Sub-Post Offices (Hansard, 13 March 1996)

§ 5. Mr. Tyler
To ask the President of the Board of Trade what assessment he has made of the profitability of the sub-post office network. [18691]

§ Mr. Oppenheim
This is primarily an operational matter for the Post Office. The Post Office Counters network as a whole is profitable and over 95 per cent. of the 19,500 post offices are privately owned and operated sub-post offices which are usually run in conjunction with other retail businesses.

§ Mr. Tyler
Is the Minister aware of the recent survey in Devon and Cornwall showing that 58 per cent. of sub-postmasters and sub-postmistresses are being forced to consider selling up, chiefly because of the impact of the uniform business rate, which is a Government responsibility? Will he acknowledge that it does not require legislation to extend hardship relief to all village sub-post offices? Will he also acknowledge how important they are to the life of villages, and undertake to make representations to his colleagues in the Department of the Environment, the Welsh Office and the Scottish Office, to bring in legislation as soon as possible, if that proves necessary? In the meantime, the current hardship relief should be extended to village post offices.

§ Mr. Oppenheim
I have great sympathy with the hon. Gentleman's points. I have not seen the survey to which he refers, however. We are committed to maintaining a nationwide network of post offices, particularly in rural areas where, as we all recognise, they are very important. We are trying to help sub-post offices, first by introducing new technology—especially the automation project, which is expected to go on stream early next year. We are also allowing Post Office Counters to sell new products, which should help, and we are allowing the Post Office more commercial freedom.
In rural areas there can be problems when sub-postmasters and sub-postmistresses retire—it is sometimes difficult to fill their places. I know that there have been three closures in the hon. Gentleman's constituency, but I understand that two of those sub-post offices have subsequently reopened.
I accept that there is concern about the business rate. I understand that my right hon. Friend the Prime Minister recently said that he would look at it again. In any case, I shall certainly look carefully at the document that the hon. Gentleman mentioned if he will send it to me.

§ Mr. Waller
Will my hon. Friend confirm that information technology and the installation of terminals in sub-post offices will provide the latter with great new opportunities and help to secure their position in the many communities in which they play such an important role?

§ Mr. Oppenheim
My hon. Friend is absolutely right. We are pushing forward the automation project as rapidly as possible. I am pleased to say that we hope that the first terminals will be installed at the beginning of next year; others will then rapidly be installed over the course of 1997.

§ Dr. Howells
Why has there been such a delay in the installation of new equipment in the 20,000 sub-post offices? Why has the cost of administering the private finance initiative to pay for this work mounted so rapidly? The public sector team allocated to the project has grown to at least 100 officials, and bidding costs alone will amount to £40 million—several times the cost of a traditional procurement.

§ Mr. Oppenheim
With respect, I am not sure that the hon. Gentleman has got his facts exactly right. This is a very large project which involves linking in Departments such as the Department of Social Security. It is important for that Department's recipients that we get the technology right. We are determined to ensure that when it goes in, it works properly. That is better than rushing it, with the result that some social security recipients might end up with problems. It is an enormous project. Automation equipment will be installed in almost 20,000 sub-post offices and post offices. As far as I am aware, the project is unique in the western world. I do not think that any other country is pushing forward automation as radically as we are. It is important that we get it right, and I am confident that the first terminals will come on stream next year.

§ Mr. Harris
I accept that there is a real problem with the uniform business rate, but does my hon. Friend agree that the incomes of many rural post offices and sub-post offices have been boosted considerably by the national lottery, and does he have any figures on that?

§ Mr. Oppenheim
I do not have any figures to hand, but my hon. Friend is right. The incomes of sub-post offices have been boosted by the national lottery, and the range of new products that we are allowing Post Office Counters to sell will particularly help to maintain the rural network.
Overall, there are some 19,500 post offices, and the number has changed little over the past six years. We are absolutely committed to ensuring that the post office network is maintained, because we recognise how important it is to rural areas.