programme.
I have said all that because the discussions that have taken place, and the reports from the Trade and Industry Committee and its successor, have concerned serious questions that arise when we try to grapple with the issue of how to maintain the viable post office network that is so important to our constituents at a time of massively shifting patterns in customer behaviour and preferences. Such changes will affect the number of people who use post offices and the frequency with which they do so irrespective of the number of post offices, and irrespective of Government policies.
We must ask how much more people use phone lines than they did some years ago—and, in particular, how much they use the internet and other technologies—to gain access to services to which, in some cases, they could have had no access 10 or 15 years ago. We must also ask to what extent they seek to gain access to services that have hitherto been provided by post offices, not simply via technology but via technology outside normal working hours. There are no easy or simple answers to those serious questions.
I do not suggest that Post Office Ltd gets everything right all the time, or even much of the time. The reports that I have mentioned and the campaigns in which I have been involved convince me that there is an awful lot that it needs to learn about how to go about these programmes, and I expect to cross swords with it again in June. I feel, however, that what does the greatest disservice to our constituents is trying to pretend that the issues are simple, or—when it comes to the practical aspects of the campaign—reducing the argument to whether people are for or against post office closures in general. That was not the approach of Alan Duncan, but I shall be interested to see what happens when the debate is reported outside and represented in leaflets. I think that simplicity will find its way straight back in at that point, and that at least one Opposition party—maybe two, maybe more—will try to present the debate and Members' votes in a way that will reduce it to something simplistic and utterly meaningless.
Mr. Cox nods, so my prediction is probably correct. I hope I am wrong, but I have to say that the Conservative party has form in this regard. Even when I was helping to question the closures in my constituency in 2004, in some cases successfully, leaflets were appearing from the Conservatives claiming that I was supporting the very closures that we managed to beat off. One Conservative leaflet doctored Hansard to back up its claims, which earned the party and the councillor involved a rebuke from Mr. Speaker when it was reported to the House.
We have seen similar action on this occasion. Opposition politicians have claimed that for Ministers to establish a framework for consultation and then use their positions as local Members of Parliament representing their constituents to argue within that framework and take up issues of local concern is somehow illegitimate. That does their constituents a disservice, and reduces the debate to trivia.
My hon. Friend has much joy to look forward to when the Conservatives get their teeth into the issue in his constituency, but I hope he does not find that his local Conservatives are as mad as mine. They jumped the gun before the network change programme was announced, and started to campaign to save three post offices that were not even in the frame for closure. All they have managed to do is frighten local pensioners. I hope that that does not happen in Birmingham, Northfield.
Let us hope not, but I am not holding my breath. This is a serious issue, and I hope that Opposition Members will think about doing the right thing by their constituents and mine, and telling the truth about it.
Turning to the situation in Birmingham, and the proposals that are likely to be published in June, I am pleased that criticisms that we made in the Select Committee some years ago have, in theory, been addressed by the Post Office in the access criteria that it has laid down. I say "in theory", because the evidence is that they have not always been followed through in practice, which is something that Post Office Ltd must address. As a local MP I will only know what the proposals are, and whether there is a problem with the methodology, towards the end of the pre-consultation phase and just before the formal consultation. If and when proposals are produced, and if there is consensus about the methodology and confidence in the way in which Post Office Ltd has drawn up its plan, even if there is disagreement about its substance, the six-week consultation is probably not too bad. In fact, the National Federation of SubPostmasters says that six weeks is probably okay, if the aim is to minimise the period of sub-postmasters' uncertainty. However, problems will arise if there is not consensus about the methodology and people end up having to argue simultaneously about the methodology and the proposals themselves during that same six-week period. My message to Post Office Ltd is that it should be open with stakeholders at an earlier stage, and I do not think that that contradicts the framework that it has laid down. I do not buy all its arguments about commercial confidentiality, and I certainly do not think that they should take precedence over letting the public know the things that they need to know.
Finally, as we approach the publication of proposals on Birmingham, access criteria will apply, as elsewhere, guaranteeing the maximum distances from post offices. That is important, and it is an improvement on existing measures. The problem that we face in Birmingham, however, does not relate to distance. Birmingham's neighbourhoods are often compact in size, but they are far from compact in population numbers. There is an average of 377.2 people—I do not know where the 0.2 comes from—per square kilometre in England. In Birmingham, the average is 3,649 people per square kilometre. Under the current post office provision, that is 7,088 residents per post office, which has resulted in unacceptable queues in a number of places in my constituency. The people queuing outside in the rain are often old, frail and vulnerable, and if Post Office Ltd further reduces the number of post offices without taking into account population density figures as well as distance, those queues will lengthen. That will hit customers even more, and it will hit the very trade that Post Office Ltd and the Government are trying to protect.
I hope that Post Office Ltd will look at that, and that Ministers will have another word with it about taking those things into account. The framework and the access criteria do not need to change. They are not exhaustive, but they are a guide to what Post Office Ltd should take into account, and population density in urban areas is an important consideration. When Post Office Ltd draws up its plans for Birmingham, it should be open with stakeholders earlier, as there is nothing in the access criteria or the framework that prevents it from doing so. It must rethink the sequencing of involving Postwatch, local government, local MPs and the public. If there is a problem with the methodology, that will have consequences for the extent to which it sticks to the framework.
That is a very good point. Post Office Ltd has talked about investing in the network and upgrading it, but the proof of the pudding is in the eating. It is not good enough for it just to say that it is going to invest—it has got to look at precisely those things, and a few more besides.
Does the hon. Gentleman accept that the criteria are meaningless, as this is a reverse engineering project, designed to close 2,500 post offices? I can tell him from my experience in my constituency that none of the criteria mean anything, as we are closing perfectly profitable post offices.
The hon. Lady is running a number of things together, and she is wrong. If she is arguing that there should be no overall target figure—and I would love to be in that situation—that would have financial consequences. That is why I asked her hon. Friend the Member for Rutland and Melton how much subsidy he proposed. He said different things in the course of his contribution: at one stage, he did not give any commitment at all, but at another, he thought the maximum of the subsidy should be that which the Government have provided. There are consequences that flow from that—there is a financial limit, as the Conservative party, too, has accepted—and we cannot avoid numbers. I do not think that the access criteria are meaningless. However, the way in which they are structured does not tackle all situations in all places, so Post Office Ltd needs to be more sensitive.
The hon. Lady has had a go, and as many other Members wish to speak, I shall now conclude.
We must be open with stakeholders at an earlier stage, and approach the consultation in that spirit. When proposing change in Birmingham and other urban areas where the reviews have not yet taken place, we must look at population figures as well as distances. We must also bear it in mind that if at the end of the process queues lengthen and those that suffer from that are the old, the frail and the vulnerable, we will not have addressed the issues that we are trying to address. I make that appeal to Post Office Ltd, and I ask Ministers to make it to Post Office Ltd as well.