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David Taylor (North-West Leicestershire): Is my hon. Friend interested in the example that I would like to cite briefly of the post office in the largest town in my constituency, Coalville? It is not only rural post offices that experience commercial problems that lead to their collapse and create social difficulties. It has happened in Coalville and although there are other post offices in the urban fringes, the Post Office, or Consignia, appears extremely slow and not especially willing to find alternative facilities for a town of 30,000 people.

Mr. Borrow: I shall deal with that shortly, but first I want to consider support specifically for rural post offices.

The PIU report set out a way forward, but we need to ensure that systems exist to ensure that money reaches the places where it is needed. The Post Office must properly assess the sort of rural network that is sustainable and should be sustained.

Similar problems exist in urban areas. I accept that where there are many urban post offices in close proximity, it makes sense to have a smaller network of larger and more viable businesses to serve the area. However, the trick is moving from the current position to where we want to be in dealing with private businesses. Sub-postmasters and mistresses say that they have never felt that Post Office Counters is good at communicating and working with them or at managing the system. Unless we get the right management to cope with the essential change in the urban post office network, it will not happen.

Many of our problems are down to getting the right management to work in the existing structure and to use the funding properly to ensure the maintenance of the post office network and the right postal delivery service. My greatest fear for both is that we may have left it too late to appoint the right sort of management to make the necessary changes to the business. Our constituents will not only suffer poorer postal services, but hundreds of them in most constituencies will experience employment problems because of the difficulties of the post office for which they work and for which they want to continue to work.

6.24 pm

Mr. Michael Weir (Angus): In my short time as a Member of Parliament, this is the third time I have spoken about the Post Office on behalf of the Scottish National party and Plaid Cymru. The direction appears no clearer, and we shall happily support the Liberal Democrat motion.

The position of sub-post offices in Scotland and Wales is precarious and causes great anxiety. It has already been said that the Government's determination to press on with automated credit transfer means that some 40 per cent. of post offices' income will vanish. It is difficult to understand how they will be replace that.

In opening the debate, the Minister spoke at length about network banking. However, the experience in my constituency is that banks, like many other businesses, have removed themselves from rural areas. In the past decade, banking services have retrenched out of rural

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areas. It reached the stage where one big bank was running an advertising campaign to try to gain a lead over its rivals on the basis that it was not closing branches.

In my constituency, several rural post offices have closed in the past few years. In the village of Farnell, the post office closed six months ago and is unlikely to reopen. The post office in Monikie keeps going simply because the current postmistress, who wishes to retire, has agreed to stay on in the hope that a new owner can be found. If that does not happen shortly, the post office will inevitably close. A third example is the post office in Marykirk, just over the border in West Aberdeenshire. It closed last month and will be converted into a house. The people of the village face a trip to Montrose in my constituency to obtain postal services. That may not seem a long way, but it is for those who do not have a car or are elderly or disabled.

The Minister cited the statistic, which Consignia also gave, that nine out of 10 people live within a mile of a post office. That is disingenuous when one considers the population break-up of rural areas. People in my constituency and in that of the hon. Member for Orkney and Shetland (Mr. Carmichael) face much longer trips to reach a post office.

Much has been said about the closure of post offices in the United Kingdom. In a rare bout of charity to the Government, I must say that it is not entirely their fault—the trend began some 20 years ago. In 1980–81, there were 22,475 post offices in the UK. That figure fell to just below 18,000 last year. It has been said that 547 post offices were closed in 2000–01. I appreciate that the rate has slowed, but that may be for various reasons. It is worth looking behind the statistics because they contain alarming messages for Scotland and Wales.

Most closures have occurred in rural areas, and 64 per cent. of all Scotland's post offices are in rural areas. In 2000–01, 89 per cent. of closures were of rural post offices. That is much higher than the UK average. The position is even worse in Wales, where 70 per cent. of post offices are in rural areas. That is the highest proportion in the UK. Last year's closure rate of 6 per cent. was again much higher in Wales.

It is not only rural post offices that are under threat. Consignia's latest restructuring plan, which was announced in March, foresees the closure of up to 3,000 urban post offices—one third of the total. The closure rate is higher in deprived urban areas. We cannot consider the Post Office purely in terms of business, balance sheets and profit and loss accounts. There is a social element to it, especially in rural and more deprived areas. That must be acknowledged.

I should like to know more about the "your guide" proposals, which are innovative, although in some ways they seem simply a more electronic form of doing what many sub-postmasters have done for many years. Post offices have been the hub of the community.

The motion also refers to delivery services and the universal service obligation, which is vital to Scotland and Wales. Both nations have large rural and remote areas, and delivery costs are higher to them than to densely populated urban areas. If the universal service obligation and the universal tariff are allowed to go, it will spell disaster for postal deliveries in those areas.

The Government have previously said that they would insist on the retention of the obligation, but I would like the Minister to tell me how that would be workable in a

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system with a multitude of operators. Many of the players will wish to go for profitable urban routes, and there is a clear danger that rural areas in particular will be left out in the cold. It does not seem feasible to insist that one carrier, Consignia, should have a universal service obligation when others do not.

What would such an obligation mean to a carrier operating only in an urban area? It would be very easy to fulfil the universal service obligation and guarantee a universal tariff in such a location. It would be much more difficult, however, for a carrier operating only rural deliveries. Most hon. Members on this side of the House believe that Postcomm's proposals will ultimately lead to the end of the universal service obligation and the universal tariff.

International comparisons give serious cause for concern. In Sweden, for example, prices have increased by 72 per cent., and deliveries in rural areas are made not to the door but to cluster points along the postman's route. The number of post offices in Sweden has halved over the past 10 years, and employment in the industry has fallen by 20 per cent. In spite of that, the Swedish postal service now runs an operating deficit approaching £20 million a year. Furthermore, postal deliveries to rural areas in New Zealand now take, on average, two days longer than before.

When Sir Rowland Hill introduced the penny post in 1840, he did so to reform a system in which many carriers were operating services of variable quality and charging whatever they liked. Mail was paid for by the addressee, and if they could not afford it they could not have it. The Postcomm proposals seem to take us back towards that system. For all those reasons, we shall support the Liberal Democrats tonight, and we urge the Government to reconsider this matter before it is too late.

6.31 pm

Mr. Roger Gale (North Thanet): I am conscious of the fact that we are short of time, and I shall be brief. I would like to consolidate what I said in the two interventions that I made earlier in this very interesting debate.

First, I very much appreciate the remarks of the hon. Member for Angus (Mr. Weir), with which I have a great deal of sympathy. He will understand why, when I have said what I have to say. We have heard a lot about rural village post offices this afternoon, and "village" has always been synonymous with "rural". In a town called Herne Bay in my constituency, there are a number of villages. It is a town of 25,000 people, but within that town, Studd Hill, Hampton, Greenhill, Herne, Reculver, Broomfield, Beltinge, and Eddington Lane all regard themselves as villages. In that urban community, those village sub-post offices—those little private businesses—are every bit as important as the ones in the bigger towns. To suggest that it is possible to consolidate all those private businesses into a few bigger ones just because they are in a town—and to say, "That's all right, isn't it?"—is completely to gainsay the demands and requirements of the people living in the immediate vicinity of those little businesses.

Those businesses are used by many elderly people, by young mothers with babies in prams, and by people who regard them as the shopping core—sometimes their

15 May 2002 : Column 824

once-weekly contact with society—of their community. We must all—not just the Minister, but all of us—be very careful before we take that away and destroy it. If we take it away, we will never get it back, and that would be one social service gone.

Not much has been said this afternoon about the other bit of the debate on the Order Paper, which concerns the delivery service. Yes, we have rightly talked about the needs of the highlands and islands; I understand why. But who is going to compete to deliver a letter from Margate in my constituency to East Anglia overnight at the price that is now charged? Who is going to want to do that job?

I know who is doing the delivering at the moment, and I suppose I should declare a slight interest here. My wife and I have living in our house a young lady whom we regard practically as a daughter, who also happens to be a postman. We know what time she and thousands like her all over the country get up in the small hours of a dark winter's morning when it is bucketing down with rain. She goes into the sorting offices and does her job there. She then lifts a very heavy bag on to a bicycle or into a van—she is lucky enough, most of the time, to use a van—and goes out into the dark with a torch to deliver those letters, as thousands like her do all round the country.

Those are the people who tell the local bobby or someone like me that somebody is not well or in trouble and needs help. We have talked a lot about business, and I understand that this is a commercial business, but if we lose the expertise of all those people delivering all those letters, trudging and cycling all those miles all around the country every day except Sunday—although even on Sunday there are collections—we shall never get it back.

I want to say to hon. Members on both sides of the House—on my own Front Bench, on the Government Front Bench and in the Liberal party—that we must not take away something that is very precious. It has been damaged by some fool who turned it into Consignia, which is about the most crass thing to have been done since we changed the tail fins on British Airways planes and ceased to "fly the flag". It is just another brand image, but it matters to people and is very precious. If we destroy it, we shall never be able to rebuild it.

We need to take a step back and have a long hard think before we lose more of our urban village, and rural village, post offices, and before we sacrifice their work force. Yes, that work force might have Spanish practices—they need to be dealt with—but in the main, it is dedicated, hard working and does a job that most people in this House would not wish to do.

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