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Post Office Closures (Great Yarmouth)

Volume 475: debated on Tuesday 6 May 2008

It is a pleasure to serve under your chairmanship again, Mr. Cook. I am sure that my hon. Friend the Minister has responded to many such debates over the past few months, and that he is well versed in his responses. To set the scene, this debate comes on the back of the difficulties that the Post Office faces across the UK. The Government’s commitment to support the network to the tune of £1.7 billion over the next three years is certainly to be welcomed, and is not seen as unimportant.

There has been an imbalance in the expectations of the Post Office’s closure programmes in different areas. I wish to make it perfectly clear where I stand on the proposals for my constituency. Most of the post offices there that might be closed are in urban areas, but two are in rural areas. I shall deal with each in turn.

We must not lose sight of the fact that this is nothing new. There has been a significant number of post office closures since 1979. From then to 1997, there were 3,500 closures, and there were no compensation packages for postmistresses and masters or for sub-postmistresses and masters. The current programme is different, because there is a compensation package for those people. However, what about the communities that are being left behind?

We can consider technology, and I am as guilty as most people of using direct debit, internet banking and such like, rarely going into the post office. No wonder post offices are making a loss. The figure being bandied around is that out of 12,500 or 13,000 post offices, only 4,000 make a profit. It is a bit disconcerting when the Opposition parties make points of political expediency, given that they say clearly in their campaign documents that they will prevent the closure of any profit-making post office. Under a Conservative Government, the post office network would be reduced to 4,000, which I do not want to happen.

I wish to go through the six post offices affected in my constituency and make the case that I shall make to the Post Office in the consultation process. There are two in rural areas, the first of which is in the very small community of West Somerton. It is open two mornings a week, I believe, for four hours on Monday and Friday mornings, but it is used extensively by that small community. By and large, it is a community without access to transport, including a bus service. Given the costs involved, I question whether the post office there should be part of the closure programme. I estimate that the savings on it would be in the region of £80 a week at most. On that basis, perhaps it would be worth while for the Post Office to consider the effect that its closure would have on the 30, 40 or 50 people, mainly pensioners, who rely on it to get their benefits.

The effect of the closure would go across into my neighbouring constituency of North Norfolk, where the small community of Hickling is suffering from the closure of its post office. A number of people there use the West Somerton post office, and that has not been taken into account. Without it, the nearest one would be at Winterton and the next nearest in Martham, some miles away. People could not rely on that. I suggest, as I will to the Post Office, that if the hours were to be reduced even further so that the post office were open one morning a week as an outreach, that would contribute a little towards the savings required.

The next post office affected is in Stokesby, another small community that has about 260 people. The people there are slightly worse off, because they are really out on a limb. The community is mainly surrounded by water, and it is three miles from the closest post office. The Post Office’s access report states that in the case of both alternative post offices, the terrain between the branches is hilly and there is no street lighting or footpaths along the whole road. The nearest branch is 2.9 miles away in Acle, which is another constituency, and the second nearest 3.1 miles away in Filby. So can people go by bus? If they are lucky, there is a bus to Acle every two hours one way, and then they will probably have to wait another two hours to come back. On the other route, to Filby, there are buses at 8 o’clock, 10 o’clock, 1.30 pm and 2.47 pm. One can see the difficulties that there will be for the small community of Stokesby. Okay, only 100 people a week use that facility, but I suggest that that number increases in the summer months, because boats on the broads land there and holidaymakers use the facility.

I shall move on to discussing the town area and to a post office in the north of the town in Beresford road. I know that one, because my mother, who is a pensioner, uses it. People will say, “Well, you are going to support that one”, but I support every single one. I certainly do not put any more weight on that one than on the others. My mum tells me how she gets to the post office, which is probably a quarter or half a mile from where she lives. She struggles down there to get her pension and also to get her papers and other shopping from the local shop. If the post office closed, she would have to walk another 200 yd to the bus stop to catch the bus to the alternative branch. It is only about six or seven minutes away, on Salisbury road, but it would not lend itself to the significant increase in the number of people using it that would occur if people were asked to migrate there. It is expected that about 1,000 extra customers a week would migrate there, so there are serious issues to be addressed. A quarter of the people in that part of my constituency are pensioners, which is a high proportion.

Moving further into the town, one post office affected is in the town centre and another is on the other side of the river. The Northgate street post office is close to the town centre and is very busy. It handles a considerable number of people each week. I wish to mention it together with the Lichfield road branch, because the alternative branch to both is at WHSmith in the marketplace. In the past two weeks, I attempted to encourage the customers of both those branches to take part in an exercise by going to WHSmith at the same time and day as they would go to their normal branch to prove that WHSmith would not be accessible to the significant number of people involved. Unfortunately, or fortunately for the post offices, people remained loyal to their local branches. In fact, those branches had an uplift in their customer base. That shows the loyalty that people have to their local communities. In both those locations, there are rows of shops that rely to a certain extent on the local population and local business.

The bus stop is 300 yd to 400 yd away from the alternative branch, and the car parks are quite a way away and operate only on Mondays, Tuesdays and Thursdays. On the other days, a market operates and there are stalls on the car park. There is no parking outside the branch, because the area is pedestrianised. The post office is right at the back of the building, and people have to weave their way through the shelves. Another disadvantage of asking customers to migrate to WHSmith is that during the summer months, the population of Great Yarmouth increases, probably threefold or fourfold. The number of people that mill around in the town centre is phenomenal. This branch of WHSmith, as a popular shop in a popular destination, would certainly experience difficulties. I would defy anyone, if there were two or three wheelchairs in the shop, to suggest that that is the right and proper place for people to go.

These two shops, in Northgate street and Lichfield road, have the full support of the community. As I have said, they are fairly busy and their closure would lead to something in the region of 8,000 to 9,000 people migrating to the WHSmith shop, unless, of course, the Post Office is again looking for a reduction in the number of people using a post office. I do not want to see that reduction; I want to see the Post Office grow. I want to see it taking forward what it has left to offer in terms of the open market and trying to encourage more people to use post offices.

I fear, however, that the number of people that we have lost over the last year or so—4 million, I understand—will be revisited next year and again we will say, “Sorry, we have lost another 3 million or 4 million”. Part of that loss will be due to the effects that these closures have had on particular communities.

The last post office that I want to talk about is the Springfield road post office. Again, it is on the other side of the river and the Post Office is encouraging people to go to the main post office on the high street in Gorleston-on-Sea. The Springfield road post office is also part of a shop and, by closing it, the Post Office would encourage up to 1,500 customers to migrate to the local shopping centre, where parking is certainly limited. The centre is very difficult for some people to access and there is a fair amount of hilly terrain, too. Such a change would be extremely difficult.

In all these cases, there is also the question of the criteria to be considered. That is where I have a particular problem, because the criterion in question states quite clearly:

“99% of the total population in deprived urban…areas across the UK to be within 1 mile of their nearest Post Office branch.”

Originally, I just thought that that was okay, but let us look at the vast majority of people in the deprived areas. We have one or two of the most deprived communities in the UK in my constituency, where some of these post offices up for closure are based. The sad thing is that, when the picture is taken across the UK, it is clear that in a constituency such as Great Yarmouth, which is a mix of urban and rural areas, the 99 per cent. criterion in question nationwide could result in a situation where as few as 75 per cent. of people are within a mile of a post office. That contrasts with largely urban areas, such as inner London, the metropolitan areas and the cities, where it is quite clearly possible for everybody to be within 1 mile of a post office.

If we take an average—I have not done the figures and I am sure that it would be very difficult to do so—the 99 per cent. criterion may well be justified. However, I make a plea: why should areas such as mine, with the deprivation that they experience, have to suffer on the basis of a UK average? I respectfully ask the Minister to have another look at the criterion and consider whether it should apply to each area of closure rather than across the UK. That would be much fairer; why should my constituents have to walk further than a mile when people in the inner cities certainly have a post office within that distance?

This campaign has obviously benefited from uniting the various communities. When I have looked at the situation in many of the areas that will be affected, I have received hundreds and hundreds of letters and I have seen that petitions have been signed all over the place. The campaign ranges across all ages. For instance, in the communities of Lichfield and Cobham, there was an issue because there are two communities together. I received a letter from Jim West, the chairperson of the local Lichfield community group, that said:

“Not very long ago, the post office in Cobham was closed. We were given an assurance that our branch would therefore not be threatened.”

That branch in Cobham was within probably a quarter of a mile of the branch that was closed not very long ago, so the community in Lichfield were pretty miffed that another branch was going to be closed. The other factor is that the Lichfield branch is also separated from the other one by a river and a main road.

At the other extreme, even the pupils at the local schools are getting involved in the campaign, which shows how the whole community is involved. Just recently, I received 50 individual letters from pupils at the Edward Worlledge community middle school in Southtown. They were very concerned about the effect that post office closures would have on their parents and grandparents.

The campaign against post office closures is certainly gathering speed and strength. Every MP will no doubt have their own story as to why their post offices should remain open. However, what I am trying to do is to put together a case for each individual post office when I believe that that post office is genuinely needed, but also a case for trying to increase the trade and business of the post office network. I fear that, if the Post Office takes this particular action, it will, next year, drive people into greater use of IT and other technology and will keep them out of their local post office. We will reduce the number of customers even further. My fear is that, in the next few years, we will see another round of cuts because there will have been a further reduction in the number of people using the post office network.

There is another side to the issue. Has there been any consultation with the branches that will be regarded as the alternatives to those that are to be closed? Will they face difficulties with increased numbers of customers? A sub-postmaster at one of the branches that I have mentioned commented that the changes will create difficulties in his shop if so many people migrate to his shop. He will have to take on extra staff and probably look at other alternatives, too.

There are a number of issues that the Post Office needs to take on board. However, people can rest assured that I will be putting my comments forward in the consultation process and I sincerely hope that that process is not just a practice for the Post Office, but one that will see it taking seriously all the comments from wherever they come.

I congratulate my hon. Friend the Member for Great Yarmouth (Mr. Wright) on securing this debate on post office closures in his constituency. He knows a lot about post office closures as he serves on the Business, Enterprise and Regulatory Reform Committee, which has conducted several inquiries into post office provision and published a report just a couple of months ago. I thus acknowledge his expertise and knowledge about this subject. As he said, the consultation proposal is that six of the existing 27 post offices in his constituency should close. The consultation is still open, but that is the initial proposal.

I thank my hon. Friend for acknowledging the extent of the Government’s support for the post office network. I will go on to say a bit more about that support, but it is not always acknowledged in such debates and it is a very important part of the picture, because whatever difficulties the network is facing—in his constituency and elsewhere—they would be far greater were it not for the huge Government support and subsidy for the network.

My hon. Friend went through in some detail the cases for the individual post offices in Beresford road, Northgate street, Lichfield road, Springfield road, Stokesby and West Somerton. Of course, I bow to his knowledge of his constituency. As he said, there is a wide variety of branches in the constituency, ranging from one with less than 50 customers a week to others with between 1,000 and 1,500 customers a week.

Although my hon. Friend knows this, I want to set out some of the rationale behind why some post office branches have to close, because this is a difficult process and, I acknowledge, one that is unpopular in those communities affected. No one likes to see their post office closing; even people who do not use their post office very much do not like to see it closing.

This programme of closures is happening because the network is losing a significant amount—some £500,000 a day—and the losses have more or less doubled in the past few years. It has lost 4 million customers a week. My hon. Friend touched on some of the reasons behind those losses. Part of the cause is lifestyle and the way in which people get their benefits and pensions paid. Nine out of 10 new retirees have their pension paid directly into their bank account. The service for paying car tax online did not exist a few years ago, but it is now used by more than 1 million people a month. Those 1 million people would have used the post office to renew their car tax. Although that choice is still available, an increasing number of people choose to pay online. There is also now direct debit and competition from companies such as PayPoint, which won the contract for TV licences. Several big challenges concerning competition, technology and lifestyle mean that the Post Office is in some financial difficulty.

My hon. Friend was absolutely right to say, as I believe he did, that a commercial network would be 4,000 branches rather than the 14,000 or so that currently exist. As a Government, we do not want the network to be reduced to that level, and that is why we have put in a subsidy of £150 million a year, which is part of a total package of up to £1.7 billion in the years up to 2011. Without that, far more post offices would be facing closure than is the case under even the current proposals.

The need for closures is not just recognised by the Government, but accepted by the general secretary of the National Federation of SubPostmasters, who said at the start of the programme:

“Although regrettable, we believe that closures are necessary to ensure the remaining post offices are able to thrive in the future.”

Indeed, the hon. Member for Rutland and Melton (Alan Duncan), the Opposition spokesman on business and enterprise, said in a debate on this issue some weeks ago that

“we have to face the facts about the future of postal services in this country…we fully expect the network to shrink in size. We have never given a guarantee that no post offices will close”.—[Official Report, 19 March 2008; Vol. 473, c. 947.]

I am not sure what the Conservative campaign literature says, although I think I have seen the literature that my hon. Friend referred to, but the truth is that, in the House of Commons, the Opposition Front-Bench spokesman accepted the need for the network to reduce in size.

Alongside the proposals for closures, there are proposals for outreach and part-time services. My hon. Friend will have heard the announcement by the Post Office about a month ago that it would pilot such services in urban as well as rural areas. It is looking at alternative ways to provide post office services, perhaps in a more flexible way and at lower cost than has traditionally been the case.

My hon. Friend referred to the consultation. In truth, I doubt whether it is possible to do something like closing post offices in a way that satisfies everyone. There will always be questions raised about consultation, but one point that I want to make, which I also tried to make to the Business, Enterprise and Regulatory Reform Committee, is that the consultation is not simply a referendum on whether there should be post office closures. I believe that we know what the answer to that would be. The decision to reduce the size of the network was announced to Parliament exactly a year ago by the Chancellor, who was then the Secretary of State for Trade and Industry. Instead, the question is how closures should be made against the backdrop of the announcement. In fact, Post Office Ltd wrote to MPs last July and stated that the consultation

“would not concern the principle of the need for change of the network, nor its broad extent and distribution…Rather consultation will be seeking representations on the most effective way in which Government policy…can be best implemented in the particular area in question.”

In other words, the Post Office is asking about the detail. It is asking, given that the network has to reduce by about 17 or 18 per cent., “Have we got it right? Have we taken all the factors into account in making the best decision about what is, inevitably, a difficult process?”

The consultation has two parts. There is a pre-public consultation phase and then a public consultation phase. In the area plan that covers my hon. Friend’s constituency, nearly one in eight of the initial proposals were changed as a result of detailed input from key stakeholders, including Postwatch.

My hon. Friend raised the issue of some offices being busy, and some being busier than others. He did not get into profitability, although some hon. Members do in such debates. Profitability is judged on not just the books that the sub-postmaster keeps, but central support costs covering things such as information technology, cash delivery and distribution, and other services that are paid for centrally. They do not appear on the sub-postmaster’s books but are, nevertheless, very real costs to Post Office Ltd. Taking all those things into account, some three out of four post offices run at a cost to Post Office Ltd rather than a profit.

My hon. Friend asked about the capacity of receiving branches to deal with custom directed to them. That should be part of the process, and Post Office Ltd should be talking to sub-postmasters whose branches will not close, but who might be in the position of receiving business from other branches, and sometimes from Crown offices, too. That should be taken into account.

I appreciate the difficulty of this issue for my hon. Friend and his constituents, but we must have some sense of perspective. Even after the closure programme is over, the post office network will still be three times bigger than the top five supermarket chains put together. Even under the plan that covers his constituency, more than 90 per cent. of people will see no change to the local post office that they use, although I appreciate that that is of little comfort when one of the 8 per cent. affected is his mother—the last thing that I want to do is to inconvenience her.

I acknowledge that although most people will be unaffected, there is concern about those who will be affected, but with the access criteria that will ensure reasonable provision in rural and urban areas, we are led to the fact that in the plan covering his constituency, some 98 per cent. of people will either see no change in the post office branch that they use, or will be within a mile by road of the nearest alternative. I do not pretend that the closures will have no effect, but we must retain some sense of perspective and acknowledge that we will still have a very large network.

Finally, my hon. Friend spoke about the future and whether the process will need to happen again. Let me just say a couple of things about that. Through the subsidy, which we have guaranteed until 2011, we have given the post office network some financial certainty for the next few years. Obviously, we will then have to make a decision about the future. Like any Minister, I cannot say what subsidy or expenditure will apply after that. That means not that there will not be a subsidy, but that I cannot set out today what it will be.

We all understand that the Post Office card account is very important to the post office network. There is a debate about whether its future use can be guaranteed. Is there any way in which pressure could be put on the Department for Work and Pensions to ensure that the Post Office card account remains with the Post Office?

My hon. Friend raises a good point about the card account’s importance to the future of the network. His expertise will tell him that that has to be judged as part of a proper tendering process. That is the legal basis on which to do it. The last thing that I want to do is to say anything that interferes with a proper legal tendering process. I hope that he will not mind if I do not get drawn too much into the matter, but I acknowledge that the Post Office card account is important for the future of the Post Office, as are areas of service provision such as foreign currency services, the car and home insurance that it is expanding into, and the broadband service that has been launched in conjunction with British Telecom. We cannot—

It being Two o’clock, the motion for the Adjournment of the sitting lapsed, without Question put.