My plans for our post offices

Yesterday the Government showed that we have listened with new measures and financial support to help secure the long-term future of the post office network.

First let me congratulate the Evening Press on your Counter Attack campaign. The fact that well over a thousand people signed your petition shows it struck a chord with your readers.

Your campaign highlighted the special place that post offices have in our national life. It's the biggest retail network in Europe. Twenty eight million people use it every week. Nineteen out of every 20 people in this country live within a mile of their local post office.

But post offices are not just businesses. They are a lifeline for many people and provide a focal point for the community in rural and urban areas as the Evening Press recognised.

Fewer people, however, are using post offices each year. The network has been slowly contracting over the last 20 years because the trend towards a cashless society, the increased use of direct debit, the growth of the internet and e-mail are all making increasing in-roads into the Post Office's traditional business.

We can't halt this trend. More and more people, for instance, want their pension and benefits paid into their bank account. It's the first choice method now, without any marketing, of over 50 per cent of all new mothers for child benefit and nearly half of new pensioners. The numbers will keep growing as those who now get their wages paid into their bank account retire.

But as well as being convenient, it's much cheaper for the tax-payer to pay pensions and other benefits into bank accounts.

The cost to the Benefits Agency - which means to you, the tax-payer - of paying a pension or child benefit is around 1p per transaction through a bank, 49p through an order book and 79p through a Giro cheque. It's a colossal difference, adding up to something like £400 million a year.

And to these savings must be added another £200 million by reducing fraud and theft associated with order books and Giro cheques. These are all savings which can be channelled to your priorities - health, education, supporting families and fighting crime.

It's why I'm convinced the decision to phase out order books and Giro cheques from 2003 is right. But I also accept that this change will increase pressure on post offices.

So last October I asked the new Performance and Innovation Unit (PIU) to draw up a strategy to build a strong future for our post office network. Their report and recommendations, published yesterday, were immediately accepted by the Government.

The report sends a clear message that the future for the Post Office lies in improving and expanding services to its customers. It means better premises and facilities - particularly in urban areas; seizing new business opportunities; and an expanded role offering Government services. All of this the Government will support.

It also stressed the importance of safeguarding the rural network. No one can guarantee, of course, that every rural post office will stay open. Some, for instance, will shut because their owners want to leave the business and the Post Office can find no one to replace them

But what we intend to do is stop any preventable closures in future.

The Government is going to provide cash support to help rural post offices cope with the switch to electronic paying of benefits when that is phased in from 2003.

This support is what rural postmasters wanted to help them over this difficult transitional period as they build up new business lines, a process the Government is also backing.

But the report made clear, too, that post offices are not just important in rural areas. They can play as big a role in community life in those urban areas with the most problems as they do in rural villages. So the Government will also give support to ensure post offices in deprived urban areas are retained as well.

And for customers, we have promised that everyone, if they want, can still collect their benefits in cash from a post office after 2003.

We have also strongly backed, as a central part of modernising the Post Office network, the creation of a new Post Office 'universal bank'.

The PIU said a universal bank offering banking services to their customers and those of all the high street banks was an idea with enormous potential. It can restore banking services to areas that have lost them. And because of the special relationship customers have with their local post office, it can also extend banking services to people who feel uncomfortable dealing with high street banks.

We are ready to back the universal bank with new investment. The challenge now is for the Post Office and banks to set it up as quickly as possible.

The details of the extra cash we are going to provide will have to wait until the Comprehensive Spending Review is announced next month. But I can promise the new investment will be there to put the recommendations of this report into operation.

This whole package offers our post offices a real chance of a successful future. It's a package which has won support from the leaders of the National Federation of Subpostmasters.

It's also an example of how this Government is seriously setting about modernising our public services and country. This is not a quick fix or an instant reaction to the latest passing bandwagon. It is a long-term solution, worked up in partnership with all those who genuinely want a secure future for our post offices.

I believe this package gives post offices the chance not just to survive but to thrive in the new century. Exactly what the Evening Press wanted.

PICTURE: The Evening Press sent Dick Turpin along with Ron Condon, sub postmaster at Byram, near Selby, to London to deliver our save our post offices petition signed by more than 1,000 readers.