Post Office Network Subsidy Scheme Order 2007

That was an interesting brief debate. I shall start by picking up a couple of points made by the noble Lord, Lord Razzall. He said, and we all agree, that the post office network is of the utmost importance and that imaginative solutions must be found not only to extend the network but to ensure that no one in our country is deprived of access to it. Years ago, I was chairman of the Library and Information Commission, which suggested that post offices ought to be introduced into the public library network. That idea was not taken up, but I am delighted to hear that there is a pilot project in Northern Ireland, where the post office is in the library. It will be very interesting to see what happens there. I have had long discussions with people about the post office and its place in society. One of the first Questions that I answered when I arrived here was on the Post Office. I can assure noble Lords that there is cross-departmental discussion on this problem, which affects everyone. It is of vital importance, and imaginative solutions will come through for the problems that are in the forefront of our minds. They will be dealt with. I was asked a number of questions, and I will try to go through all of them. If I fail to answer any, we will of course write. The noble Lord, Lord De Mauley, wondered if this one-off payment would be debated each year. The answer is that we are agreeing up to £160 million each year to 2011, but the order allows payments to be made beyond that time. It is a fairly long-term commitment. What is the detail of the £1.7 billion funding package? As I said, we are proposing to invest up to £1.7 billion, subject to European state aid approval, until 2011, but it is impossible at this stage to determine in detail how this proposed money will be utilised. The intention is to use the money to continue the Government’s annual subsidy, restructure and modernise the Crown network, compensate sub-postmasters who exit the network as a result of restructuring and cover losses in the network. The exact breakdown will depend on how Post Office Ltd implements the necessary restructuring of the network to meet the framework set by the Government. The noble Lord, Lord De Mauley, asked whether redundancy payments are part of the £160 million. They are not; they are part of an additional package. The noble Lord also asked why the word ““establishing”” is used in paragraph (2) on page 2, rather than ““maintaining””. The answer is that the restructuring of the Post Office network may involve some post offices being relocated. The setting up of some new offices is intended to be covered by subsidy funding as appropriate, so the wider word ““establishing”” was used in this context. Paragraph (1) on page 2 covers maintenance. What, asked the noble Lord, Lord De Mauley, is the long-term strategy? We have proposed a strategy that ensures access to a nationwide network. Part of that is a reduction in some size of the network that will help the sustainability of the remaining network. The noble Lord also asked what the options are for introducing new business to post offices. There are a number of initiatives in hand. The government proposals support Post Office Ltd’s efforts to develop new financial services products, building on its success already in this area; for example, as leading suppliers of foreign currencies. Government support so far includes some £500 million investment in Horizon, enabling the Post Office to develop its financial service business by opening up its counters to up to 20 million bank customers and becoming the UK’s leading provider of foreign exchange services. Post Office Ltd will expand its financial services offered to customers, including a rollout of 4,000 free-to-use ATMs across the country, and is looking to develop new market and business opportunities among internet companies and other mail operators. Finally, an opportunity is being trialled to provide customers with the ability to pick up parcels they have ordered through mail order companies, or via internet services, from Post Office Counters. To go back to the point made by the noble Lord, Lord Razzall, a lot is happening. We are not just looking at a static entity; we are trying to make it as relevant as possible and give it business depth. The noble Lord’s final question was: what is a reasonable distance for people who do not drive to travel to their post office? Our proposed criteria ensure that that nationwide network will remain. We sought views in consultation on what people thought of our access criteria. We cannot comment at the moment on that as we are waiting for the government response on the consultation that has just closed, but that question will be an important part of it when it is published. The noble Lord, Lord Razzall, asked whether the subsidy would reflect the social role of individual sub-post offices. Our package reflects the social role of the network. The continued subsidy being considered today recognises that the social role is of utmost importance. The noble Lords, Lord Razzall and Lord Dearing, asked for creativity, inter-departmental initiatives and evidence of fresh and imaginative thinking on the Post Office network. I have given a few examples of that and Her Majesty’s Government continue to look at the scope for government initiatives at central and local level to utilise post offices as a service delivery channel, but we also need to be able to offer choice to citizens on how they can access services—for example, electronically. The noble Lord, Lord Dearing, asked what assessment has been made of the associated costs of moving government business away from post offices. The Government recognise the important social and economic role of post offices, as I have said many times in the past half-hour, and want to maintain a network with national coverage. We need to recognise that it is not a question of offsetting the costs of paying benefits against the costs of the network. We acknowledge that post offices that can never be commercially viable but which play an important social and economic role will continue to need to be publicly funded. The final question of the noble Lord, Lord De Mauley, was whether other mail operators could use post offices. Any mail operator or online business that is serious about using the post office network should approach Post Office Ltd, which will give it a sympathetic reception. If a commercial agreement cannot be reached the operator can take that up with Postcomm for it to consider. I hope that I have answered all the questions. If not, I will come back later. On Question, Motion agreed to.