Sub-post Offices (Hansard, 21 March 2002)

§ 4. Mr. James Clappison (Hertsmere)
What assessment she has made of the prospects for sub-post offices. [42848]

§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt)
The Government are committed to maintaining a nationwide network of post offices. We have allocated £270 million over three years for modernisation of the network. In January, we announced our support for a compensation package for the urban network restructuring programme to be undertaken by Post Office Ltd. Detailed discussion of this and an investment support package is continuing and a state aids notification will be submitted shortly.

§ Mr. Clappison
While the Secretary of State may say that she is committed, is it not the case that last year a record 547 sub-post offices closed and that sub-post offices faced a further loss of business through the introduction of automated credit transfer? Can she give an assurance for her Department that the universal bank is on course to be delivered at the same time as the introduction of automated credit transfer—in April 2003? Apparently, it has already been delivered to the wrong address once and had to be redirected. Can she assure us that it will not be lost in the post altogether?

§ Ms Hewitt
I will not take lectures on post office closures from a member of the Conservative party, given that there were 3,500 post office closures under the Conservatives. In the last nine months we have seen a welcome reduction in the rate of post office closures. As the hon. Gentleman should be aware, we placed a requirement on the company to avoid preventable closures. Discussions are progressing on the universal bank and the project is on track.

§ Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East)
What steps are being taken to strengthen the management of the network?

§ Ms Hewitt
As my hon. Friend the Minister for Employment and the Regions said last month, a new chief executive has been appointed for the post office network. David Mills, the new chief executive, has an excellent track record in retailing and will be able to bring that experience to exploit the extraordinary potential of what is our largest retail network. He will take up his job next month and immediately start going round the country to talk to sub-postmasters and their customers. I look forward to the proposals that he will no doubt wish to put to the board and Ministers for further strengthening the post office network.

§ Brian Cotter (Weston-super-Mare)
On 1 March in response to a question I asked, the Secretary of State indicated that 73 post offices are currently under consultation with regard to closure. In the majority of cases nobody is applying to take them over. Does the right hon. Lady agree that that is not in the least surprising, given the uncertainty over the profitability of sub-post offices and the uncertainty that continues, following the answer just given, on the universal bank? Can we have more certainty, particularly about the universal bank, because there is no real commitment that it will be a profitable concern sufficient to make up for the lack of profitability as regards other Government measures?

§ Ms Hewitt
It is perfectly true that there are some sub-post offices in urban and rural parts where it is not possible to get somebody to come forward and take over. That in part reflects the fact that we have within urban areas alone about two-thirds of the population living within half a mile of two and sometimes up to five sub-post offices. Some of those sub-post offices are struggling to survive commercially. That is why we have agreed with the company and the National Federation of Sub-postmasters a programme both for compensation and investment to ensure that sub-post offices will indeed have a good commercial future. As I said, we have already committed £270 million over three years to implement the recommendations of the comprehensive performance and innovation unit report to ensure that customers and sub-postmasters alike have confidence in the future of the post office network, which is vital to the social fabric of our country.