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Post Office Closures (Mole Valley)

Volume 472: debated on Wednesday 5 March 2008

I am grateful for the opportunity to debate this subject, Mr. Benton. I thank the Minister for attending, at least to listen, and I hope that he will pass on the information. He must feel like a one-man relay; he has a team on one side, and he is standing on his own on the other.

I looked up the Minister’s constituency. It is completely different from mine, but I have some understanding of it. Originally, I came as an ethnic minority immigrant from a very rural area of New Zealand to work in one of the deepest, darkest, most difficult areas in inner London, so I have some idea of the sort of problems that he faces, although I have moved to a mostly rural area. My constituency has real farms, some semi-rural. It is geographically the largest constituency in Surrey, and the electorate is somewhat bigger than the Minister’s. It has two small towns and approximately 32 villages, and the proportion of elderly people is equivalent to the proportion of votes that he received at the last election.

Transport is predominantly by private car. There are some buses and there is a little bit of train service, but they are not much use to local people, particularly for getting to post offices and so on, because services run predominantly along radial lines to and from London. As I said, a considerable proportion of the population—about 60 per cent.—are elderly, and the proportion is slightly higher in the areas where post office closures are being suggested. One must add to that the fact that in some villages, particularly those near farming areas, there are many families whose members do not or cannot drive—or at least mum cannot drive because the car goes with dad to work—or do not wish to drive.

Many outsiders see Surrey as green and wealthy, but it is mixed. I could take the Minister to some of the villages in my constituency, particularly the deeply rural ones, where people are extremely poor. The mobility of such people is also extremely poor. Life expectancy in Surrey and Mole Valley is high, but that brings access problems, because quite a few people there are elderly, and some are very elderly. I was intrigued by a Help the Aged survey pointing out that between 2001 and 2005, the proportion of the elderly who used the post office at least once a week rose in both rural and deprived urban areas. Some 99 per cent. of older people in rural areas consider their local post office to be a lifeline, and 88 per cent. would have to make special travel arrangements to reach alternative services. That applies particularly to the areas in my constituency where closures are suggested.

My Surrey villages have been under threat from a number of events. Village shops have gone and village halls have been hurt by recent licensing legislation, although that is not the subject of today’s debate. There have been a number of post office closures in my constituency over the years, but on this occasion seven closures are threatened. Seven closures is fairly savage, and most of them will have a severely detrimental effect. I realise that, realistically, asking for all seven post offices to remain open would be whistling in the wind. From looking at the results of the consultation and the changes that have occurred, it is particularly apparent that I am unlikely to get any, but I hope that the Minister will think carefully and perhaps pass back the information that I give him as part of the consultation. I shall pick several of the post offices, touching first on some of the most important ones, the closure of which would be severely damaging.

I do not know whether the Minister knows Surrey at all, but I shall start with the post office at Mickleham, which is a small village tucked in under Box Hill. On the other side of the village, some distance away and hidden by trees, is the busy A24 dual carriageway. The village is well known for the Running Horses restaurant and public house, the Box Hill school and Rose’s store and post office. Rose’s is a true community store. Several years ago, the then owner and postmistress wished to retire, so the people of Mickleham reached for their cheque books and wallets and the whole community bought the store. It is now run on its behalf by an enthusiastic postmistress and her equally enthusiastic partner, who share ownership with the village.

A high proportion of the community are elderly, and a surprising number are very elderly. Royal Mail’s figures say that 63 per cent. are retired. Some have cars, some prefer not to use cars, and some I would prefer not to use their cars, but all shop at the little local store. Some residents of Mickleham are unable to go elsewhere because they are elderly, disabled or children who attend Box Hill boarding school, which is an international school with many pupils from overseas. They have no access to postal services other than at Rose’s store and post office. I am being a little cautious because one young lad said to me, “Well, if the post office closes, my school report will be much delayed getting home to China.”

If the Mickleham post office closes, private transport will be the only choice for pensioners. They will have to go to the post office by car. Yes, there is a bus, but the service is pretty irregular, and going on foot is not a realistic choice. The store owners and managers accept people’s difficulties, particularly those of the elderly in the area, and they deliver to and work with residents in their homes, including by providing some post office requirements. I probably was not expected to be able to say that, but those residents would not get those services otherwise.

The local parish council’s reaction has been extremely vigorous. The council points out that Rose’s store is the only shop in the area; that it is central to the village; that it serves commuters, farmers and other workers, young families and retired people; that it is a general store and the only post office; and that it is used by the people of Mickleham parish, as well as by the pupils of Box Hill school, the staff and pupils of St. Michael’s school, St. Michael’s church, St. Michael’s community nursery, the Juniper Hall field centre, the Surrey Hills area of outstanding natural beauty project office, the Surrey Wildlife Trust office, the National Trust offices for the North Downs, the two local pubs, and a hotel, café and restaurant.

Many local residents, particularly those who are ageing, work from home. The post office is vital to them. The alternative would be to move full post office facilities to Leatherhead or Dorking, which would involve a six-mile round trip that is not easy. Parking, including disabled parking, is available outside Mickleham post office, and a small ramp is being developed for the severely disabled. Those facilities are not easily available at the alternative post offices.

Another post office that I should like to mention is the Abinger post office at Abinger Hammer, which is a very old and quite famous village on the busy A25. Because the village is so old, the A25 is particularly narrow there, but it is still as busy as one would expect from a road called the A25 and the footpath is very narrow. The retail areas in most villages in the region were busy 100 years ago, but now they have gone. The exception for Abinger Hammer is the post office, general store and tea shop. That is like a business with three legs and, like the three-legged stool, if one leg goes, it will fall over.

The post office serves Abinger Hammer and, unlike Mickleham’s, the area beyond it, which goes way back south into the country lanes all the way to Holmbury St. Mary. I mention Holmbury St. Mary because it has a little post office that is not used much and is closing. All the people between those two villages and beyond will have to go to Abinger Hammer, as many already do. If Abinger Hammer closes, they will have to go to Gomshall, which is where the nearest post office would be, but travelling there would be quite difficult.

I have received a large number of sad letters from my constituents about the post office closures. Most of the letters are about the Abinger Hammer post office, and many are from very worried, elderly people, a number of whom are disabled. There are still elderly and disabled people in this country, particularly in country areas such as that around Abinger Hammer, who do not understand or have cheque books and who do not use banks. They use cash for everything and rely on the post office to get it. The number of elderly and disabled people is surprising, and they will be severely affected.

There is a bus service, but it is erratic and many such people cannot use it. They time their shopping around the post office. I mention that because one complaint that has been made about the Abinger post office by outsiders—this is mentioned in the Royal Mail dialogue—is that it is not open every day. That does not matter in a village area such as Abinger Hammer, because the village people will shop on days when the post office is open. That is why the system works. It is extremely likely that if Abinger Hammer lost its post office, the other two businesses would close. If that happens, the village as we know it will be gone. It will have the structure, the old houses and the Abinger Hammer clock, but it will not have those three remaining retailers.

The last rural post office that I want to discuss is the one at Effingham Junction. Most of the points that I have made apply to this post office, so I shall not repeat them. Effingham Junction is a strange village in that it sits alone, isolated. It is near to a railway station, but one that is not suitable for the people who live there. The village has a high population of elderly people and a large number of families. Many of the mums cannot drive, either because they do not have licences, or because their families have one car and dad has the car in the day to go to work.

I am running short of time, but I want to discuss two more non-rural post offices that are in the main towns of Leatherhead and Dorking. It is disturbing that the Royal Mail usage figures—as both the postmasters and I see them—do not fit with the postmasters’ understanding. They are gross underestimations, which was why I asked the Minister about the mode and method of assessing usage. He gave me a holding answer and I received an answer yesterday saying that the query had been passed to the Post Office to get an answer. Unfortunately, therefore, I cannot discuss the answer today, but there is a distinct feeling, particularly at the Kingston road post office in Leatherhead, that the figures are wrong.

The owner of the Kingston road post office bought it about six years ago. He is an extremely enthusiastic gentleman who works exceptionally hard, and in the past 12 months, he has spent a considerable amount of money on refurbishing and modernising his shop and shop front, including the post office sections. As he, his accountant and the Inland Revenue understand the figures, they have gone up year on year. I wonder whether the Post Office saw that his post office was between two others and simply picked piggy in the middle. If it did, that was a big mistake. His post office serves one of the most deprived wards in Surrey, but it is different from others because around and behind it are a considerable number of firms on industrial parks. When a single footfall comes in off the industrial parks, it can mean a load of postal work, especially because the dubious nature of deliveries means that there are many special delivery, high-value and expensive postal requirements at that office.

One of the two alternative post offices is, admittedly, not far away from that post office—it is just down the road. However, it is not preferred by local residents because youths and gangs congregate in that area and there has been persistent trouble there. Also, as far as I can see, it is not open for the hours that the Post Office proclaims it to be. It is not popular. On the other side—the south—is a much bigger post office, which is in the centre of Leatherhead. That one is overworked and therefore has not been chosen for closure.

There is not much time left to discuss the South street post office in Dorking, to which the same issues apply. It is busy, but does not have the appreciation of the Post Office, because the usage figures seem to be low. It is used by many people, especially elderly people, because the main post office in Dorking is extremely busy. On Saturdays, the postmaster has to organise the queues because it is so busy.

I should like the Minister to look specifically at the cases I have mentioned—some more than others. I know that he will tell me sweetness-and-light things because we are in the consultation period and he cannot give me any yes-or-no answers. However, I ask him to put those cases to the Post Office for realistic reconsideration.

I congratulate the hon. Member for Mole Valley (Sir Paul Beresford) on securing the debate. I appreciate the spirit and genuine concern with which he made his points on behalf of his constituents. As he said, Post Office Ltd proposes to close seven of the 29 post offices in his constituency. There is no doubt that the closures have caused concern to the communities that will be affected, as he has outlined.

Let me start by responding to the hon. Gentleman’s final point and clarifying the situation. As the Minister, I have no role in asking Post Office Ltd to consider individual post office closures. Neither do I have a role in deciding whether post office A or post office B should close. I shall explain the Government’s role in the situation, but he is mistaken if he thinks that Ministers are the court of appeal on individual offices in the programme. Sadly, that is not the case. Post Office Ltd and Postwatch have a system for implementing such decisions, and a system for reviewing them if Postwatch is not satisfied. However, that process does not involve Ministers in relation to individual post offices.

The hon. Gentleman outlined the important role of post offices in his constituency, and many others, for elderly people, disabled people and other vulnerable members of the community. He is right, and the Government recognise that point. That is why we do not see the Post Office as a commercial service, and why it is heavily subsidised. Indeed, we are in the midst of a programme of support for the Post Office that is worth up to £1.7 billion between 2006 and 2011, including an annual subsidy of £150 million a year. Without that, instead of the current 14,000 branches throughout the country, we would have a commercial network of about 4,000, and many thousands more post offices would be under threat. We subsidise the Post Office significantly precisely because we realise the importance of its role. However, several changes occurring in this country and others mean that, even with that level of subsidy, the current network is not sustainable. That has been recognised by the general secretary of the National Federation of SubPostmasters, who stated:

“Although regrettable we believe that closures are necessary to ensure the remaining Post Offices are able to thrive in the future.”

I do not pretend that the process is an easy or popular one, but let me give some of the background reasons for the closures. The Post Office loses a significant amount of money. Every day that the network is open for business, it loses a little more than £500,000—some £3.5 million a week. There are 4 million fewer customers visiting post offices, compared with just a few years ago. In some of the least used offices, the subsidy per transaction—every time someone does something—can be up to £17.

Even after other closures in recent years—a programme a few years ago concentrated on urban areas—1,000 sub-post offices in urban areas compete with six or more sub-post offices within a mile for a declining number of customers. I appreciate that that situation may not be reflected in the hon. Gentleman’s constituency, but it is part of the national picture.

Why are financial losses going up and the number of customers going down? There have been big lifestyle changes. The hon. Gentleman mentioned pensioners, cash and so on, and I appreciate that that is a factor, but it is one that has gone down a great deal in recent years. Eight of 10 pensioners choose to have their pension paid directly into the bank. Among new retirees and people coming up for retirement, the figure is nine out of 10. The Post Office card account plays an important role for some pensioners, but not for the majority or close to the majority.

There have been other changes as well. People pay bills by direct debit and online.

I understand the point that the Minister is making, but I hope that he understands in turn that, with high life expectancy, my constituency has a large proportion of very elderly people who do not have cards, cheque books and so on. They do not understand and cannot handle change. So although the figures may be right nationally, they do not apply to my area.

The hon. Gentleman says that the national picture is not reflected in his area. I do not know whether that is also true in respect of the figures for people paying bills online. We gave people the option to pay their car tax online, and 1 million a month choose to do so. Perhaps none of them live in Mole Valley—I do not know—but I suspect that some do. People can still go to the post office to renew car tax, but, given the choice, 1 million a month choose to do it online. That reflects the wider changes that are taking place in society.

There is also a cost implication to how benefits and some bills are paid. It costs about 1p for the Government to make a payment directly to a bank. It costs about 80p for the transaction to be done at a post office, and £1.80 to make a payment by girocheque, which is then cashed at a post office.

I am not sure whether any Government in the future would reverse the process. We intend to have a successor product to the Post Office card account, and to keep that option available for people, but I doubt that we will ever return to the benefit books of the past. I do not know about the Conservative party. Perhaps it will make a commitment in that direction, but I am not sure that any future Government would do that.

Let me say a little about the process and the consultation, which have caused a great deal of controversy. People say, “The consultation cannot be genuine because we do not want the closures but they are still happening.” But it is important to understand that the consultation is actually about how the process will be implemented; it is not about whether people want closures. The overall decision was announced in May last year. Losses are running at such a rate that we cannot just make them go away. Through consultation, Post Office Ltd is trying to ensure that it does the best job of getting right what is already a difficult process. That is why it talks to local authorities, sub-postmasters and hon. Members. It then has to make the difficult decisions.

If the hon. Gentleman thinks that, within its criteria, the Post Office got it wrong for individual offices in his constituency—he touched on that—my advice to him is that the review process operates through Postwatch, which would say to the Post Office that it got it wrong. That starts on a local basis and builds up through the Post Office structure. Ultimately, Allan Leighton, the chairman of Royal Mail Group, will make a final decision. The decision does not come to Ministers, and I believe that that is right. I am not sure that Ministers should make decisions about which post office should close and which should stay open.

The financial implications are real. I cannot speak about the individual post offices in Mickleham, Abinger Hammer and the other attractive sounding places in the hon. Gentleman’s constituency, but the average cost to Post Office Ltd of the post offices that are closing is £18,000 per branch per year. The Government are committed to subsidising the Post Office network and have contributed a significant amount of money to do so—£150 million a year—but even that cannot sustain a network in which three out of four offices lose money. The loss is some £18,000 per branch per year, depending on the individual circumstances of the branch.

One of the branches that the hon. Gentleman mentioned appears to be profitable from the sub-postmaster’s point of view. I would make two points on that. It may be profitable in terms of a retail business and the post office going together. Post Office Ltd obviously does not take into account the retail side. On the post office side alone, the sub-postmaster does not see the central infrastructure costs—things such as IT support, delivery of cash to pay benefits, delivery of various Government forms such as passport forms and so on—for supporting the branch. They do not appear in his or her branch accounts, but when both the central infrastructure costs and the payments to the sub-postmaster themselves are taken into account, three out of four branches lose money, including, I have to say, some relatively busy branches, depending on whether they are close to others and so on.

The hon. Gentleman disputed the customer usage figures given to him by Post Office Ltd for some of the individual branches in his constituency. He is right to say that we have asked the company to write to him about how they are calculated. Perhaps I should not go into them today, but the figures indicate that fewer than 200 customer transactions a week take place in some of the branches that he mentioned. I appreciate the value that his local communities put on the branches, but a relatively small number of transactions take place in some of them on a weekly basis.

I appreciate the hon. Gentleman’s points. I also appreciate the nature of his constituency. Because it has many small villages and towns, it has 29 post offices in the first place. I appreciate that the closure process is difficult, but even with the large subsidies that the Government have put into the network and have guaranteed for the next few years, some closures are, unfortunately, necessary. That is the difficult process that we are going through at present.

The Post Office criteria for access are that, broadly speaking, most of the population in urban areas should be within 1 mile of a post office and, in rural areas, within 3 miles. Other factors are also taken into account. If the hon. Gentleman thinks that the criteria are wrong, he should ask Postwatch if it would be willing to refer the decisions on some individual branches to appeal. That is the way to deal with the issue. I cannot make decisions about individual branches, nor should I be able to.

The process is difficult, but at the end of it there will still be a larger number of post offices than all the banks put together, and three times as many post offices as outlets of the five major supermarket chains put together. I hope that the network will be more stable in future.