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Volume 405: debated on Wednesday 21 May 2003

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Motion made, and Question proposed,That this House do now adjourn.— [Jim Fitzpatrick.]

7.17 pm

:The Government's programme of deliberately closing 3,000 post offices in urban areas is now biting hard. At the end of April, 447 proposals for closure had been put forward to Postwatch. I am told that, so far, 205 branches have closed under the programme.

I have long opposed that vicious assault on a key pillar of the social fabric of urban England. It gives me no satisfaction to report that my experience of what has been happening in the Christchurch constituency has justified my worst fears, as expressed in previous debates and questions in the House.

Last November, I challenged the Prime Minister on having reneged on his promise, made prior to the 2001 general election, that he would do everything in his power to enable all post offices to become general Government practitioners. Indeed, the Government are using £180 million of taxpayers' money to bribe up to 3,000 sub-postmasters to withdraw their services from the public.

The ostensible reason for the Government's policy U-turn was that the conclusions from the evaluation of the "Your Guide" pilot of post offices as general Government practitioners were that if such a service were rolled out nationally it would not represent value for money. However, everyone close to the subject knows that that was specious and disingenuous. There certainly cannot be worse value for money than bribing sub-postmasters with 28 times their monthly income to close down. We have reached a situation where the size of the bribes, which average £60,000 and are often nearer to £100,000, is far greater than the market value of the good will.

True to new Labour, however, the Government do not want to accept responsibility for the consequences of their actions. That is where Postwatch comes in. If Postwatch does not object to the closures, the Government are off the hook. Fortunately, Postwatch is objecting—and more vociferously than it has in the past.

Postwatch was set up under the Postal Services Act 2000 as a replacement for the old Post Office Users National Council. Its principal statutory objectives, according to its annual report, are to protect, promote and develop the interests of all customers of postal services in the United Kingdom. In 2002 it received grant in aid from the Department of Trade and Industry of between £8 million and £9 million. I accept that that is dwarfed by the £438 million net administration costs of the Department, which have risen by more than 40 per cent. in four years, but it remains a significant sum of money.

Postwatch is accountable to the Secretary of State for Trade and Industry. The purpose of this debate is to ensure that the Secretary of State is properly accountable to Postwatch and, through it, to those who depend, like so many of my constituents, on an extensive urban post office network.

Postwatch has negotiated a key role in the consultative process over post office closures. It is given privileged access by the Post Office to details of branches proposed for closure two weeks before any public announcement is made or MPs are informed. It can then participate in the public consultation, which takes place over the following 28 days. During that public consultation, however, it is not allowed to share with the public the vital information that is essential for proper public evaluation and discussion of any closure proposal or alternatives.

It is clear from the Christchurch experience—Stanpit and Town Common sub-post offices were involved—that a public consultation period of only four weeks is far from adequate. It is not enough time for public meetings to be convened or for information that comes to light to be fully investigated by Postwatch. I recognise the need for reasonable speed, but surely the period for consultation could be extended to six weeks, even if it meant Postwatch forgoing its two weeks of privileged access. Something urgent must also be done to ensure that all the facts are available to inform public debate on proposed closures.

Closure proposals are now coming forward at a rate of between 16 and 30 every week. Amazingly, however, there is no ostensible plan underlying them. That became apparent in Christchurch when, on the day after the decision was announced to close Stanpit post office—despite the strongest possible representations from Postwatch, local residents, councillors, and, indeed, myself—it was announced that Town Common post office was proposed for closure. That prompted me to inquire why the overall plan for future post office provision in Christchurch had not been published.

Postwatch took the point up with the south-west region of the Post Office, but was told that there was no plan and that closures were carried out on an ad hoc basis in response to individual requests by postmasters to close down their service. I am told that there are now more than 3,000 applications by postmasters to take the money—more applications than can be satisfied. There is still no plan. If I were the Minister, I would regard it as extraordinarily irresponsible for the Post Office to proceed in this way with what is effectively a business reorganisation, particularly when funded with £180 million of taxpayers' money.

The Post Office will not even discuss the number of closures planned for different parts of the country. For example, it is rumoured in the south-west—only one of nine Post Office regions in England—that as many as 1,000 urban sub-offices are to be closed. That is one third of the national total, which is extremely worrying, but there is no opportunity for open debate because the key information is suppressed.

Postwatch is also concerned about reports that Post Office managers responsible for the urban reinvention programme are to receive a 25 per cent. salary bonus if they reach their target of closures. Why have the targets in individual areas not been shared with Postwatch? When Stanpit post office was closed, despite Postwatch's objections, there was a strong feeling that Postwatch was not being taken seriously. In respect of the Town Common post office, a regional review meeting is taking place tomorrow.

But such a review meeting will not be of any substance if the outcome has already been pre-empted by a binding contract between the Post Office and the subpostmaster. That problem occurred in the case of the closure of Downside post office in the constituency of my hon. Friend the Member for South-West Bedfordshire (Andrew Selous). I am delighted that he is in his place and will participate, albeit briefly, in the debate. While I welcome the instigation of a regional review, I find it disturbing that the Post Office has not been willing to disclose to Postwatch, in advance of tomorrow's meeting, whether it is already irrevocably and contractually bound to pay compensation to the sub-postmaster at Town Common, irrespective of the outcome of the consultation.

The Post Office says that it is still intent on ensuring that 95 per cent. of people in urban areas live within a mile of the local post office, but that is a national figure rather than one with any local validity. In Christchurch, the proposed closure of Town Common post office will result in several thousand more residents living more than a mile from their nearest post office.

The Minister rejected a suggestion that I made during the Easter Adjournment debate that the Government should decide closure cases if Postwatch had raised serious objections. He said that he would not become involved because the matters were commercial decisions for the Post Office. I call on him again to become more involved, because it is apparent that a lot of taxpayers' money is being wasted on subsidising the closures of the "wrong" sub-post offices. That is certainly the situation in west Christchurch where, as a result of gaining access to information about the number of basic transaction hours expended on Post Office business, it has become apparent that the post office identified as an alternative, in Barrack road, currently has less business than Town Common, which is scheduled for closure. Furthermore, the Barrack road post office has recently been acquired by Tesco, and there is no guarantee that Tesco will wish to maintain it as a post office in the long term.

Those points were made in a strong letter by the south and west regional chairman of Postwatch, Charles Howeson, to the Royal Mail Group, dated 18 March 2003. He said:
"The Post Office at Town Common serves a significant percentage of Christchurch's residents, 27 per cent. of the electorate, as highlighted in various representations to you, not least at the public meeting held on…13th March. Indeed, your own figures record that Town Common Post Office undertakes significantly more postal transactions than Stourvale… Far from the half an hour a day's transactions being undertaken as stated… at the meeting, the office undertakes between 2.5-3.0 a day—six times the figure quoted…the fact that your migration modelling only predicted that 22 per cent. of Town Common's customers would transfer to this branch is indicative of the non-viability of the proposal: people will not/cannot access this branch."
He also makes the point that the alternative branch at Barrack road does not have a secure future now that it has changed hands.

What has happened as a result of that letter? No notice appears to have been taken of it and the Post Office has confirmed that Town Common post office will close at the beginning of June. That resulted in the regional secretary of Postwatch, Mr. Hepburn, writing to the Royal Mail Group to request an appeal. That letter, dated 1 May, made the point that the Royal Mail Group had not satisfactorily considered and addressed all the issues that were raised by the proposal. It also requested an early meeting. That meeting will take place tomorrow and I hope that it will result in a reprieve for Town Common post office and all the people who use it, many of whom are pensioners.

The role of Postwatch goes further than objecting to closure when it is not the right solution. Postwatch's involvement goes to the heart of the viability of the post office network, and that is why I was very interested in some of the information it gave to the Trade and Industry Committee. Postwatch gave oral evidence yesterday and had already produced written evidence. It makes it clear that in its view the actions of the Post Office and the Government are deliberately undermining the viability of what remains of the post office network. Postwatch is concerned about the introduction of the new card for the direct payment of benefits and the mixed messages about that. It is very worried about the contrived and complicated process that ordinary citizens have to go through to get access to a post office card account. It seems as if the whole process has been designed to deter people from applying for such an account.

Tellingly, Postwatch also makes the point that the cost of running a post office is going up, with the minimum wage rising from October to £4.50. In an annexe to its evidence to the Committee, it shows that the individual transaction payments received by post offices for card account, bank and other transactions are wholly inadequate if they are to survive in the longer term, let alone the near term. It is extremely concerned and critical of the Government's involvement in what I regard as a conspiracy substantially to reduce our post office network.

7.31 pm

I am grateful for the opportunity to speak briefly in this debate.

Many post offices have been closed in my constituency, including those in Studham and Tottenhoe, but I wish to mention in particular the closure of Downside post office in Dunstable—the first closure against which Postwatch lodged a formal objection. Postwatch sent a letter to the Post Office in which it said that that would be an opportunity
"to test if this consultation process will be taken seriously by yourselves".
Sadly, that was not the case.

I am angry about the fact that, at a residents meeting that I chaired in which 60 local residents discussed the future of Downside post office, a senior official from the Post Office assured us that no decision had been taken to close it, even though a draft agreement had been signed with the former postmaster. There was no new information at that public meeting that could possibly have influenced the Post Office to close Downside, and the reasons that I was given when I pursued the matter by letter involved such things as pedestrian access, transport links and the distance to other post offices, all of which were known before the meeting. The only thing that the Post Office could have taken away from the public meeting was the fact that the post office was a much-needed facility in the area. It is a case of deceit—not a word that I use lightly—on the part of the Post Office to tell my constituents that no decision had been taken. I do not believe that that was the case, because of the reasons that I was given. The Post Office actively discouraged another business in the same parade of shops from taking over the post office, even though it had offered to do so. I should like the Minister to respond to those specific points.

7.33 pm

I welcome the opportunity to respond to the issues that have been raised by Opposition Members. I congratulate the hon. Member for Christchurch (Mr. Chope) on securing the debate, and I listened carefully to what he and the hon. Member for South-West Bedfordshire (Andrew Selous) said.

I think that the hon. Member for Christchurch said that there was a rumour that there might be 1,000 urban closures in the south-west. I have been told that there are 634 urban post offices in the south-west, so I can reassure him that there certainly will not be 1,000 closures. He also said that the average compensation payment was about £60,000, but in fact it is less than £50,000, and was £49,700 until the end of April. Nevertheless, he made some important points that I want to address carefully.

Let me stress that the Government remain firmly committed to maintaining a viable nationwide network of post offices. We recognise fully the importance of sub-post offices as a focal point in their local communities, particularly for the elderly and less mobile. The post office network serves 24 million people every week. The current rationalisation and modernisation of the network is part of what we need to do to strengthen its viability, maintain good accessibility and provide a wider range of better quality services to customers.

The number of people using the Post Office has declined sharply in recent years. That has happened for all sorts of reasons, partly past under-investment but certainly not only that. In many urban areas, the network is now too dense to be supported by the level of business that remains, so the Post Office has to undertake this careful process of reducing the number of urban post offices, but in a way that minimises the inconvenience caused to customers and maximises the number of people who continue to use the post office network. The alternative would be a process of unmanaged decline, where individual sub-postmasters simply decide to shut down and leave. Opposition Members would accept that such an unmanaged process would be much more damaging to the interests of our constituents in urban areas than the one that we are going through.

Let me comment on the constituency cases referred to by the hon. Member for Christchurch. I am aware that there was very strong feeling in Stanpit against the proposals, particularly as the Post Office's alternatives were felt to be inappropriate for people with disabilities because of problems with access. I am pleased to say that—as I am sure he is aware—Purewell Cross, which is the nearest alternative to Stanpit, has received an investment grant of about £2,500 to improve the facilities there. I understand that Postwatch's concerns have been significantly allayed in the light of the fact that improved disabled access is being provided at Purewell Cross. Indeed, Postwatch is monitoring the provision of a ramp there. That is an example of the kind of improvements that we want to arise from the consultation process that Postwatch is taking forward.

Again, I recognise that Postwatch opposed the proposals for Town Common. The hon. Gentleman was concerned about the fact that Tesco had recently acquired one of the alternative offices, and there was a question about its long-term security as a post office. I understand that, if there were any change in the arrangements at that store, six months' notice of that fact would be needed, so there would be time to ensure that there was an alternative in the area. However, as he said, there will be further discussions between the company and the Postwatch South and West tomorrow.

The hon. Member for South-West Bedfordshire and I have discussed the case that he raised, and I pay tribute to him for the way in which he has diligently pursued it. I have seen a recent letter from Peter Carr, the chairman of Postwatch, in which he makes some suggestions about what might be done in that case. Post Office Ltd. will consider those suggestions—I do not know what the outcome will be—but that continues to be a live issue.

When a sub-post office closes under the programme, the Government will meet, from a £30 million fund, the costs of adapting and improving those offices that remain. The key to improving standards in those offices will be the increased volume of business that they can expect, but the grants for each office that expects to take on a significant number of additional customers—to be matched by the same sum from the postmaster—will be an important boost too. The grant made to the post office at Purewell Cross is an example of that. I should make the point that that is the first ever programme of Government investment in urban sub-post offices and that it is an additional measure on top of those recommended in the performance and innovation unit report, which started the whole process. Proposals that Post Office Ltd. makes for closures under the programme are determined by how many offices are close to each other in the area, the current and projected business volumes and whether individual sub-postmasters have already indicated that they want to leave the network. Those are by no means the only criteria for the decision, however. Factors of high importance to customers are also examined closely. Those include the convenience of other branches, public transport links, facilities, access for the disabled and the ability of other branches to absorb the work without detriment to the service that they provide. Post Office officials visit every area, walk in the area, and make a study of the configuration of the offices and of local factors before submitting a proposal. The aim is to ensure that it is as easy and convenient as possible for customers to use other post offices nearby: after all, the Post Office wants to maximise the number of customers who continue to use the network at other offices, thereby maximising the amount of business from a closing office captured by other offices in the post office network.

The hon. Member for Christchurch set out the legislative basis on which Postwatch was set up. It is an independent organisation, and is not attached to the Royal Mail Group or any part of government. It was set up as a consumer watchdog for postal services to ensure that post offices, Parcelforce, Royal Mail and any competing postal providers give the best possible service to customers. It is consulted on every closure and relocation proposal that Post Office Ltd. makes, and has been given an important role in the implementation of the restructuring programme by examining every proposal made and monitoring the overall programme. At the start of the process, Postwatch set out for me the funding that it would need, in its view, to do that job well, which required the appointment of a number of field advisers around the country. The Postwatch budget for the current year includes that additional funding in full, and staff have been recruited accordingly. We did that because we recognised that the Postwatch contribution is essential for the programme to be seen through successfully.

Postwatch, in its briefing on the urban reinvention programme, has accepted the findings of the performance and innovation unit report: that changes to the urban network are needed to achieve economic viability and to bring about "bigger, better, brighter" post offices. Rightly, however, Postwatch has also made it clear that although it does not oppose the principles behind the programme, it needs to set the aims of Post Office Ltd. against the needs of customers and it will monitor carefully the implementation of the programme.

Building on the code of practice in relation to Postwatch and Post Office Ltd. for branch relocation, closure and conversion, an enhanced consultation process has been negotiated that aims to allow customers, Postwatch and other representative bodies to have their views heard, to influence and, when appropriate, to change the Post Office's decision. During public consultation, Postwatch researches local opinion, conducts its own investigations into the impact of the proposals on customers, and examines every proposed closure and its impact on the local area with the aim of ensuring that the right branches stay open and that they provide the right services, by assessing opening times, number of counter positions, impact on queuing, disabled facilities and access, product availability, planning issues, transport and other factors.

Postwatch does not expect to oppose proposals that involve closing an individual branch in an area where there are other branches that are easily accessible to the local population and that offer a good range of services. If Postwatch is not convinced by the proposal, it asks the Post Office to withdraw or modify it to make it more acceptable. If that does not happen, Postwatch will coordinate local opposition, and if necessary, will campaign to keep a branch open.

I understand that, so far, Postwatch has received 550 advance notifications of proposed closures. Eighteen were withdrawn before reaching the public consultation stage, and another 24 were modified. The latest figures that I have show that Postwatch opposed 23 of the 484 public notification letters received. Four cases that have entered public consultation have been withdrawn completely because of objections made by Postwatch and others. Proposals have been amended as a result of issues raised during consultation in a further nine cases. Typically, amendments were made to the timing of the change proposal or to suggest improvements and changes to facilities in nearby branches that were expected to pick up migrating business from the closing office.

Of course each closure has an effect on customers, but there have been relatively few contentious proposals to date—we have heard about three in the debate. In the light of the experience of the early stages of the programme, an additional review procedure has been added to deal with disputed proposals. The procedure has been agreed between Postwatch and Post Office Ltd. and may be applied when Postwatch opposes a closure decision. I agree with the hon. Member for South-West Bedfordshire that the process did not work well in the case that he drew to my attention, and the new procedure is, in part, a response to that. I accept that that is of no comfort to him but I hope that the procedure will help to avoid such difficulties in future. The procedure is administered at a senior level in both Postwatch and Post Office Ltd.

It is important for hon. Members to note that Postwatch recognises that with or without the urban reinvention programme, sub-postmasters will want to leave the network from time to time. It believes that taking an active role in a programme of managed change provides the chance to examine an area and its post office provision systematically, logically and analytically, and also gives Post Office Ltd. the opportunity to concentrate on taking poorly located and underperforming branches out of the network. Post Office Ltd. has said that it will shift its emphasis from more vulnerable offices to wider areas as the programme continues.

The programme will run for three years. It is in its early stages but it is important that we get the decisions right. I welcome the comments that have been made in the debate.

Question put and agreed to.

Adjourned accordingly at thirteen minutes to Eight o'clock.