Thank you, Mr. Atkinson, for allowing this debate to go ahead and for giving an hour and a half of your time this morning. This important debate relates to the whole of the United Kingdom, but we are talking about Lancashire, and there is no better county. Lancashire is a proud county—it is the red rose county. It is good to see that so many hon. Members—some are leaving, but some are joining us—have turned up today to show their commitment to the Post Office in Lancashire. It is important that we are allowed to express that view. Once again, I thank you, Mr. Atkinson.
The future of the post office network has come under considerable scrutiny following the announcement that 2,500 post offices are set for closure. This debate will focus on Lancashire and on the proposals put forward under the Lancashire, Fylde and Southport area plan, so we have two other areas to consider—it is important that we mention that. Under the proposals, 59 post offices—20 per cent. of the existing network—will shut, following the previous closures throughout the’80s and ’90s and up to the present day. The problem is that there is nothing new in this. However, we suffered due to the major closure programme in the ’80s and we are suffering now.
I congratulate my hon. Friend on securing this important debate. He has raised an important issue in respect of the cumulative effect. Does he agree that, as post offices have been closed over the years, fewer people live within a mile of a sub-post office, making their lives increasingly difficult and putting more pressure on post offices in town centres, which may be equally inaccessible?
I cannot disagree with my hon. Friend. As somebody who lives in her constituency and who is a strong advocate of all the people, she knows better about such things. If we follow the programme of closures, the most vulnerable will find it most difficult of all to access a post office. Hon. Members must ensure that that point comes across loud and clear, and no one does so more than her.
My hon. Friend is making a powerful case, as ever, for the people of Lancashire. Is not the problem the scale of the proposal, which goes way beyond closing uneconomic post offices? For example, Longshoot post office in Haslingden in my constituency is successful and has a good business plan. There are 800 names on a petition to save it. In such circumstances, is it not time that the Post Office thought again?
I totally agree. My hon. Friend is a strong advocate for community post offices and for the people who use them. I could not agree more with him. He has been standing up for the Longshoot post office: he has made a powerful case in the past and will continue to make powerful representations in future.
It is important that this debate takes place. We are not saying, “Let’s save everything”, because that would be naive. We are trying to make a constructive case where there is room for manoeuvre and for decisions to be changed. Personally, I would go further: I would like to see no post offices closed, but even I have to be realistic about what we can achieve. We are here today to try to achieve something for post offices in our areas and for those in special circumstances, such as Longshoot post office.
Lancashire has been hit hard by the closures, as we have just heard, with more than a quarter of the post offices in the county closed since 2003. We have already had a big hit and, prior to that, throughout the ’80s, we were hit just as hard. That is an inordinate amount of closures for an area with a diverse population, a significant number of deprived areas and a large rural footprint to bear. We should also remember that, despite “Coronation Street” and people’s image of Lancashire being cobbled streets, the truth is that we have a large rural area. My constituency has 22 parishes in more than 80 square miles, with a large farming area. That is so from the south of Lancashire to the north. We have a great rural area, but we have the great urban areas as well, with a high concentration of people living in them. We ought not to think that Lancashire is purely a built-up area: we have a built-up area, but we have the rural areas, too. That is why it is not appropriate to hit Lancashire as hard as we are doing at the moment.
I am sure that hon. Members will wish to highlight individual examples in their respective constituencies. I should like to talk about the closure programme in Chorley in more detail. The Post Office has proposed five closures in the Chorley constituency. We have contacted the sub-postmasters of each of the post offices and three of them—in Charnock Richard, Withnell and Eccleston—have expressed their desire to close. It is impossible to try to keep those post offices open if the sub-postmasters wish to close them; after all, the buildings are theirs. Some may argue that they have a contract, but if they close the door there is not a lot that we can do about it.
It is a little bit ironic and a touch hypocritical—I will not say that it is childish—for the sub-postmaster at Withnell to ask people to sign a petition to save the post office. Why could he not have been honest and said, “No, it is time for me to go. I wish to close”? To do that under the banner of a Conservative councillor is rather silly. If the council and the councillor were more serious, they would be putting in more services to help to save the post office.
Of course, there is little that we can do when a sub-postmaster wishes to close. However, as we have heard already, we ought to get up and start shouting when a sub-postmaster wishes to remain in business and there is a strong business case to keep a post office. In such a case, the Post Office should reconsider its current proposals. For example, the Bolton street post office is successful: between 1,000 and 1,500 customers per week access it, sometimes increasing to 2,000 a week. That is a viable operation. It is an important post office. In fact, it is one of the few post offices where people can park directly outside, both in front and across the road, with a car park nearby too. It is wrong even to consider closing it, because there is so much parking. People cannot park outside many post offices these days. Bolton street post office is within walking distance for many, but parking outside is also available.
Many elderly residents living near Bolton street post office do not have access to a car—the area has low car ownership too—so it is difficult for them to go to the Crown post office or the one on Devonshire road, which is more difficult to access. The bus does not go from the Bolton street area to the Crown post office or the one on Devonshire road. We ought to reconsider the Bolton street issue.
In the area that I am talking about there are elderly people’s flats and old people’s bungalows, and many elderly people living to the south of the post office. It is critical that we stress the area to the south of the post office, because the alternatives are in the north. If people reach Bolton street post office from the south, they have a minimum of another half a mile walk north to the next post office. We have to emphasise Bolton street’s geographical position, because if the post office were closed people would have to go three miles to the nearest post office in the south. This closure has not been well thought out.
We must also consider new housing estates. Within five minutes’ walk of Bolton street—less than quarter of a mile—Multipart, part of the old Leyland Trucks parts centre, has been demolished, making way for new houses. In fact, 400-plus new houses will be built on that site, some of which will be low-cost homes. That area fits the plan of growing a post office, not closing it. Those 400 properties must be taken into account. The demolition has taken place and the builders are now setting about the reconstruction of houses in the area. That is additional development: houses are not being taken away; new houses are being put in. That is happening less than quarter of a mile away—only five minutes’ walk—from Bolton street post office.
In addition, several other planning permissions have being granted. The local development south of Bolton road has planning permission for 1,000 properties, which will be built as part of the Government’s plans under the old Commission for the New Towns, if anyone remembers that. We were a central Lancashire new town, and the Government left land for housing development. A new road was built, and to pay for it they gave that land, so the housing development is paying for the new bypass. Those 1,000 houses have not been taken into account, and that is a further reason why the post office should not close. That is all to the south, where there is no other post office for three miles.
I mentioned the 2003 closure programme. We were all led to believe then that that would be the end of post office closures, and I remind hon. Members that the Bolton road post office was the reason that the other post offices had to close. It is absurd that both the Moor road post office in Pall Mall and another south of Eaves lane were allowed to close on the ground that the Bolton road post office was an alternative. We cannot pretend that circumstances have changed between then and now. The fact is that customers were driven to the Bolton road post office, and now the Government propose to take that post office out of use. That is a farce and a disgrace; it is shambolic. The reason given is that it is a different closure programme, but that has nothing to do with it. The fact is that people were told to use Bolton road post office; because the Government have jiggled the figures, they now want to close the one that was recommended for use. Come on—let us have some reality in the Post Office. We need reality, because there has been none in the closure programme, which is nonsense.
When we look at the alternatives, they are not that good. I shall continue to argue against the Bolton road post office closure. The Crown post office is in the centre of town and, as we all know, Crown post offices are an important part of town centres. In Chorley, the Crown post office is key to the town centre. I do not believe that closing Bolton road post office will assist the Crown post office. We already have long queues in the Crown post office, which is well used because Chorley is a great place, and people love to shop there and to use Chorley market. The Crown post office serves not just the local community, but Wigan and other areas whose inhabitants want to shop in Chorley. As it continues to develop, the footfall through Chorley town centre continues to increase year on year, and the beneficiary is the post office.
The Crown post office is struggling to deal with the business that it already has. There are great proposals for the town centre with redevelopment and plans for a new shopping centre, which will bring even more people into Chorley who will access the Crown post office. Let us have a little common sense, and let us use it to ensure that we do not give 1,000, 1,500 or 2,000 people from Bolton road an unacceptable service, because the Crown post office is not capable of providing an acceptable service.
Charnock Richard is a small village and had a post office within a supermarket, which decided that it did not want the post office because it was not viable as it had only 50 to 80 customers a week—I am being generous. I understand that it costs money to operate it and that it does not make economic sense for the village to have that post office, but I care about those 50 to 80 people who use it. Charnock Richard has many bungalows for older people, who should not be neglected. Although the numbers may be small, they could access the post office through a mobile service.
My hon. Friends the Members for South Ribble (Mr. Borrow), for Hyndburn (Mr. Pope), for Blackpool, North and Fleetwood (Mrs. Humble), for Morecambe and Lunesdale (Geraldine Smith), and for Pendle (Mr. Prentice), and even the hon. Member for Ribble Valley (Mr. Evans) have all come to hear this debate because they care about the post office. If a post office does not make economic sense, and closing it would leave a community without access to a post office, a mobile post office could serve all our constituencies, and would be viable and ensure that the people we represent, including the old and most vulnerable, would have access to a service. We must provide that access. That is a way forward, and we are not asking for the baubles to go with it. Far from it. This is a realistic debate, which recognises that, although I do not want any post office closures, if we are to have them we must put something else in place to ensure that we do not neglect the people whom we represent.
The advantage of a mobile unit for Charnock Richard is that it could serve other constituents. We must be realistic. We all know the value of the post office and what it brings to local communities. It plays a central role in local communities and provides a focal point for older and vulnerable people where they feel safe, where they can share problems, and where they can obtain help with the service that they are accessing or if they require other information about paying bills, filling in forms, and so on. We know what value sub-postmasters provide in the community. That is why post offices are important, and that is why we must consider their social impact as well as their economic role. Post offices are social providers, and that is why they are important.
However, taking the business case as it stands, the Government could make a significant difference to the future viability of the network. Unfortunately, we have seen withdrawal of services from post offices, and people are no longer encouraged to buy their car tax from the post office. They are encouraged to go online or to use any method other than the post office.
Using the post office always provided a good safety check. When someone turned up to pay their car tax, they had to produce up-to-date MOT and insurance certificates. As they were known by the people in the post office, a car could not be cloned, because more often than not everyone in the village knew what car they drove. That was local, personal contact, with the right ticks put in the right boxes. Face-to-face contact provided a security check to ensure that no one was cheating the system. Now, we are discouraging people from using the post office.
As for the BBC, what a total disgrace. It uses taxpayers’ money to produce programmes, but it shafts local post offices. That is totally unacceptable and disgraceful. It claims to want to be part of the community, but when it can be it becomes so remote that it is totally unacceptable. It must reconsider its position. It says that it is saving money, but for small change it is willing to sacrifice post offices.
Has my hon. Friend had similar representations to those from my constituents who find it difficult to renew their television licences because many providers who took over when the post offices lost the franchise have stopped dealing with television licences? Some of my constituents travel miles and miles to find somewhere to renew their TV licence.
That is absolutely right. There was no better advert for people to renew their TV licence than going to the local post office. They knew that that was where they got their TV licences. Now, they must dodge about and look for signs outside shops saying “PayPoint” but—my hon. Friend the Member for South Ribble is absolutely right—when they go in they are often told that the shop has stopped dealing with TV licences because it got fed up. When they ask why the sign is still up, they are told that it brings people into the shop, but it does not provide the TV licence. People are actually not buying a TV licence because we are making it so difficult.
I congratulate the hon. Gentleman on obtaining this debate. The issue is about more than the individual services that the post office is or should be providing, such as TV licences—although I fully endorse the provision of such services. The post office has lost not only the small amount of money that it received for handling the TV licence transaction, but the person coming into the post office who might have bought other services while they were there. A lot of post offices are small grocery stores and sell other things, so they have lost that business as well. The knock-on effect on post offices is much wider than losing the profit that they would have made on TV licences. Marginal post offices will be pushed even further towards the edge of the cliff, over which they will fall—if not this year then next.
The hon. Gentleman is absolutely correct. If people are not going into a post office for a particular reason, they will not pick up something else when they are in the shop. We all know that. The mentality is to get people in and then sell another service to them and if people do not have access to the service that they require, it is another a nail in the coffin for post offices—as the hon. Gentleman said, if it is not this year, it will be next year.
If the BBC claims to be part of the community and wants to use taxpayers’ money, it ought to go back to its roots and allow people to buy their TV licence in post offices. The sooner it tears up the existing contract the better. The message for the BBC is this: start looking after the community. We represent taxpayers and at the end of the day they are the people who keep the BBC going through their licence payments and tax.
As I have said, it is important to note that every time a service is removed customer numbers fall and we are faced with more programme closures. We must be realistic and bring in more services. The vicious circle must end and rather than remove services, we must bring in new ones. More services must be given to the post office so that it becomes a viable business operation and at the same is able to play a vital social role. I cannot understand why we have had to badger, persuade and blackmail—although that might be taking it a bit far—to try to get banks to come into the post office. Banks have had no desire to do so, but now that we own Northern Rock there is no greater opportunity. Why not put branches of Northern Rock into the post offices? That would provide them with a viable business that can compete on the high street with other banks and would also provide a whole new customer range, such as customers who have never been able to access a building society or bank before. As you come from the north-east, Mr. Atkinson, I am sure that you agree that we must ensure that Northern Rock has a viable future.
However, such a proposal would also ensure that post offices have a whole new business. If Northern Rock is not put into all post offices, I suggest that there is no better building society than the Chorley and District building society, which is very profitable, well used, well managed and wins awards year after year. The Chorley and District building society would like to grow. At the moment it has three branches and it considers that nothing would be better than opening a branch within the local post office. That would help Chorley and District building society and give customers access to a building society and to the other products it can sell.
I congratulate the hon. Gentleman on securing this debate. Does he agree that a positive way in which what he is advocating could be achieved would be to put ATMs in all the post offices that remain open? The Royal Bank of Scotland has been actively doing so in Scotland, so should we not encourage the banks to do the same in England?
There is no problem with having ATMs in post offices, but I do not believe it would be the saviour of post offices—although as long as the ATMs are free it would go a long way to assisting most post offices. That proposal will not quite have the necessary impact. I am fully supportive of anything that will help, but I do not believe that ATMs are the panacea for the future of the Post Office. We must be more up front than that. As I have said, Northern Rock is a good example in relation to that—people could use its ATMs. However, there is much more that we can do, which is why it is important that we do tie up—whether it is with a local building society or a national bank. We need to ensure that the Post Office has true partners and now that we own a bank, we should make good use of it.
On local authorities, I notice that Lancashire county council sent a letter to MPs that states that it wants to save the Post Office. Well, let us be honest about Lancashire county council. If it wanted to, it could encourage more services to be provided through the local post office. For example, if someone has a parking fine, why should they not be able to pay it at the post office? The county councils can do so much more: for example, they are busy closing information centres in our constituencies, so why not provide some of that information through the post office? The postmaster could be used to provide access to the information and a rent could be paid to the postmaster.
By being more creative we can do so much to save post offices. Instead of just passing a resolution at county hall, let county councils face up to the problem. I am sure that the Minister will wish to comment on this, but there is nothing at all to stop the county council from subsidising the post office network. In fact, I believe that Essex county council has done so and that the closure programme in Essex has been put on hold. There are real alternatives and ways in which we can save the post office network. Local authorities can do so much more by making more services accessible through it. That would be a way forward. However, we cannot and must not forget the Post Office card account, which has been a huge success. That really is the future of the Post Office. If it does not have that service, we can say goodbye to virtually every post office. The Post Office card account is vital to the future of the Post Office and is without doubt the most crucial part of saving our post offices.
I shall end by making the following points as I do not want to take any more time. Local authorities can play a part and I ask county hall not just to engage in gesture politics by passing a resolution, but to be part of saving the network. Local authorities must ensure that if they care about the network, they put the work into it. Much more can also be done by district councils. This debate is about saving our community post offices and, as I have said, there is no stronger business case than the Bolton street post office in Chorley. I believe that other hon. Members will be able to put similar business cases. It is time for the post office network to wake up and listen to the communities that we represent.
It is, as always, a delight to follow my friend from Chorley (Mr. Hoyle), who made his case well. He speaks with great authority as he is a member of the Business, Enterprise and Regulatory Reform Committee.
The BERRC. It has just produced a report on the post office closure programme. Like everyone else, I am dismayed by what is happening because the post office is part of the fabric of urban and rural life. When post offices close, it will virtually be impossible to recreate the network.
About 10 or 20 years ago, it was fashionable to get rid of parkies—park keepers. Parks and public spaces became no-go areas. Now everyone is talking about reclaiming public space and the park keepers are coming back because people have realised that the wrong decision was made years ago. Similarly, in recent years, there have been proposals to close police stations. The police told us that no one visited police station x in a little village in the middle of nowhere, but they did not realise that police stations are hugely symbolic. People see them as a place of refuge; they are part of the waft of our life and we need such institutions.
If such a thing has not been recognised by the Post Office and others, it has been recognised by our local newspapers in east Lancashire—Pendle lies in the east of the county and 500,000 people live there. The case has been championed by the Lancashire Telegraph, which had the front page headline, “Doomed: quarter of East Lanc’s post offices to close”. It also had photographs of all the post offices. Over the following weeks, there have been stories underlining how the closures will personally affect people.
The Carr Hall post office is in my constituency of Pendle. A local newspaper article says that Tom Lees’s 20-minute trip to the post office could soon take him nearly five times as long, because the Post Office wants to close his local post office at Carr Hall. He tells the paper that he has worked out that if the post office is closed, it will take him one hour and 37 minutes to get to the alternative post office that has been identified.
Another article has the headline “Hands off our sub post offices” and there is a photograph of my colleague the Member for Burnley (Kitty Ussher), who is championing the cause of the post offices under threat next door to my area. Other headlines include “Protestors vow to fight closure plans” and “Death of village!” Villagers in Higham have vowed to save their local post office. That article quotes Debi Archer, the postmistress, who took over the premises almost two years ago, as saying that the post office and shop form the heart of the community and that if they were taken away, the community would die.
“Post office closure fury” is a headline from Barnoldswick, the town where I live. The article states:
“Barnoldswick Town Council has condemned the Post Office’s plans to close its office in Gisburn Road”.
Barnoldswick is a town of 12,000 people. It has two post offices, so if the Gisburn road post office goes, it will have one post office for 12,000 people. Would someone from Post Office Ltd explain to me the rationale for that? No wonder people are infuriated.
I am sure that the Bishop of Blackburn does not do fury—[Interruption.] Well, perhaps he does in his private moments. He is, in his ecclesiastical way, upset. He said to the local paper:
“It is vital that this review process is a genuine consultation, not just a cosmetic public relations exercise to rubber-stamp business plans”,
and continued in that vein. The Lancashire Telegraph editorial picks up that theme, citing the Post Office’s response to people who have been handing in petitions. My friend from Hyndburn (Mr. Pope) talked about the post office in his neck of the woods, where 800 people signed a petition. The Telegraph editorial says that the Post Office has been giving the impression that those petitions do not carry much weight. It goes on to say that the consultation is a sham. That is the issue. We are marching people up to the top of the hill. We are giving them the impression that, through petitions and letters, they can change the result.
Is my hon. Friend aware that when the Lancashire Telegraph went to the headquarters of Post Office Ltd to hand in a petition, nobody came out even to accept it? Is that not a disgrace?
That is appalling. It genuinely shocks me to hear that people who would have spent a long time getting names for the petition should have been sent away with a flea in their ear, without even seeing someone to hand their petition over. That is, as my friend says, an absolute disgrace.
Let me return to the question of the consultation, because that is central. I should perhaps have said earlier that I wrote to all the postmasters of the post offices threatened with closure in my constituency—there are six of them. Let me say this in parenthesis. When I was first elected as the MP for Pendle in 1992, there were 28 post offices. We have already lost 10. The proposal is that we lose another six, so we will be left with 12 post offices out of the 28 that I inherited. Of course, that is not something that started in 1992; it has happened under Administrations of all colours.
According to the House of Commons Library note on post office numbers, there were 22,405 post offices in 1981-82, but now the number is down to just over 14,000. The Post Office and the Government want to get it down to about 11,500 and I think that the Select Committee has concurred with that. There has been a steady and relentless decline in the number of post offices throughout the nation year in, year out, but the rate of closure has been accelerating. Since the late 1990s, the net change has increased dramatically. In 2002, there were 345 closures and there were 262 closures in 2001, but in 2003-04, the number shot up to 1,278. In 2004-05, there were 1,352 closures. There has been a falling back since then, but the programme has been accelerating.
We do not need to be a mastermind to understand the pressures on the post office network. The banks have been vacating the high streets. The internet is now ubiquitous, and people pay their utility bills and so on via the internet. We have heard about TV licences. People can renew their car tax online. We have to recognise and accept that the context in which post offices are doing business has changed almost out of all recognition over recent years. As Lenin would say, “What is to be done?”
A change of Government.
Let me say this to the Conservatives. I do not want to hear them saying, “We will keep the post office network at its present size,” unless they really mean it and will put the subsidies into it. Do the Conservatives want to see the post office network with 11,500 post offices, or at a level—I think that the Minister referred to this in his evidence to the Select Committee—at which only commercially viable post offices would exist, which would be about 4,000? When the Conservatives give commitments, as they do, to keep profitable post offices, are they talking about that bare minimum of 4,000? If not, how much subsidy will they put into the network?
As I said in my opening remarks, I believe that the post office network is a social good and that it should be subsidised. We subsidise all sorts of things. We subsidise nuclear power stations, for God’s sake. My friend from Chorley is shaking his head, so I think that we will carry on this discussion after the debate. Within the constraints of the competition rules of the European Union—I have to raise that this week, of all weeks—we should subsidise our post offices and we should make it clear to the people who use those post offices what the public subsidy is. It is not just to the individual post office, but to clusters of post offices. If we did that, people would realise how much public money is going in to keep those post offices alive. I very much hope that we can have some lateral thinking from the Post Office and the Government to keep this essential part of our social fabric in existence.
Order. I would like to enable all Lancashire Members present to speak, if possible. I therefore ask hon. Members to keep an eye on the time. The winding-up speeches ought to start shortly after 12 o’clock.
I will keep my remarks fairly short, Mr. Atkinson, and concentrate specifically on the issues in my constituency where four post offices are due to close. I will touch briefly on the issue of consultation. Unless local people are ready for or have anticipated the consultation period, six weeks is not an adequate time in which to consult. In my constituency, I wrote to everyone affected by the closures in the villages of Mere Brow, Much Hoole and Hutton. I invited them to write to me and to join me at a village meeting, which was a very good use of the communications allowance. I also wrote to 500 or so residents of properties near the Bent lane post office in Leyland, which is an urban post office. As a result of that letter, I received about 150 replies. At 5 pm last Thursday, I held a boisterous meeting with 80 to 100 local residents. Some very strong views on all four potential closures were expressed. From my point of view, hearing such views was very useful because it enabled me at the end of last week to put together formal objections that had to be in by Monday of this week. I want briefly to run through the results of that consultation on the four post offices.
The first post office is in Mere Brow, which is a small village of about 500 people. The whole area is very rural and the post office is open three days a week. Postwatch has expressed concern about the closure mainly because of the public transport problems of getting to an alternative post office. The two nearest post offices are in Banks and Tarleton, but there is not a good public transport system to them. I recognise that the existing post office, which is in someone’s home, is very small, but were that post office to close without an alternative, it would create real problems for people who do not have access to their own vehicles. At the very least, if that post office closes, the opportunity should be taken to use a mobile post office, and park it in the car park of the village hall, which is used a couple of times a week for pensioners’ groups. That would be an ideal way of ensuring that people who cannot get to an alternative post office at least have access to post office services.
The second village affected is Much Hoole where the post office is in the village shop. The previous owner of the business reduced the hours about a year or so ago. The new owner wants to increase those hours, but nothing has happened because of this consultation. The real concern that came across to me at that meeting of local residents was that if the post office was closed it could also lead to the loss of the village shop. That is something that the Post Office should seriously take into account when considering closures. It should look to see whether the reduction in the hours has led to a loss of business. If the shop was open longer, would some of that business return?
The village of Bretherton, in the constituency of my hon. Friend the Member for Chorley (Mr. Hoyle)—it will be in South Ribble at the next election—lost its post office a few years ago. The residents of Bretherton were told that their next suitable post office was in Much Hoole. Therefore, they are now in the position of not just losing their own post office, but potentially losing the post office to which they have been directed. Residents in Much Hoole will have real problems accessing alternative post offices. The nearest one is in Walton Bridge, which is about a mile away. Access to it is across a busy main road, which is a problem for anyone with disabilities, and mums with young children find it difficult to use some of the footpaths in the area.
The third post office is in the village of Hutton. Again, it is in the village shop. The nearest post office is in a busy supermarket in the village of Longton. One could argue that that post office would be a suitable alternative, but I reiterate the point made by my hon. Friend the Member for Chorley about access for people with mobility problems. The advantage of the post office in Hutton is that people with mobility problems can park right outside. It is not easy to park outside the post office in Longton because it is at the back of the premises. Access can be difficult because it is busy. Given the access problems at the Longton post office, the post office should look seriously at the implications of closing Hutton.
The fourth post office is in Bent lane, in Leyland. There are two other post offices in Leyland that could possibly be used. Both of them are on busy main roads, which makes it difficult to park outside. One of the issues that was expressed very strongly to me last week was that many residents with mobility problems would find it very difficult to access either of the alternatives. They like the Bent lane post office because they can access it in their wheelchairs or drive there and get in and out of the premises easily.
What struck me as extraordinary was that out of the 500 or so households that I wrote to, I received 150 replies, and with just three or four days’ notice of a meeting at 5 o’clock on a Thursday evening, 80 to 100 people turned up. That shows the strength of feeling that exists. The properties that I wrote to are in a block that is bordered on one side by the west coast main line, and on the other side by the M6, with main roads to the north and south. It is mainly elderly people who live there. There are a lot of bungalows and some shelter schemes. The passion in that area to retain the post office was clear on day one and was much stronger than I expected.
The Post Office needs to review the Bent lane closure and recognise how important the post office is to the area. It also needs to look at the future development of the old Royal Ordnance factory site. In Buckshaw village, which is being built, 600 or 700 properties are in my constituency; the rest of the development is in the constituency of my hon. Friend. What has come through to me, both from that meeting at which there were several residents of Buckshaw village and from letters that I have received, is that Bent lane is the obvious post office for Buckshaw village, which is an expanding development. My hon. Friend passed a letter to me that he had received from one of his constituents in his part of the village. When I spoke to the Post Office several weeks ago, it was clear that it had not taken into account the future development of Buckshaw village. There is no post office in the village, which will end up as a community of several thousand people. Such a community would usually be expected to have a post office of its own. If there is not to be one, the Post Office needs to look very carefully before it considers the closure of any of the post offices that are the obvious ones for residents to use.
I think that I have covered most of the points. I emphasise that I do not want to see any closures in my constituency and I have done all that I can to make the best case possible. The Post Office should be prepared to listen very carefully to the strong views of constituents.
Post office closures are nothing new. Long before I was an MP, I remember fighting a campaign to save Morecambe’s main post office from closure. The Conservatives were in power. The leader of the campaign against the closures—he fought a wonderful campaign—was my right hon. Friend the Member for Kingston upon Hull, West and Hessle, now the Secretary of State for Health. My right hon. Friend the Member for Neath (Mr. Hain) and Glenys Kinnock came up to support the campaign. It is amazing how things change over the years.
Were they successful?
They were successful and Morecambe Crown office is still open.
The staff recently told me that they had concerns about what will happen in 2011. Even people working in the Crown post office network do not feel secure in their employment. When I worked on a post office counter more than 25 years ago, I felt that I was in a secure job. People were well trained and quite well paid. That is certainly not the case at the moment. People feel very insecure and morale is low. We must bring some stability to the post office network.
In the years that I have been in Parliament, a lot of business has been taken away from the post office network. Some of it has happened through the natural changes to the way in which people live. More and more, people have pensions paid through bank accounts, and some people pay their TV licence through the post. The changes have been difficult, but the Government have failed to find new business for post offices. It is a shame that we had such a strong network throughout the country that could have been used as a Government agency; it is a wasted opportunity.
However, we are where we are, and we have been through closure programmes. In 2003, I did not oppose all of the closures that were proposed for Morecambe. Some of the urban branches were close together, and it was hard to put up an argument why they should not close. I told my constituents at the time, “Use it or lose it,” which is still the case with some post offices. I am not fighting to save every single one—some have a very low number of transactions and cannot be justified—but the programme has gone too far. The Government are in danger of losing the public service ethos and simply treating everything as a business, but the Post Office is about public service, particularly in rural communities. I represent a large rural constituency, and I know how much villages in it value their post office services.
Everyone agrees that the current consultation has been a bit of a sham and people do not feel that their views will be taken on board. There is strong opposition to the closure of three post offices in my constituency, and we must wait and see whether the Post Office takes the valid objections to that on board. The local newspaper, the Lancaster Guardian, is mounting an excellent campaign to champion the post offices’ cause, because many village post offices around Lancaster, and many in the city itself, are threatened with closure.
I should like to say something about those three post offices in my constituency that are wrongly, mistakenly, being closed, beginning with Nether Kellet, which is a small village. The post office there is the village store, so if it closes, the village loses its shop, which is important. I represent a tourist area, and the post office acts almost as a tourist information centre for people who go through the village. The nearest branch, in Bolton-le-Sands, is difficult to get to—there is no reliable public transport and people would have to change buses to get there. Such a journey is out of the question for pensioners and people with disabilities, who are the core of the people who use the Nether Kellet branch. People who have no transport, who may have lived in the village for years and years, or those who can no longer drive, need the service and to use the shop and post office together.
Post offices in villages provide human contact during normal working hours. People know that if they have a problem, they can go to the post office and find someone in an emergency, or if they simply need some support. Village offices play a vital role for the community. The Post Office should look seriously at the closure of the Nether Kellet branch.
Another office, Kellet road in Carnforth, is very different. I know the sub-postmistress, Debbie Buckley, well—I worked with her more than 25 years ago. She and her husband Paul have a thriving business, they are really good with people, and their shop and post office is successful. It serves a community in which there is some deprivation and a large number of elderly pensioners; it serves a large estate in Carnforth. People use it—it is not uneconomical; it is a very successful business, so I have no idea why the Post Office is closing it. The Post Office will tell me that that information is commercially sensitive, but I know the person who runs the office and what the figures are, and there is no way that it should be closed.
Finally, I should mention the third office. The chairman of the parish council, Michael Rothwell, talks about the matter better than I can. He writes:
“Geraldine…As requested I have listed some of the issues which would affect Yealand if the Post Office branch is closed…The following facts are relevant…The Monday morning session is the most important as it links the Coffee Stop in the village hall. The two together are an important focus of village life…The Yealand Post Office is in the village hall and fits well with the Post Office model for their Outreach scheme…The village hall has parking just outside the door and has disabled access. Parking at Warton Post Office”—
the nearest office—
“is extremely difficult, even for badge holders…The only bus service is Carnforth Connect. Funding is guaranteed only until March…Without the Post Office there is a risk that the Coffee Stop would no longer be economic. The Coffee Stop funds a monthly newsletter for The Yealands, so if the Coffee Stop ceases, so does the newsletter…There are strong community benefits to retaining the Post Office service, even if it is only on Monday mornings.”
That is not too much to ask because the office is so important to the village. I ask the Post Office to look seriously at the closures in my constituency, because I think that they are wrong. We will see how good the consultation is and what the Post Office comes back with.
Given the lack of time, I shall not go through the individual post offices in my constituency that are proposed for closure; rather, I shall pick up on the key themes that have emerged in the debate. I congratulate especially my hon. Friend the Member for Chorley (Mr. Hoyle) on securing the debate, and all Lancashire Members who have taken the time to attend.
I listened with interest when my hon. Friend the Member for Pendle (Mr. Prentice) spoke about the petition that his newspaper established because the Blackpool Gazette has collected several thousand signatures. I was appalled to hear that when the staff from my hon. Friend’s newspaper went to present the petition, there was nobody there to accept it. I shall be in touch with the editor of the Blackpool Gazette to find out what he experienced, because it is appalling practice for the Post Office not to recognise the strength of local feeling that is so well put together by our local newspapers.
The debate has highlighted the cumulative effect of several years of closure programmes, and I especially endorse the comment made by my hon. Friend the Member for Chorley about the post office to which people had previously been referred, but that is now designated for closure. That is exactly what has happened in Blackpool. My local post office in Homefield road closed in 2003-04, and I was told to go to the Red Bank road branch. What is now being proposed for closure? Red Bank road is. In practice, the cumulative effect will be that more and more Blackpool residents go to our central post office.
The Minister knows from correspondence with me and my colleague, my hon. Friend the Member for Blackpool, South (Mr. Marsden), that the relocation of our central post office to the basement of WH Smith is entirely unsatisfactory. Sadly, before Christmas, an elderly constituent of mine had a fall going down the stairs into that basement and died a few days later. I have also had many complaints from people who cannot use the lifts. WH Smith put a new lift in, but the two lifts are not sufficient for the elderly, people with a disability, and parents with pushchairs, who all want to use it. It is claustrophobic in the basement. The sub-post office closures will mean that more and more people use the basement in WH Smith, which is inadequate.
The consultation in Blackpool—the same applies to some extent in Morecambe—does not take visitors into account. Red Bank road post office is just off the promenade and is used by visitors as well as local residents. What are they going to do in future? That also applies to the Lighthouse post office in Fleetwood.
Finally, we have spoken about business being taken away from post offices, but the Post Office is trying to attract new business. It has announced the introduction of a Christmas savings club following the Farepak fiasco and I have seen adverts on the television for new insurance products. Surely this is a time when we should be standing back and saying, “Let the Post Office build up that new business.” Let us not take away these essential facilities at this point. We should be backing post offices, not allowing them to close.
I take note of what you said about wanting to start the wind-ups at 12 o’clock, Mr. Atkinson. I hope that I will be allowed 60 seconds to answer the question posed by the hon. Member for Pendle (Mr. Prentice) which was, to quote Lenin, “What is to be done?” Yesterday, I was standing only a few feet from Lenin’s tomb in Moscow, so perhaps I can have the opportunity to say what can be done.
The first thing is to stop the closure programme, take a breath, and see what can be done. Hon. Members have mentioned initiatives that could be introduced in post offices: local authority services, Government services and private services, including banks and mortgages. All sorts of things, including the TV licence, could be introduced in post offices.
Everyone knows that post offices are vital, and everybody knows that not all are economic. It is not communist to want to save them—it is common sense. We know that subsidies will be necessary if the branch network is to stay open. I agree with the hon. Member for Pendle that once it has gone, it will be gone for ever. It is like the railway structure of the 1960s. People say, “My goodness, if only we could reintroduce it,” but we cannot—it is too late. Let us at least value what we have, and not do away with it.
We know that there is a cost, but we also know that there will be a tremendous cost if we carry on with the closure programme. There will be a cost to our villages and towns, to our elderly people, to those who do not have transport, and to those in rural areas who do not have a regular bus service. All that should be put into the mix before the Government allow one more post office to close.
I had offered to be slightly brief so that more Members could speak, but the hon. Member for Ribble Valley (Mr. Evans) was so extremely brief that I have all the time that I need.
I congratulate the hon. Member for Chorley (Mr. Hoyle) on securing the debate, which is on a very important issue. Hon. Members from every part of the country are concerned about it, and there is widespread anger about the post office closure programme. It is probably the most important matter raised in my constituency. The hon. Gentleman spoke about a number of post offices in his area. He also spoke about low car use in his constituency, saying that the closure of post offices would have a particular impact on the vulnerable.
The hon. Member for Pendle (Mr. Prentice) spoke about the impact of closures on rural areas, as did the hon. Member for Chorley. He also said that post offices were a social good. The hon. Member for South Ribble (Mr. Borrow) said that the process would result in the loss of village shops, as did the hon. Member for Morecambe and Lunesdale (Geraldine Smith). The hon. Member for Blackpool, North and Fleetwood (Mrs. Humble) spoke about the petitions that she has been collecting and the cumulative effect of closures in her constituency.
My hon. Friend the Member for Southport (Dr. Pugh) was keen to speak today, but unfortunately he has had to attend a Select Committee hearing in Burnley. However, he has told me how concerned he is about the loss of two post offices in his constituency. He feels that they are based on poor data and that they will have a real impact on the elderly.
There is widespread anger about post office closures but, as the hon. Member for Pendle said, post offices closures are not a new phenomenon. Since Labour came to power, 4,000 have been closed. The Government now propose closing a further 2,500, and 3,500 were closed when the Conservatives were in power.
Another theme in the debate, which echoes the feeling in my constituency, has been that the consultation is a sham. The Minister has said at Question Time that in the rare cases when a local campaign manages to save a post office, the Post Office will be required to close another next door. Communities have a real sense of helplessness. They do not wish to arbitrate with the Post Office on which post office ought to be closed; they want to feel that the Post Office will listen to their case for the local post office.
There is also great frustration that six weeks is not long enough for a community, working with the council and local businesses, to put together a package to save a post office. When questions have been asked in the House, the Minister has made it clear that the presumption will always be for closure because most post offices are not viable. He has clearly said that there is a hidden subsidy. There is a real sense that it does not matter what people want; they will never be able to put together a package to persuade the Post Office that the local post office ought to be saved.
The hon. Member for Chorley said that Lancashire is being hit hard, but I suspect that hon. Members from across the country will say that every area is being hit hard. For example, Brent had 40 post offices in 1997. We now have 30, with another six set to close. That is a 40 per cent. reduction. We, too, have a diverse and deprived area. Many people do not have a bank account, and the queues at the remaining post offices are appalling. A common theme—it has been raised by hon. Members—is that even if a closure does not have a large impact on the immediate area, it can have a greater impact on neighbouring post offices.
In the hon. Lady’s constituency, a much higher concentration of people live in a much smaller area. We have geographical size, and closures mean that people have to travel much further to the next post office. That is why we have been hit so much harder than other areas.
I did not mean to suggest that less pain was felt in the hon. Gentleman’s area. I was making the same point that other hon. Members have made: we are all angry about the impact of closures on our constituents. I understand what the hon. Gentleman and others say about travel, particularly in rural areas. There is also a cost to the environment, which is never taken into account by the Government when they consider the impact of a closure programme.
Several hon. Members mentioned the impact of a closure on a particular shop, but closures in my constituency can affect small parades of shops. We tend to lose the whole parade because of the loss of footfall. A number of reports have considered the impact of post office closures on local areas. The New Economics Foundation suggests that for each post office closed, the loss to an urban area is an average of £277,000. The Government are saving only £45 million from the closure programme. If we add up the additional costs associated with closure, I wonder just how much of a saving is being made. For example, a loss of £277,000 to the local economy must be a loss of between £47,000 and £50,000 in VAT to the Government.
There must be all sorts of other hidden costs. In a rural area, studies commissioned by the Government suggest that for every £1 in subsidy, there is a £2 to £4 benefit to the rural economy. We have spoken about the impact of closures on the vulnerable, but they can also have a big impact on small businesses and local areas.
The loss of a post office is one of many losses about which my constituents feel strongly. We are losing things that are seen as a community’s hubs and centres. For example, we have lost many health centres, and police stations are now proposed for closure. That is in addition to the post office closures; and only last week jobcentre closures were announced. There is a real sense that all the places where people go for face-to-face advice and help are being closed.
It surprises me that the Government are going through this pain for such a small sum. In the bigger picture, £45 million is small change, especially when one considers that Royal Mail Group paid its board just over £4.5 million in bonuses. That would be more than enough to save all the post offices in London that have been proposed for closure—and, I suspect, those proposed for closure in Lancashire that have been mentioned today.
The Government have no long-term plan to save the network. Only 7,500 post offices will be required to meet the access criteria that the Government have set with the Post Office. It is as if the Government are managing the decline of the post office network. When we reach the end of the present 2,500-closure programme, are they going to stop there, or will they carry on whittling the number down until we reach 7,500? Worse still is the spectre of the 4,500 post offices that are financially viable. The belief seems to be that closing post offices that are not financially viable will force the footfall into those that remain, but I doubt whether the evidence supports that. It is more likely that a substantial proportion of people will simply change their behaviour. They will stop using post offices and use other services, including online services. All that will happen is that we will see a progressive downfall of the Post Office, and of course there will also be an impact on Royal Mail. Will people who run small businesses really stand in a very long queue in a post office that is several miles away from their area? I suspect that they will just use a competitor.
Several hon. Members said that the Government have systematically reduced the services that are provided by the Post Office. There is real uncertainty about the Post Office card account. Some 3.75 million people use that service at the moment and it will be devastating if the Post Office loses the contract for it.
We really need a full, proper and long-term plan for the Post Office. For example, we need a plan to ensure that the Post Office card account is more flexible, that ATM machines can operate from post offices, and that post offices have an opportunity to diversify their business. I think that post offices should be separate from the Royal Mail so that they have an opportunity to work with the Royal Mail’s competitors. For example, why cannot post offices be set up as depots to pick up parcels from a number of different delivery companies?
People throughout the country are immensely frustrated by this closure programme. There is a real sense that the Government do not understand the important social asset that post offices are and that they have no long-term plan for securing something that is valuable to the community. However, although the Conservatives have been campaigning in their local constituencies to save post offices, they have no long-term plan either. They have no plan for investment in the Post Office and their actions smack rather of opportunism.
It is a great pleasure to serve under your chairmanship, Mr. Atkinson. I welcome the Minister, although I do not envy him, because I cannot remember a debate in my entire time in Parliament in which the Government’s actions have been so fully condemned by so many Labour Members. The programme of closures that the Government are embarking on is clearly highly unpopular and I am not sure that it is entirely wise.
I pay great tribute to the hon. Member for Chorley (Mr. Hoyle) for securing this debate. He made a cogent case about the situation in his own constituency, which bears many similarities to the situation in my own constituency, as I will demonstrate later. At the outset, I should say that my hon. Friend the Member for Wealden (Charles Hendry) usually speaks for our party on these matters, but he is tied up in a Public Bill Committee elsewhere. I am sure that the Minister will understand that.
I offer my condolences to the residents of Chorley who use the Bolton road, Chapel lane, Charnock Richard, Eccleston Bridge and Withnell Mill post offices, which are to be closed, and to those other residents in Lancashire who use the 54 other branches earmarked for closure. In my local media, I have described these closures as being worse than the Beeching railway cuts of the 1960s. As has been said elsewhere, in many areas people now wish that they were able to open those branch lines that were closed, and indeed I think that one or two of them will reopen. The same may well be true of some of these post offices; in 10 years’ time, I suspect that one or two of them may well reopen.
Of course, as the party spokesman it would be unwise of me to claim that the Post Office network could feasibly have remained unchanged. However, as the hon. Member for Pendle (Mr. Prentice) suggested should happen, the Opposition would have embarked on a period of lateral thinking about how the post offices could have been used more viably. The hon. Member for Chorley mentioned the BBC contract, and there has also been the driving licence contract. There are lots of other ways in which the Government could have encouraged greater use of all the post offices. County councils could have used them for all sorts of services and the district councils could have used them for residents to pay council tax.
With a little lateral thinking, there is no reason why more post offices should not become more profitable. I mentioned the provision of ATMs in post offices earlier in the debate; one could think even more laterally about that issue. Why could not one have an individual ATM programmed so that the Post Office card account could be used for benefits claimants to draw cash in their own area? There are lots of possible innovations, but we have seen nothing from this Government about how they might make the Post Office more viable.
In its area plan proposal for Lancashire and Fylde with Southport, Post Office Ltd reports that 33 per cent. of residents in the area live in rural communities and it is those communities that will be hardest hit by closures. I am sure that those residents who will be affected by closures would like to understand the thinking of the Government on these closures, when they are saving a mere £140 million and then investing £1.7 billion in restructuring. That really is the politics of the madhouse.
My constituency is due to lose seven post offices, all of them in rural areas, and the rural bus service is particularly useless. Would my hon. Friend agree that the social importance of the post offices in these villages cannot be underestimated? The post office is a place where local people gather and converse, and if that centre is to be closed, a very important social tool in villages will be destroyed.
My hon. Friend made an effective short speech, proving the old maxim that the shorter the speech the more effective it is. His intervention is also absolutely spot on. As I have said, village post offices are the glue that holds rural communities together. So much is transacted in the post office that goes far outside the post office’s normal business. If somebody is sick, it is the postmaster or postmistress who knows about it and gets something done. If somebody is in trouble, one way or another that news comes through the post office. That network is what the Government are destroying in this process of closures. I entirely agree with the hon. Member for Morecambe and Lunesdale (Geraldine Smith) about how much people in rural areas value their post offices.
I come now to one or two of the more technical aspects of the debate. The access criteria that the Government have produced for closing these post offices are flawed in many ways. The Government have not taken into account geographical features. If there is a very steep hill, how can one ask an elderly person or somebody in a wheelchair to get to their nearest post office? The post office may be only 3 miles away, but if there is no bus service or there is a bus service that goes only once a week, it might as well be 30 miles away. The 3 miles is measured as the crow flies, but very often the distance is much more than 3 miles if one has to walk or go by car. Furthermore, as has already been said in this debate, the programme has not taken into account the businesses that might well be damaged by the closures.
I have a post office in my constituency that serves 10,000 people, 750 new homes are about to be built near it and yet it is scheduled for closure. The hon. Member for Pendle says that one of the towns in his constituency will have only one post office for 14,000 people. In Cirencester, if the two post office closures go ahead as proposed, there will be one post office for 17,000 people. The people of the Cotswolds will gather in Cirencester on Saturday for a stamp-buying exercise. It will be interesting to see what happens to the centre of Cirencester then and whether Post Office Ltd takes note that that crowded post office will not be able to cope if the other post offices in Cirencester close.
As has already been made clear in this debate, there is evidence that if one post office that is scheduled for closure is saved another post office has to close. I hope that the Minister will be able to confirm today that that is not the case. However, if it is the case, I ask him sincerely how he will campaign in his constituency, how the Prime Minister will campaign in his constituency, and how the 20 Ministers will campaign in their own constituencies. I hope that they will not use their undue influence to keep their own local post offices open at the expense of those in other constituencies.
As has also been mentioned in the debate, the consultation period is simply not adequate. Six weeks is simply not enough time to get people motivated to protest and to find real hard evidence as to why their post office should not be closed. In the Cotswolds, 12 post offices are either scheduled for closure or for an outreach service, some for as little as two hours. There is a post office in Stratton where the postmaster has been offered £100,000 if he will retire and he still wants to keep the post office open. Last month alone, his turnover was £468,000 and yet that post office, which also serves 10,000 people, is scheduled for closure. We are closing some of the most profitable post offices, which really is the politics of the madhouse.
The hon. Member for Chorley rightly points out in his early-day motion 763 the importance that post offices play as focal points for their communities; my hon. Friend the Member for Ribble Valley (Mr. Evans) has also made that clear. The hon. Member for South Ribble (Mr. Borrow) said that he has organised local post office meetings in his constituency at very short notice. I had seven such meetings two days after the closures in my constituency were announced. Up to 250 people attended each of those meetings. I have another one scheduled for this Friday, where people will express their real anger. I have also received more than 500 letters about this closure programme. All of this evidence shows how unpopular the closure programme is.
Given this scenario of closures, it is likely that it will be the younger and, ironically, the more mobile residents who will be the first to move out of the affected areas when these changes occur, because they are the people who are able to move. It will be the poor, vulnerable, elderly and disabled who will be left in these isolated rural areas without the services of a post office.
I want the Minister to answer a number of simple questions. A number of post offices are scheduled for outreach in Lancashire, while eight are scheduled for outreach in my area, and I want some assurances. We are talking about not only the post offices that will close under the current programme, but the many that have been offered very limited outreach—one post office in my area has been offered only two hours. For how long is the funding for outreach guaranteed? How will it be modified if the outreach proves not to work or is insufficient? Is what is happening now merely a prelude? Will outreach be provided this year, with the post offices that receive it likely to be scheduled for the next round of closures?
As the hon. Member for Chorley and his constituents, the residents of the Cotswolds and people across the country know, the present round of post office closures has been badly managed and will cause devastation to local communities. The financial calculations do not make sense, the access criteria are too limited and the consultation period is too short, but perhaps the Minister can reassure us that that is not the case and that the closures will not be as bad as we imagine.
I congratulate my hon. Friend the Member for Chorley (Mr. Hoyle) on securing the debate. I congratulate all the Lancashire Members present on expressing their views and I very much appreciate the concern that they have shown in pursuing their constituents’ feelings about the proposal to close post offices. Five post offices are scheduled for closure in my hon. Friend’s constituency, and other hon. Members spoke about the closures in their constituencies.
I concur with my hon. Friend the Member for Pendle (Mr. Prentice), who pointed to the expertise in this matter of our hon. Friend, who is a member of the Business, Enterprise and Regulatory Reform Committee. The Committee has looked into these issues in some detail—most recently in the report that it published just a couple of weeks ago—and my hon. Friend brings an impressive knowledge and expertise to the debate.
My hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) concluded her speech by saying that we should back the Post Office, and that is where I would like to begin. The Government do back the Post Office and we will have backed it to the tune of £3.7 billion by 2011, which includes past subsidies starting from 1997 and current subsidies going forward. I do not want to be partisan in a debate that affects hon. Members from all political parties, but there was no subsidy at all under the previous Government.
It is not a question of the Government turning their back on the Post Office or not backing it; the Post Office is undergoing huge change because of the changes in people’s lifestyles, which my hon. Friend the Member for Pendle and others mentioned. We are talking about a difficult process, and I have no doubt that it is unpopular, but the change affecting the Post Office would be a great deal larger if it were not for the Government’s support and subsidy to the network.
When we take into account the direct costs to local post office branches and the costs of central infrastructure support, such as IT, cash handling and other services, which are not paid for by the sub-postmaster or sub-postmistress, it becomes clear that three out of four post office branches lose money for Post Office Ltd, which is why the commercial network on its own would have only about 4,000 branches.
Significant Government support is therefore going into the post office network. Nevertheless, at just over 14,000 braches, the network was judged to be unsustainable, by not only the Government, but the general secretary of the National Federation of SubPostmasters, who said:
“Although regrettable we believe that closures are necessary to ensure the remaining Post Offices… thrive in the future”.
Let us look at some of the figures and at why the Post Office is in such a difficult position. Post Office Ltd lost £174 million last year, or £3.5 million a week. The hon. Member for Brent, East (Sarah Teather) referred to staff bonuses, but paying none of those bonuses would cover the Post Office network’s losses for only about 10 days. What would it do after those 10 days? The network loses £3.5 million a week; every day the Post Office is open for business, it loses £500,000 or more.
There has been a significant decline in custom. Some 4 million fewer people visit post offices every week, compared with just a few years ago. Past closure programmes have been mentioned, but 1,000 sub-post offices in urban areas are competing for business with at least six other sub-post offices within a mile of them, and that is at a time when the number of customers is falling.
The decline in customer numbers is influenced by huge changes in people’s lifestyles, which we all know about. We tend to think, for example, that one of the core services that post offices offer is the capacity for pensioners to pick up their pension, and a number of pensioners do that. However, I should point out that eight out of 10 pensioners have their pension paid into their bank account, so about one in five are picking up their pension at the post office. I do not know what all the hon. Members present intend to do if they reach retirement age and live to a glorious old age, as I hope that they will, but the number of new retirees choosing to have their pension paid into a bank account is not eight out of 10, but nine out of 10.
Have the Government done enough to look for new business for the Post Office? The network can fulfil a really good and helpful function by bringing Government agencies close to people.
My hon. Friend makes a good point, and some of the suggestions for new business that she and other hon. Members made during the debate are being taken up. Hon. Members mentioned free ATMs, and I am happy to say that 4,000 free-to-use ATMs are being installed in post offices. Hon. Members also asked why the new Post Office card account cannot be used at ATMs, but I am happy to confirm that it will be possible to use it at ATMs. Such new business ideas are important, and we should give the Post Office management credit for some of the—
I shall come to Northern Rock. We should give the management credit for some of their innovations on foreign currency, insurance and so on. My hon. Friend mentioned Northern Rock, and I should tell hon. Members that the Post Office already offers a mortgage service to the public. There is therefore new business and there is support through Government subsidy. Even given those two factors, however, the Post Office still faces the difficulty that three out of four branches are running at a cost to it.
Will the Minister answer one key question? If one post office that is scheduled for closure remains open, does that mean that another post office must close?
The reason why that has happened in a number of cases is that the average cost to Post Office Ltd of post offices that are scheduled for closure is £18,000 per branch per year. If one is saved, therefore, the Post Office must find that saving somewhere else. I can confirm to hon. Members, as I did to the Select Committee, that that will not happen in every circumstance, but that is why it happens in some circumstances.
Time does not permit me to go through much else, other than to say that I understand the feelings that hon. Members have expressed. We are talking about a difficult process, which is being driven by lifestyle change, and I can assure hon. Members that the Government are committed to continue supporting the Post Office in the years to come.