Skip to main content

Post Office Closures

Volume 455: debated on Thursday 18 January 2007

7. What representations he has received following his statement announcing post office closures in England. (116325)

We have received a large number of responses from a wide range of people. There was a debate in the House on the post office network earlier this month.

I thank the Secretary of State both for that answer and for the statement that he made in December. Does he appreciate, however, that North Yorkshire is probably the most rural, as well as the largest, county in England? About 84 per cent. of its population live within a mile of a post office. Will he guarantee that that will still be the case in five years’ time? Will he free sub-post offices from the constraints of their current contract so that they can offer new services and not be so dependent on the subsidy in future?

I appreciate the point that the hon. Lady makes about North Yorkshire, but it is not the only rural part of the country. The objective that I set last December was to ensure that there is a national network of about 12,000 offices, and we are prepared to make the money available to support such a network between now and 2011. There will never be a network of anything like that size without public subsidy. About 4,000 branches could be supported on a commercial basis—perhaps 1,000 or so more—but I believe that the Government have an obligation to ensure that there is a national network. That is why we believe that the size of the present network needs to be reduced; otherwise, it will become more and more expensive. We should remember that the Post Office lost £2 million a week last year; this year, it will lose £4 million a week. That is why we had to take action. I set out the access criteria in the consultation document published just before Christmas.

Back in 1996, the main Crown post office in my constituency closed when the Co-op took over the franchise. In late 2005, the Co-op terminated that franchise early, leaving us without a main post office for two months. The new post office, 12 months after moving to a new building, is still a building site. Given such experiences, may I urge my right hon. Friend to strengthen the franchising arrangements to ensure that such a sorry tale does not happen again?

If the Post Office decides on a pattern of post offices, it is important that it remains in place. If a difficulty arises from a franchisee giving up the business—my hon. Friend alludes to the fact that the vast bulk of such franchisees are individuals in private business and are not part of the Post Office, except in transacting its business—we need to sort that out. Following on from the point about WH Smith made by the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), who is no longer in his place, it is important to realise that sharing of businesses offers the best future for many post offices, as that increases the number of people who come through their doors. That is the main problem that confronts the Post Office at present.

It has been announced that the Royal Mail sorting office in my constituency will close, with the loss of hundreds of jobs. Is the Secretary of State aware that Government policy and the Communication Workers Union are directly responsible for that, as they have blocked attempts by management to modernise and reform operations? As my hon. Friend the Member for Rutland and Melton (Alan Duncan) has said, hundreds of millions of pounds of business have been lost in the past few months alone. Will the Secretary of State now meet the Royal Mail’s senior management and deliver the changes that they need to compete in the private sector and save jobs in my constituency?

The hon. Gentleman has already arranged to meet the Under-Secretary of State for Trade and Industry, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), to discuss the specific difficulties at Reading. In relation to his wider point, the Royal Mail is now in competition with a number of other major operators. It will face stiff competition and have to undergo substantial changes. The Royal Mail board is committed to that, and it is important to recognise that change is essential if the Royal Mail is to survive.

From discussions with senior Royal Mail executives earlier this week, I understand that about half the projected 2,500 closures will be in urban areas with populations of greater than 10,000, which were reinvented by the earlier urban programme. Under that programme, volunteers were sought, and there were no compulsory redundancies, as it were, on any scale; on this occasion, that will happen. Does not that lead to problems, especially if a thriving business is given compulsory redundancy because there are other post offices nearby, whereas a struggling one is allowed to continue? Would not that be perverse?

I think that redundancy is unlikely, because most people are not actually employed by the Post Office. We expect about 2,500 branches to close, but as I said in my statement in December, we need to ensure that in each area the Post Office satisfies itself that there is a network that meets the access criteria I have set out. If that means that in some areas there are three post offices and there is business for two, it makes sense to review the position.

As I have said, losses have risen from £2 million every week last year to £4 million this week, and if we do not do anything the figure will go up and up and up. No Government will be in a position to go on supporting those losses. Everyone believes that given the huge changes in the nature of its business, and for all the reasons that we have discussed when we have debated the issue, the Post Office must take the necessary action. We are prepared to support it—we are willing to provide £1.7 billion over the next few years, in addition to other support that we are giving Royal Mail Group—but to say that there must be no change, or that business should not adapt to what its customers want, does not strike me as terribly sensible.

Bingley post office in my constituency closed before Christmas and a temporary post office was put in its place. According to a parliamentary answer, 99 per cent. of towns the size of Bingley have full post offices. Will the Secretary of State assure my constituents that his announcement before Christmas about post office closures will not stop the Government and Royal Mail doing everything possible to keep a permanent post office in Bingley, in view of the important part that it plays for local people and the support that it gives local businesses with the footfall that it generates?

My hon. Friend the Under-Secretary of State tells me that the hon. Gentleman is corresponding with him about the matter. I hope the Post Office can produce a solution that is satisfactory to him and to his constituents.