Post Office (Hansard, 11 May 2000)

§ 3. Mr. David Amess (Southend, West)
What recent representations he has received on the reorganisation of the Post Office. [120506]

§ The Minister for Competitiveness (Mr. Alan Johnson)
I have received a number and variety of representations over time about the Government's proposals to transfer the Post Office to plc status under the provisions of the Postal Services Bill. Internal reorganisations of the Post Office are a matter for Post Office management.

§ Mr. Amess
Will the Government listen to Post Office customers, postmistresses and postmasters all over the United Kingdom, and particularly in Southend, West, who are disgusted by the Government's proposals to disorganise the Post Office? Does the Minister realise that as a result of his Government's damaging policies, as many as 500 sub-post offices will close? Will he explain to the House how he expects those hard-pressed small 995 businesses to generate enough income to replace the third of their income that they will lose by 2003 as a result of his Government's policies?

§ Mr. Johnson
I just about managed to catch that question. We are modernising the Post Office and investing £500 million to computerise the network. With regard to closures, the hon. Gentleman may like to know that the record number of closures was in 1992, when 478 post offices closed. One reason may have been the introduction of automated credit transfer by the previous Government in 1990. The challenge for Royal Mail in the hon. Gentleman's area is to deliver a package between Basildon and Southend as quickly as he managed to move shortly before the last election.

§ Mr. Gordon Prentice (Pendle)
We all eagerly await the report of the Cabinet Office performance and innovation unit on the future of the Post Office. The prospect of subsidy has been held out to us by the Secretary of State. May not we have to go down that road if we are to preserve post offices in small towns and villages, of which there are many in Pendle?

§ Mr. Johnson
We await the conclusions of the PIU report. There has always been an element of subsidy in the post office network—the cross-subsidy between heavily used post offices and those in more remote rural locations, to the tune of £30 million a year. The clause is in the Bill in case we need it. The way forward that everyone supports is for the vast majority of post offices to be commercially viable because of the number of transactions across the post office counter.

§ Mr. James Gray (North Wiltshire)
Since the Government came to power, eight sub-post offices in my constituency have closed—of the 500 which it is proposed will be closed this year. That greatly exceeds the number in 1992, which the Minister mentioned a moment ago. How can he justify the fact that he is introducing one of the most damaging pieces of legislation on sub-post offices by saying, "You lot did worse than we did"? If sub-post offices such as those in Colerne and Box in my constituency close—they are threatened with closure this year—how will people pick up their pensions in cash, even if the Government put in place some procedure by which they could do so?

§ Mr. Johnson
The hon. Gentleman is wrong. There will not be 500 closures this year. I do not know where that figure came from. The number of closures for the financial year 1999–2000, the last year for which figures are available, is 383—well below the 478 that I mentioned earlier. In the past 20 years, 25 per cent. of the network has closed. Ten per cent. of the rural network closed between 1990 and 1997. As Opposition Members know full well, given that half a million people a year are moving voluntarily to ACT, there will not be a solution to the problem until we can find a way to ensure that the Post Office has other forms of transaction coming across post office counters to protect their future.

§ Fiona Mactaggart (Slough)
May I thank my hon. Friend for his concern about a post office that was to be closed, which I raised in the Chamber on a previous occasion—the post office on Slough trading estate? Partly because of his concern, a new post office will open 996 there in July so that the service will be restored to the businesses and the people who live in that part of Slough. May I offer my hon. Friend the chance to come and open it?

§ Mr. Johnson
As I worked as a postman in Slough, and as I worked at that office, it would be a delight for me to open it.

§ Mr. Jeffrey Donaldson (Lagan Valley)
Will the Minister join me in paying tribute to sub-postmasters and their staff throughout Northern Ireland who, during the last 30 years, have courageously continued to provide the people with a service despite intimidation, violence and continual attacks on their persons? Does the Minister understand the concern now felt by those sub-postmasters about their future, in view of the Government's proposal to extend ACT provisions? Will he give special consideration to the position of sub-post offices in rural areas in Northern Ireland which, in spite of the violence of the last 30 years, have continued to provide a much-needed service?

§ Mr. Johnson
The hon. Gentleman has raised an important point. During the troubles in Northern Ireland, 16 post office workers were killed on duty and clerical staff were declared a legitimate target by one terrorist group in the early 1980s. They were subject to proxy bombings and hostage attacks. We should indeed pay tribute to those who continued to work under the most difficult circumstances.
We will ensure that there is a proper future for the post office network. We are determined to protect post offices, not just in the hon. Gentleman's constituency and in Northern Ireland generally—although obviously it is important for us to do that—but throughout the United Kingdom, and that is what we are working towards.
The most difficult option is to grasp the nettle now. If we had done nothing, the network would have gradually drifted away, as it has for the last 25 years.

§ Mr. Phil Sawford (Kettering)
Is my hon. Friend aware that many people who rely on post offices are among the weakest and most vulnerable in our communities? Does he share my concern about the Conservatives' continued suggestions that we, the Government, intend to withdraw opportunities for cash payments from post offices, despite all the ministerial statements and all the leaflets that have been produced? Will he again confirm that we have no intention of withdrawing the facility that allows people to receive benefits and pensions in cash if they so desire?

§ Mr. Johnson
That is a good point. It is important for us not to undermine the network by continually talking it down, because that affects the properties of sub-postmasters and, for instance, their ability to obtain bank loans.
Let me repeat that we have given a pledge that all pensioners and benefit recipients who still want to draw their pensions and benefits in cash across a post office counter—undiluted by bank charges, and weekly if they are paid weekly now—will be able to do so, before and after the change.

§ 4. Mr. Graham Brady (Altrincham and Sale, West)
If he will make a statement on the future provision of post office services. [120508]

§ The Minister for Competitiveness (Mr. Alan Johnson)
The Government are fully committed to a nationwide network of post offices, and recognise the important role that they play in local communities. We are contributing nearly £500 million to the cost of equipping the network with a modern, automated online IT platform. The system will be installed throughout the network comprising 18,500 post offices, enabling the Post Office to improve existing services and take advantage of new business opportunities. The report from the performance and innovation unit of the Cabinet Office on the longer-term future of the post office network is expected soon.

§ Mr. Brady
Does the Minister realise that in some of the parts of my constituency with the greatest amount of social housing, sub-post offices stand to lose up to 70 per cent. in turnover? The same applies to the constituencies of many Members on both sides of the House. Does that not mean that when post offices are closed as a result of the Government's policy, those who need the services most will lose them more often?
Last week the Labour party lost 600 seats in the local elections, and the Prime Minister said that he would start listening. Is it not time that the Government started listening in this instance, and changed their policy in order to save post offices?

§ Mr. Johnson
I know of the dependency of post offices in urban areas on the payments to which the hon. Gentleman refers. Indeed, I published the answer to a written parliamentary question giving the hon. Gentleman and others the figures.
Let me emphasise again that the Government are not looking to close post offices; we are looking to protect them and to keep them open. I repeat that 25 per cent. of the network has disappeared in 20 years. The Conservatives' solution was to break the Post Office Counters network away from the rest of the Post Office, and to privatise Royal Mail and Parcelforce. We will take no lessons on the Post Office, especially from the Conservative party.

§ Mr. Bob Blizzard (Waveney)
Does my hon. Friend share my anxiety that some sub-post offices, which have quite a lot of customers, are nevertheless egged on by the Conservative party, which continues to tell them that they will close? Does he find it worrying that although the Government make it clear, as my hon. Friend has done again this morning, that people will be able to get their benefits and pensions in cash, some post offices are shooting themselves in the foot by frightening their customers away? The message to all those who have signed the petitions should be, "Use your local post office and you won't lose it."

§ Mr. Alan Johnson
My hon. Friend makes an important point. I recently visited post offices in his constituency to emphasise it. Since the rally that took place in Westminster in April, when the general secretary of the National Federation of Sub-Postmasters met the Prime Minister, dialogue has continued between me, my 998 right hon. Friend the Secretary of State and others in Government to ensure a shared vision that allows sub-postmasters and sub-postmistresses to stop the propaganda to which my hon. Friend referred and to know that they should not only survive but thrive in the network that we aim to create.

§ Mr. David Heath (Somerton and Frome)
Given that the performance and innovation unit's report seems to be travelling second class, will the Minister put some flesh on the bones of the shared vision? Has he discussed with the Chancellor the scale of and timetable for any subsidy? Has he consulted the Secretary of State for Social Security and thus shown that the Government are cross cutting, not merely cost cutting? Most important, has he a shared vision with postmasters and postmistresses in which they have confidence?

§ Mr. Johnson
On the PIU report travelling second class, we said that the exercise would be a cross-cutting, thorough and comprehensive examination of the network, and that we would publish the report in the spring. We still intend to do that. That should be contrasted with the previous Government's review, which began in 1992, muddled through until 1994 and began a new phase and, in 1997, ended where it began. Discussions with other Departments take place all the time. We are considering not a Department of Trade and Industry, Department of Social Security or Treasury issue, but one that involves the whole Government. Our discussions and the PIU report are intended to find a Government solution.