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Huw Merriman (Bexhill and Battle) (Con)
I beg to move,
That this House has considered service provision in the event of post office closures.
It is an absolute pleasure to serve under your chairmanship this afternoon, Mrs Gillan. I am grateful for the opportunity to lead this debate about post office provision. I have particular concerns about post offices closing and not being reopened, or not for some significant time. This being a debate about post offices, I very much hope to receive your stamp of approval, Mrs Gillan. I am conscious that other MPs will wish to speak—mail or female—and I will leave plenty of time for them to do so. If I go on for too long, I am sure that Members will tell me in no uncertain terms, “Letters speak!” I shall leave behind the appalling puns and move on to the subject of the debate.
With the Post Office having moved towards a franchise model, local provision is increasingly reliant on private individuals providing a post office as well as running their own business. If those individuals decide to hand in the keys, the Post Office is left to try to find a replacement, and the community is without a post office until it does. I shall explore three areas in my speech. First, I shall provide a brief case study of the closure of my local post office in Heathfield in my constituency, Bexhill and Battle. Secondly, I shall assess whether the Government’s contract with Post Office Ltd obliges the latter to provide replacement post offices following closures. Thirdly, I shall ask the Minister what more can be done to ensure that Post Office Ltd is held responsible for better service provision.
Turning first to the case study on post office closure, Heathfield is a rural settlement serving 12,000 residents. It is the largest parish in the country by population. In most eyes, it is a town, although it is fair to say that I would be run out of town—or, indeed, parish—if I suggested so. As befits a population of that size, Heathfield has a high street with banks, supermarkets, and both national and local shops. Whereas high streets around the country may be struggling, Heathfield’s has strong footfall, with new national retailers opening for business.
In March this year, the postmaster running the post office branch expressed a wish to leave the business. Post Office Ltd identified a potential new postmaster, but he was unfortunately unable to secure a lease agreement on the site. Sadly, the branch closed on 1 April 2015. The Post Office employed an agent postmaster, but he could not agree a lease on the premises either. That leads to my first issue: Post Office Ltd will send in a temporary postmaster to run a post office only from the existing site, so people are at the mercy of the landlord when it comes to making this work. Post Office Ltd will not look at alternative temporary premises for the temporary postmaster, despite there being plenty of premises available in my Heathfield example.
By summer, the pressure applied by the community and our fantastic county, district and parish councillors caused Post Office Ltd to consider a temporary solution in the form of a portakabin post office. Despite the district council offering a berth in the car park adjacent to the existing site, Post Office Ltd decided that that was not logistically possible, so it opted for a different car park in Heathfield. Having delivered the portakabin via crane, time was taken waiting for BT and other suppliers to kit out said portakabin. That leads to my second issue: Post Office Ltd must have huge buy-in clout when dealing with its vendors, but there appeared to be an institutional unwillingness to drive BT and others to deliver the required capability, or to hold feet to the fire.
When the portakabin was finally ready to go live, Post Office Ltd engineers found that the site was not flat enough to provide safe access for customers. The portakabin was promptly removed, and no temporary solution has been provided. That leads to my third issue: there are more than 11,500 post offices in operation, so if my local one can close, I am sure that others can and have closed.
Mark Pawsey (Rugby) (Con)
My hon. Friend makes an important point. I am sad to hear what has happened in Heathfield. I hope that the same will not happen in Bulkington in my constituency, where the Co-op gave notice of withdrawing its post office franchise only last week. That set all sorts of hares running in the village, with talk of the post office closing down. It is not the post office that is closing down; the Co-op has elected to take away the franchise and has not, at this stage, taken any steps to find an alternative site. My hon. Friend has raised an important problem, and I look forward to hearing from the Minister how the Post Office might deal with such matters.
Huw Merriman
I thank my hon. Friend for making that point. Indeed, Co-op was one of the retailers we approached in Heathfield to see whether it would be willing to take on the post office, but that particular Co-op franchise at least made it clear that it was not in the business of post offices anymore. That might add fuel to my hon. Friend’s fire.
David Simpson (Upper Bann) (DUP)
I found it humorous when the hon. Gentleman mentioned post offices in portakabins—they would not last too long in certain parts of Northern Ireland. Does he agree that although the Co-op might have had some responsibility, so does the Post Office, because post offices are part of the fabric of the community, and are where pensioners and others meet? Surely the commitment needs to come from the Post Office.
Huw Merriman
I absolutely agree, and will touch on that when I discuss the effect on my constituents.
Karen Lumley (Redditch) (Con)
I thank my hon. Friend for securing this debate. I add my concerns to the others expressed, because the post office in Inkberrow in my constituency is up for consultation. The local shop was keen to have it, but the Post Office could not consult properly with local residents. It would be great if post offices could be sited in community facilities such as pubs.
Huw Merriman
I very much take my hon. Friend’s point. One of the challenges we have found has been in trying to find businesses that are willing to take on post office sites. The choice does not seem to be there any longer—at least, not that I can see from the situation in Heathfield.
Andrew Percy
I congratulate my hon. Friend on securing this debate. In my constituency we have exactly the same problem, with post offices closing and there being a long gap before they are replaced. There are problems even when people are willing to take on a post office. A sub-postmaster in my constituency wishes to take on a post office in another community, but he cannot because the Post Office demands that he goes through all these hoops, despite being a serving sub-postmaster. Often, because of the processes put in place by the Post Office, willing people will not accept the role, and we end up with no facility at all.
Huw Merriman
I very much agree with my hon. Friend. The compliance process is long and detailed. The current consultation in Heathfield means that we will not see a solution until February at the earliest.
Returning to my story, the portakabin was removed because the Post Office Ltd had no plan in place for portakabin roll-outs. If the closures that I believe will come do come, there needs to be a plan. The councillors realised that a permanent replacement was the only option, so they approached a number of national and local stores in the high street. I will give examples that show how difficult it now is to get businesses to take on a post office. Having previously hosted the post office, Sainsbury’s said no, despite losing footfall following the closing of the adjacent post office and having to compete with a new Waitrose. A WHSmith is opening soon, which is a good sign that the town is vibrant; one would think that the business would work well there, but it said no. As I say, Co-op said that it is not taking on post offices. The post office used to be sited in the sorting offices, but Royal Mail refused to accommodate even a temporary outlet. All other retailers declined to apply.
Finally, one local business, an off-licence, was willing to make an application. Thank goodness for that gentleman. That leads me to my fourth issue: the model now seems to be that neither village post offices—often called “locals”—nor main post offices in towns will operate as a stand-alone business now. That would be fine if existing businesses were willing to take on the operation, but as our experience in Heathfield shows, they are not. I question whether the commercial terms will stand the test of time for the other 11,500 post offices when renewal comes up.
As I said earlier, the Post Office is now in consultation with the community until January 2016. The expectation, if all goes well—touch wood—is that the new post office service will be in place in February 2016. That is almost a year after the doors closed to a post office that serves 11,500 to 12,000 residents.
Throughout the period of closure, the vast majority of customers have had to use services at a village a few miles from Heathfield. That is fine for those who have a car and can travel, but like many hon. Members here, I represent a rural constituency in which the bus service has been reduced. The proportion of over-65s in my constituency is 10% above the national average. The elderly cannot jump on a bus and then wait more than an hour in the cold to come back.
That leads me to my fifth issue and my second key question. Does the Government’s contract require the Post Office to provide a post office replacement following a closure if the branch serves a significant number of community members, or has been closed for, say, six months? It appears that it does not. Post Office Ltd must meet access criteria, as they are called, and overall branch numbers, but as somebody at the Post Office rather haughtily said to me,
“The way in which the Post Office meets the access criteria and branch numbers is an operational matter for the Post Office.”
That may be so, but it is also of great significance to my constituents and those of other hon. Members. The Post Office currently meets the access criteria, but I question how long it will continue to do so in the marketplace that I have described.
My concluding question is: what more can be done to ensure that Post Office Ltd is held responsible for better service provision? If the Government contract required either a temporary or permanent replacement to be in place within a set period, Heathfield would not have been without its post office for so long. I call for the contract terms to be amended to require a replacement post office to be in place within six months if the previous post office serviced a community of, say, 10,000 residents or more. If a replacement fails to be found, there should be financial penalties and ramifications on the career ladder. Although the Post Office staff have done everything they can, their roles are not subject to incentives, and there are no penalties if a post office closes, provided that the general access criteria are met. Those are the changes I ask for.
Mrs Cheryl Gillan (in the Chair)
Four Members have indicated that they would like to speak, and we must accommodate the three Front Benchers’ speeches. I will not impose a time limit, but I hope that you will all bear that in mind.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak on this issue. I commend the hon. Member for Bexhill and Battle (Huw Merriman) for bringing it to Westminster Hall for consideration. This is a key issue in my constituency—as in, I believe, every other constituency. We have experienced a lot of changes to our post offices over the years, not all of them for the best, although some have been carried out constructively.
The post office is a national institution that has been at the heart of British society since its inception. The post office in my constituency is more than just a post office. The post office is a community hub for people in towns, villages and hamlets up and down the country. It holds together the fabric of society. My post office, although I do not visit it very often, is also a shop, and that is where the change has taken place. It is clearly the thriving centre of the village. For many of the people who go to the post office to post letters or whatever else, the social interaction they get there is vital. Without it, they would suffer.
Mr Gregory Campbell (East Londonderry) (DUP)
On the issue of the other services that local post offices provide, over the past 20 years there has been a reduction of almost 50% in the number of branch post offices, and that trend looks likely to continue. We need a fundamental reassessment of the services provided by branch post offices, particularly in rural areas.
Jim Shannon
As always, my hon. Friend sums up the whole debate in about two sentences. He is absolutely right. Those are clearly the issues, and that change needs to take place across the whole Post Office.
Post office restructuring and modernisation will affect different post offices in different ways. In some places, there is concern that the post office, its services and its community value will be lost. In others, including my constituency, the concern is about the staff who face dramatically increased working hours for the same wage. That issue has to be taken into consideration. When post offices, their services and their provisions are lost, our role is to protect those who are adversely affected by those changes. Elderly people can be left vulnerable and isolated by the loss of what for many is a community hub.
Over the years, I have had the chance to work with post office counters. I want to mention Mark Gibson, who has worked hard to make the necessary changes. Over the years, with his help and the help of local people, we were able to move local post offices into shops in several villages on the Ards peninsula: Kircubbin, Cloughey, Portavogie, Ballygowan, Saintfield and Ballynahinch. The Scrabo estate post office was moved into the Ards shopping centre. Those are the things that can be done if we have the co-operation of the post office counters and those who own shops.
Changes can result in job losses in my constituency, as well as the loss of the community value of the post office. We need to put in place mechanisms, to which my hon. Friend the Member for East Londonderry (Mr Campbell) referred, to enable the post office to do more. For example, why cannot every post office deal with vehicle tax? That could be done in every post office across the Province. They could deal with benefits, banking and other things. I spoke to the Minister before the debate, so he knew that that question was coming. I hope for a full answer when he speaks.
We have some questions about the post offices in Ballywalter, Portavogie and Killyleagh in my constituency. They are coming into the new system. The postmasters and postmistresses are concerned about how the changes will take place, and the staff are worried about their working hours. Hopefully, relocating staff from closing post offices will alleviate that problem.
It seems that when the individual in charge of a post office decides that they no longer wish to trade, they simply shut up shop. On some occasions, post offices have closed. We were able to move all but one of the post offices I mentioned into other shops in the area. The hon. Member for Bexhill and Battle mentioned a post office that moved into a pub. That is unusual, but it is important that it was retained.
We warned about the drawbacks of the privatisation of the Post Office. Now that it has happened, the Government should do everything they can to ensure that the Post Office has plans in place to make adequate provision. I understand that the contract with the Post Office was geared towards requiring Post Office Ltd to find temporary or permanent replacements for closed post offices. We have to be careful about how the Government push Post Office Ltd. The Government need a hands-on approach to ensure that the major changes happen smoothly, that those who are adversely affected are protected, and that Post Office Ltd fulfils its contractual obligations.
In conclusion, the post office is an integral part of my society—the villages, estates and towns of Strangford, which I represent. People in those villages and estates need post offices for social interaction and for the services they provide. Post offices are the lifeblood of all the villages and estates in my constituency. My plea to the Minister is that he helps them to remain that way.
Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)
It is a pleasure to serve under your chairmanship, Mrs Gillan. I congratulate my hon. Friend the Member for Bexhill and Battle (Huw Merriman) on securing the debate. I pay tribute to the hon. Member for Strangford (Jim Shannon), whose remarks, as always, were considered.
I hope to inject some optimism into the debate. Our debates in this place are often full of doom and gloom about issues facing our constituencies. Of course, it is right that we advocate on behalf of our constituents, who need to access local services, but some good things have been happening to post offices that have benefited my constituents. I will refer to a few of those things and talk about the issue, which my hon. Friend the Member for Bexhill and Battle raised, of the challenges that communities face when post offices temporarily close, often due to unforeseen circumstances.
Post offices are the lifeblood of many rural areas and of many of the shopping parades on the periphery of our larger town centres. That is certainly true of my constituency. The service that they provide to older people is particularly important, offering a focus in the village or community for people who have little daily contact and may otherwise be isolated. That is particularly true in rural areas of Suffolk. There is some cause for optimism, however, because the Government have taken supporting post offices seriously. At the beginning of the previous Parliament, as a result of the spending review, £1.3 billion was put into securing a modernisation programme for post offices both large and small, including Crown post offices, main post offices and local post offices. The programme is bringing benefits, certainly to my constituents. A further raft of £640 million was announced in 2013, £20 million of which is specifically for remote rural post offices. Residents in central Suffolk have benefited from that.
One issue that was flagged up when the modernisation programme was taken forward was that the Post Office needed to modernise some of its practices, recognising that we now live in a digital age. We need a Post Office that can benefit from economies of scale and from collocation with other community services. Post offices can benefit village shops by attracting more customers and helping to maintain the viability of shops and services that may otherwise be at risk as people move towards online shopping.
Andrew Percy
I hope my hon. Friend does not think that we are all being negative. The post offices at Pollington, Eastoft, Airmyn and Wrawby were all closed under the previous Government’s closure scheme, and we are pleased that that scheme has gone. The concern about the current positive policy is the huge delays when people are told that they are getting a new post office but then it does not open, meaning that people change their behaviour and start using other services or post offices elsewhere. That is the concern, and I would not want him to think that anyone who is criticising that is at all negative about what the Government have done on post offices. We have protected them in a way that previous Governments did not.
Dr Poulter
My hon. Friend makes a valid point. I am sure that the funding and investment that I have just outlined is welcomed by Members from both sides of the House, because it has gone directly to maintaining the viability of some of the most remote rural post offices. However, the challenge that my hon. Friend throws down, which was also raised at the outset by my hon. Friend the Member for Bexhill and Battle, is a good one.
When a post office is temporarily closed, such as the one that my hon. Friend the Member for Bexhill and Battle mentioned in Heathfield, a village with which I am familiar having spent some of my younger days in his constituency, the problem is that the closure can become de facto permanent. Even when a temporary closure is flagged up to the local community and the Post Office many months in advance, the Post Office does not always act quickly enough to put in place either a temporary or permanent solution. I am lucky to have an engaged parish council that considered a number of options for maintaining the viability of the post office in Stradbroke. I helped in that process, and I am pleased that we still have a functioning post office service.
As my hon. Friend pointed out, the danger, and the evidence from elsewhere, is that a temporary closure can last for many months. The viability of the service is then lost and many customers start to take their custom elsewhere, which can have a knock-on effect on the potentially fragile local economy that benefited from having a post office. When the original £1.3 billion was provided, conditions were imposed to ensure that services remained accessible and viable. I am interested in what the Minister has to say about how we can better work with the Post Office to deal with the issues around temporary closures and to speed up the process, so that such closures do not become de facto semi-permanent and so that services can be put back in place. At the moment, it seems that a good policy that has benefited and encouraged the viability of many rural post offices, particularly through collocation, can be undermined in some communities by temporary closures.
Dr Poulter
I will, but I am conscious of the time and the need to close my remarks.
Jason McCartney
I thank my hon. Friend for giving way and congratulate all those who have contributed to the debate. I was not aware that other Members were in the same situation as me. My own village post office in Honley has now been closed for six weeks and I have been struggling to get any explanation from the Post Office as to why. Business has been migrating elsewhere. Only this afternoon, the post office in Meltham, which is where we were supposed to go, has also closed. I thank my hon. Friend for raising this issue, which I am now aware exists across the country, not just in my constituency.
Dr Poulter
My hon. Friend is absolutely right that any community could face temporary closures. The great tragedy of such closures, some of which can be unforeseen and happen at short notice, perhaps due to the death of a long-standing postmaster, is that they are often not sudden and are flagged up many months in advance when a postmaster wants to retire. We need prompter action and early engagement from the Post Office in such circumstances. Given the conditionality of the money in the £1.3 billion modernisation programme, I am interested to hear what further steps the Government can take to ensure that the Post Office gets it right. We do not want temporary closures to become permanent, and we must recognise that temporary closures can have a detrimental effect on the other shops in a village or community that relied on the footfall brought in by the post office.
The Government have taken some promising steps towards reinvigorating the Post Office. I believe that 150 new branches opened last year as a result of the modernisation programme. That is good news, but we need to address temporary closures properly. I look forward to the Minister’s remarks.
Several hon. Members rose—
Mrs Cheryl Gillan (in the Chair)
Order. We still have five speakers left, with half an hour to go. I call Dr Paul Monaghan.
Dr Paul Monaghan (Caithness, Sutherland and Easter Ross) (SNP)
Thank you, Mrs Gillan, for the opportunity to discuss the important issue of service delivery in the event of post office closures. I congratulate the hon. Member for Bexhill and Battle (Huw Merriman) on securing the debate and on highlighting his case study, the features of which I recognise only too well.
Post offices play an enormously important role in the lives of communities across the UK, and nowhere is that more evident than in constituencies such as mine that have many remote and rural communities. Indeed, the post office is the heart and soul of many villages in my constituency, and for many people it is the only means to interact with the outside world. They do so not only through postal services and parcels but through banking and accessing business services, submitting identity documents, obtaining a passport or driving licence, accessing cash, building up a modest savings account, receiving pensions and collecting benefit entitlements. I appreciate the challenges that the Post Office faces in delivering that range of crucial range of services, and I appreciate that it is working hard to ensure that its services remain as accessible as possible, particularly for older and disabled customers.
Between March 2001 and March 2015, 531 of Scotland’s post offices were closed. That is equivalent to over 27% of all post offices being lost—more than one in four. Each of those closures is a disaster for the local community, depriving it of the means to interact with the world in the ways that I described. On 8 November 2015, just a few weeks ago, The Mail on Sunday published an article stating that there had been a large number of temporary post office closures in rural villages and towns of Scotland. Figures obtained by the paper showed that 90 post offices in Scotland are now officially registered as temporarily closed. I say “temporarily”, although a third have been closed for more than five years. Commenting on that sad fact recently, the consumer spokesman for Citizens Advice Scotland noted:
“Local Post Offices are vital for remote and rural communities as consumers and business there can face difficulty in travelling to alternative branches.”
The paper noted that new figures provided by the Post Office under the Freedom of Information Act demonstrated that as of 31 March 2015 there were 1,492 post offices in Scotland, of which 1,402 remained open. Of the 90 classed as temporarily closed, 77 were in rural areas. Several of those are in my constituency. Of the temporarily closed post offices, 34 have been closed for five or six years, six for four years, two for three years, seven for two years and 14 for one year. Within the past year alone, 27 post offices have closed temporarily throughout Scotland.
The effect of post office closures is dramatic, not least because many of the post offices have evolved to take on responsibility for delivering a range of banking and business functions, in addition to the traditional post office role. That evolution has taken place because many of the banks operating in the UK have implemented a programme of branch closures and reduced opening hours in many communities. In the rural areas of my constituency that often means that the local post office is the only available financial service provider within a 60-mile radius. It goes without saying that where the banks have closed and the post office follows, communities are left in grave circumstances. Such a situation is far too common, as we have heard.
To be clear, accountability for the post office network lies with the UK Government, who have a responsibility to ensure that post office services are available for Scotland’s rural communities. In those communities there is no alternative to post office services.
The Postal Services Act 2011 sets out the minimum requirements of the universal service obligation, on which the Post Office must deliver. The requirements are statutory and may be altered only with the consent of the UK Parliament. The minimum requirements are: at least one delivery of letters every Monday to Saturday to every address in the UK; at least one collection of letters every Monday to Saturday; postal services at an affordable, uniform tariff across the UK; a registered items service at an affordable public tariff; an insured items service at an affordable public tariff; a free-of-charge postal service to blind or partially sighted people; and free carriage of legislative petitions and addresses.
The Post Office, posts and postal services are reserved to the UK Government under the Scotland Act 1998, but the Scottish Government are committed to strengthening the long-term sustainability of the post office network in Scotland, consistent with the national performance framework. Recognising the importance of post offices, the Scottish Government have determined to provide funding to local post offices to maintain their crucial service delivery through, for example, the post office diversification fund for Scotland. The objective of the fund is to contribute to the regeneration of deprived urban areas by sustaining and improving post office branches on the margins of viability that provide socially important services and facilities and that act as an anchor for other retail activity. Such objectives clearly apply to rural areas as well. In 2011-12, for example, 48 post offices throughout Scotland received funding of upwards of £25,000, individually awarded to various outlets for a variety of improvements, including refurbishments, improved security, retail equipment and so on.
The Scottish Government recognise the valuable social role of post offices, particularly in deprived and remote areas of Scotland. That is why the Scottish National party continues to promote innovative approaches to delivering public services through post offices. We want to support local authorities, local enterprise networks and third sector organisations to work together to find sustainable solutions that place post office services at the heart of community-based services.
The UK Government must do all in their power to protect rural communities from the destructive impact of post office closures. Post offices perform a vital service in many areas of the UK. They have a pivotal role to play and are often the only place where letters and packages can be sent and received, bills paid, cash withdrawn and savings deposited. For communities that as often as not do not have internet connections, such services are essential in every meaning of the word.
Scotland has many remote and rural households and communities, and in common with communities in other countries in the UK, they should not have vital services taken away from them. I call on the UK Government to improve strategy and policy and to secure post offices for communities throughout the UK, but particularly in remote and rural areas.
Mrs Cheryl Gillan (in the Chair)
I would like to start the wind-ups at 10 minutes past 5, with five minutes for each of the Opposition Front Benchers and, I hope, 10 minutes for the Minister. That is what I am aiming for, so I hope Members will accommodate it.
Ian Lavery (Wansbeck) (Lab)
I congratulate the hon. Member for Bexhill and Battle (Huw Merriman) on bringing this important issue to the Chamber. It is not only important for rural communities, although I understand what hon. Members have been saying.
In August, the shop in which the post office was operating in the community of Newbiggin-by-the-Sea in my constituency went into liquidation—in a flash, just like that, the post office was closed. Newbiggin is a lovely seaside village of about 6,000 people where lots of them depend on the post office services. There is no bank in the area—the village is at least three miles from a bank or any other post office—and the area is in the top 10% of deprived lower layer super output areas, so a lot of people depend on benefits and there are a lot of elderly people in the village. To have the post office taken away means, almost within minutes, a devastating impact on families, individuals and isolated people. As has been mentioned, those people might not be able to jump into a car or have great transport links to get to the next nearest post office and, to be honest, a lot of those elderly or vulnerable people might not have a clue where the next post office is. The issue is really important.
It is easy to criticise the Post Office and everyone else concerned, but we have to think about the communities, the people and the devastating impact on them, not just in Newbiggin in my constituency, but in villages and towns throughout the country, as has been explained in the Chamber this afternoon. We have got to have some sort of reliable post office provision, and it cannot be that if the old lady or gentleman who runs the post office sadly passes away, that provision is basically withdrawn. People depend on these services and there has got to be some form of contract between the Government and the Post Office so that in the event of a liquidation, a death or something like that, people can still use post office services, the lifeblood of their community.
I urge the Government to think about how we can come together with a strategy—a community contract—between the Government, the Post Office and the community to ensure services whatever happens. Unfortunately, in life things do happen, and post offices have been closed not because of anything that the postmaster or postmistress has done, but because of circumstances outside their control. The Government should be ensuring that that provision cannot, even temporarily, be withdrawn.
Martyn Day (Linlithgow and East Falkirk) (SNP)
I thank the hon. Member for Bexhill and Battle (Huw Merriman) for securing the debate and I am pleased to serve under your chairmanship today, Mrs Gillan.
We have heard a similar story in all parts of the House: how vital post offices are in their communities and the extent to which they are more than just a service—they are about the community hub and their impact on a whole range of different sectors of society. I find myself fully in agreement with the speech just made by the hon. Member for Wansbeck (Ian Lavery). He highlighted the impact on people in deprivation when a post office is closed. Those are often the people who have less access to public transport, the internet and other vital services, which shows how vital post offices are in the community.
My hon. Friend the Member for Caithness, Sutherland and Easter Ross (Dr Monaghan) highlighted the Scottish situation, which I am a bit more familiar with, and the good work done by the Scottish Government through its post office diversification fund. That is an example of what can be done. That fund has been key in saving post offices on the cusp of viability, certainly for larger communities of more than 10,000 people, which is a beacon for the way forward, because it has allowed those post offices to continue and act as an anchor for other services, which gives great vitality.
The hon. Member for Bexhill and Battle (Huw Merriman) talked about the problem of delays in getting temporary offices up and running, while my hon. Friend the Member for Caithness, Sutherland and Easter Ross mentioned the impact of temporary closures that go on way beyond what anyone would think was in the realms of temporary. Upwards of five years is not temporary; that is semi-permanent. Perhaps the Minister might look for a way to address that blight. If we think a closure is temporary, we can accept a bit of grief for a few months, but we cannot accept that for years.
The hon. Member for Central Suffolk and North Ipswich (Dr Poulter) made many valid points, including on the impact of temporary closures. A strong message we can take from the debate is that we need something done about that. The hon. Member for Strangford (Jim Shannon) pointed out how vital post offices are as community hubs, which is a point everyone has made in the debate. They go beyond a service and while we might now live in a digital age, many elderly people who may not be as digitally competent are utterly dependent on those services, as are businesses who have poor broadband connections and need those services for general business and communication. That covers a huge range. I hope that I have not missed out any contributors to the debate, but I think we pretty much agree with everything said in all parts of the House. I look forward to the Minister’s response.
Yvonne Fovargue (Makerfield) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Gillan. I congratulate the hon. Member for Bexhill and Battle (Huw Merriman) on securing this important debate. He is keen to ascertain what the Government will do to ensure that the Post Office has proper plans in place for provision and that, where there are problems, it acts quickly to ensure an available replacement, whether on a temporary or permanent basis.
The hon. Member for Strangford (Jim Shannon) hit the nail on the head and spoke for everyone when he said that the post office is the heart of the community. Post offices are indeed an essential part of British life, providing somewhere for people not only to buy their stamps and post letters and parcels but, as the hon. Member for Caithness, Sutherland and Easter Ross (Dr Monaghan) said, to access many other vital services. As my hon. Friend the Member for Wansbeck (Ian Lavery) said, sometimes they are the only places where people can access such services—it might not be possible to go anywhere else.
Of course, things do change. Quite often that is as a result of technological change. The hon. Member for Central Suffolk and North Ipswich (Dr Poulter) summed that up by saying that we are in a digital age and, as a result, the number of post offices has fallen in recent years. Most post office branches are operated by franchise partners or sub-postmasters who are independent business people, so, in order for their post offices to remain open, they often rely on Government subsidy. Despite some reassurance, clearly there are still real pressures, which have not been helped by the controversy surrounding the Post Office’s Horizon accounting system.
Many hon. Members have raised cases in the House in which it appears that honest and hard-working sub-postmasters and sub-postmistresses have had their reputation tarnished and livelihood threatened—in some cases they have lost their liberty—having been accused of improper accounting. Whatever the truth, in those cases computer software was responsible for the loss of large sums of money. Unquestionably, that may have acted as an off-putting factor for those who might have considered running a post office as part of their business.
In addition, as has been pointed out, some post office proprietors have been resigning from the business because they are concerned that their post offices are not financially viable. Local papers throughout the country are full of stories—I see them in my constituency—of postmasters and postmistresses struggling to stay in business. Often, that occurs where Post Office Ltd has changed the status of a local post office as part of national changes to the service, which leaves them having to rely on commission to offer what services they can.
When that happens, the survival of the post office is dependent on the viability of the shop in which it is contained and some complain that they cannot afford to run the post office, in particular owing to the extended opening hours demanded by Post Office Ltd. Will the Minister tell us how many sub-postmasters have resigned in the past year as a result of being unable to run their business profitably with a post office in their premises? What procedures do the Government expect them to follow when it becomes clear that a post office is in danger of closing?
Without proactive policies, thousands of constituents can be left without a local post office because Post Office Ltd is unable to rely on the good will of an individual operator. Does the Minister believe that Post Office Ltd is taking adequate steps to be proactive in preventing closure and acting swiftly enough to ensure that a replacement is available locally when a post office has to close? Indeed, does he believe that conditions put on replacements, such as very long opening hours, are unreasonable?
Jim Shannon
One thing that has not been mentioned but the Minister could take on board for his response is the possibility of incentivising financially those who want to take over a post office. Perhaps the Government need to offer a small financial bonus or incentive to enable people at least to consider that, based on a contract and proper conditions. That has happened in Northern Ireland and perhaps it should happen here as well.
Yvonne Fovargue
That is certainly something to put to the Minister. The Government have committed £640 million from 2015 to 2018 to fund the network transformation programme and to protect branches where vital services are provided to communities but the post office is not commercially viable. Is the Minister content that sufficient funding is being provided to fulfil that task? What will happen when the subsidy runs out in 2018? Can he guarantee that after that point the transformation programme will have ensured that remaining post offices are commercially viable? I look forward to his response.
Stephen Barclay (North East Cambridgeshire) (Con)
It is a pleasure to serve under your chairmanship, Mrs Gillan. I congratulate my hon. Friend the Member for Bexhill and Battle (Huw Merriman) on securing the debate and the way in which he has championed this issue most effectively since his election to Parliament. He raised a number of points that it may be helpful to address at the outset, on whether this is a new model in the Post Office, to what extent it is commercially attractive and how the Post Office is being held accountable.
Like my hon. Friend, I represent a rural constituency and I have a similar change programme in my area. I am also aware of the challenges in areas such as mine on public transport, to which he alluded. As for whether the franchise model is new, it is not; it has been around since the 1990s and it is long-held practice to collocate a post office and a shop. What is changing to a certain extent is the number and scale of post offices being collocated, and while in the past we had post offices with shops that sold sweets, birthday cards and various other things—many of us will remember that from our childhood—now we more often have shops with a post office attached to them.
On whether running a post office is commercially attractive, the footfall generated is very attractive to many shop owners. Indeed, having one counter as opposed to two can mean that customers do not have to queue twice and can make managing staff in the shop more efficient. There are therefore commercial attractions to collocating a post office in another business nearby, which is part of the appeal for many taking that approach forward.
The hon. Member for Strangford (Jim Shannon) rightly spoke of the social hub that the post office offers. That is why I hope he will support the Government’s manifesto commitment to secure 3,000 rural post offices and, as part of the arrangements with the Post Office, to maintain 11,500 branches as part of the network. The Government recognise, through the funding that has been allocated, the important social hub that post offices provide. Indeed, that is in stark contrast to the previous Labour Government, under which at least 5,000 branches closed as part of their closure programme. The Government have made a commitment to the Post Office in recognition of the exact point the hon. Gentleman raised—that post offices make an important social contribution to communities.
My hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) injected a welcome note of optimism to the debate, recognising that, in securing the network as the Government have done, we have increased significantly the hours that branches are open, often on Sundays, compared with the past.
Alongside the allocated funding, there is a specific £20 million community branch fund, which I urge Members to take advantage of. The fund encourages branches that may be the last shop in their community to bid for things they may need to make their businesses more viable, so measures are available within the funding mechanism to help preserve post offices where they are aligned with the last shop in a village or community. That is part of the wider £2 billion allocated since 2010 as part of this programme.
Before I come to the specific case in the constituency of my hon. Friend the Member for Bexhill and Battle and the chain of events behind the post office’s temporary closure there, I turn to my hon. Friend the Member for Brigg and Goole (Andrew Percy), who raised the issue of the hoops that have to be jumped through, causing frustration and adding to the time taken to open a new post office or appoint a new postmaster. I think we all share that frustration, but there are good reasons for it, given the significant position of trust that postmasters and postmistresses hold within their communities and the large sums of money they often handle. It is therefore right that a thorough consultation process is part of those appointments, but that can have an impact.
Andrew Percy
I think any reasonable person would accept that. We could perhaps do better by ensuring that interim measures are in place while something else is being worked on. That is the problem. Everyone understands the importance of a postmaster’s job and the compliance regime that must go behind it, but the length of time between the closure of a post office and the opening of a new one is unacceptable, and we need to smarten up on that.
Stephen Barclay
My hon. Friend raises a valid point. These things are looked at on a case-by-case basis, and each case tends to be different. That is highlighted in the case of the post office in the constituency of my hon. Friend the Member for Bexhill and Battle, where a number of interim measures were tried. He alluded to a portakabin being used and the attempt made to look at whether that could be located close to the store or needed to be further away. The issue of temporary staff was considered. A mobile van was also considered, which is sometimes suitable, but the volume of customers at the Heathfield store was too high. There were specific issues with the portakabin, but that solution was tried.
Attempts are made to mitigate the time taken, but sometimes local factors work against that. Unfortunately, in my hon. Friend’s case, a chain of events has made it more difficult to put the interim solution in place. I hope that better news is imminent. I know he supports the proposal for a new permanent host for the post office in Heathfield: Unique Wine Ltd, which is on the high street. The consultation is ongoing, so I hope there is light at the end of the tunnel for him.
In terms of locating a post office in an existing business—in that case, an off-licence—there are plenty of examples around the country of such collocation working well, not least due to the longer hours in which it enables the public to access the post office. I take slight issue with the suggestion from the hon. Member for Makerfield (Yvonne Fovargue) that the Post Office is imposing unfair terms by asking for longer hours. She also suggested that the public are not getting access to post offices. I think most customers will welcome the fact that a post office, through collocation, is open for longer hours. That is part of the public benefit.
Yvonne Fovargue
I will simply give the Minister an example from my constituency, where a local shop has a post office in it but is finding it difficult to maintain a profit with that post office because of the hours for which it has to maintain that particular counter. It is thinking of closing the service, rather than keeping it open for shorter hours.
Stephen Barclay
Indeed, but the proposed new branch in the constituency of my hon. Friend the Member for Bexhill and Battle would be open for 21 hours longer a week than the previous store. Notwithstanding the time taken to put the new branch in place, once it is in place, subject to the consultation, the collocation means that the post office will be open for an additional 21 hours, which I think will be particularly welcome to his constituents.
The Post Office is tasked by Government to maintain a network of 11,500 branches and to meet specific access criteria—for example, that 90% of the UK population live within 1 mile of a post office. The Post Office is meeting those criteria, as set out in the annual report it publishes. That agreement does not specify that every community must have or retain a post office. That is because the business needs the flexibility to respond to local circumstances in each case. Were we to require the Post Office to maintain individual branches or reopen them within a set period—an issue that my hon. Friend the Member for Bexhill and Battle raised—it could lead, in extremis, to a new post office having to be built if a lease could not be secured on an old site. Such a restriction would be counterproductive to protecting the commercial viability of the network.
The economics of the Post Office is such that with the changes brought about by the internet and the digital world, small stand-alone post offices sometimes do not generate enough business to be sustainable on their own. The modernisation programme that the business has been following for the past few years has been about moving local post offices into a vibrant shop where the overheads of a business, such as property and staff costs, are shared with the host business, which is what we are seeing in my hon. Friend’s constituency.
The experience of the Post Office’s directly operated branches—the Crown branches—is illustrative. Collectively, those businesses have moved from making an annual £50 million loss to breaking even. That underlines the Government’s commitment to the Post Office network and a mix of modernisation, automation, labour reform and, in no small part, the franchising of weaker branches that are not delivering that performance. Were the Post Office to be forced to run more directly operated businesses with weaker turnover than in busy town centres, those branches would not be sustainable without greater public subsidy. Rather than force that on the business, we are allowing the estate to manage itself in a more value-for-money way, while protecting the 3,000 rural branches and the wider network.
It is regrettable that the Post Office has been unable to maintain service provision at Heathfield since April. However, that is not due to a lack of effort or expense by the Post Office. Unfortunately, local circumstances sometimes prevent the ideal outcome, as we saw with the portakabin example. In most cases, the business is able to find a way to maintain provision successfully. I am glad that a potential branch has now been found in my hon. Friend’s constituency, which I know he supports.
In seeking a solution at Heathfield, we should not lose sight of the fact that the Post Office is delivering a service that is open for more hours, with less public subsidy, and therefore offers a better, value-for-money service for the taxpayer. That reflects the Government’s commitment to maintaining the branch network and recognising the social hub that the hon. Member for Strangford described so well.
Question put and agreed to.
Resolved,
That this House has considered service provision in the event of post office closures.