HL Deb 06 February 2002 vol 631 cc637-9

3 p.m.

Baroness Miller of Chilthorne Domer asked Her Majesty's Government:

Whether they believe that Postcomm's proposals for the Royal Mail will be in the interests of residents in rural areas.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)

My Lords, Postcomm's primary statutory duty, laid down in the Postal Services Act 2000, is to ensure the provision of a universal postal service. Subject to that primary duty it also has a duty to further the interests of postal users where appropriate by promoting effective competition between postal operators. It is for Postcomm to decide how it carries out these two duties. Postcomm's document, Proposals For Effective Competition in UK Postal Services, published on Thursday 31st January, is for public consultation and we would expect any concerns about the universal service obligation to be thoroughly considered.

Baroness Miller of Chilthorne Domer

My Lords, while thanking the Minister for that reply, my Question asked whether the Government believe that the proposals will he in the best interests of residents in rural areas. Perhaps the Minister will comment on what feedback he has had from such residents, because the feedback that I have received is that they do not believe that the proposals will be in their interests. Nothing else that has happened to what was the Post Office has been in their interest, from the closure of hundreds of post offices to the mess that cabling for rural areas, which is being undertaken by the private sector, is now in. So the lesson of privatisation, without even considering the railways, suggests to them that Postcomm's proposals are hasty, ill thought-out as to their effect on rural areas and certainly not in their interests.

Lord Sainsbury of Turville

My Lords, the reason for setting up Postcomm was for it to advise or take action in such areas. It has put forward these proposals and they are being consulted on. It is clearly inappropriate for the Government, having appointed Postcomm to do that job and given it the necessary authority, immediately to state their own view on the matter. The reason for the consultation is clearly to decide whether the two duties given it by Parliament are being handled in the right way.

Although we may blame the Post Office for many things, to blame it for broadband, which is of course a telecommunications matter, is carrying its responsibility too far. As for issues concerning the rural network, which I think is what is of concern to the noble Baroness, they have nothing to do with this issue. They have to do with declining customer numbers for rural post offices. We tackled that difficult issue through the recommendations of the Performance and Innovation Unit report, which we accepted.

Baroness Miller of Hendon

My Lords, given that 547 sub-post offices have closed, that the Post Office or Consignia has shown a heavy loss for the first time in 25 years, that 63,000 days have been lost through industrial action—all of that since April 2000, when the Postal Services Act 2000 came into force—can the Minister say whether the Government think that the Act was a success? Apart from asking what the Government are doing to help those in the country, what are they doing to help anyone in any part of the country—in rural or urban areas?

Lord Sainsbury of Turville

My Lords, the figures that we now have for the closure of rural post offices are actually rather better than that. During the first half of this year, there has been a sharp reduction in the number of closures—

Baroness Miller of Hendon

My Lords, I was not asking about that.

Lord Sainsbury of Turville

My Lords, I was going to give the noble Baroness the figures; I thought that there was some dispute about them. I have already dealt with the Act: first, it is a good Act; secondly, there has been rather a short time in which to judge it. As I was about to point out, on the subject before us the performance is better.

Lord Clarke of Hampstead

My Lords, first, may I ask my noble friend to convey to the Post Office my congratulations—and, I am sure, those of many noble Lords—on the excellent issue of stamps for Her Majesty the Queen's Jubilee today? Having said that, does my noble friend think that the seven weeks left for consultation on opening up the post are sufficient or constitute undue haste that is likely to cause more difficulty? The recent National Audit Office report expresses concern that introducing competition could affect rural services. Will the Minister give us an assurance that rural services will be protected if the fears of the National Audit Office are confirmed?

Lord Sainsbury of Turville

My Lords, I think that the report was published at the beginning of January and the consultation period lasts until the end of March, which seems to me reasonable. As I said, the issue of competition is not directly related to the closure of rural post offices. The issue there is the finances of not Consignia but rural post offices—the difficulty that they have in being profitable with falling customer numbers. It is worth remembering that 56 per cent of the rural post offices that closed last year were already open for only restricted hours and had no shop and fewer than 70 customers per week. That is the nature of the problem; it is not to do with the finances of Consignia.