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Mr. Connarty: That shows the extent to which the hon. Gentleman is out of touch. There are no longer any sponsorship deals. I am a member of the parliamentary panel of the CWU, and I declare an interest. When sponsorship existed, I also declared my interest on the Floor of the House. There is currently no sponsorship, but if the hon. Gentleman wants to ban strikes, that will apply not only to one union but to the whole of industrial Britain.

Mr. Whittingdale: I accept the hon. Gentleman's curious distinction. I am not entirely sure what it means, but I accept his assurance that there is no sponsorship agreement. I am not talking about banning the strike, but I hope the CWU recognises that a national strike is the last thing needed by a business in the terrible state that the Post Office is in. Such action would do enormous damage, especially to small businesses, in a short time. If the strike goes ahead, I hope that the Government will consider removing the Post Office's monopoly.

Even if the Government do not lift the monopoly, greater competition will be one of the drivers of the improved performance in the Post Office that everybody supports. I welcome the regulator's moves to introduce more competition, and we look forward to his proposals for achieving that. Limited progress in introducing competition has already been made, but Postcomm needs to do more to encourage new entrants and to ensure that contracts with the Post Office are attainable and fair.

Competition will help to ensure that service standards do not deteriorate further. The universal service obligation is enshrined in the Postal Services Act 2000, but there

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have been worrying reports that it may be chipped away at the edges. As I have said, we already know that morning collections and second deliveries will be scrapped. Yesterday it was reported that domestic deliveries may not be made until the afternoon, with only businesses receiving mail before 10 o'clock in the morning.

It therefore appears that the Post Office cannot guarantee to deliver a first-class letter the next day, and that in future a letter may not even arrive until the afternoon of the subsequent day. Not only domestic customers will suffer: as the Federation of Small Businesses pointed out, it is often almost impossible to identify home-based businesses from the address on the envelope, so it is inevitable that many small firms will lose out if the proposal goes ahead. One report in Sunday Business even said that there are secret plans in the Post Office to end household deliveries all together. As the Liberal Democrats were identified as the source of the story, we can probably take any such reports with a pinch of salt. None the less, whether or not the report is true, the performance of Royal Mail is not good enough and is getting worse. Yet, Ministers have attempted to claim that that is entirely a matter for the management of Consignia and that they bear no responsibility. They cannot get away with it.

Mr. Challen: Will the hon. Gentleman explain how the private sector could guarantee all the services that he fears losing, except by charging more for them? He may be aware of a report in yesterday morning's Yorkshire Post featuring a business man in Hawes, North Yorkshire, who says that he greatly fears the impact of all the changes. However, the hon. Gentleman must say what will replace them.

Mr. Whittingdale: I ask the hon. Gentleman merely to look at the record of what has happened in Germany and Holland. Indeed, he should consider the record of other privatised utility companies, each of whose performance has improved.

Mr. Martin O'Neill (Ochil): Will the hon. Gentleman share the information that he obviously has about the liberalised markets in Europe? To what extent has liberalisation affected domestic rather than commercial deliveries? Will he give us the figures?

Mr. Whittingdale: I do not have the figures to hand. I have read the NAO report, which makes it clear that, where competition has been introduced, the main post office has largely continued to have the vast majority share of business. I see no reason why that should not happen in this country. The Post Office should be an extremely successful business. I have no doubt that if it were allowed to compete, it could do extremely well. I anticipate not that it would lose a large share of the business, but that the introduction of competition would, as has happened elsewhere, act as a general driver to improve performance and increase efficiency. It is the Government who have decided to keep ownership of the Post Office in the public sector and who retain responsibility for the management of Consignia and its strategic direction. It is, therefore, the Government who

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are ultimately responsible for the company's performance and for ensuring that the customers get the standard of service they are entitled to expect.

Mr. Geoffrey Clifton-Brown (Cotswold): Does my hon. Friend agree that the more the Post Office fails to give a reasonable, everyday service, and as the likelihood of a general strike increases, the more people will find alternative methods of sending their communications, perhaps through e-mail or text messages? As more people use such means of communication, fewer will be sending letters, so the unit cost will rise and the downward spiral worsen.

Mr. Whittingdale: My hon. Friend is entirely right. That is another reason why strike action is the last thing that the Post Office needs at this time.

I turn now to a different aspect of the business of the Post Office, but one that is equally important and that matters to a huge number of hon. Members in all parts of the House—the future of the counters business. I suspect that hon. Members in all parts of the House acknowledge that the 18,000 post offices and sub-post offices throughout the country perform a vital service. In my constituency and those of many other hon. Members, sub-postmasters play a vital part in sustaining the life of their local communities, especially in rural areas, and also in deprived areas of our cities. All too often, when the sub-post office closes, the village dies.

Once again, it was the current Secretary of State for Transport, Local Government and the Regions who said two years ago:

Yet, following that statement, another 382 sub-post offices closed that year. Last year, the figure increased to 547 closures in a single year. I have no doubt that the Secretary of State for Trade and Industry will say that the rate of closure has slowed. I must warn her not to take too much comfort from that. Many sub-post offices are hanging on only because it has been found that no one is willing to buy the business. The sword of Damocles is hanging over the sub-post office network, and the Government are responsible for that.

Mr. Bob Laxton (Derby, North): Will the hon. Gentleman acknowledge that the issue is not only the closure of sub-post offices and rural post offices? In the constituency of the hon. Member for West Derbyshire (Mr. McLoughlin), a small rural sub-post office has recently re-opened. That was at Ashford in the Water. In some areas, where there has been co-operation on the part of local authorities and Consignia, offices are opening. It is not a matter of closure everywhere.

Mr. Whittingdale: I agree with the hon. Gentleman, who I understand is another Member who is sponsored by the Communication Workers Union.

In my constituency, I was delighted to assist in the re-opening of a sub-post office in Great Totham. However, for every sub-post office that is opening, I can point to at least a dozen that are closing. I have quoted

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net closures. I am sure that the hon. Gentleman will not try to pretend that the sub-post office network is not shrinking every year.

Mr. Patrick McLoughlin (West Derbyshire): I am grateful to the hon. Member for Derby, North (Mr. Laxton) for giving me the opportunity to intervene on my hon. Friend. I understand that the hon. Gentleman is a Parliamentary Private Secretary in the Department of Trade and Industry.

Although the opening of the Ashford in the Water post office is welcome, the closure of the post offices in Cubley, Longford, Rostan, Flagg, Lea Bridge, Kniveton, Fenny Bentley, Clifton and Taddington took place under this Government.

Mr. Whittingdale: I am most grateful to my hon. Friend. The real tragedy is that the experience that he has set out in Derbyshire will be repeated in every county. There is no question but that sub-post offices are closing in alarming numbers and are continuing to do so.

Mrs. Angela Browning (Tiverton and Honiton): I have a sense of deja vu because many of the predictions that we on the Opposition Benches made two years ago are being seen to come true. Perhaps it is worth mentioning that sub-post offices are private businesses. They are businesses into which people have put their pension money and their lifetime savings. When they cannot sell them, they see their assets—often assets on which they were relying for retirement—diminishing.

Mr. Whittingdale: My hon. Friend is absolutely right. That is one of the great tragedies. People who have put all their savings into the asset of a sub-post office are finding that they are unable to sell the business. As a result, they will be left with far less to provide for themselves in retirement.

I have already quoted the former Secretary of State for Trade and Industry. When my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) was speaking for the Opposition on these matters, she warned precisely what would happen if the Government continued with their policy.

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