Thursday 10 January 2019
[Mr Nigel Evans in the Chair]
Crown Post Offices: Franchising
I beg to move,
That this House has considered franchising of Crown Post Offices and the effect on high streets and local communities.
I refer Members to my entry in the register of Members’ interests. Just before Christmas, we learned that 74 Crown post offices faced closure or franchising to a retail branch, including my local one in Wigan. Taken alongside the 150 that have already been closed or franchised, that represents a staggering loss of 60% of the network in only five years. Crown post offices might be a small part of the overall network, but they are significant, historically accounting for between 10% and 20% of overall profits.
Many of us in the Chamber remember the anger when post offices were closed under the previous Labour Government. We should have learned then that the Post Office is important to the people of this country: it is our asset, we own it and we are proud of it. When the coalition sold off Royal Mail, two thirds of the public were strongly opposed. But here we are, and once again we have been cut out of the consultation.
The Post Office says that it has been consulting, but there is every reason to believe that those consultations are nothing more than a sham. The 2017 wave of closures was announced before Ministers had even bothered to respond to their own consultation, in which 75,000 people had urged them to think again. When the Aberdeen office was franchised, WHSmith advertised for new counter staff—at what was described as the “fantastic” level of the minimum wage—while the consultation was still going on and before any consultation with trade union representatives about terms and conditions.
My hon. Friend is making a powerful argument. Does she agree that, as with our argument for postal workers, we demand better working conditions, pay and prospects in public assets that perform well? Does she agree that modern post offices can give more service to the public, but that that must not mean less for the workers in them?
I could not agree more, and I know that my hon. Friend is a tremendous champion of that workforce in his Bury constituency. That point goes to the heart of how a publicly owned service should set the standard for how we treat our workers and our customers. I absolutely agree with him.
I congratulate my hon. Friend on securing the debate, and I wish her, the Chair and all Members a happy new year. She made the important point about ownership of the Crown network. We are the owners but, in addition, the Government are the sole shareholder, so by proxy the Government are closing down our public services. We need the opportunity to have not just a debate, but the information before anything happens.
I absolutely agree with my hon. Friend. On that basis, I was quite horrified at what happened last month when I went to my Crown post office to talk to the staff. I went with a representative of the Communication Workers Union, who had notified management in advance, but an area manager was then sent all the way to Wigan to block me at the door. We were chucked out of the building, but for some time I stood outside in the street in the freezing cold to talk to staff about their concerns and fears. A number of counter staff who had initially been keen to talk emailed me later to explain that they had been put under significant pressure not to come outside.
Why is a publicly owned business trying to intimidate and silence its own staff? It was particularly telling that the area manager said that she had been sent by the press office. This is an organisation apparently more concerned about appearances than about the rights of its own workforce.
My hon. Friend is making an excellent case. One of the most disillusioning things for staff is that this business hawks itself around to every and any shop that might try to fit a Crown post office into it, on the basis that that is better than a properly run, properly financed Crown post office. Does she agree that that can do nothing but disillusion staff?
My hon. Friend is absolutely right, and that is the view expressed very strongly by my constituents in Wigan. Over in Oldham, Members have had a significant response to a public petition that they set up for precisely that reason.
A Citizens Advice report showed that in those post offices that have been franchised, the result is longer queues, reduced counters and a significant loss of experienced staff. No wonder disability groups and pensioners groups have been critical of such plans.
My hon. Friend is making a powerful case. I wish her campaign in Wigan every success, as I do the campaigns of my hon. Friends the Members for Oldham West and Royton (Jim McMahon) and for Ashton-under-Lyne (Angela Rayner) in their constituencies.
For us in Blackpool, sadly, the boat has already sailed. Our Crown post office, which was a grade II listed building, now lies empty, while my constituents have to go down stairs, which is not easily accessible to people with disabilities, to an unprepossessing place in the middle of the shopping centre. Does my hon. Friend agree that, besides the intimidation she described, the Post Office is on a hiding to nothing purely in commercial terms if it continues to outsource branches in that manner to WHSmith, which is widely regarded as one of the worst retailers on the planet?
I agree, and I think that my hon. Friend the Member for Reading East (Matt Rodda) might have an issue from his constituency that is relevant to that point.
I thank my hon. Friend for giving way, and I agree with my hon. Friend the Member for Blackpool South (Gordon Marsden). In Reading, we have serious accessibility issues. The existing Crown post office is to be shut. It has been there for some time, is busy and has ground-floor access, which is welcome for many local disabled people. Unfortunately, the post office is now to be moved into the upstairs of the very busy WHSmith branch on Broad Street in Reading. The lift access is only by a relatively small lift to the first-floor premises to be used.
My constituents are concerned about that, and about the additional problem of the sub-post office in the village of Caversham, which has been closed due to other, unrelated matters. Local businesses rely on that local post office, as do many elderly and disabled people. I agree with both my hon. Friends about accessibility, which is paramount for disabled people, elderly people and small businesses. I urge my hon. Friend to continue her campaign and the Minister to look into the matter.
Many Members have similar anecdotes from their constituencies—I can see that the Minister is listening, and I am grateful to her for doing so. I have learned that access to post office counters in WHSmith is a huge issue for those with mobility impairments. Some, such as the one that my hon. Friend has just mentioned, have been located on the first floor in premises that do not have an adequate-sized lift. Yet over 1 million people have their social security paid into a post office card account.
The Minister is supposed to represent the interests of the public in discussions with Post Office Ltd and UK Government Investments. Will she tell us whether she has asked colleagues in the Department for Work and Pensions to carry out an equality impact assessment of the consequences of franchising on disabled claimants? I have seen no evidence of such discussions or of an equality impact assessment by the DWP. What discussions has she had with her DWP colleagues, and will an equality impact assessment be placed in the House of Commons Library as a matter of urgency, and certainly before any further action is taken?
Last year, as my hon. Friend the Member for Blackpool South (Gordon Marsden) alluded to, WHSmith was voted the “worst retailer” on the high street by Which? readers, and it has been in the bottom two for eight consecutive years—it turns out that there is a lot of competition for worst retailer on the high street, so that takes some doing. Why, therefore, are the Government handing our valued public service to the worst retailer on the high street?
Significant sums of our money are being spent on, in effect, privatising the Post Office, using the worst business model available, yet apparently we do not get a say. At a recent meeting of the all-party parliamentary group on post offices, which is chaired by my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Gill Furniss), the network and sales director told MPs that
“this is a commercial decision for us alone”.
Yesterday, I received formal notification of the consultation on the Crown post office in Wigan. The document that I was sent said:
“the change of management of the branch to one that is operated by a retail partner rather than by us directly is a commercial decision for Post Office Ltd and therefore we are not seeking feedback on this aspect of the change.”
That shows complete contempt for the public who own this service.
I congratulate the hon. Lady on securing this incredibly important debate. The Minister know about this, but in my hometown of Tain in the highlands, our post office has been moved into a wee narrow newsagent where there is no room to swing a cat. That means that when a pensioner wants to talk about his or her pension or any other aspect of PO services, there is no confidentiality whatever. On 22 March, that newsagent will shut. We do not know where the new post office will be. There is a feeling of helplessness among my constituents. People in my home town want to know what will happen. I take on board the hon. Lady’s point that we, the people, do not feel we are in control.
The hon. Gentleman’s constituents clearly have a very strong voice here.
I congratulate the hon. Lady on securing this important debate. The Crown post office in Motherwell was closed down and there was a consultation. As we all know, the consultation consists of simply saying, “Can we have your opinion on the new place we have decided to put the post office?”, but then totally ignoring that opinion. Does the hon. Lady agree that this is yet another example of Tory privatisation of public services by default?
I absolutely agree that that is happening, and the public can see it is happening, which accounts for the anger and the public response, particularly from older people, who the Conservative party has traditionally been very concerned to attract. It would be worth reflecting on the fact that the National Pensioners Convention has come out very strongly against the latest wave of Crown post office closures, because it can see where it is going, and it will not be in the interests of its members.
It concerned me when it became apparent at the all-party parliamentary group meeting that, should WHSmith fail, there is no plan B at all. There have been widespread media reports that WHSmith is in trouble. In fact, we have been here before. When the bizarre decision was taken some years ago to move branches of the Post Office into, of all places, Bargain Booze, which then folded, we were left in crisis. It seems there is no learning happening. Unless the Minister tells me otherwise, the Post Office has no plan B for what will happen in the event of WHSmith’s collapse.
Will my hon. Friend give way briefly?
I give way to my hon. Friend the Member for Cardiff Central (Jo Stevens), as she has not yet spoken.
I am grateful to my hon. Friend. I am losing my post office in the centre of Cardiff, the capital city of Wales. It is our last post office in the city centre. Does she agree that the Financial Times got it absolutely right when it said:
“Once a high street without a WH Smith seemed unimaginable. Now it seems almost inevitable”?
I absolutely agree. I give way to my hon. Friend the Member for Reading East, as he said he would be brief.
I thank my hon. Friend for indulging me. I want to raise the mismanagement and the way in which the Post Office does not seem to engage with local retailers or look for suitable retail outlets to place sub-post offices. The problem we had in Caversham, not in Reading town centre, is just that. A local pharmacy shut and the post office then shut. It has taken months for Post Office officials to find new premises. Elderly and vulnerable people do not know where the post office will reopen and are very concerned. I would welcome the Minister meeting with residents to discuss this matter.
My hon. Friend highlights a key issue that simply has not been heard, understood or addressed by the Post Office. These postal services matter not just to customers and staff but to our towns. In recent years, many towns across the country have been hollowed out. Bank branches have closed, and as the Centre For Towns has showed, bank closures have hit towns harder than cities or rural areas. Many of the banks that have closed branches in the centre of Wigan over the last few years were at pains to tell me that the service would not be lost because customers could use the post office, but now we find that the post office is closing.
I thank my hon. Friend for securing this important debate. Does she agree that WHSmith having been voted the worst retailer should ring alarm bells for the Government, and that the plan should be suspended on that basis?
My hon. Friend is absolutely right. The Minister will hear “suspended”, “halted”, “paused” and “moratorium” over and over during this debate. It is not just about bank closures, the threat to the post office and the fact that WHSmith is in trouble. Many towns that face the loss of their Crown post office have had closures of major department stores such as Marks & Spencer, House of Fraser and Debenhams. Like the Crown post office, those are destination stores—they attract people into our town centres who then stay and shop elsewhere. There is a very real prospect that our town centres will begin to fall like dominoes. A perfect storm is hitting our high streets.
My Crown post office in Wigan has stood on its site in the centre of our town for 134 years. It has weathered a global financial crash and two world wars, yet apparently it cannot survive three years of Tory Government. One of our major concerns is about the lack of proposals for the building, which is owned by the Post Office. It is a striking building right in the centre of town. Will the Minister tell us what is envisaged for those buildings? Will we see derelict and abandoned buildings blighting our already struggling high streets?
My hon. Friend makes an important point. The Government are trying to regenerate town centres, yet they are closing down buildings. In a town in my constituency, the building has been empty for some years and is a blight on the landscape.
My hon. Friend is absolutely right; that is a story I hear over and over from colleagues around the country. Behind those losses is a loss of spending power in our towns. Over several decades, good jobs have been lost and replaced by minimum-wage, insecure work. Young people have left and there has been a significant loss in the working-age population. The jobs that remain do not pay enough to sustain our local services. We have felt the anger from those areas in recent years, so why do the Government allow this process to continue?
WHSmith employs its staff on part-time contracts at the minimum wage, whereas post office counter staff typically earn £21,000 a year. It matters for the viability of our town centres that people are paid properly, and for the health of our nation that people are treated properly. In my view, this failed economic model was one of the direct causes of the heavy leave vote in constituencies such as mine. It has caused justifiable anger in our towns, so why is that failed economic model being employed?
Surely, if Government mean what they say about listening to those who have been left behind and about trying to reinvigorate our high streets, they must abandon this plan right now and seek an alternative. All the plan means, as the Communication Workers Union puts it, is that post offices are on
“a path of managed decline”.
For the 800 or so staff facing transfer or redundancy, I suspect that this will be the final straw. The vast majority of staff who faced franchising were not subject to the Transfer of Undertakings (Protection of Employment) Regulations 2006 in either of the last two rounds of transfer. Workers in Wigan tell me that it has been a tragedy to watch services run down over several years. Some of them have worked for the Post Office for decades, but this is the final straw.
The Post Office faces pressure from the loss of traditional services such as letters and from falling Government revenue, but it is by no means without assets. Last year it announced profits of £35 million. That should have been the catalyst to retain experienced and well-paid staff and expand into new areas—in France, La Banque Postale, established a decade ago, made a profit of €1 billion in 2016—but instead, it has cut staff and branches and awarded the chief executive a 7% pay rise. Behind the latest wave of closures is a story of greed, exploitation and carelessness with the social fabric and economic heart of our communities.
My hon. Friend is making an incredibly powerful speech. Nottingham city centre post office is incredibly well used and very busy. When that transfers to WHSmith—the Post Office is not interested in what local people have to say about that—a lot of the staff will not transfer but will choose to leave. The post office will lose some of those experienced staff, who probably have a very good relationship with existing customers. On behalf of all of us who face a post office closure in our towns and cities, does she share my concern that that is a huge problem and a dereliction of the service we have come to expect?
My hon. Friend is absolutely right, but it does something else: it prevents the Post Office from being able to adapt, change and build new strategies for survival in the future. A lot of the staff standing on the cold street outside the Crown post office before Christmas told me that in recent years they had come to believe that what was happening was a deliberate strategy to run down our postal services, to the point that they are no longer viable or sustainable. That would be a shameful thing for the Government to preside over, without acting. Those staff, our towns and our communities deserve so much better than that. I ask the Minister today to place a moratorium on the franchising programme and to bring together stakeholders for a conversation about how to grow the business and make the Post Office fit for future challenges, rather than selling off one of our most valued public services to a failing retailer.
The Minister has consistently told us that it is not the place of Ministers to intervene, but perhaps she will take a leaf out of the book of her colleague who presented a petition to the Commons urging the then Business Secretary to instruct the Post Office to halt post office closures and listen to the people. That was back in 2008, and the right hon. Member for Maidenhead (Mrs May) was absolutely right. If the Prime Minister recognises the role of Government in protecting this publicly owned national asset, then surely so must the Minister.
Order. I can see that there are a lot of people who want to speak. I do not intend to put a time limit on speeches, but I want everyone to speak who wants to, so please show some time restraint.
It is a pleasure to serve under your chairmanship, Mr Evans. I pay tribute to my hon. Friend the Member for Wigan (Lisa Nandy) for her thorough and eloquent opening speech, which set out very clearly why this is such an important subject. It means a lot to my constituents, particularly in the Middleton area, where in October last year we learned of the plan to move our busy town centre Crown post office into a branch of WHSmith. My constituents are extremely concerned about the potential loss of their post office from its current site and its proposed move into a struggling retail outlet in the town. If I was told that the branch of WHSmith was moving into Middleton post office, to increase its footfall, that would have made a lot more sense. I might have supported the move as mutually beneficial, but to do it the other way round is simply farcical.
WHSmith faces an uncertain future. Last year it announced the closure of six of its high street stores, plus the planned closure of 24 of its budget Cardmarket outlets, over the next three years. It is well known that WHSmith’s high street stores have struggled and that they are shored up by overpriced airport, railway station, motorway service and hospital outlets.
My hon. Friend is absolutely right. It is not the time of year to promote chocolate or other consumables, but would she agree that some of the prices that WHSmith charges at the outlets in railway stations and other places are scandalous in terms of the mark-ups?
My hon. Friend is right. There was a scandal last year about a particular hospital outlet that was charging eight times the high street price for toiletries, and getting away with it because it had a captive audience. Last year, a 7% rise in trading profits at WHSmith’s hospital and travel stores helped to offset a 3% fall in sales and profits at its high street stores, so we clearly have a business that is struggling. It is a huge risk to relocate vital post office services into a business that is closing stores and might lose more.
Over the past five years, the Post Office, which is entirely owned by the Government, has announced the closure of 150 flagship Crown post offices. The announcement that a further 74 Crown post offices are to be closed and franchised, including the one in my constituency, means that the Crown network will have been cut by 60% since 2013. Closing flagship branches, getting rid of experienced staff and putting counters in the back of a WHSmith is not the plan for growth or innovation that the post office network so desperately needs, and does not offer the level of service that the public should expect. At best, the relentless closures point to a lack of vision; at worst, they suggest the managed decline of a public asset.
My constituents have shared their concerns with me about the potential closure of our post office, and a local petition to save Middleton post office has so far attracted nearly 1,000 signatures. Our high streets are already struggling, and the loss of our flagship post office will be a major blow to Middleton town centre. Many constituents have made the point that it makes no sense to move the post office counter service to WHSmith 500 metres away, disconnecting the counter service from the sorting office, which will remain where it is. We are assured that public consultation on the future of Middleton post office will be happening at some point but my constituents are quite rightly concerned that this is already a done deal and that their responses will be ignored. I would like reassurance from the Minister, which I can pass on to my constituents, that she will ensure that any public consultation is meaningful and that the concerns of the general public will genuinely inform and shape any final decisions.
The chief executive of WHSmith, Stephen Clarke, has said that the franchising of post offices into his stores is attractive to the Post Office because his stores cost less to rent and run. It is wholly unacceptable that this is used as justification for backdoor privatisation of our Government-owned post offices. In the absence of a business plan for the Post Office, it would seem that saving money is the only motivation for the move. It seems odd that a party that claims to be the party of business has no clear plan for improving the performance of the post offices it runs. It is also highly significant that the so-called party of business cannot turn out a single Back Bencher for this important event.
I end by asking the Minister to put a stop to the process of privatisation by the back door and to begin a review of how the Post Office can grow its business through new products and innovation. We expect nothing less from the self-styled party of business.
It is a pleasure to serve under your chairmanship, Mr Evans.
The post office has historically been a focal point of any community. Until recently, in my own community—in my constituency—there were five post offices within walking distance. Now there is one, which is inside a general store. We still have a few post offices in Swansea, but most of them are franchised, including the Crown post office in Morriston.
Crown post offices offer a crucial service to the local community and their potential loss will always be a great concern to that community. Citizens Advice tells us that over half the population consider a local post office to be one of the most important services in the local community. Moving Crown post offices into private hands is a worrying trend; most importantly, we do not want it to lead to the number of post offices on our high streets declining further, and we certainly do not want any more job losses than have already occurred. It is becoming a real problem in Wales, where we have seen the greatest percentage drop in the number of post offices, with 25 closing between 2017 and 2018.
Current employees of the Crown post office must have their employment protected. That issue is being championed by the Communication Workers Union with its Save Our Post Office campaign. The CWU rightly makes the argument that the decision to franchise Crown post offices to WHSmith will hugely affect those who are currently employed by Crown post offices, moving them into lower quality jobs with WHSmith, with inferior wages and hours.
I declare my entry in the Register of Members’ Financial Interests. Does my hon. Friend agree that, although staff moving from the post office to WHSmith, for example, will have their terms and conditions protected under TUPE, their pensions will not be protected, and so they stand to lose a significant amount from the transfer between one employment and another?
That is of great concern to staff members I have spoken to. WHSmith, as we have heard, was recently voted the UK’s worst high street shop. Why are we transferring a cherished brand, the Post Office, into the hands of a negatively viewed private retailer? Since 2012, 484 post offices around Wales have been modernised or moved into premises such as convenience stores, newsagents and pharmacies. Citizens Advice carried out mystery shopping in 122 of those post offices across Wales and found accessibility concerns about one in five of them.
We cannot let the transformation of post offices across the UK alter the service that they offer to our communities and particularly to vulnerable consumers. Crown post offices are integral community hubs, offering valuable services to our high streets, and the decision to franchise a further 74 is a grave mistake. It is putting jobs at risk, putting services at risk, and potentially eroding the good will and spirit in our communities.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this important debate.
Crown post offices, like the postal service itself, are at the heart of our communities. Up and down the country, post offices are hubs for local people and their neighbourhoods. They bring people together, they connect people, and at a time when community institutions, from pubs to community centres to libraries, are closing at record rates, we need our post offices as never before.
I pay particular tribute to the post office staff serving my constituents in Croydon North. I had the opportunity of visiting the Post Office depot in Factory Lane just before Christmas; I repeat here, on the record, the thanks I offered the staff there for the fantastic job they do for the rest of us all year round, not only in the very busy Christmas period. It is sad in the extreme that, instead of protecting these vital and publicly owned assets, the Government are complicit in what my hon. Friend calls their managed decline. It is particularly galling for the public that they are paying more while getting less. The costs of getting rid of staff and refurbishing the franchisee’s stores are met by the public, but they all lead to a reduced service.
It is a tragedy to see our postal services being run down in this way. Fewer counter positions means more time spent queuing, especially at busy times of the year such as Christmas. The loss of post offices presents particular difficulty for older and disabled people who are less able to get around—particularly, as we heard earlier, if new facilities are situated above ground floor level—and overworked staff have less time available to offer help and advice to customers who may need it.
My hon. Friend makes an important point about people with mobility difficulties. One of the issues that has been raised with me is that of people who have other conditions, perhaps neurodiverse conditions, who find the overload of being in a busy shopping centre particularly difficult. Does he think that has been properly recognised in the proposals to franchise into shopping centres?
My hon. Friend makes an important point; clearly that has not been taken into account at all. My hon. Friend the Member for Wigan referred to an attempt to site a post office in a retail outlet called Bargain Booze. How inappropriate is that for many people—children, for instance, who might be going to a post office to use its services, but are walking through aisles of cheap, low-quality alcohol? That is entirely unacceptable.
I endorse what my hon. Friend has just said. We had exactly the same situation in Blackpool, where a very well used sub-post office was transferred into that position. We managed to get some amelioration of the presentation of the booze, if I can put it that way, but it is not a welcoming environment for people to go into late at night to get the services of a post office branch.
I agree completely with my hon. Friend’s important point.
Of course, it is not just customers who are suffering from the current franchising model. Many staff lose their jobs, only to be replaced in due time by lower paid staff. That, fundamentally, is how franchise partners deliver a service more cheaply. They cut staff numbers, they cut staff pay and they cut staff terms and conditions. In all seriousness, we are not going to protect our high streets or tackle growing levels of in-work poverty through a race to the bottom.
My final point is about the lack of a real forward vision for our post offices. Of course services have to change as society changes, but change does not only mean closure. The CWU has called for the Government and Post Office Ltd to set up a “post bank”, which my hon. Friend the Member for Wigan referred to earlier, along the lines of those seen working effectively in other European countries. Thornton Heath is an important district centre in my London constituency. Like many towns outside our cities, it no longer has a bank at all since Barclays closed its branch last year. Many small businesses in such areas trade in cash, and they need a bank in the locality—in the neighbourhood—to deposit the day’s takings. Not all businesses are digital and not all businesses are online. We are driving small businesses into ruin by allowing basic facilities like banking to be withdrawn. What a fantastic opportunity a post bank would be to revitalise our Post Office and our hard-pressed high streets at the same time—and what a crying shame that we lack a Government with either the ambition or the vision to seize it.
I pay tribute to my hon. Friend the Member for Wigan (Lisa Nandy) for securing this debate. I will be brief because she has said everything that all of us in the Chamber would echo about the problems we have with this proposal.
I draw hon. Members’ attention to the Conservative manifesto back in 2010, which said that it would make the post office the front office of Government services. How hollow has that manifesto promise proved? In fact, we could be here all day picking holes in what the Conservative manifesto promised and what the Government have since delivered. To put that into context, we consistently have debates in this Chamber about the dilution of our post office services locally, whether Crown post offices, franchises or the postmasters and postmistresses who run our post offices, because it is not the front office of Government at all.
In 2011, £172 million of Government services went through our post offices. That fell to £168 million in 2012 and was down to £141 million by 2015. In 2017 it was down to £114 million and it dipped below the £100 million mark in the Post Office annual accounts in 2018, at £99 million. That is not the front office of Government; it is the Government withdrawing services from the very thing they are supposed to be protecting on behalf of our constituents.
We can add to that the history of the project. The Royal Mail and post offices were split off under the Postal Services Act 2011. The Royal Mail was subsequently privatised. The Government said they would look after the post office network, but we have seen that post office network withering on the vine since the Royal Mail and post offices were split up under that piece of legislation. Indeed, if we look at the share price of Royal Mail today—it is just over £2.50—we see that the Royal Mail may be in a bit of financial trouble. It is hardly a success for the taxpayers of this country or for the Royal Mail.
Franchising is difficult not just because successful franchising operations end up in WHSmith. We have heard of the problems with that. I draw hon. Members’ attention to the Consumer Futures report done in 2012, away back at the start of this process, which said how disastrous franchising into retailers such as WHSmith would be. That has proved to be correct. The Government at that time, when I was the shadow postal services Minister, said that the Consumer Futures report was built on incorrect data, but it has since proved to be absolutely correct when we look at the practice of franchising Royal Mail services.
The Morningside Crown post office in my constituency was a profitable branch at the top of Morningside Road. I can tell hon. Members how popular it was in terms of footfall, because that is where we do our street stalls in south Edinburgh. On a Saturday morning, there is no better place to be than outside the post office, with a stream of people going in and out, looking to engage with their Member of Parliament on various issues. That Crown post office came up for franchising, and the interesting thing about its franchise potential was that no other shop in the local area wished to take the franchised post office. As my hon. Friend the Member for Wigan mentioned, when asked about its plan B if a franchisee does not come forward or if no franchisees satisfy the criteria for running a Crown post office, the Post Office does not have one; it has no idea.
I remember when we had a public meeting in Alloa with Gordon Banks, the former MP for Ochil and South Perthshire, when Crown post offices there were threatened with closure. Someone from the audience asked Post Office Ltd what would happen when either the franchisee failed or if no franchisee came forward, and the answer was that the Post Office itself would have to invest in the Crown post office. Perhaps we should invest in post offices before they are up for closure or franchising.
I have to pay tribute to Ibrahim Joulak, the sub-postmaster who runs the Bruntsfield post office in my constituency. He will take on the Crown post office by merging his small sub-postmaster’s post office and the Crown post office. However, franchised Crown post offices do not have all the services that we expect from the major Crown post offices, further diminishing our constituents’ use of the post office, which is a vicious circle for post offices that want to be self-sustaining.
Footfall is key if we want to revive our high streets. The best thing to drive footfall is services that people wish to use, and my constituency postbag certainly shows me that people wish to use local post offices. That drives the local café and the local newsagent, and people moving around our local communities drives the viability of public transport services. We need these linchpins in our local communities.
The most interesting and ironic thing I have seen on the franchising arrangements in my area is that four major high street banks have also closed their branches, and the letter they send to account holders says, “Don’t worry, you can use your local post office.” Well, they can do so only if their local post office exists. It is the very same problem with the free bus pass in many parts of Scotland. Of course pensioners can travel anywhere they like in Scotland with a concessionary travelcard, but they have to be able to get on a bus.
I acknowledge the hon. Gentleman’s commitment. As high street banks continue to close branches, could we not turn the whole argument on its head, keep Crown post offices open and offer the banks a one-stop shop in these wonderful old premises that have been there for hundreds of years, thereby giving an additional service to post office customers?
That is a great intervention. I keep asking the chief executives of the Royal Bank of Scotland and other high street banks why they do not co-host with post offices, bringing together two business models that are struggling because of the way that we use modern communications and modern banking. The technology must be available. If I can do all my banking on my smartphone, surely the high street banks are able to co-locate with post offices and provide that for our constituents.
Finally, the reason why staff tend not to be TUPE-ed across when there is a franchisee partner is that franchisee partners simply do not want them because they do not want the cost. The reason they do not want the cost is that they want fewer staff. The reason they want fewer staff is that they think the service cannot possibly be efficient and effective unless there are fewer experienced staff, so staff tend to take the quite generous redundancy packages from the Post Office. That experience is then lost and there is a brain drain from the service, and again there is a vicious circle of the service becoming less efficient and less able to meet the needs of the local communities.
It is right for the Minister to come here again. I hope we are not having this same debate about franchising and the closure of post offices again next year and the year after and the year after that. The Minister is new in her role, but I hope she eventually grabs the nettle of the post office network, pauses the franchising process, looks at what the Post Office can do on its profitability and then invests those profits back into the current network, so that we can all have post offices in our communities that are sustainable for the future.
It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this debate—we can tell from the quantity and quality of the Members attending how important it is. She gave an excellent speech, as others have said, and set out the case so well. I will probably repeat some of what she said, but because it is so important I think it is well worth saying twice, or even three or four times. Maybe then we will get the message across to the Minister, who I am sure will be in no doubt about how strongly we all feel about this.
Over the last five years, 150 Crown post offices have closed, with the closure or franchising of a further 74 Crown post offices announced in October last year. Unlike many of my colleagues, I am fortunate that no Crown post offices in my constituency are scheduled to be closed or franchised under those plans. However, the Crown post office in Sunderland is one of the busiest in the country. I can only imagine the impact on the local community if it were to be closed in the next phase of franchising. I thought I had better get in there now and stake the claim for that one to be taken off any future list.
Post offices are at the heart of local communities and are more than just somewhere for people to buy stamps or post letters. They provide vital services for many across the country, and it is therefore right and perhaps obvious that proposed closures are taking place in the face of significant local and national opposition. That is why we are all here today.
The continued privatisation and closure of Crown post offices risks leaving vulnerable customers and rural communities without access to banking and postal services. In addition, a 2016 report from Citizens Advice concluded that franchising to retailers in the past has led to inferior services and poor disabled access, which is concerning given the number of disabled welfare claimants and pensioners who access payments via Post Office card accounts. Will the Minister please tell the House whether the Government plan to carry out equality impact assessments to ensure that any post offices that are franchised are accessible to all?
Franchising is often accompanied by substandard service, as we have heard. A constituent of mine who is a former Crown post office employee wrote to me recently to voice his concerns about the impact of franchising on the employment of trained, experienced staff. In fact, Citizens Advice reported that franchising leads to a deterioration in service and fewer staff with less experience. It seems that the economics of the franchise model are based on cutting staff numbers and reducing service provision. Franchise plans put in place by the Post Office in 2014 could work only if 50% of existing Crown post office staff left the service. This expulsion of experienced, knowledgeable staff is all done at a massive cost to the taxpayer, with £13 million paid in compensation agreements to redundant postal staff between 2014 and 2015. Then, after all these experienced staff are let go, their jobs are replaced with low-paid, temporary employment.
Recently announced plans show that many Crown post offices will be franchised to WHSmith, as my hon. Friends have said. Unions have raised concerns about the retailer’s employment practices, given that its business model is based on low-wage, part-time jobs paying little above the minimum wage, whereas the usual pay for a counter position at a Crown post office is way above that. How can the Minister justify the replacement of well-paid, quality jobs with low-paid temporary positions? It is exploitative of staff and residents in areas where Crown post offices will be franchised.
I wrote to the Minister recently to voice my concerns and those of my constituents, and I thank her for her quick response. She said in reply that franchising is not a process of privatisation or closure. However, when considering the staff cuts, substandard service provision and poor profits that the postal service has faced in recent years, it appears that this publicly funded service is going through a period of managed decline.
The Minister also told me that franchising was about reducing costs for taxpayers. However, the process of franchising is paid for by public money. Millions have already been spent on compensation agreements with Crown post office staff and on installing and furnishing new, franchised branches. The Post Office will not even disclose the magnitude of some of these costs and has refused to carry out a public consultation on franchising.
Does the Minister agree that the public should at least be consulted before they are billed for substandard service and the loss of publicly owned assets? There has been a serious lack of transparency throughout the process and it is wrong that significant sums of public money are being used to finance the privatisation of the post office network. Franchising leads to poor service, poor accessibility and job cuts. The Government must justify their use of franchising and acknowledge the effect on service provision in all our local communities across the country.
It is a pleasure to serve under your chairmanship, Mr Evans. I commend my hon. Friend the Member for Wigan (Lisa Nandy) for initiating this debate and speaking so powerfully in introducing it. As many hon. Members have said, she laid out comprehensively the matters that we have concerns about.
I recently met a number of postmasters in my constituency to discuss their concerns, so the issue is not just the collapse of the Crown office network—the 60% decline that we have seen in that network. Last year saw the sale of the Dennistoun Crown office in my constituency; it was franchised off. I remember going along to the consultation that the new franchisee was holding, and he seemed upbeat about the opportunity that he had to make a difference. I was looking at the plans that he had. On the face of it, it was all quite impressive—the layouts and accessibility and the opportunity.
Obviously, at that time I expressed the concerns about TUPE-ing. We have seen that the general trend is that the majority of Crown office staff will leave. As my hon. Friend the Member for Edinburgh South (Ian Murray) said, staff will have a very generous settlement scheme, but that is because the business model of the franchising is set up so that it is sustainable only if those people take the settlements. TUPE-ing people across on the same terms and conditions is not a sustainable business model for the franchise. It is almost rigged, in a way, to create that perverse incentive to leave. There is a draining out of skills and knowledge and a diluting of employment protections and the standards of employment that people would generally have working in this sector.
The postmasters came to see me because they were concerned. The same guy I was talking about came six months later, and his mood could not have been more depressed. It was just awful to see the change from his initial upbeat enthusiasm. That small business owner had been looking to make an entrepreneurial fist of it, but he felt that he had been conned in the way he had signed up to the deal.
The main concern of the postmasters was the viability of the operations because of the reduction in funding and resource. For example, postmasters now have to rent ATMs at a cost of £8,500 per annum, but they get an income of only £7,500 per annum from those machines, so that is a net loss of £1,000 to the franchisee, just from the obligation to have an ATM on-site. There are associated business rates as well.
The Government have invested £1.3 billion in the post office network. However, that money does not appear to filter down to the franchisees. Banking contracts with new franchisees have changed. Postmasters used to receive 70p per £100 for providing banking services; they now receive only 31p per £100. That creates another problematic and precarious situation for many franchise owners.
As hon. Members have said, there has been a widespread programme of commercial bank branch closures, which has hit my constituency. Near the Dennistoun Crown post office, we have seen the closure of the Royal Bank of Scotland branch in Dennistoun in the last 18 months or so. Before that we saw the closure of RBS in Possilpark. My constituency has increasingly become a banking desert. It increasingly relies on post office services, which in turn are becoming increasingly precarious because all the Crown offices are being franchised. One has already been franchised, and indeed one franchise cannot be shifted because it is so unattractive to any prospective franchisee.
The situation is not working at all and is not sustainable. Potential earnings have been eroded to the point at which people believe that cash starvation will lead to the closure of many post office outlets. The view is that post offices should go back to being run as they were. My fear is that offloading the Crown office network on to franchisees stores up a time bomb. There could be a wholesale collapse in the provision of postal services across the UK within the next five years because those people literally want to drop the keys and walk away because it is costing them money to run these businesses. It is a drain on their resources. Why on earth would they be paying money to run them? I fear that the Post Office is sort of saying, “Let’s offload this. We’ll create a superficial holding pattern for a couple of years and lock the people into these contracts,” and in two years’ time things are going to drop off a cliff and we are going to see a massive collapse in the overall post office footprint across the UK. That is my real concern.
I hope the Minister takes on board and addresses my points, and that she offers to meet postmasters who have those concerns. Postmasters in my constituency believe that their ability to provide a service, which they want to provide, and employment in the constituency is being severely eroded and that retail operations within the franchises are not sufficient to allow their survival. They believe that contracts should be renegotiated to allow both the service provision and the ability to earn a reasonable living. Of course, the Communication Workers Union actively opposes the franchising of the post office network for that very reason. Employees in those branches believe that they are 39% underpaid.
The model is totally unsustainable and risks further collapse in the post office network across the UK. I hope you will take on board the direct feedback from postmasters in my constituency. Sorry, I hope the Minister takes on board that feedback—perhaps you will as well, Mr Evans, and perhaps your constituents are also affected. I hope the Minister addresses those points with urgency because this is an urgent issue affecting postal services across the UK.
It is a pleasure to serve under your chairmanship, Mr Evans. I thank my hon. Friend the Member for Wigan (Lisa Nandy) for opening the debate so powerfully. I certainly echo many of the comments that she made. If the Prime Minister did not underestimate the power of Government to intervene, I see no reason why the Minister should not intervene on behalf of all our constituents to ensure that this franchising process is halted. It is absolutely clear that it is riddled with problems. I shall reflect on the situation in my constituency in York and some of the challenges that are being placed at the door of people there because of the decision to franchise the service.
The first issue is the consultation process taking place over the Christmas period—it closed on 28 December—the busiest and most stressful time for post office staff. I pay tribute to them, but to have this situation hanging over their head over the Christmas period is nothing short of cruel. It also ignores the input that they would have wanted to have into the consultation. The issue is not just them and their jobs, but their customers, whom they care deeply about.
I want to highlight two particular issues: the impact on the local economy in York, and the location of and access to the post office. The post office has been at 22 Lendal since 1884. It has survived two world wars and still stands proud today. It is a busy and profitable Crown post office, which is a real advantage for our city centre which, like many high streets, is struggling. It is at the entrance to our city—a city that attracts 7 million people every year and a city that people will come into on a Saturday or during the week to use the facilities of the post office.
It is in a prime location for transport links, whether people are using the train or the bus to come into the city. Crucially, disabled people are able to pull up outside the post office to access the services, and for those who cycle, there is parking space for bikes outside. The post office is in the most profitable and accessible part of our city. It is boosted by having opposite to it Britain’s best pie shop—Appleton’s. People have a dual pact whereby they buy their pie and use the post office.
As the Member of Parliament for Wigan, I am duty-bound to assure my hon. Friend that the best pies in the country are found in my constituency.
My hon. Friend may say that, but by all judgment, Appleton’s has won the prize for the best pie shop in the nation.
To get back to business, the reality is that York’s post office is a profitable post office that works for my constituents. It is in the prime location. If the post office could choose its location, it would still be exactly where it is. However, the post office will be moving to WHSmith in Coney Street. That is not far, but the post office will be going into an area of the city that is struggling and where shops are shutting. The number of empty retail outlets that we see as we walk around is growing year on year and month on month, which is of great concern. People will not be able to pull up in their vehicle outside the post office because it is a pedestrianised area. That means that the post office will be inaccessible, particularly for disabled people but also for older residents.
The area will also have tighter controls in future. Mail vans will not be able to pop by because of the counter-terrorism measures that our city is taking—the Post Office was not even aware of that during the consultation process. If a van were to go there, it would have to be well out of hours because of the new counter-terrorism plan. It would have a very precarious route down a dark alley, which leads down towards the river and has been deemed unsafe under health and safety inspections, let alone if someone were to be in that alley with money—they just would not go there. It is deeply concerning for staff, who would have to use that as the only means of accessing the building other than going through the shop itself.
The post office will be located at the back of WHSmith. It will not be the first business to try to succeed there. Costa Coffee had a business at the back of WHSmith and it failed. In its current location, just down the road, Costa Coffee is thriving, but at the back of WHSmith it did not work. This does not make sense for the future of the post office. Therefore, its current location is the right place for it.
I am glad that my hon. Friend has raised this situation where the post office is transferred and shoved right at the back of an existing WHSmith store, which is exactly what is proposed in Cardiff Central. We know that very few people are going into WHSmith because it is an ailing retailer. Walking right to the back of an ailing retail shop will not make it easy for people to access the postal services they need.
My hon. Friend has made a powerful point. This has to make business sense and, where it does not, it should not proceed. I also highlight the fact that custom will be lost from retailers in the city who bank and place deposits within the post office. They do not feel safe having to walk through and then queue in a retail outlet. They have already said that they will be transferring their business away from the post office. That has to be taken on board. This does not make business sense or economic sense, nor does it make sense for our high streets or my city.
As my hon. Friend knows, I know the branch she refers to very well from my student days and I use it at Christmas when I visit my daughter. It has excellent services, including an exchange bureau, which can compete with the best. Those kinds of services, which are working in purpose-built buildings, need to be maintained and enhanced. She is making an excellent case, but she makes it for the rest of the country, as well.
It is so important that we do not sell off our family silver, which is exactly what this process will achieve, certainly with regard to my city.
Finally, I want to raise the issue of the war memorial placed in our post office, where 16 fallen men from the first world war and ten from the second world war are honoured. It is unknown today what will happen to that war memorial. I reflect on the words of Harold Wood, who today is 95. In 1942, he defended our city as part of the Home Guard. He said:
“The Luftwaffe couldn’t destroy it. It would be sad to see the Post Office do it.”
Our post office survived two world wars, so it would be a shame to close the doors, thereby ensuring that its profitability, service and access will be lost to my constituents.
It is a pleasure to speak in this debate. I congratulate the hon. Member for Wigan (Lisa Nandy) on bringing this debate to the House. The fact that so many people are here indicates our interest in the subject and the importance of post offices to every constituency. I am pleased to bring—as I often do in Westminster Hall—a Northern Ireland perspective to this debate. I will speak about some of the success stories that we have had recently in post offices and their strategy. I am pleased to see the Minister in her place. She looks very lonesome in that top corner, but from my discussions with her, I understand that she is very much interested in the views we are putting forward. I know her response will be positive and I look forward to hearing it.
I will also make some comments about the high street, because it is important to have a high street. I was just talking to the hon. Member for Ynys Môn (Albert Owen), and I said to him that if a shop goes vacant and stays vacant for a while, it almost becomes infectious. It is important to ensure that somebody comes in quickly; otherwise, it will lead to the problems we are seeing across the UK mainland.
I hail from a rural area that has seen the closure of every rural bank in the last five years. The Scottish National party has highlighted the issue of rural banks closing, which is something I have seen in my constituency in the last five years. Any change or alteration of the post office greatly concerns me. We have no banks at all in the Ards peninsula, where I live. Almost every bank that has pulled out—except Ulster bank, which has created a mobile banking service and has a customer adviser in the area once a week—has pointed to the post office and urged people to make the most of the ability to lodge money and lift money through the post office. I have to say that that strategy has been successful in the Ards peninsula for a number of reasons. First, the post offices are there—I will explain how we have been able to keep them over the years—and secondly, two credit unions have opened in Portaferry and Kircubbin, which give some banking opportunities and supplement other facilities.
The figures in the background information may be a wee bit deceptive—I say that gently and with sincerity to those who did it. Some 111 Crown post offices have closed and 1,008 agency post offices have closed. Attempts have been made to build that up by using the outreach service, which can help a bit, but does not take away from the main issue. The role of a post office is not just to do monetary things. Other hon. Members have said that post offices should be doing more where they can, and that is one of the things that I want to look at. What can they offer? Can I do my driving licence there? Can I do my passport there? Can I pay some bills there? Can I do other things? That is what we need to do. I am not sure that the outreach service makes that happen. Therefore, I suggest very gently that the outreach alternative is not really where we are. A well run network of rural post offices is needed.
I am very aware of any changes to the services offered and I am supportive of colleagues who are losing branches to what has been described to me as privatisation by stealth. That is why I support this debate. I am here to register my support for the post offices and to support those hon. Members who are probably having more difficulties in their constituency than I have in mine because of some of the success we have had.
The briefing from the Communication Workers Union, which I am sure we all received, is clear:
“The Post Office Ltd uses public money to finance the closure and franchising programme.
Everything from compromise agreements to get rid of existing staff (£13 million in 2014-15 alone), to refurbishments on stores it then franchises (£4.6 million was spent on 39 branches), and installing post office counters in franchisees’ premises (the post office refuses to disclose this expenditure), are met by the public. Yet, in return, the public receive a reduced service.”
That is the concern we all share, as hon. Members have said. It continues:
“While Crown offices represent a small share of the overall network, they have historically brought in between 10-20% of the Post Office’s overall revenue”—
a significant amount that cannot be ignored—
“and so any further closures could jeopardise the future of the network.
There is no evidence of respite from the slash and burn approach either, as the Post Office Ltd announced in July that they want to attract new applicants to set up ‘New Network Locations’ in 450 postcode areas throughout the UK.”
That perhaps unsettles the present franchise and network of post offices, as well.
“This initiative will have a substantial and far-reaching implication on the future of every flagship Crown office and Crown office job, as well as impact on Postmasters in sub Post Offices across the network many of whom are already reporting they are struggling financially.”
The two independent reports to which some hon. Members referred—one by Consumer Focus from 2012 and another by Citizens Advice from 2016—concluded that the previous franchising of Crown offices to WH Smith resulted in longer queuing and service times, inferior customer service and advice, poorer disabled access and a reduced number of counter positions. Those facts tell the story. If a service is going to be provided, it should be a good service. If the service is run down and secondary, by its very nature, that leads to the further reduction of the Post Office.
Alongside that, the closure and franchise programme results in the loss of experienced staff, as hon. Members have said. The sub-post office managers in the peninsula that I represent have historically been second to none and we have been truly blessed, but part of that is that they have invested in their businesses. It is not the big firms such as WHSmith that have been offered the franchises, but the smaller shop groups. That has enabled post offices to be retained, because there is an investment, but there also has to be a wage for the sub-postmasters or sub-postmistresses to be able to continue running them.
Having post offices in shops and garages across the peninsula is one way that we have made it work. Someone signing on to work for another company and not as a postmaster or postmistress may not affect quality of the service, but it means the loss of what people see as a community asset. I think all hon. Members have referred to and understood the importance of the community asset that we have.
I have lived on the Ards peninsula for all but four years of my life. It is a close community that has grown, with many people coming to live and retire there. Over the years, the post office has been the cog at its core—a central point for meeting friends. It is also a central point for saying, “You know something? Mrs Jones hasn’t come in this week to collect her money or make a transaction.” The people at the post office know that and then, as they often do, they will call out to see if she is okay. There is a critical community aspect to the post office that cannot be ignored, which is neighbour looking out for neighbour, as we do in this House as representatives.
The hon. Gentleman is absolutely right to talk about the social service as well as the postal service. There are also cash-handling services that post offices provide for small businesses. Wherever they transfer to, that service is not available.
The hon. Gentleman is absolutely correct. Small businesses are another aspect that I want to mention. When the banks closed, they said, “You can do your business through the post office,” but people need to have that opportunity for lodging money and for getting cash out to pay staff wages. That is really important for small and medium-sized businesses, and that is why the intervention that the hon. Gentleman referred to is critical.
The closure and franchise programme means that the relationships that customers have with staff are lost, and it limits the Post Office’s ability to expand into the new services that customers want it to provide, which is another thing we need to make sure happens. Moving to a model with less space, fewer specialist staff and fewer experienced staff is not a model that customers want or that will bring future growth.
In the short time I have, I will set out how the post office counters have developed in conjunction with small and bigger shops. I will mention some of those places, because it is important for the evidential base—probably no one will know where they are, but hopefully the Minister will get to know them shortly, when she comes to visit my constituency sometime in April, after we get Brexit out of the way. They include Ballywalter, Ballyhalbert, Greyabbey and Kircubbin; Ards town, where Scrabo post office closed but was moved to the Ards shopping centre, which is only a couple of hundred yards away; Stratheden, where the post office was moved out to one of the larger shops; and West Winds, where the same was down. Those examples worked because the shops were big enough to absorb a post office and a counter, and to give a service, but the person who took it on had to have a wage that justified them looking after it, which is important as well.
The Minister knows the pressure on the high street well, as do all hon. Members present. The news stories in the media are always full of negativity—“This store has done well. That store hasn’t done well.” We want to make sure that post offices can play their role. The Crown post office in Newtownards in my constituency is critical to the future of the high street, and we are pleased to report that it has been retained.
Although I am thankful for businesses such as the Spar in Carrowdore, which has incorporated a post office in its shopping outlet that carries out all the post office functions, including foreign currency, and whose staff are certainly highly trained, that does not seem to be the case for all franchises on the mainland, as hon. Members have said. As an MP for a rural area, I give my wholehearted support to those wanting to preserve the skill and make-up of post offices in areas that rely on them as the only monetary exchange.
Earlier, someone said that privacy is sometimes needed for financial transactions. I want that to be recorded in Hansard. That is perhaps the one thing I would like to see more often in a post office. We live in an age where everyone overhears conversations about other people’s monetary transactions in the post office, but we do need privacy for some things.
The Post Office was not designated for privatisation and I sincerely oppose an attempt to privatise it by stealth—I put that on the record. The service it provides is truly a lifeline in rural communities and that service must be first class. For that reason, it must be retained. I look forward to the Minister’s response. I know that in her response, we will hear some of the reassurance we need.
It is a privilege to speak under your chairmanship, Mr Evans. I thank my hon. Friend the Member for Wigan (Lisa Nandy) for securing the debate and for introducing it so comprehensively. As she will see, I have been waiting for three years to say some of these things; this is a great opportunity.
My hon. Friend the Member for Croydon North (Mr Reed) started by talking about the impact and importance of post offices in our communities. Before coming here, I was a community worker and an academic studying community work. I can testify that having such institutions on our high street as part of our community is incredibly important. Some institutions, such as libraries and post offices, have been part of our communities for generations, and different generations use them to mingle and come together. They not only form a physical presence in our community, but bring different parts of our community, of different ages, ethnicities and backgrounds, together in the same place. They are uniquely and incredibly important to the cohesion of our communities.
Since 2000, I have lived in the Brunswick Town area of the Hove constituency that I represent. That town is characterised by having lots of the regency houses for which Hove is known. It also had a Crown post office that had been there for many generations. It was a well loved and heavily used post office. I was elected in 2015. Two months after being elected, I was contacted by the Post Office, which said that it was opening a consultation with the potential to close the branch. I immediately met Post Office representatives in my office in Parliament, because if the Post Office was going to have a consultation, I wanted to engage in it in an open-hearted, engaged and positive way. I wanted to make sure that it got all the information it needed to make a decision in the best interest of the community that I represent and that every single voice that needed to be heard would be heard.
When the Post Office’s representatives came to Parliament and sat with me, the first questions I asked were, “Is this a genuine consultation? Are you going to listen to the voices in our community? Are you going to look at and study the facts and base your decision on those facts, or is this a fait accompli? I need to know right now.” They both looked me in the eye and made me an absolute cast-iron categorical promise that it was a genuine consultation that would look at the facts and listen to the community, and that they would base their decision on what they saw and heard.
On the back of that, I engaged fully to try to deliver the voices and the information the Post Office’s representatives needed to hear. I made sure that there was a public meeting one evening, to which 200 local community residents turned up in an open-hearted way, so that they could sit with the representatives, feed in their insight and how they use the Post Office, and make sure that their needs were taken into consideration. That meeting was a difficult one, because people were really concerned, and I made sure that the people who had come from the Post Office were treated with respect, which sometimes meant challenging the people I represent and ensuring that they engaged in a positive way. In other words, I used some of the political capital that they had given me in order, at times, to push back at them. That is a difficult thing to do at such meetings, but in the interests of getting the right outcome it was worth doing.
A petition was set up locally that received 5,400 signatures and there was another petition online that received an additional 2,000 signatures. The voice of the community was heard loud and clear.
The Post Office said of this post office—the Crown post office in Brunswick Town in Hove—that it had spoken to customers who were very willing to make the walk, for 1.1 miles uphill, to another post office, which was in a convenience store that had a counter. However, at the public meeting, not one person said that was the case. The Post Office could not provide me with the names of people who had said they were perfectly happy to make that journey. I went into the Brunswick Town post office several times to speak to customers and I could not find a single customer who said they would rather make that journey of 1.1 miles up a hill than use the post office that was already in their community and that had been there for generations.
So I went back to the Post Office with that information and the Post Office ignored it. I told the Post Office about people who could not make that walk of 1.1 miles, either because they were living with disabilities or living into old age; they simply could not make that journey. The Post Office heard their voices directly, because I made sure that it heard those voices directly.
Then I went in to the Brunswick Town post office, because the Post Office had said to me that in the previous year the footfall and the number of customers for it had fallen. The Post Office showed me statistics to back that up. So, as I say, I went into that post office and when I opened the door I saw something that I had seen very, very regularly—a queue, snaking through the building all the way to the door. Of the three counters, only one was open. In the 15 years that I had lived in that community, I had never seen a situation in which only one counter was open; it was always the case before that the post office had been a hub and all of its counters had been open.
So I spoke to some of the staff in the post office and it turned out that eight months earlier a diktat had come down from the Post Office to close two of the counters and not use them; only one of the counters was to be used. Why was that? I am absolutely convinced that the Post Office was running down that Crown post office, by allowing only one counter to be used and by only allowing the staff there—against their wishes—to use one counter.
It was very clear that the Post Office wanted to drive down the customer numbers, so I wrote to it and asked directly, “Have you asked the question and looked into whether the fall in footfall is due to fewer people wanting to use that branch, or is it because more people are finding it difficult to use that branch, or they just give up before they get to the counter in the first place?” The Post Office could not answer the question.
The process ended and the Post office announced in writing that it was going to close the Crown post office in Brunswick Town. There would be no further engagement and within weeks that post office had closed.
This sorry story ends a year later, when I walked down the street in Brunswick Town and discovered that the Post Office had opened a new branch inside a convenience store next door to the Crown post office that it had closed down, because it said there was no need for it. I repeat: next door. I have absolutely no doubt that I was misled, that the community I represent was misled and—worst of all—that the customers who used and depended on that post office were misled and the staff who had given a career and indeed a lifetime in work to that post office branch were misled. The post office staff’s jobs disappeared and the jobs that have been created in their place have no pension liability and no guarantee that they would have the standards that people who work long-term in the Post Office can expect. And those workers were no longer part of the Post Office family.
We have a Prime Minister who stood on the steps of Downing Street and said she was going to maintain those sorts of rights and tackle injustices. The Post Office is one of her companies; it is an organisation that she runs. However, she has allowed it to dwindle, to be stripped of assets and to be taken away from our high streets, and replaced with something that has less value, that makes less of a contribution to our communities, and that offers less stability and value in the workplace to the people who work for it.
I say to the Minister directly that I understand that she has said that it is not her job to meddle with the running of the Post Office. However, in times such as this, I and my community expect her to roll up her sleeves and get stuck in, because if branches are being taken from our high streets, and MPs and our communities are being misled, we are their elected officials, she is speaking on behalf of the Government and we expect her to act.
It is a pleasure to serve under your chairmanship, Mr Evans, and a particular pleasure to follow a very powerful speech by my hon. Friend the Member for Hove (Peter Kyle). It was a salutary warning, and I suspect that some of my comments will echo the concerns of others about the so-called consultation process. I also congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on her powerful introduction. She speaks for all Labour Members on these important issues.
The announcement a few months ago that Cambridge was one of the post offices to be put through this process was met with incredulity in my city. People are absolutely furious. I will say a few things about our local circumstances, trying not to repeat some of the points that have been very well made already, and then make some general reflections.
The Crown post office in Cambridge has around 15 very experienced staff, who between them have 150 years of experience—experience that is likely to be lost if this process continues. The post office has already been moved across the street—that was not a popular decision eight years ago—from one of the many fine buildings in Cambridge, in order, we were told, to secure its long-term future. There are some interesting definitions of “long-termism” in the modern world. That post office is one of the most successful in the region and possibly, I am told by my colleagues in the Communication Workers Union, in the country. It has been one of the top-selling post offices for travel currency, travel insurance, travel-related products and passport checking. It is one of the top-performing post offices in the area, so we might expect it to be celebrated as a success story.
That post office is also one of the few nationally to carry out biometric services and provide international driving permits, which is what I want to focus on. There has been a huge change in our country for those coming here to work or study, which most of us—who do not have to go through such processes—are probably only dimly aware of. Those people have to have biometric residence permits. If we are to have that system, we also need a system to allow them to register their biometric data, and in my area it is the Crown post office in Cambridge to which they are directed.
[Mr Graham Brady in the Chair]
In conducting the research for this speech and talking to people locally about how the whole system works, I stumbled on what can perhaps only be described as a coincidence. In November, just after the announcement of the consultation, guess what quietly happened? That biometric information system has been very quietly transferred from the post office—although it still exists there at the current time—to the local library. However, it is hard to know how anyone would find that out, because if they go to the Home Office website or Post Office website, they will still be directed to the Cambridge Crown post office.
Let us, for the moment, continue to follow the public advice, because biometric residence permits are needed by all foreign nationals from outside the European Economic Area if they want to stay in the UK for longer than six months, extend their visa, or settle in the UK or have other interactions with the Home Office. In areas such as mine, which have huge numbers of people coming to study or work, and contribute to our local economy, this issue is enormously important. For instance, I am told that almost all the 2,000 non-EEA staff at the University of Cambridge will need to have used, or will need to use, those services, and if they cannot go them to Cambridge, they will have to go to Huntingdon, Harlow or Romford, which requires hours and hours of travel on public transport.
I have a similar situation in Cardiff Central, where the biometric centre was in our post office, which is due to be put into WHSmith. I met with the post office to ask whether the biometric service would transfer to WHSmith, and guess what? It will not. Does my hon. Friend agree that that creates another barrier for people who are already in a vulnerable situation?
I totally agree, and that is an important point. Apparently, only 37 WHSmith stores across Britain have the wider access for wheelchair users, and if that is no longer available, people from my area would have to travel to Luton, Milton Keynes or London—a major diminution of service. It may be possible that those services can be provided elsewhere. Frankly, who knows? Maybe the Minister can enlighten us. Maybe she can tell us whether the timing of this transfer was random chance or coincidence. Maybe she can guarantee the future of our local library. I do not know, but my guess is that the Government have very little clue about the future, and I doubt that any answers at all will be offered. We shall see.
Other Members have mentioned disability access, and I concur entirely with the comments made about WHSmith in general, which I will not repeat. What I will say is that those of us who have been in and out of WHSmith in Cambridge know that it is already a crowded store. It is not listed by WHSmith as one of its wheelchair-friendly stores, and the idea that it is going to be a pleasant experience for people seems almost unimaginable, frankly. We have huge doubts. These services should be available to people and properly accessible. I say to those running the campaign on behalf of the Post Office that they should be careful of who they are taking on, because we have some pretty powerful campaigners locally. Councillor Gerri Bird led a campaign a few years ago to stop the toilets in the Lion Yard shopping centre in Cambridge being moved from one floor to another. After months of campaigning, she won and the other side lost. I say to the Post Office that it should be careful who it takes on. It would do much better to back down soon, gracefully.
Let me turn to some of the wider issues. As we have heard, the Government have said that they are worried about the high street. That is understandable; we all are. There are huge challenges, but we should not make them worse. This is not just about where a service is provided; as other Members have said, it is about the kind of institution. Many years ago, I worked for John Garrett, the former MP for Norwich South—some Members may just about remember John. He wrote a book, presciently entitled “Westminster: Does Parliament Work?”, which is good reading in these troubled times. I remember going around the local post offices in Norwich early in the morning with him, and the thing that struck us was that at every post office, there was a queue. An accountant, I suspect, would say, “Why are these people standing outside the post office when, if they came an hour or two later, they could just go in and be served?” The answer, of course, was that this was the occasion when most of those people got to see their friends. They were standing outside; as other Members have already said, it was part of a wider social issue. For the bean counters who are looking at the Post Office balance sheet, that probably does not count for anything, but it really counts in looking at the NHS balance sheet, in terms of the impact on people’s mental health from loneliness and so on. That is why the Post Office is a public service, not just a business.
People may also remember a recent, much-loved BBC television series, “Lark Rise to Candleford”. Some will remember the inestimable postmistress Dorcas Lane, who was at the heart of that local community. I suspect that series was much loved partly because it spoke to a conception of Englishness—one of fairness, kindness and public service—that many people still crave. As other hon. Friends have already alluded to, that also goes to the heart of the debate that is happening in the Chamber just a few yards away. Others have written eloquently on these related issues. My hon. Friend the Member for Dagenham and Rainham (Jon Cruddas), who was in the Chamber earlier, wrote of the then coalition Government back in 2011:
“The government is not conservative; it is liberal and extreme. Through its indulgence of the banks and corporate and media power, and attempts to sell off parts of our English common life to the highest bidder—forests, waterways, ports, the Post Office, sport and culture—it is systematically destroying the hard-won victories of generations and, in so doing, unravelling the essential fabric of this country.”
These post offices are part of that fabric. For my city of Cambridge—high-tech Cambridge—our post office is part of the essential fabric of our city and our community. I may be dismissed as a romantic socialist, and I would not disown that label, but I will conclude by posing a question to the Minister: what kind of conservative does not understand the place of the post office in an English country town or community?
It is a pleasure to serve under your chairmanship, Sir Graham. You will get the idea that today, tempers are fraught and passions are running high. There is genuine concern about the impact of these policies on our communities, which are met with a Government who are stubbornly pursuing a course of action that has no support. You would be forgiven for believing that you are still chairing the 1922 Committee, but no: this is a debate on post offices, with MPs who are genuinely concerned about the impact of these changes on the fabric of our communities and the future of our high streets. We can dismiss post offices as places where people go just to post a letter or send or collect a parcel, but they are more than that: they are the community. They are part of our collective identity, secure a sense of belonging, and are also important to our sense of place. They are critical to the fabric of our community.
Oldham has seen more than its fair share of changes, and more than its fair share of taking the burden of modernisation and austerity. It has seen every single one of its day care centres and every single one of its council-run youth centres closed. It has seen thousands of staff sacked from the local authority. It has seen its police stations in Chadderton, Royton and Hollinwood closed; it has seen every single custody cell in a town of 250,000 people closed. It has seen the magistrates court closed; it has seen the county court closed. It has seen the taxpayer-supported Royal Bank of Scotland close every single branch in a community of 250,000 people, and when RBS decided to close its high street bank, what did it say? It said, “Part of our consideration is how close our existing branch network is to the post office network, because that will provide an alternative banking function for the local community.”
In these types of consultations, the organisation contacts the MP for the constituency where the branch is based. Ironically, however, Ward Street, where Oldham post office and the Royal Bank of Scotland sit, is on the boundary between Oldham West and Oldham East. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) was contacted and consulted about the closure of the Royal Bank of Scotland branch, and I was consulted about the closure of the post office across the road, but never the two shall meet. There was no consideration of the impact that the Royal Bank of Scotland closing would have on the post office, and the Post Office gave no consideration to the impact on the high street and local community of the closure and relocation that it was proposing. That post office has just undergone a significant modernisation programme, with far more self-service facilities to free up staff time and so provide for a wide range of services that will not be transferred to the WHSmith branch in Oldham’s Spindles shopping centre. That is important—the branch is heavily used. We have not been given the exact usage numbers, but the Post Office admits that the Oldham branch is one of the largest and most heavily used branches in the north-west. That branch is extremely valued by the community.
Critically, the branch is located on one of our main streets, where buses drop people off. There are 62 drop-offs every hour on that road outside the post office. Interestingly, just beyond it is one of the steepest inclines in Oldham, which is quite a steep town anyway—anyone who has been there knows that it is a big hill with a town plonked on the top of it. That is the steepest incline down to the shopping centre, so to get from the string of bus stops to the shopping centre where WHSmith is located, elderly people and those with limited mobility will have to go down one of the steepest inclines in Oldham. At the moment, they can park in the loading bay, or on the yellow lines if they have a blue badge, and pop straight in without any problem. They cannot do that in the shopping centre: a blue-badge holder visiting Oldham shopping centre pays the full price, the same as every other car park user. Straightaway, people who rely on transport and their blue badge to use a post office will be hit with a charge that they currently do not have to pay, just for using that essential facility.
Oldham has a far wider range of services than neighbouring Rochdale town centre, where the beautiful, stunning Crown post office was closed with the promise that one would reopen in future. We are now years on and the replacement has not followed. In Ashton-under-Lyne next door, the Crown post office, in a beautiful Victorian building, was closed and then relocated to WHSmith in the shopping centre. Many of the services provided in Oldham are not provided in our neighbouring towns, so Oldham provides services for nearly 700,000 residents who need, for instance, to use a biometric enrolment service. If a non-EU national needs a residence permit or a permit to work, they have to go and use the biometric enrolment service there. If they do not use the current post office facilities—I understand the contract has been let out elsewhere—the nearest venue to go to from Oldham is Sheffield. How does that make sense when we are just about—potentially; who knows?—to leave the European Union and we do not know what immigration arrangements will be in place and what permits might be needed in future.
The idea of downgrading and changing the service is an absolute nonsense. Even now, particularly in Oldham, where we have a large Bangladeshi, Pakistani and Indian community, a very heavily used service will be taken away from local people and will be transferred.
What about the Care Quality Commission ID services? If someone working in the health and social care industry needs their ID checked to make sure that they are fit to work, they have to go to the post office to get it checked. If that service is not transferred from Oldham into WHSmith, people will have to go to Gorton or to Harpurhey, and there is not a single direct bus route to either of those places.
What about CRB checks if someone wants to work with young people? Teachers and youth workers have to get their ID checked. The service is currently provided in Oldham’s Crown post office, but is not provided in neighbouring Rochdale or Ashton town centres. The idea of downgrading those services for such a large body of the population is an absolute nonsense that shows the lack of co-ordination across Government. Has any consultation taken place with a Home Office Minister on the contractual change for the biometric enrolment service? Has any conversation taken place with the Department of Health and Social Care on the changes to the CQC ID services and the CRB check services if they are not transferred to WHSmith? Financial services, ID checking and current and credit card accounts are currently provided in Oldham, but not in neighbouring Rochdale or Ashton town centre, but they have the potential to be lost during the move, too.
We hit the ground running with the campaign in Oldham and started an online petition. Between our street petition that started in December and the online petition, we have about 2,500 signatures of local people. The hallmark of every one of the conversations that took place concerns how baffled people are that the move is even being proposed. People have been told that all the closures and the downgrading of the high street is because of austerity. They have been told how difficult it is for retail and how everyone needs to take their fair share of austerity and that is why they are losing all these other public services. People have been told that and for quite a long time they accepted that that is just the way it is—times are very difficult and that is the impact. Not a single person can explain why the move makes sense. It makes no sense to the community and the people who use the post office. It makes no sense for the high street to lose a vital anchor to support that part of the town centre and our Market Hall and the traders who operate there.
What about the fabric of our community? We have heard many fantastic contributions about the social role that a post office plays apart from the commercial transactions that are provided. When we hear people defending the modernisation programme—I use “modernisation” loosely—they say, “Things have to change. Things will never stay the way they are. You have to keep up with a changing world.” The post office modernisation programme is a good example of how it has tried to keep up with demand. The number of branches in the 1980s was 22,000. It is now down to 11,000, so we have lost half the network over the past 30 years. That is modernisation—if you like closing stuff—but it has taken on a far wider range of services, trying to be more commercial and trying to attract footfall in its premises. By and large, it has done a reasonable job and the community has benefited.
The Crown post offices have shouldered the burden. When we look at the closures across all the post offices, agency post offices are down by 9%, but Crown post offices are down by 29%. We have lost a third of our Crown post office network as a result of successive closures, but still the public pay into the post office network as a vital public facility. What is the deal? There was no public payback with the Royal Bank of Scotland. Taxpayers bailed out the bankers, and what thanks did they get? They walked away from every one of our towns, cities and high streets. What is the payback for the taxpayer with the post office network? What is the community dividend for the investment that we collectively make in essential public services? It cannot be a repeat of the Royal Bank of Scotland’s “to hell with the community, turn your back on the community”, simply because the Minister would not take responsibility and says, “This is just all commercial.” Such decisions are not commercial when generations of facilities that have been built up to provide that infrastructure in our community will be gone and can never be replaced.
Finally, I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this debate. She has seen the passion in the room today. I also congratulate the CWU trade union for the work that it does in leading the charge against the changes. The Minister has an opportunity. She is a young new Minister looking to set out on her ministerial career and to make her mark. Let everything that we have learnt over the past two to two and a half years be a lesson for everybody. If we pursue stubbornly a narrow direction that does not have support, ignoring what those with concerns say, we will end up in a cul-de-sac and people will be marked by that. I do not believe the Minister wants that mark on her reputation. I believe she wants a reputation as a Minister who understands that we are all here to represent our communities and to listen and to act on the legitimate concerns raised. Let that be her ministerial reputation and not one of stubbornness and closed-mindedness.
Order. Before I call the next speaker, I will explain that we have just over half an hour before the wind-up speeches need to begin. Three Back-Bench Members are seeking to catch my eye. I would rather avoid imposing a time limit, but if the three can consider each other we will avoid it.
I thank my hon. Friend the Member for Wigan (Lisa Nandy) for securing this timely and much needed debate. Much has already been said about the damage that the downgrading of post offices can do, and I want to provide examples of what has happened in my constituency. Over the past few years, both before and since my election, Lewisham West and Penge has seen three post offices downgraded and franchised out in locations in Forest Hill, Sydenham and Beckenham. Two are Crown branches. The Forest Hill post office now operates out of a WHSmith shop, occupying some of the upper floor. Although it is serviced by a lift, it is cramped, the queue is frequently lengthy, and it is potentially an unfit environment for more vulnerable people. We must remember that vulnerable people are more likely to require the services offered by a fully equipped post office, including the elderly, those who might not have access to the internet and those who have difficulty in understanding, speaking or reading English and require a face-to-face service.
In Beckenham, the Crown branch property has been sold off and the service desks moved out of my constituency and up the high street to a WHSmith store. We have heard numerous examples of why WHSmith stores are not fit for purpose as post offices. Some of the services that used to be run in the Beckenham post office are now located in a convenience store, which has the post office that I now have to use, whereas I used to go to the Crown one. I do not want to do a disservice to the very nice chap that runs the post office there, but it is simply not an appropriate location for a post office. It is a convenience shop and space is limited, and it has only one counter. The queue often trails around the whole shop because demand is high, and the one counter simply cannot keep pace with the people who want to use the services. For a wheelchair user, or someone like me who often has a pushchair with them, or a small child in tow, it is neither an efficient nor a convenient experience. The queue snakes between shelves full of alcohol on one side and the freezer on the other. I have lost count of the number of times when I have been there with my three-year-old and have had to tell him no, he can have neither wine nor ice cream while I am trying to send a parcel.
Joking aside, it is a real issue. The Crown post office in Sydenham has just been franchised out. It is and has always been a hub of our community and I remember using that post office when I was a young girl to get my passport and pay into my national savings account. It has saddened us in Sydenham that the franchise has been awarded to a stationery company, ZCO Ltd, with no good track record of running post offices. We are all incredibly worried. The Crown post office in Sydenham provided biometric services, which a number of my constituents had to use. Now they are being told they have to travel five miles to Brixton to get access to the services. It might not sound far to travel on public transport in London, but let us think for a moment: often it is vulnerable people who need those services. Sometimes they do not have recourse to public funds. Affording the bus fares to and from Brixton is not a very practical solution. With each and every downgrade, initial assurances are offered that services will remain unchanged and facilities will be kept on a par, yet whenever branches in Lewisham West and Penge have been downgraded, the assurances given upon franchising have quickly unravelled, leaving my constituents with a sub-par postal service experience.
As a former employment rights lawyer, I have deep concerns about the employment of staff members at franchised-out branches. When I have written to the Post Office seeking assurances, at the outset, they have always been given, but what is the reality? Some protections exist under TUPE but the CWU found that, in 2014-15, only 10 out of 400 staff from Crown post office branches that were closed were TUPE-ed over to the new retailer. In 2016, the figure was six out of 200—3% of staff. Those are shocking figures. Not only is that bad for jobs and workers’ employment; it is bad for customers’ experience. People employed by the Post Office service are highly skilled and trained staff, and they are used to the face-to-face interactions that the job requires. When such high-quality trained permanent staff are lost, services inevitably decline.
We should think about the effect that post office closures and downgrades have in the high street. When we ran the campaign to save the Sydenham Crown post office, local businesses said they desperately wanted to keep it because it would mean footfall on the high street. People who went to the post office would shop in local, usually very small, independent retailers. There is now a lot of worry locally about the effect on the high street of the downgrade. Crown post offices provide stability to high streets. A lot can be said about the transition to online commerce, but one step that the Government can and should take to protect high streets is to stop franchising out our post offices. It is not the only solution, but allowing those vital services to continue on the high street, serving our communities and constituents, is surely in everyone’s interest. The downgrades and closures, and the franchising out, need to stop now.
It is a pleasure to serve under your chairmanship, Sir Graham, in such an important debate. I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing the debate. I pay tribute to the Communication Workers Union for its tireless work on this issue. Having served as a union representative with the CWU, I have witnessed the dedication of the union and its members in fighting against Crown post office closures. I have been with Royal Mail for 28 years, so I know that post offices are central to daily life in our constituencies. They serve as the hubs for towns and villages, and are the very lifeline of rural communities. It is not just that they serve the public; they have their complete confidence and trust. Post offices are trusted to deliver, receive and collect goods in letters or parcels daily. The public know that they are staffed by dedicated postal staff who are proud to work in the Post Office network and who not only have local knowledge and contacts but are firmly rooted in the communities that they serve.
Postal workers have good jobs that they are proud to do, with terms and conditions second to none, secured through agreement between the CWU and Post Office management. The principle of the Post Office is that it is a business that serves people’s needs, not one that pursues profit. That is the reason why it has dedicated staff who are always willing to go the extra mile, who treat their customers’ goods as if they were their own, who always provide extra help and support to vulnerable customers, displaying patience and willingness to help customers in need, who will help and guide customers when a form needs to be filled in, who take the time to speak to their customers, and who use their local knowledge and contacts to contribute to daily community life. It is that sheer dedication to the customers that has made our post offices so cherished by the public.
The Post Office is not a new business. It has lasted over 500 years. Postal workers have been proud to wear the uniform and are proud of the Post Office’s history. I remember when the Royal Mail was one big network, dedicated to serving the public good, with postal workers united in purpose to support customers—as they still do. We never missed a single letterbox. We delivered six out of seven days a week. We were out in all weathers, come rain or shine. We dealt with the public’s goods across the UK, from Land’s End to John O’Groats. We worked day and night to collect, transport, separate and deliver goods within a 24-hour turnaround. For 21 years, I fought successive Governments to stop the sale of Royal Mail, but eventually a Tory-Lib Dem coalition was successful in selling it off. I said then—and say it today—that Royal Mail was not for sale.
Despite the sale of Royal Mail, Post Office Ltd was kept in public hands, but post office closures soon followed, and some post offices began to be moved into the private sector. Along with redundancies, there were attacks on terms and conditions by the new management. Good people, who were dedicated to and passionate about their work, were treated as just a number—and that number was the amount it would cost to make them redundant. A choice was put before them of accepting a redundancy package or continuing in their job with worse terms and conditions than they had enjoyed. Let me be frank: that is theft. They steal our jobs and our terms and conditions, all of which we won through the collective efforts of our unions and their members.
We were told that some closures were necessary—that some were carried out to protect other post offices and that no further closures would occur. Each time, those promises to the workers and the communities that rely upon post offices were broken. We now face the prospect of the Government giving away more public money to help to sell off a further 74 Crown post offices, severing the connection between the post office and the community and leading to the loss of more dedicated staff. It is another blow to Britain’s high streets. That public money is being awarded to WHSmith, a company that holds the hotly contested Which? award of being voted worst retailer by consumers. It offers low pay for its staff, poor terms and conditions, and service standards lower than those expected in our post offices. This race to the bottom will simply lead to a decline in the service that the public receive and a decline in standards, which will tarnish the proud history of the post office network and its dedicated staff.
I will do all I can—I know the CWU will do likewise—to fight the planned sell-off of our post offices. From the support shown in this debate by the Labour party, we can say that we will be doing all we can, unlike the Tory party, given the empty seats on the Government Benches. Not one Government Back Bencher has turned up to try to defend themselves. The battle to protect our vital post offices is one that must be fought and, more importantly, it can be won. I pay tribute to Liam Murphy, a CWU rep. I stood alongside him, Glasgow and District Amal postal workers and Carole and David Bowmaker, who are good, hard-working union reps. We fought twice, and we won. East Kilbride still stands today as a Crown post office. If the battle comes again, I will stand with the same people, standing up for that local community. I also pay tribute to the CWU national officer, Andy Furey, who is here today. He has dedicated his life to fighting these battles. He has been all around Britain talking to the people now sitting at home, wondering, “What happened to that good job I had?”
This Government meddle, meddle, meddle. It is their job to meddle, but I ask them to stop the closure and sale of post offices, work with the CWU, listen to local communities and invest in our Crown post offices, protect the high-quality service that the public deserve and expect, and provide some long-overdue job security to the dedicated staff.
It is a pleasure to serve under your chairmanship, Sir Graham.
I will, but in my own manner and style. [Interruption.] Do not worry, there is no risk of passion. It is good to see you in the Chair, Sir Graham. We have not quite had 48 Members talking about posting letters today, but I hope you feel at home nevertheless. Labour Members are much less fractious, which is helpful.
We have had such a high turnout because of the excellent timeliness of the debate. We have had a good debate, and that is thanks to my hon. Friend the Member for Wigan (Lisa Nandy), who always captures the zeitgeist. As a former Hammersmith Broadway councillor, she will know how much we have grievously suffered in Hammersmith and Fulham from the depletion of the post office network. Indeed, the Crown post office in her ex-ward moved some years ago and was franchised into WHSmith. In the past few weeks and months, I have had complaints about the service operating there.
One by one, we have lost every Crown post office through closure or through their being stuffed into a WHSmith branch. Last year, we had one left, which was the Shepherds Bush post office on Shepherds Bush Green. It is a good site and a dedicated building, and it is quite famous, because one of its frequent customers was the comedian Richard Herring. When he had his Metro column, he used to write about the Shepherds Bush post office and the more eccentric members of the constituency who he used to meet on his almost daily travels there. It was a good, friendly place, and it had wonderful staff with long service there. It was a busy branch, made more so by the fact, as is often the case in town centres nowadays, that banks were closing branches and referring people to the post office. We thought it was good.
Last year, we were told that the post office had to move because the lease was up on the building and the landlord was redeveloping. Reluctantly, we accepted that. I spent a long time helping to look for another site in the town centre. I spoke to the local shopping centre and we tried to provide something else, but talking to the Post Office is like banging one’s head against a brick wall, because the only deal in town is WHSmith. I do not know what the commercial terms are, but I suspect that the Post Office gets the space for free, or something like that, because WHSmith is so desperate to increase footfall in its pretty lousy shops. The Post Office is made an offer it cannot refuse on those terms. That is what happened.
The post office closed and moved a five or 10-minute walk away, depending on mobility, to the Westfield shopping centre. As we have heard, the office is hidden away in the back of a WHSmith with no natural daylight. Because it is the largest shopping centre in Europe and has a good footfall, the office has survived and kept its busyness and activity, but with a completely different clientele. I am glad to see that we have the support of the National Pensioners Convention and many disability rights groups in pointing out that it is not just about the facilities in the post office, but about the accessibility. Most of the elderly and local people who used to use that post office now go to sub-post offices half a mile or a mile away because they are more accessible than where the Crown post office has moved to. None the less, things continued.
The one thing we were told was that, despite the disruption and despite moving to a less favourable and less convenient location, the branch would remain a Crown post office. In all the meetings I had with the Post Office—this was only a year ago—it said that the branch would be a Crown post office with all the advantages of that. Guess what? When the wholesale franchising and closure programme was announced last year, we found out that, no, the branch would become franchised and part of the WHSmith network.
Like my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) and many others, I pay tribute to the CWU, which has run an effective campaign drawing attention to the issue. The Post Office thought it could get away with it because the public would not notice a change in ownership. The changes were not necessarily, as was the case with Shepherds Bush, about moving the facility, so the Post Office thought there would no apparent change. The CWU has done an excellent job in drawing attention to the matter, because the implications are severe.
To take the example of Shepherds Bush, the manager will leave and retire after more than 20 years’ service. She has been excellent. Half the staff are similarly going to take the settlements on offer and go. The others all want to move elsewhere in the post office network, to those few Crown post offices and other services that remain open. Not one wants to join WHSmith, even though some of the staff at Shepherds Bush have already moved there from other Crown post offices closed in the recent past, including the Acton post office in the seat of my hon. Friend the Member for Ealing Central and Acton (Dr Huq).
Why do people not want to work for WHSmith? It is not too difficult to work out. When I looked at the new rosters, sometimes less than half the number of staff will be on duty. I was there just before Christmas, and it is a busy office with queues, yet WHSmith thinks that where five staff are on at the moment, it can manage with two in future. That is bad for the customers and for staff, too. The terms and conditions are appalling in terms of pensions, holiday and pay. People will be on the minimum wage and could be on half the pay they would have earned as an experienced postal worker working for the Post Office. I am sure that many of the staff at WHSmith try to do a very good job, but as an employer it is appalling. Anyone who does not believe me should follow the Twitter account, @WHS_Carpet, which is a rather tongue-in-cheek look at the extraordinary way in which that business conducts itself. We do not know whether it will have a future. What a risk to take, putting post offices into those stores.
I am afraid that Post Office Ltd has shown a contempt for very loyal staff, who have often stayed with it over many years. It has also shown an attitude of defeatism. Where is the leadership? Where is the confidence in the services that it provides? There is none. It is all about cutting back.
That comes on top of a number of other initiatives that have depleted the network. I know that we are not talking about sub-post offices today, but within the last two to three years I have also had three sub-post offices—two of which were the nearest ones to Shepherd’s Bush Green—close “temporarily”. I think one has been temporarily closed for more than three years now, on the basis that we cannot find anywhere for it to go.
Overall, the service that is available is becoming worse, and for those who rely on it, which is still many people, there are longer distances to travel and longer queues to stand in. I would like to know from the Minister what the justification is for paying out quite large sums from the public purse to try to induce members of staff to retire, move on or take redundancy at this point. Presumably that only helps WHSmith, because it does not have to inherit those staff under TUPE conditions.
I would like to know what happens to all the equipment in the post offices. Very expensive and often quite new equipment has been fitted there. Is that simply handed over to WHSmith, or are payments made? I would like to know why senior managers in Post Office Ltd have received 7%—in some cases 9%—pay rises this year, given what they are presiding over. The staff have received less than 3%.
I feel that I have been misled over what has happened in relation to the post office network in my constituency. I also think that the Communication Workers Union and the staff have been misled, because they have worked in good faith over many years to try to ensure that the business is profitable. That has meant, in some cases, reducing staffing—by agreement and in the proper way, through collective bargaining—in a joint effort and in the belief that the management were sincere in their efforts to ensure that this viable Crown network would survive. All they have actually achieved is to do the dirty work of the Post Office, which now has fewer staff that it has to pass over to WHSmith. That makes it easier to do, but even so, it is relying on money.
There has not been a proper public consultation. I was struck by the comment from Post Office Ltd to the all-party parliamentary group that this is
“a commercial decision for us, not them”,
“them” being the public. This is a matter of great concern to the public, and it has not been given proper consultation or publicity.
I end by asking the Minister to consider, even at this late stage, a moratorium on the closures and changes. Please can we look again at the network, and have a proper review of services before we proceed in this way? Otherwise we will stumble through this and be back here again in six months to a year facing more closures of Crown post offices, until the network does not exist at all. It is part of our heritage, and part of something that we can be very proud of in this country. It still provides an excellent public service where it operates, and we are letting down not only the organisation’s staff, but all the customers who rely on post offices across mine and each one of our constituencies.
It is a pleasure to serve under your chairmanship, Sir Graham. I thank the hon. Member for Wigan (Lisa Nandy) for securing the debate and for her very informative introduction, and all those who have contributed for the very consensual nature of the debate. Some 15 Members have spoken so far, which says something about the strength of feeling in the House.
As we have heard, Crown post offices are large post offices that are directly managed by Post Office Ltd and account for about 2% of post offices. I am grateful for the Communication Workers Union briefing, which is very informative. It highlights how, despite that small share of the overall network, Crown post offices have historically brought in between 10% and 20% of the Post Office’s overall revenue—a point that several Members have made, and which is well worth emphasising.
There are no Crown post offices in my constituency—unsurprisingly, given how few are left across the country as a whole. Having said that, it is fair to point out that Linlithgow and East Falkirk gained two post offices between 2011 and 2018, increasing their number from 18 to 20. However, that figure includes hosted outreach venues. As we have heard, a variety of services are offered at different ones, which adds to the confusion of the public when such events happen.
On 11 October last year, the Post Office announced an agreement with WHSmith that would see up to 41 further Crown branches relocated within WHSmith stores this year, and WHSmith take over the running of 33 Crown post offices already hosted in its stores. The decision to turn 74 Crown post offices into franchises in those stores is alarming for a number of reasons; Members have rehearsed them well, and I do not need to go into all the technicolour detail again. However, reports that the franchising is being done without consultation with existing local post offices are particularly alarming. That means that competition risks destabilising the existing network even further. There must be more consultation and strategic consideration on franchising. It is alarming to hear that in some cases franchised WHSmith outlets are opening within five minutes of existing post offices, and without any advance notice having been given to existing postmasters.
We know that the Post Office’s director of sales and trade marketing has stated that there is no contingency plan in the event of WHSmith collapsing, even though it has, as has been pointed out, experienced consecutive 14 years of sales decline. Although we would not wish that to happen to any business, the reality of our modern high streets is that businesses are folding on a regular basis, so a contingency is, in my opinion, required. That is before we consider the fact that WHSmith was voted the worst high street retailer by Which? consumers in 2018, having been ranked in the bottom two over the previous eight years. That raises a serious question about the quality of service on offer from that franchisee.
We must ensure that further franchising happens only after consultation with local businesses. It is essential that our post office network remains robust for communities and businesses across the entire country. Given the mismanagement, the UK Government cannot have that as a priority. Post offices play an important role for our rural businesses and are part of the fabric of our communities. I will not pretend that my constituency is particularly rural, but it has many rural aspects; it is a mixture of small towns and villages between the major cities. Increasingly, as banks have gradually withdrawn from many of our local high streets, post offices have become a last-stop banking facility for many people.
Post offices provide an important part of national infrastructure, particularly as parcel delivery has been growing with the rise of e-commerce, which allows us to have many more businesses throughout our communities. Small businesses, especially rural ones, contribute more than £200 billion to the UK economy. They rely on post offices, with an estimated 80% likely to lose money if rural post offices close. More than 2 million small businesses—62% of all small businesses—use post offices at least once a month, and in rural areas, they are vital, with 36% of rural businesses using post offices at least weekly.
Due to issues including the new postmasters’ contract, Crown post offices are closing more and more regularly. The UK Government must ensure that the post office network remains able to cover all areas of the country, especially rural ones. More than 1,500 of the 11,547 post offices in the UK were temporary as of March 2018. That is 426 more than in 2014, according to post office data collected by the House of Commons Library.
The question of post offices temporarily closing is really down to the fact that Post Office Ltd cannot contract new sub-postmasters to run them. That is not to the benefit of my constituents in Wishaw, who lost their post office for almost four weeks last summer.
I thank my hon. Friend for making an excellent point. I hope that the Minister is listening.
The Scottish National party supports a strong network of post office branches, which are the backbone of local communities and businesses. Many post offices are offering a greater range of services, including paying in money, after many local bank branches have closed. Some 537,000 businesses are registered in rural areas, accounting for one in four of all companies. They are very creative—almost half are considered to be innovators—and they contribute, as I pointed out, more than £200 billion to our economy. Small rural businesses are more likely to use post offices for deliveries and paying bills, and twice as likely to use them for withdrawing or depositing cash. Citizens Advice found that eight in 10 small businesses in remote rural areas would lose money if local post offices were closed. That should be a salutary economic warning to us.
The UK Government’s disastrous privatisation of Royal Mail and recent mishandling of post office management show that they cannot be trusted with our public services. The current contracts make it harder for sub-postmasters to afford to keep going, as my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) pointed out. At the same time, Post Office Ltd recorded net profits of £35 million in 2017-18, up from £13 million in 2016-17. As hon. Members have pointed out, its chief executive Paula Vennells got a 7% pay rise last year, while postmasters took an average pay cut of 4.5% and 11,500 Post Office workers received a combined £17 million pay cut. I ask the Minister to take urgent action to review the contract for sub-postmasters that was introduced in 2012.
My final point is about the effect on footfall on the high street. Closing a post office and moving its services to a franchisee will not increase the franchisee’s footfall, since many of the customers were already using the high street; it simply reduces the footfall travelling across the high street and has a detrimental impact on other businesses. What we actually need is to ensure throughput on the high street. If a post office closes and is moved out of a town centre location, that can be even more detrimental to the local community.
There are many concerns about the proposal and its effect on customers, staff and local communities. At the end of the day, we must remember that the Post Office is wholly owned by the Government. I implore the Minister to step in and halt the process.
It is a pleasure to serve under your chairpersonship, Sir Graham. I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this debate and delivering an impressive and eloquent speech. Passions have risen high today, which illustrates the value of the post office network to hon. Members present and to people in the community, so it is hugely disappointing to see the empty seats on the Conservative Benches.
Post offices are a vital community asset that serve as an anchor for individuals and local businesses, as many hon. Members have highlighted. Citizens Advice surveys have shown that half of Britons say that a post office branch is the most important service in their local community. In rural areas, the importance is even greater: one rural resident in five says that without their local post office they would lose contact with friends or neighbours. Post offices are hubs rooted in community and history, and they have innovated: services have grown and now cover some Government services, while postmasters have been innovative in providing new products to accommodate the rise of online shopping.
At the same time, it is not a revelation that our high streets are struggling. In October, the Chancellor took a “too little, too late” approach to the crisis, showing the Government’s lack of commitment to our town centres. Although they shirk responsibility for the collapse of our high streets, the Government are too eager to discount their own role in overseeing the managed decline of a long-established and vital part of our high street: our post offices.
Our debate today has focused on Crown post offices, the large flagship post offices that are in prominent high street locations and are directly owned and managed by Post Office Ltd. Over the past five years, the Post Office, which is entirely owned by the Government, has announced the closure of 150 Crown post offices—40% of its 2013 Crown post office network. The closure and franchise programme has come in three waves, and the latest announcement in October 2018 stated that a further 74 Crown post offices were being closed, with an estimated 700 jobs at risk.
There is a strength of feeling about the closures across all parts of the country. I anticipate that the Minister will argue that this is not a privatisation process, but franchising is by definition a model part of privatisation. This Government drove the disastrous privatisation of our Royal Mail, many of the consequences of which we are seeing today, with private shareholders creaming off millions in dividends while services are on the decline. I am afraid that the franchising programme appears to be an incremental step in the same direction, privatising our Post Office one Crown at a time.
The impact of the closure and franchise programme is significant for the public purse, for the accessibility, quality and breadth of the service provided to the public, and for the sustainability of the network. Our high streets face a crisis and it is being compounded by the Government-managed decline of the Post Office. As I wrote in a recent article:
“The Government may continue to peddle the myth that it has no agency over our high streets—the truth is they are willingly letting a proud institution and the public down.”
They are letting the Post Office fall by the wayside in an appalling act of negligence.
Plucking post offices out of the heart of business hubs, as the closure of local Crowns does, is bad for local business and bad for the Post Office. It exacerbates financial exclusion in deprived areas, where—in the light of the significant bank closures in recent years—local people may have no access to financial services. My hon. Friend the Member for York Central (Rachael Maskell) has been vocal about the proposed relocation of her local Crown away from the town centre and into an area that has seen a 15% decline in footfall over two years. It is an economic fallacy to suggest that shifting a post office to a quieter part of town, away from the economic activity, will be in any way helpful to the long-term sustainability of the network.
Indeed, in allowing the transfer of counters into WHSmith, the Government risk the viability and sustainability of communities’ access to post offices. It has been suggested that WHSmith is shifting its priorities away from the high street, as highlighted by its acquisition of InMotion, a US company known for airport services. That is worrying and raises serious questions about the retailer’s long-term viability and its desire to be on the high street. As my hon. Friend the Member for Heywood and Middleton (Liz McInnes) told us, there has recently been a 3% decline in profits. It is therefore surprising not only that Post Office is choosing to partner with WHSmith in this way, but that when pressed during a meeting of the all-party group on post offices, Post Office representatives provided no reassurance about any contingency plans that they may have prepared for the event of a collapse.
My hon. Friends the Members for Hove (Peter Kyle), and for Cambridge (Daniel Zeichner), spoke eloquently about the lack of meaningful consultation in their constituencies. Indeed, during the all-party group meeting, we learned that decisions on closures had already been made and that the consultation process was merely asking for little bits of information about whether people thought they had disability access—someone in the senior management actually said that. I challenged him, saying that the consultations should be asking the public about the closures, and that responsibility for disability access should lie with the management of the post office in question.
I am grateful to my hon. Friend for raising the issue of access, because clearly many disabled people use post offices. Does she agree that if the proposal will mean less access to post offices, it should surely be stopped?
I very much agree, and I will go into that point in more detail later.
Post Office management claim that they will have six months’ notice if a retailer that hosts a Post Office counter collapses, but in reality a collapse could be immediate and would risk the total closure of the counter. It seems reasonable that contingency planning should be done to prepare for all eventualities. Has the Minister had any discussions with the Post Office about the matter? Can she assure us that she is aware of reasonable contingency plans for any of those scenarios?
My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) referred to the independent reports published by Consumer Focus in 2012 and by Citizens Advice in 2016, which looked at the impact of closing and franchising former Crown post offices and locating them in WHSmith branches. They concluded that it has led to an increase in queuing and service times, a deterioration in customer service and advice, poor disabled access, and a reduction in the number of counter positions. As hon. Friends have pointed out, the retailer has been voted as providing some of the worst customer service in the UK—surely not a ringing endorsement.
The impact of these changes on local communities is significant, and vulnerable people, the disabled and the old suffer the most. The general secretary of the National Pensioners Convention, Jan Shortt, has said:
“Older people are some of the biggest users of the Post Office, and many rely on being able to talk to expert staff, but the move to franchise services to WHSmith is going to be bad for customers...pensioners will find some of the offices are no longer easily accessible or particularly private. This will become a second class service if we don’t stop these plans immediately.”
Similarly, the chief executive of the deaf and disabled rights charity, Inclusion London, and representative of the UK-wide Reclaiming Our Futures Alliance of disabled people and their organisations, Tracey Lazard, said:
“Replacing accessible Post Office premises with a post office counter squeezed into the back of a WHSmith store can leave Disabled people at a significant disadvantage, particularly people with a mobility impairment. Post Office Ltd should be taking action to maximise the accessibility of its premises and services rather than taking this retrograde step that cannot be justified and will instead further Disabled people’s exclusion.”
Given that Crown post offices are Government property, and that Post Office Ltd is proposing a change that may well be detrimental to disabled people, does my hon. Friend agree that it is absolutely incumbent on it to carry out an equality impact assessment?
I completely agree. I am sure we will be asking the Minister whether she will address that, as it would seem that it is completely irresponsible of Post Office Ltd not to do so. It should be at the heart of any consultation with the public and the organisations I have referred to, which represent many of those people.
Despite fierce local opposition to the closures and the franchising programme, the Post Office has not undertaken serious and meaningful consultation and has been clear the closures will go ahead. At the meeting of the all-party parliamentary group for post offices in October, when asked that the consultation process consider the range of views on the matter, senior Post Office representatives were forced to admit that the decisions about the closures had been made, and that the consultation would merely be an exchange of information and a look at further details. Given the Post Office’s public mandate and the fierce opposition to the closures, that is astonishing.
My hon. Friend the Member for Oldham West and Royton (Jim McMahon) highlighted the particular impact that the closures will have on disabled constituents in our communities. There is also the impact on financial inclusion, as well as on the many other services, including the very important biometrics and essential Home Office information and documents that are issued in post offices. In the end, despite huge public opposition, a large amount of public funds have been used, with significant job losses and significant closures.
The Minister will no doubt repeat what she has said before about not having overview of Post Office structures and processes, referring to the fact that these are commercial decisions for the Post Office. However, I refer her to a petition that the current Prime Minister, the right hon. Member for Maidenhead (Mrs May), presented in March 2008. My hon. Friend the Member for Wigan cited it earlier, and it is worth mentioning again. That petition urged the Government to “instruct” the Post Office halt the closure of the post office in Maidenhead and
“to listen to the views of local people in respect of their objection to the closure of this vital part of the local community.”—[Official Report, 6 March 2008; Vol. 472, c. 142P.]
Perhaps the Minister could take a lead from the Prime Minister under whom she serves, call in Post Office management and instruct them to halt the closures. Instead of investing in our post offices, maintaining expert staff and broadening the services available, the Post Office under this Government is going backwards.
I applaud the Communication Workers Union for its campaign, Save our Post Office, and its championing and protecting of workers’ pay and conditions of service. At the same time as post offices are closing, sub-postmasters are seeing a decline in remuneration. Many have written telling me they are just about breaking even but earning less than minimum wage, and services are declining. My hon. Friend the Member for Glasgow North East (Mr Sweeney) gave worrying examples of this trend of many sub-postmasters losing their livelihood and acquiring significant debt. I have had correspondence from a sub-postmistress who told me that she is likely to lose her home because the figures she was given when taking on that sub-post office have never been realised.
How is the Minister scrutinising the Post Office’s strategy and what it means for the service? Will she outline what consultation there will be, to ensure the strategy brings in relevant stakeholders and the public in a proper wide-ranging consultation? I am quite astounded that the Minister did not once come to the House so that parliamentarians could have the opportunity to scrutinise these decisions and what they mean for our constituents.
The Labour party has been clear. We want to grow the service, end the closures of our Crown post offices, maintain good pay and conditions for staff and innovate into the future, because we believe in our public institutions and what they mean to the public. At last year’s election, we pledged to create a commission to look into setting up a post bank, which would be an important step forward in financial inclusion and would also provide important income streams to maintain, sustain and grow post office services more widely.
I am pleased we have had the opportunity to debate this important matter today. I urge the Minister to recognise the strength of feeling expressed in today’s debate and reconsider her position. I urge her to take a more considered approach with the Post Office—a publicly funded institution—first, by halting the closures and, secondly, by holding Post Office Ltd to account for the decisions it is making that are having a negative impact on our constituents.
It is a pleasure to serve under your chairmanship, Sir Graham. I congratulate the hon. Member for Wigan (Lisa Nandy) on securing this important debate. Although I am one of only a few Tories in the room, I thank all hon. Members for their contributions. I recognise their passion as well as the importance that post offices represent to MPs.
As a constituency MP, I understand the valuable role of the post office for me and for my constituents. Post offices play a vital role at the heart of our communities and are an essential part of our villages, towns and cities, so the future direction of the Post Office is important not only to the Government, but to all our constituencies.
The festive season has just passed, when the dedication of Post Office staff across the country was shown. They come out in force to help our constituents and deliver the parcels and letters destined for our loved ones. I thank the Post Office and Royal Mail staff for the efforts they have put in over recent months. It is estimated that more than 60 million customers visited post office branches in the run-up to Christmas, and I want to mention one small rural post office in Herefordshire that opened its doors this year to host Christmas dinner for those who would otherwise have been alone. That highlights the social value of post offices, not only within our high streets, but beyond.
To repeat what I indicated in November’s debate on post office franchising, this Government value and recognise the economic and social importance of post offices to people, communities and businesses across the UK. That is why we made a commitment in our manifesto to safeguard the post office network and support the provision of rural services.
On the manifesto commitment to protect post offices, is it still Conservative party policy to make the post office the front office of Government?
What is definitely Government policy is to make sure that we have a network of post offices that offer a wide range of services to our constituents, and that that is sustainable into the future. Franchising is not a closure programme. It is a way to secure better sustainability for the future of our post offices, and it is a good thing that Post Office is working with high street retailers to recognise that.
The performance of the Post Office over the past decade shows that the network is at its most stable in a generation. Between 2010 and 2018 we provided nearly £2 billion to maintain and invest in the national network of at least 11,500 post offices.
I thank the Minister for her comprehensive response so far, but it would be good to get confirmation that this will move on, because we cannot keep having these debates every few months. Does she realise that the outreach service counts each and every stop that a mobile post office makes as a branch? A single vehicle travelling to a village for half a day each week or every two weeks would class each stop as a branch, which is where the figure of 11,500 branches comes from.
I recognise some of the concerns about mobile branches that the hon. Gentleman raises. I can assure him that I am moving on to it, and obviously I have had the opportunity to listen to hon. Members this afternoon. I am sure hon. Members will agree that we do not want to go back to the days when we saw over 7,000 post offices shut, as was unfortunately the case under the previous Labour Government.
The post offices meet and exceed all the Government’s accessibility targets at the national level. Government investment in the network enabled the modernisation of more than 7,500 branches, adding more than 200,000 opening hours per week and establishing the Post Office as the largest Sunday trading network.
The Post Office’s agreement with high street banks enables personal and business banking in all branches, providing vital access to cash and banking services to consumers, businesses and local economies as bank branches continue to close. It is right to say that the agreement held with the Post Office and banks benefits our communities, which the Minister responsible has made very clear to Post Office Ltd, to my colleagues in the Treasury and to the financial institutions that I have spoken to. The Post Office is providing a vital service to our constituents, and it should be remunerated for that—in doing so, hopefully that will ensure that our postmasters are also remunerated correctly for the service they provide to our constituents.
The Minister talks about banking services, and I would like to bring her back to a point made earlier. When post offices supply ATMs—clearly when banks close down, ATMs often just disappear from the high street or village—the rental is so much that they lose a significant amount of money. Does the Minister want to put that right in order to incentivise keeping ATMs in post offices so that they are available to all our communities?
The hon. Lady is absolutely right to say the loss of banks and access to cash has been a concern for our constituents and high streets. To individual MPs who represent a constituency where they feel that their post office is in a position to add an ATM—it is not always possible—as the Government representative I will always feed in specific issues that relate to individual constituencies or branches where we can improve services. I put that offer out there. Give me the details and I will always follow it up.
The Minister has been given the details today—they will be in Hansard. Postmasters see that they are subsidising the ATM, which just seems wrong to me. I ask the Minister to go back and review that, and to look at finding some way that she can compensate sub-postmasters for that service.
I have heard what the hon. Lady has said today, and I will go away and look it. Every post office operates differently throughout the country. There is not a standard rule for all branches, but I will continue to look at the issues that have been highlighted. I care as much about our post office network as any hon. Member does, and that is not just because I am the Minister in post.
The Post Office’s financial performance has improved significantly, and consequently Government the funding required to sustain the network has drastically decreased and is set to decrease even further in upcoming years. It is the first time in 16 years that the Post Office has made a profit. There was a time back in the early 2000s when the Post Office had a deficit of more than £1 billion. Things have changed, and we are ensuring that we get value for money for the taxpayer while ensuring that we sustain the network.
The Minister is talking eloquently about the profits that the Post Office is making, but the people who run smaller post offices—the sub-postmasters —tell me that they cannot live on the new contract. When they have to hand back keys to local post offices, does she think it is right that the Post Office is making profit at the expense of these hard-working individuals?
I understand why the hon. Lady has raised concerns about sub-postmasters, and she is absolutely right to do so. Whoever has my role in Government—whichever colour of Government—has a duty to defend the Post Office but also to hold it to account. Since being in post I have challenged the Post Office and will continue to do so. Yes, it is commercially independent and operates within terms. We represent the taxpayer, who is the shareholder and owner of the post offices. It is right that we hold the Post Office to account for decisions and that we exert influence where we can.
Changing consumer behaviour has been a serious challenge for post office and small retailers, including many postmasters, which is why in the autumn Budget we made decisions on business rates to ensure that we helped not only some of our sub-postmasters, but small retail more generally.
There is widespread misunderstanding that franchising is a closure programme that will lead to redundancies and the deterioration of services for consumers, but that is not the case. I appreciate that proposed changes to the delivery of post office services can cause concern in some affected communities, but post office branches are not closing—they are being franchised either on site or by relocating them to other high street locations.
Franchising has been common practice since 1635, when King Charles I issued a proclamation allowing the public to use Royal Mail. The model has endured to this day, and the vast majority—11,300 of our 11,500 post offices—are run successfully as a franchise or on an agency basis with retailers, whether large or small. Delivering post office services as part of a wider retail offer is a proven model that brings benefits to the community.
The hon. Member for Wigan raised concerns about the post office in her constituency, which is included in the 40 that will be taken over by WHSmith. Subject to consultation, WHSmith will take over the running of Wigan’s central post office. Let me be clear that the community in Wigan like other communities across the UK is not losing is post office. It will be relocated to a nearby WHSmith branch, and the services will be more accessible for customers.
I am grateful to the Minister for trying to address some of our concerns, but the community is not being consulted on whether the post office is moved into WHSmith. A consultation is explicitly ruled out in the documents that I have been sent. Although she says that this is technically not a closure, to our community it is. The post office has stood on that site for 134 years. Some of the staff have worked there for decades and offer the sort of service that will not be possible in WHSmith. When she has finished winding up—I appreciate that she needs time to respond to our concerns—will she consider meeting with a group of us to talk this through and consider what we can do to address some of those very strong concerns, which are not being heard at the moment?
It is right that Post Office Ltd is holding consultations. I apologise; the hon. Lady said earlier that she had been chucked out of the store and that language of intimidation was used. That is quite an accusation to make, and I would recommend that, if that happens to any Member, they should make Ministers aware so we are able to—
That is what I am trying to do.
Absolutely, but that has not been done prior to today. We will take those things forward. I have met other Members about other issues in their constituencies.
It is right that the Post Office is commercially independent, because that enables us, as the major shareholder, to hold it to account at a ministerial level, and I am always happy to do that. I assure the hon. Lady that the proposed changes would add six hours a week to the Wigan branch’s opening times. She is correct—this goes back to an earlier point—that the ATM will not transfer over to the new site, so I understand her concerns about her constituents relating to that service, which would change in that situation.
Post offices are not the same from one street to the next; branches provide very different services. If these are not closures but relocations, is the Minister saying that the services provided by the post offices today will be entirely transferred across to WHSmith, and that there will be no loss of service?
The programme of franchising is moving Crown postal services. Our objective is to ensure that, when the post offices are moved, they deliver better services and that constituents have better access to them. Part of the franchising programme is about ensuring we have a post office network for today, which suits the modern retail environment and consumers’ changing habits.
Will the Minister follow up the question of my hon. Friend the Member for Wigan (Lisa Nandy) and meet a group of us? I am seriously concerned about the reduced access—not necessarily to the building but to the high street in front of the post office—and the impact on my high street and the local economy. Will she meet us to discuss those detailed issues?
As I have said—I thought I was quite clear—I am always willing to meet Members who have issues relating to post offices in their constituencies. I said that earlier. I reiterate that I will listen, hold Post Office Ltd to account and take those things forward. That does not necessarily mean that I will agree with some hon. Members’ positions, and they will not always be achievable, but I will make Members’ cases on their behalf.
The UK visa and immigration biometric enrolment services for the Home Office were available to a mix of 99 directly managed and WHSmith branches nationwide. However, as was mentioned earlier, the Home Office recently awarded that contract to Sopra Steria, which now runs the service in new locations. On the Post Office being in a position to deliver services for our constituents, I will always ensure that we work together to strengthen the services and add value to the services that the Post Office will deliver for the Government.
WHSmith has been operating post offices since 2006 and has proven to be a reliable and dependable presence on the high street. There are some misplaced concerns about the Post Office’s contingency plan should WHSmith go into administration. The latest financial results show that the company’s high street businesses recorded their third-highest profit in more than 15 years despite the well-documented challenges on the UK high street. The Post Office is not complacent; it regularly meets with all franchisees to ensure they are delivering on the terms of their agreements. That is an ongoing process.
I am concerned that we are running out of time, Sir Graham, and I think the hon. Member for Wigan may want to wind up—or I can carry on. Post Office staff at franchise branches will have the opportunity to transfer to new franchises under TUPE employment protection, which means that they will benefit from the same terms. Alternatively, staff can leave with compensation, and there may be opportunities available elsewhere in the network. WHSmith’s post offices are currently performing well, and I have every confidence that the recent deal will help to secure Post Office services on a sustainable, profitable basis in communities across our country.
I hear the concerns about the consultation process, and I have said that I will take them forward with the Post Office. As the Minister, I will not call on Post Office Ltd to stop the franchising process, but I will work with it to ensure that it delivers its business in the best way possible and benefits our communities.
We need a sustainable network. It is not correct that the Post Office owns all the Crown branches—the buildings are not all freehold and some are leasehold. It is right that the taxpayer holds the Post Office to account and, as the Minister, I will do everything in my power to harness opportunities and to increase services in the post offices. There will be many opportunities and, as the high street changes—I am also the Minister with responsibility for the retail sector—I will continue to work with the Post Office to ensure that we are delivering for our communities and that we increase the services that post offices provide.
I thank all the many Members who have turned up today to show the strength of feeling that there is in every corner of this country.
I am grateful to the Minister for sitting through the debate, listening to our concerns and taking on board some of the issues relating to the consultation process, but I probably reflect the view of every Member who has spoken when I say that I am deeply disappointed that she has not agreed to suspend the process. There is a moment now—it will not come again—when we can choose to stop this thing that has failed us and our communities for so long, and to start to change course.
I am grateful to the Minister for agreeing to meet me and a group of my hon. Friends to discuss this matter further. I hope she will continue to reflect on it and that she will think again.
Question put and agreed to.
That this House has considered franchising of Crown Post Offices and the effect on high streets and local communities.