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Consultations on Post Office Closures

Volume 485: debated on Monday 8 December 2008

Motion made, and Question proposed, That this House do now adjourn.—(Mr. McAvoy.)

I am very privileged to be having this intimate exchange with the Minister. I am delighted to see that he will be replying. He knows the west midlands, and my part of it, well; indeed, he has been seen in dungarees driving a steam engine on one occasion. I shall also be fairly quick, as I am sure we all desperately want to get home.

The Table Office changed the title of this debate. I wanted it to be a little more confrontational, because the full title I had put down was “Meaningless consultations on Post Office closures”. Perhaps the word that is now missing was felt to be too confrontational and therefore non-parliamentary, but I hope to prove that the consultation was not only meaningless but a complete sham. I shall also explain why we in Wyre Forest are experts in consultations.

Everybody knew the Post Office had to trim its branches—that it had to lose about 2,500 branches to remain viable. I was delighted when the Government announced the retention of the Post Office card account by post offices, because that avoided possibly a further 3,000 post offices becoming unviable, and I still hoped that the network change programme, which was going to public consultation, might actually be a real consultation and that there would be scope for changing the proposals if we could produce good grounds for doing so. Sadly, that did not happen and it was a rubber-stamping exercise.

For our area of Herefordshire, Worcestershire and the west midlands, the six weeks’ consultation on the network change programme ended on 7 October. As we knew that it was to be scrutinised by Postwatch, the independent watchdog, we were hopeful that it would be open, fair, fully monitored and fully scrutinised. In Wyre Forest—this situation was typical of many constituencies—four branch offices were scheduled for closure. There was no argument about two of the closures—one of the offices was tiny and had few customers, and the other had not had a postmaster for quite some time—but there were tremendous arguments about the other two proposed closures.

Those two post offices were not loss making, and one was providing a vital service to a specific residential community. The other was providing the only banking facility to serve one of the main entrances to the town in question. As the Minister knows, I am talking about the road that runs from the Severn Valley Railway station. The road contains the county court, the magistrates court and about 48 small and medium-sized businesses, which need this particular office to do all their banking. Many of these are single-handed businesses, and the alternatives now offered to them mean that they have to use their car to go to a different office. If they choose to go to the one in the centre of the town, they face enormous queues, parking is difficult and expensive and instead of their being able to walk down the road for five minutes or less, their journey will take an hour or more.

The important local responses were sent to the Post Office by the closure date, and my own was copied to Postwatch. I gave details of the vital nature of those two branches, I enclosed petitions—they had 677 and 777 signatures respectively—and I pointed out some of the inaccuracies in the consultation details. Unanimous support for the two offices was provided in a detailed response from Wyre Forest district council. I listed the local businesses and gave details, because a survey carried out by the council had found that of the 30 businesses that had responded, some 20 used this particular branch two to four times daily. They had no convenient alternative, not only for postal work but for banking and the cashing of cheques.

Having done my job—I had met the sub-postmasters, councillors and constituents, and I had got my reply in on time—I sat back to wait. The consultation ended on 7 October, and we heard nothing until 28 October, when the decision to close all four post offices was published—what we had done had made no difference at all. Prime Minister’s questions happened to be taking place the next day and, to my amazement, I managed to catch Mr. Speaker’s eye. I had tried to phone Postwatch that very morning and, after being given the runaround on the phone, I discovered, at that late date, that it had ceased to exist as a separate organisation on 1 October—before the end of the consultation—when it had merged into Consumer Focus. The Prime Minister kindly said that he would talk to me about appeals against closures, but, realising that his diary was much fuller than mine, and on the advice of his Parliamentary Private Secretary, I put a few questions to him on paper. I asked how the consultation could be fair if the independent scrutineer had been merged and had taken its eye off the ball at that time.

On 4 November, I received an e-mail from the chief executive of Postwatch—I am sure that the Prime Minister had sent my letter straight on to him. He apologised for giving me the runaround on the phone but, more significantly, he apologised because a vital letter, which was supposed to have been copied to all MPs on 13 October—a fortnight before the closure decisions were finally made—had never been sent. It was not until after the final decisions had been made that MPs discovered that Postwatch had not taken into account any of the detail of the consultation responses that had mostly been sent to the Post Office. I appear to have been the only person to realise that if we wanted Postwatch to look at those submissions, we had to send them directly to Postwatch.

I had an e-mail on 12 November from Consumer Focus that made me even crosser. It implied that no one in the business community had replied to the consultation, because no one had sent a response direct to Postwatch. Even the district council’s very full response had not been acknowledged by Postwatch. I had another e-mail from Postwatch at that stage, which said:

“I can confirm that no local businesses wrote direct to Postwatch in favour of retaining Comberton Hill. We only received one letter from a customer during public consultation which did not raise this particular issue. We do not have the opportunity to examine the full responses that are sent by customers direct to Post Office Ltd but we do receive a summary of responses received by them for each proposed closure following the end of public consultation.”

So Postwatch does not see the responses unless they are sent directly to it. Postwatch also said that it has

“three main sources of information…customers raising issues direct with us…customers copying to us their letters and emails to Post Office Ltd…and the summary of responses that Post Office Ltd. prepares.”

So we as MPs did not know, until far too late, that those crucial responses had never been seen by Postwatch, the scrutineers of the whole exercise.

Kidderminster’s local paper, The Shuttle, had a front-page banner headline reading “Postbotch? Watchdog accused of falling asleep on duty over closure of vital post offices”.

I had two reasons for applying for this debate. The first is general and the second is local. The general issue is about consultation. I have demonstrated that this consultation process was flawed. I was elected in the first place after an extremely flawed consultation process on hospital closures, and I said in my maiden speech:

“The wider issues on which I was elected are to campaign for…openness in decision making and against the use of spin, and for a greater voice for ordinary people in major decisions that will affect them”.—[Official Report, 26 June 2001; Vol. 370, c. 549.]

In health, we have come a long way, because soon after I was elected the Government set up the Independent Reconfiguration Panel for the NHS. That panel is now being used more and more, and has just produced an up-to-date report entitled “Learning from Reviews—an overview”.

The panel has carried out 14 full reviews and in three of them it did not support the authorities, which emphasises its independence. In four cases, it supported the authorities. In the other seven, it supported the authorities but with conditions, and with the sensible condition that replacement services had to be in place before changes were made.

The Department of Health is consulting in a meaningful way. If one Department can do that, other Departments ought to be able to, particularly when independent bodies are meant to be scrutineers. My first plea is that consultation should be looked at across all Departments to make it real and meaningful. As for the local issue, how can we move forward at home? We have lost two profitable, vital post offices and we have inadequate replacement arrangements.

I have three questions. First, is it true that if after closure a postmaster attempted to reopen to provide some of the same services, he would lose all the compensation that he had been promised by the Post Office? Secondly, how is it practicable for other local organisations to step in and run a vital branch? I understand that in Stroud the local council is considering the possibility of reopening a local branch. Essex county council is doing the same. Would the Minister support those moves, as they represent local government responding to the needs of local communities?

Finally, the Prime Minister kindly replied to my letter of 3 November only on 1 December. I want to read part of his letter in the hope that the Minister can clarify matters. The Prime Minister wrote:

“Turning to the review process for closure decisions after the local public consultation, this process can be invoked where Postwatch shows that, for an individual branch”

Post Office Ltd

“has not given due consideration to material evidence received during the public consultation in coming to its decision”.

The huge problem is that Postwatch was not aware of all the major points that had been put forward, so how could it have said that the consultation had not been satisfactory? How could we, as MPs who did not get the crucial letter until far too late, do anything? The consultation in this case was a huge shambles and in a fair world the Government should order it to be redone. I am appealing to the Minister for answers and for any help.

I congratulate the hon. Member for Wyre Forest (Dr. Taylor) on securing the debate at this perhaps later than planned hour. I have great respect for the hon. Gentleman and I know that he has pursued the issue with great tenacity and determination.

The hon. Gentleman’s principal concern, as he has outlined, is about how the recent consultation process operated in his constituency, so I shall not take up too much of his time by going over the background to the post office closure programme in general. He will know that that background is a drop in the number of customers of about 5 million a week in recent years and a network that is losing £500,000 a day. Of course, the Government do not see the Post Office as a purely commercial network and that is why through investment, subsidy and funding debt the Government will put about £3.7 billion into the network between 1997 and 2011.

The hon. Gentleman mentioned profitability and asserted that the two branches in his constituency were profitable. But profitable from whose point of view? When central costs—those supplied by the network—and sub-postmaster costs are taken into account, three in four post offices are not profitable but are in fact dependent on some kind of support. I counsel caution on the hon. Gentleman’s part when asserting profitability.

The programme for reducing the size of the network by about 2,500 from 14,000 branches has been taking place over the past year or so, finishing with the area plan that covered the hon. Gentleman’s constituency and mine. I should make it clear that as a Minister I have played no part over the past year in selecting individual branches for closure. That difficult task is carried out by Post Office Ltd.

The hon. Gentleman raised some specific concerns. He focused on the role of Postwatch in scrutinising responses to the local consultation and thus the basis on which Post Office Ltd reached its final decisions about the closure proposals in his constituency. Postwatch plays an important role in the process. It represents the consumer, and as the Prime Minister said in his letter to the hon. Gentleman, Postwatch is the trigger for putting an individual closure decision into a review process conducted jointly by Post Office Ltd and Postwatch. The hon. Gentleman used some harsh words, saying the process was all a sham and so on.

There are two phases for proposals in an area plan. There is a pre-consultation phase, when Post Office Ltd discusses its initial plan with sub-postmasters and perhaps with local authorities and others in the area. During that phase about 10 to 15 per cent. of proposals are changed, depending on individual area plans. There is then a six-week public consultation, and over the past year about 91 closure decisions were withdrawn during that process, although a number were followed by replacement closure decisions.

The hon. Gentleman said that he does not believe that Postwatch properly fulfilled its functions in the consideration of responses in his area, and that for two branches in particular, Comberton Hill and the Walshes, the process was not properly carried out. He raised two issues: first, Postwatch’s incorporation into Consumer Focus, the new combined consumer body and, secondly, the consideration of specific representations made about the branches. As he said, he raised his concerns at Prime Minister’s questions and subsequently in a letter to the Prime Minister. He talked about his difficulties in trying to contact Postwatch by telephone.

The Prime Minister responded to the hon. Gentleman’s concerns on 1 December. He referred to the incorrect contact information that I acknowledge was given out by Consumer Direct. I understand that Mr. Howard Webber, the chief executive of Postwatch—who remains in charge of the residual Postwatch role in the network change programme—apologised for the error in what the hon. Gentleman was told and for the failure to copy him into the letter to which he referred.

Checks continue to be made in Consumer Direct about the information that is passed on. It is regrettable that the hon. Gentleman was not given the correct information when he called, but the critical question is whether that inhibited Postwatch in carrying out its proper role in the area plan, and I disagree with him that the merger with Consumer Focus stopped Postwatch from doing that. The situation was envisaged, and the Postwatch team working on the network change programme was kept on during the transfer so that it could continue its job—indeed, I spoke to Mr. Howard Webber today and he is still doing that. With regard to the closure programme that affected the hon. Gentleman’s constituency, the chief executive of Postwatch attended the key meetings, so I am afraid that I do not agree that the merger in which Consumer Focus was created stopped Postwatch playing its proper role.

Let me turn to the hon. Gentleman’s second concern, which he raised in letters of 13 and 17 November to the Secretary of State for Work and Pensions. I gather that there may have been an issue to do with the hon. Gentleman not receiving a reply from me, but as far as I know, he wrote to the Prime Minister and the Secretary of State for Work and Pensions. I am not aware of his having written to me directly on the matter. He will be aware that the process in government is that letters eventually find their way to the correct Minister, even if they were not sent to the correct Minister, and I have now replied to him.

In that correspondence, the hon. Gentleman raised concerns about whether consultation responses sent by Wyre Forest district council and Robert Arthur Davies Ltd had been properly considered. It appeared initially that those responses may not have been seen by Postwatch staff before final decisions were signed off. However, I understand that Postwatch has confirmed that the Wyre Forest district council response to which the hon. Gentleman referred was received, logged and seen by the appropriate Postwatch staff at the appropriate time. Postwatch confirmed that to me today, when I checked.

Postwatch has not found a record of having received a response from Robert Arthur Davies Ltd. The issue is whether that had a material effect on Postwatch’s judgment on whether to recommend the branch in question for the review process. Both the responses were seen by Post Office Ltd before it reached its final decisions on the branches at Comberton Hill and the Walshes. The points made in both responses were reflected in the summary of responses prepared by Post Office Ltd and shared with Postwatch. It is important to recognise that those summaries of responses are the primary and most comprehensive channel through which the Post Office was able to consider and assess local issues and concerns about each specific closure or network change proposal in the past year. That is true not only of the plan covering the hon. Gentleman’s constituency, but more generally, across the programme.

My understanding is that, with regard to the hon. Gentleman’s constituency and the branches that he is concerned about, some 14 responses covering concerns raised by businesses were included in the summary of responses. Postwatch believes that it had the necessary information to enable it to make a decision on whether to ask for a branch closure to be reviewed, and it decided not to ask for such a review. The reason for that decision is the proximity of alternative branches.

I always tread carefully when it comes to local knowledge; the hon. Gentleman will have much more of it than me. However, I understand that Postwatch’s view is that there is an alternative to the Comberton Hill branch 0.6 miles away. Kidderminster has three post offices and there are eight post offices within a 3 mile radius of the Comberton Hill branch. As for the other branch, there is an alternative office a similar distance from it—about 0.7 miles away. There are two post offices within a mile of it, and five alternative branches within 3 miles. Postwatch did not think that there were grounds for a review in those circumstances.

Let me turn to the three questions that the hon. Gentleman asked me at the end of his speech. He asked whether sub-postmasters lose all compensation if they provide services that they previously provided in their post office. They do not lose all compensation. The compensation was negotiated with the National Federation of SubPostmasters, which represents sub-postmasters. Its general secretary thought it fair that an adjustment be made to the compensation package. He said, “Why should taxpayers subsidise sub-postmasters for the loss of business that they are not actually losing?” An adjustment is made, but I would argue that the compensation for sub-postmasters is still fair.

I would also point out that the sub-postmasters of post offices closed under the previous Government did not receive any compensation at all. As for the question of whether third-party organisations can step in, I suggest that I write to the hon. Gentleman about what we have said about that, because letters have been issued by the previous Secretary of State setting out how that might happen. The hon. Gentleman mentioned Essex county council, for example. I have covered the review process, which is triggered by Postwatch if it thinks that there are grounds for doing so such as proximity to other branches and so on. In the case of the two branches to which he referred, Postwatch did not think that there was a case. It saw the summary of responses that was supplied, and that was its main source of information throughout the programme. I do not think that it was sham—I do not argue that it was perfect—but I suggest that as the POCA decision has now been made, this is hopefully a period of stability for the network after the closure programme.

Question put and agreed to.

House adjourned.