§ 5. Dr. Vincent Cable (Twickenham) (LD)
If she will make a statement on the appeals mechanism in relation to post office closures under the network reinvention programme.␣
§ The Secretary of State for Trade and Industry (Ms Patricia Hewitt)
Proposed closures of urban post offices are considered in accordance with the code of practice agreed by the Post Office and Postwatch. That includes an escalation procedure for handling cases 1443 where Postwatch strongly opposes a closure. Cases are escalated for consideration at senior levels up to and including the chief executive of the Post Office and the chairman of Postwatch.
§ Dr. Cable
Is the Secretary of State aware that almost every appeal against urban post office closures is being rejected, regardless of the strength of the case or the backing of Postwatch? Is not the reason for that the fact that the group of people making the decisions on closures is the same as the one hearing appeals?
§ Ms Hewitt
When the new Financial Secretary to the Treasury, my hon. Friend the Member for East Ham (Mr. Timms), was responsible for this matter, he strengthened the consultation and escalation process, and that has worked well. But the hon. Gentleman not only wants to scrap the DTI, he wants to privatise the Post Office. He was the author of a Liberal Democrat policy paper that was voted on by his party conference, and which proposed moving to the privatised Dutch model, even though there are only half as many post offices per head of population in the Netherlands as in the UK. If he wants to help post offices, I suggest that he talks to his Liberal friends in Aberdeen council, who have stopped people being able to pay their council tax, council rents and business rates at the post office. That has made it more difficult for post offices to stay open, and it shows that we must watch what the Liberals do, not listen to what they say.
§ Mr. Bill O'Brien, (Normanton) (Lab)
Can my right hon. Friend tell me who is responsible for responding to appeals from Members of Parliament for an audit of the assurance that 95 per cent. of the population will live within one mile of a post office? In my constituency, it is estimated that 25 per cent. of people live more than a mile away from a post office. Who is responsible for auditing the assurances that have been given, as neither Postwatch nor the Post Office take responsibility for that?
§ Ms Hewitt
Postwatch takes its responsibilities enormously seriously. Under the urban reinvention programme, Postwatch staff go and look at all the post offices proposed for closure, and take note of where alternative offices are situated. The problem is very simple: in too many places, nine or 10 post offices serve the same population living within a mile. The pledge that 95 per cent. of people will be within one mile of their nearest post office applies across the whole country. The Post Office and Postwatch, the consumer champion, have the responsibility of ensuring that that target is achieved.
§ Mr. Owen Paterson (North Shropshire) (Con)
On one hot day last year, I visited 28 post offices in my constituency. Nearly every one is under threat, thanks to the complete mess that the Government have made of the benefit card system. I took a delegation to see the new Financial Secretary, when he was responsible for these matters, and he confirmed that he had made it a requirement that there should be no avoidable closures. Will the Secretary of State confirm what an avoidance closure is, and will she say how she intends to allow post offices to make representations?
§ Ms Hewitt
Perhaps I could just point out to the hon. Gentleman that before the Government started 1444 investing in and saving rural post offices, they were closing at the rate of about 400 a year. We have brought that number down to just over 100 a year by imposing on the Post Office a requirement that rural post offices should not be closed unless that is absolutely unavoidable—in other words, when it is impossible to find people to run them. To avoid those closures, as I announced earlier this morning in a written ministerial statement, we are extending for another two years the payments that we make to rural post offices. That means that, on top of the £450 million that we have put in already, there will be a further £150 million a year for another two years. That is very good news for people living in our villages and countryside.
§ Mr. Anthony D. Wright (Great Yarmouth) (Lab)
Two post offices in my constituency closed even though Postwatch objected and supported the campaign against closure. On appeal, the Post Office decided to go ahead with the closures. Does that not show that Postwatch is a toothless tiger? Is it not about time that it was given powers to ensure that it can overrule the Post Office when it has serious objections to a closure?
§ Ms Hewitt
I will certainly look at the specific case that my hon. Friend raises, but I stress that in several cases around the country—including my own city, where I was involved as a constituency Member—Postwatch has persuaded and cajoled the Post Office into changing its mind. Postwatch has insisted on post offices staying open, and it is a strong and well-resourced consumer champion. Obviously, I understand my hon. Friend's regret that the post offices were not reprieved in that case, but Postwatch has been responsible for changing the decisions in several cases, and that is exactly how the escalation process is designed to work.
§ Mr. Henry Bellingham (North-West Norfolk) (Con)
Is the Secretary of State aware that in Norfolk several rural sub-post offices—some of them are appealing against closure—set up a new token payment scheme with Powergen? The scheme was very popular with sub-postmasters and the public alike. However, the Post Office has cancelled the contract with Powergen and is stopping sub-postmasters dealing directly with that company to keep the scheme going. Is not that very short-sighted and possibly a restraint of trade? Will she investigate?
§ Ms Hewitt
Decisions of that sort are of course a commercial matter for the Post Office, but I will take up with David Mills, the chief executive, the matter that the hon. Gentleman raises. I hope that he will welcome the announcement that I made this morning of a further £300 million to support rural post offices. We have seen, in Norfolk and other parts of the country, good new arrangements to support postal services. Post offices are opening in pubs and village halls, and we are piloting mobile post offices. All those innovations give us the opportunity, in the longer term, to keep postal services in those villages where they still exist and to extend them to all those thousands of villages that lost their post offices in the Conservative years. Will the hon. Gentleman tell the House whether he would cut the £300 million that I am giving to rural post offices? Of course he would.
§ Clive Efford (Eltham) (Lab)
I understand that the sub-post offices that are to close have signed a contract 1445 to accept a compensation package, but is my right hon. Friend aware that if money is paid over it closes down the option for the local community to campaign to keep the service in its area, perhaps by moving into a supermarket or newsagents, where economies of scale could apply and the cost of running the service overcome? Many of my local communities where post offices will close include elderly people who will find it impossible to travel to another area. The suggested alternative post offices might as well be on the moon for such people. We must provide the option of keeping postal services in local areas.
§ Ms Hewitt
We all care about our local post offices and of course they are a lifeline for elderly people in particular. However, we must face the reality that sub-postmasters and mistresses all over the country simply cannot make a living. With the changes to people's lives—the shift to banking, the use of the internet and more people owning a car—post offices have fewer customers. The Post Office, through the urban reinvention network, is providing better post offices. Most customers are transferring to those other post offices, which are bringing new customers in by providing new services. That is the real way in which we will save post offices in future.