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Kelvin Hopkins (Luton North) (Lab)
I beg to move,
That this House has considered the future of the Post Office.
It is a pleasure to serve under your chairmanship, Mr Wilson. I am pleased to secure this important debate on the crisis in the Post Office. First, I must declare an interest: my constituency Labour party has a formal agreement with the Communication Workers Union, which provides financial support, and I am a member of the union.
The Post Office is inflicting severe cuts. Its cost-cutting measures are affecting both its employees and the public it serves. Some 59 post offices are being closed or franchised, and the Post Office’s defined-benefit pension scheme is being terminated. That has all come about as a direct consequence of the separation of the Post Office from Royal Mail when Royal Mail was privatised. Cuts to Post Office funding followed, and the Government failed to deliver on their 2010 promise to turn it into a
“genuine Front Office for Government”
and to grow its financial services.
This is a matter of serious concern. Trends in the Post Office’s traditional work and the lack of a proper strategy for growing new revenue mean it will not have a secure long-term future, or possibly a long-term future at all. It cannot survive simply by imposing cuts and going through further cost-cutting regimes. The Government must stop the cuts—particularly the proposed closures and franchising—and bring together stakeholders, including the Post Office itself, trade unions, and industry and customer representatives to develop a meaningful and convincing plan for the future.
Mary Creagh (Wakefield) (Lab)
My hon. Friend is making an excellent speech. WHSmith is now operating more than 100 post office branches. Does he agree that the franchising operation means that the Post Office is losing experienced staff, providing poorer service and offering a smaller range of services? For example, the closure of the Crown post office in my constituency means that the biometric enrolment service is no longer offered.
Kelvin Hopkins
I thank my hon. Friend for her intervention. In fact, later in my speech I am going to say more or less what she just said. I thank her for reinforcing that point.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I congratulate the hon. Gentleman on securing this really important debate. Does he agree that, as a result of its decoupling from Royal Mail in 2013, the Post Office has lacked an overall strategy? It should now be rethinking its whole enterprise, which should be one of growth, rather than one of contraction.
Kelvin Hopkins
I agree with the hon. Gentleman. What is happening is the opposite of that, so I want the Government to put their weight behind the Post Office to enlarge, expand and improve it.
Albert Owen (Ynys Môn) (Lab)
I concur with everything the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) said. Many communities across the country—particularly rural communities—are suffering bank closures and financial seclusion in addition to the closure of Crown offices, which are the backbone of the Post Office. We need expansion, and we need it now.
Kelvin Hopkins
I agree. It is vital that rural communities, in particular, have public services, sometimes on a smaller scale, to ensure that people living in more dispersed communities have proper access to those services.
Anna Turley (Redcar) (Lab/Co-op)
My hon. Friend is being extremely generous in giving way so early in his speech. I want to follow up the point that my hon. Friend the Member for Ynys Môn (Albert Owen) made about financial services. The post office in France set up La Banque Postale, which has made £1 billion of profit, and the CWU is campaigning for our Post Office to emulate it. It should look at expanding into financial services as a means of increasing value.
Kelvin Hopkins
My hon. Friend, too, has anticipated something I am going to say in my speech. That just reinforces what I am going to say, so I am pleased about that.
The Government, bending to pressure and concerns from inside and outside Parliament, have just launched a consultation document, but it must lead to genuine action. It must not simply be a token exercise that does not change thinking in the Government and the Post Office. We need effective action to promote a long-term and successful future for the Post Office.
The Post Office’s current funding package runs out in March 2018 and must be replaced by an effective strategy and support for the future. The negotiations between the Government and the Post Office must not be simply a ritual seeking in reality just to manage decline. For customers, the most significant measures taken this year are the two announced tranches of Crown office closures and franchises, which followed an earlier programme affecting 50 Crown post offices in 2014-15.
My hon. Friend the Member for Wakefield (Mary Creagh) mentioned franchising. Independent research carried out in the past five years found that franchises left to WHSmith in 2007 and 2008 perform poorly—worse than Crown post offices in queue times, service times, customer service and advice, disabled access and the number of counter positions. That brings to mind the failure by railway franchises to measure up to the five-year record of success when the east coast main line was returned temporarily to the public sector. Franchises have also seen losses of experienced staff, fewer specialised staff and less space.
Mr David Winnick (Walsall North) (Lab)
The Post Office made an attempt to close Willenhall Crown post office in my constituency, but there was a successful campaign against the closure and it decided after a while to drop its plans. It is now going to start all over again. The closure will have a most adverse effect on the local community, in which the Post Office has so far shown absolutely no interest. It is obviously tremendously disappointing. I am very pleased indeed that my hon. Friend has initiated this debate.
Kelvin Hopkins
My hon. Friend demonstrates the point: we need to put pressure on the Government and the Post Office at both a national level and in local campaigns if we are going to save the Post Office for our communities and its staff.
For employees, good jobs have been replaced by insecure employment. In 2014-15, only 10 out of 400 staff from former Crown offices were TUPE-ed over to new retailers. Public money was used to pay off long-term staff so the franchisees could employ more low-paid, less experienced staff with less job security—effectively, a taxpayer subsidy to the private franchises. All that amounts to a failed strategy for the Post Office.
Mary Creagh
On that point, if a member of staff is TUPE-ed over, they could end up managed by somebody on the minimum wage in a WHSmith, even if they are on a significantly higher salary. That creates difficulties and tensions in the workforce in the new environment.
Kelvin Hopkins
My hon. Friend makes a good point. The union and I support the idea of having proper pay for all staff so that sort of discrimination and inequality does not occur. All staff should be TUPE-ed over as they wish. They should not just be bought off with public money to enable WHSmith to make more profit.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
I thank my hon. Friend for securing this important debate. This is a big issue in my constituency, in which Blackfriars Road and Walworth Road Crown post offices are set to be franchised. Does he think that the fact that the incomes and pensions of the current staff are being put at risk completely undermines the commitment that the Prime Minister made at the Conservative conference to a more responsible capitalism?
Kelvin Hopkins
I will come on to talk about the fact that the Post Office is abandoning its defined-benefit pension scheme. That should be resisted and opposed.
The Government said that they would keep the Post Office in public ownership when they privatised the profitable Royal Mail, but franchising to private retailers is not public ownership. The public interest has been put at risk while Royal Mail is paying out more than £220 million a year in dividends. The Post Office’s revenues are falling, the “Front Office for Government” plan never actually got off the ground and Government funding is reducing.
I have a number of suggestions for the way forward. First, discussions about the Post Office’s future must be subject to parliamentary scrutiny and approval. Secondly, the Post Office must commit to making no threats of compulsory redundancy. Thirdly, the Government must deliver on their pledge to make the Post Office a “Front Office for Government” and set up a UK Post Office bank. Fourthly, the Government should stop using public money to subsidise the outsourcing of Post Office services to retailers. Fifthly, the plan to close the defined-benefit pension scheme should be abandoned; the scheme has a surplus of £130 million at the moment. Sixthly, the Post Office must be required to use the remaining Crown post offices to drive the growth of the new services and to give a secure future for the whole post office network.
The Post Office must remain as a vital public service and a community resource for the long term, with secure jobs and good terms and conditions for all its employees. My own preference is that a future Labour Government should bring Royal Mail back into public ownership and create a comprehensive integrated postal industry using internal cross-subsidies where necessary and appropriate. I imagine that may be expecting too much of the present Tory Government, but it would undoubtedly be massively popular with the public and serve us all well for the long term.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am delighted to catch your eye, Mr Wilson, in this very important debate. I pay great tribute to the hon. Member for Luton North (Kelvin Hopkins), who secured the debate today. News of any organisation looking at the closure or franchising of 59 Crown post offices with a projected loss of 2,000 jobs should rightly be met with horror, as the hon. Gentleman described. This reduction in operations can only mean a worse service for customers, longer queues, fewer staff, worse disabled access and the loss of a crucial community asset. I am sure many hon. Members are here today because of a threatened closure in their own constituency and, sadly, I am no different. As the MP for one of the largest rural constituencies in the country, having easy access to the services that a post office provides is an utter necessity. Since 2000, the number of rural post offices has decreased by about 3,000. Likewise, the number of Crown post offices—the larger branches that have more services—has dropped by 1,200 in the past 25 years.
The largest town and principal economic and commercial hub in my constituency is Cirencester. Its branch is one of the 59 proposed closures. It operates from a leasehold property and offers a wide range of services, including access to pensions and benefits, tax payments, driving licence and passport renewals, lottery terminals and foreign exchange. The four counter positions and two self-service kiosks are often subject to long queues and high demand. For such a valuable service to continue to exist, we must look at ways for Crown post offices to diversify their services and grow their dwindling customer base. As I said in my speech on the Post Office’s future way back in 2010:
“The message that the Government need to give to the Post Office is not ‘closure, closure, closure’ but ‘opportunity, opportunity, opportunity”.—[Official Report, 2 November 2010; Vol. 517, c. 213WH.]
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I do not know whether the hon. Gentleman is aware, but there are rumours that a third round of franchise announcements and therefore closures of Crown post offices is due at any moment, with a potential loss of 190 jobs. Does he not think this debate might be an opportunity for the Minister to put some pressure on the Post Office to think again about that third round of potential franchises?
Geoffrey Clifton-Brown
I am grateful to the hon. Gentleman for bringing that to the attention of the House. I have not heard those rumours; I will simply respond with a line from later in my speech. If the Post Office were Tesco, it would be thinking not about closing profitable branches but about how to make those branches more profitable by providing a more attractive service for the customer. That is what I would like my hon. Friend the Minister to take away from this debate today. Let us see how we can make the Post Office work better for its customers.
What the Post Office needs is a proper business model for the future, which, above all, needs to consider how much of the business should be commercially profitable and which bits of it the Government, through the taxpayer, are prepared to subsidise. Although I do not agree with the hon. Member for Luton North that it should be wholly brought back into public ownership, there is no doubt, given the number of small suburban and rural branches, that it will inevitably need some form of public subsidy in future. That public subsidy should be clearly defined. The bits that can be profitable, such as the Crown post offices, should be made to operate as efficiently as possible.
Kelvin Hopkins
An internal cross-subsidy is appropriate where there is a public service component. When we had the Royal Mail and post offices effectively in one industry, cross-subsidy was possible. I think we should return to that principle of cross-subsidy.
Geoffrey Clifton-Brown
The hon. Gentleman and I are largely in agreement. I have clearly said that there will continue to be a need for an element of taxpayer-funded subsidy for areas that can never be profitable, such as some of the smaller rural and suburban branches, so there will inevitably be a mixture of the commercial, which needs to be exploited to the maximum, and an element of public subsidy.
The hon. Member for Ynys Môn (Albert Owen) mentioned the issue of banks closing. I have two important branches closing in small rural towns: Lloyds in Fairford and HSBC in Moreton-in-Marsh. Many of the services that those banks currently provide, such as depositing cheques and drawing benefits, pensions and so on, will be provided in future by the post office. If the post office then closes in those communities, my constituents in those communities will be left with a severe disadvantage.
Albert Owen
In addition to the banks closing and poor post office coverage, there is a lack of broadband and mobile coverage. So when people are asked to go online because they cannot physically get to these buildings, that is not available either.
Geoffrey Clifton-Brown
I entirely agree with the hon. Gentleman. I need to make progress now or I shall be reprimanded by the Chair for taking too long. There is so much to discuss in this debate and I have a little section in my speech about some of the innovative services that have been mentioned.
People view post office premises as dingy and out-of-date places that they do not want to visit. Clearly, the Post Office as a commercial organisation needs to do something about that. Branches needs to be attractive places that the public want to visit. The franchise model is not the nirvana that everybody thinks it is. Pizza Express, for example—I say this to my hon. Friend the Minister—was at one point 100% franchised, but the offering was so variable that the franchises were brought back into central management and it is now a highly profitable enterprise. If the likes of Pizza Express take the view that they do not want franchisees and they want to manage it themselves, I am surprised that the Post Office is not going down that path.
Geoffrey Clifton-Brown
I will give way one more time to the hon. Gentleman.
Kelvin Hopkins
I thank the hon. Gentleman for giving way; I will try to be brief. In many parts of industry now, insourcing is the buzz word rather than outsourcing. There may be a strong case for that across public services as well as in the private sector.
Geoffrey Clifton-Brown
I think it comes back to the Post Office maximising the opportunities that it has got. I want to come on to that a little later in my speech, but the hon. Gentleman is right. The Post Office needs to consider very carefully how it operates in today’s world.
When the Post Office decoupled from the profitable Royal Mail business in 2012, little was done to create a coherent strategy for the future. Now, in 2016, with the change in retail banking behaviour and the closure of more than 1,700 branches across the UK in five years, small businesses need a post office bank even more. Currently, the Post Office provides access to business accounts for some of the bigger high street banks rather than its own service. However, this is limited, slower and inconsistent in terms of provisions across the network.
Geoffrey Clifton-Brown
I have given way an awful lot. I might give way a little later in my speech, if I may say that gently to the hon. Gentleman.
For the estimated 1.5 million adults in the UK without a bank account, an affordable service, such as a post office bank account that offered responsible deals on personal loans, would help to tackle the problem of payday lenders that charge huge annualised sums. It would be of great benefit to some of the poorer people in our society. After all, if Tesco opened a wholly owned bank eight years ago, notwithstanding its recent hacking problems, why cannot the Post Office do the same? Tesco has innovatively expanded a range of financial services. As has been mentioned, across the channel, La Banque Postale has a mandate to increase access to financial services and offer microcredit loans to those who have previously been financially excluded.
Phil Wilson (in the Chair)
Order. May I respectfully remind the hon. Gentleman that he has been on his feet for nine minutes, and quite a few other Members want to get into the debate? If he is nearing the end of his speech, I think that everyone will appreciate that.
Geoffrey Clifton-Brown
I am grateful, Mr Wilson; I have taken rather too many interventions, so my speech has become rather too long.
The Post Office ought to look at innovative ways to improve its services. Its post offices are dull and dingy places, but perhaps it could spruce them up and think about such improvements. There are all sorts of ways it could improve what it offers, such as internet hubs and internet cafés, business hubs and collection points for local authorities, and subletting if the premises are too large, as has been done in Penge.
I pay tribute to postmasters and postmistresses and their staff throughout the land, who do an incredible job. Often they go way beyond what their employers require, to help their communities. The post office is the glue that holds this country together. I appeal through the Minister for the Post Office to reconsider, among other things, its decision to close the Crown post office in Cirencester. It must be highly profitable, so why is it being closed? The Minister needs to look carefully at the closure process, to see whether it is the right thing for the country.
Phil Wilson (in the Chair)
As quite a few hon. Members want to take part in the debate, I ask them to restrict their comments. I do not want to introduce a time limit, but it might come to that, so hon. Members need to be careful about interventions.
Danny Kinahan (South Antrim) (UUP)
I congratulate the hon. Member for Luton North (Kelvin Hopkins) on raising this matter.
I apologise for being slightly parochial, but in Northern Ireland there are some 500 post offices, and we are going through exactly the same problems. A recent report commissioned by the Government and carried out by YouGov and London Economics looked at the social value of the Post Office. From the survey, they found that 95% of individuals and nearly 90% of small and medium-sized enterprises used post offices at least once a year; but there is much more to it. The people who use them like using them. In the street as I was walking here, I met two people from the west country, and we discussed the fact that I would be speaking in the debate. They were senior citizens—elderly; they said they did not want to go digital. They like the community hub that works around the post office, and said please would I stand up for that.
I have twice spoken on this subject at Stormont. I was there only five years, and as a new boy it was almost the first thing I spoke about. There was a document about the six steps to save the post office; they included banking, broadband and working with everyone. It was a fantastic idea and everyone supported it, but it seemed to be ignored. At the end of my time there, it came up again. The point I was trying to make, which has already been made by others, was that as well as thinking of every post office as a centre of the community we should also look at the losses to villages, towns and parts of cities where the library, pub and bank have gone and the school has closed. We should start to work with councils, parish councils and whatever community bodies are there, to identify the places that we must save, which are the community hub and the post office. Rather than let decisions about those things be made without talking to others, let us work through them and try to hold everything together. If subsidies are needed— I think that was an excellent idea—let us try to get that to happen.
We can all learn from each other, including Members from Northern Ireland and Scotland—all the devolved Governments. Let us try to find policies that will pull things together, so that the Post Office must talk to us before it starts closures and we can work out how to save a town’s post office. My post office in Antrim has been having a battle to find a place to go. The chemist and the local retail shop turned it down. By the time a decision was made, everyone thought the post office was closing, and the figures had gone down; so those concerned did not want it, because it was not going to bring anything. We need to talk before the news gets out and causes such a reaction.
Albert Owen
That is absolutely right. Llangefni in my constituency put a petition before Parliament. We won the argument; those concerned agreed with us then. However, the Post Office has come back with the same proposal to close the same Crown post offices. It is not listening.
Danny Kinahan
That is exactly the point; the Post Office is not listening, but it needs to. At least it has put a consultation out, in our case; but it should listen before decisions are made. I make my plea—let us all talk to each other, consider towns and the centres of communities, and work together.
Phil Wilson (in the Chair)
If hon. Members keep their remarks as brief as that, we may get everyone in.
Marcus Fysh (Yeovil) (Con)
It is a pleasure to follow the hon. Members who have spoken already.
I want to support the millions of customers all over the land who rely on the Post Office service in many remote areas as well as in towns. A post office recently closed in my village, East Coker, so I understand how important that is to a community; but it is true even in big towns such as Crewkerne, where the town centre post office recently closed.
Phil Wilson (in the Chair)
Because we donated 15 minutes to the Division, we will now finish at 4.45 pm. I want to bring in the Front Benchers at a quarter past 4. I reiterate that if people limit the time that they take, everyone should get in. I call Marcus Fysh to continue his speech.
Marcus Fysh
Thank you, Mr Wilson. I was saying that it is often only when a community faces the loss of its post office that it realises what a wonderful service the post office system provides. I speak in support of not just the customers but the postmasters who provide that service.
Post offices are often owned by hard-working families who constantly look for ways to improve their flagging profitability and get more footfall. Postmasters run 97% of the country’s 11,500 post office branches, but they lack any meaningful union membership or collective voice. They are represented only by the National Federation of SubPostmasters, a trade association that is funded in part by Post Office Ltd. NFSP chief executive George Thomson recently said that “without serious changes” to the Post Office Ltd business,
“there may not be a network to fight for in the future.”
Successive Governments have spent billions subsidising Post Office Ltd. Some £2 billion of taxpayers’ money has been used on the latest network transformation programme, which has not yet proved able to make the network sustainable and profitable. The Post Office has halved its losses in the last financial year, but that seems to have been done at the expense of postmasters’ pay and increasing branch closures and redundancies. The front-line service has suffered: the queues remain and extended opening hours are sometimes inconsistent and quite unpredictable. We must ask why. In many cases, postmasters are struggling to staff and operate their branches on the money that the Post Office now pays. The reduced revenues from core services simply make many things that post offices do unprofitable, and I know from speaking to postmasters up and down my constituency that they are genuinely concerned about whether they will be able to keep going with those things.
Hon. Members have made several useful proposals during the debate, and I urge the Government to consider them carefully, because Post Office Ltd itself does not seem to have any obvious plans to introduce new services or increase revenue in a way that could help. A growing number of post office branches are up for sale—there are currently more than 730 advertised on the Daltons Business website alone.
One of the key issues with the franchise model that we need to look at is that the computer system on which the whole network relies is well and truly overdue for replacement. It is, in fact, at the centre of an ongoing High Court action. Thousands of postmasters have been blamed for losses that may in fact have been caused by the use of that computer system. Some of those postmasters have been convicted and some have been made bankrupt by the Post Office, and losing that court action may pose a major solvency problem for the Post Office itself. I call on the Government to look into that with some urgency.
In that context, it should not be a major surprise that the unions are taking action, although the Post Office’s move away from a defined-benefit pension scheme is possibly not the right point to complain about, given that there has been a major move away from such schemes in almost every other walk of life in recent years. We need to look at the Post Office; it is in danger of running out of control and its governance issues require serious work and attention. I urge the Government to take an active role in that, because postmasters and their customers up and down the land really depend on the Post Office.
Catherine West (Hornsey and Wood Green) (Lab)
It is a pleasure to serve under your chairmanship, Mr Wilson. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this important debate.
There are two affected Crown post offices in my constituency. Local people have pointed out to me that that is particularly bad news for disabled people and there will be a reduction in post office services in the area. Tens of thousands of pounds have recently been spent on refurbishing the Crouch End post office. There seems to be a distinct lack of logic in ploughing a whole lot of public money into doing up a post office and promptly closing it. In the case of the closure of Muswell Hill Crown post office, there is a further risk to local jobs, because there are another 60 jobs at the Royal Mail sorting office behind the post office. In the London property market, once the doors of a facility like that close, a real estate agent will pop up and sell it either for some sort of housing development or more coffee shops. If there is one thing that Crouch End does not need, it is more coffee shops. We need proper services for local people.
In the various parts of my constituency that have become more populous in a short time, with denser housing developments, we desperately need services such as post offices. A petition has been signed by hundreds of thousands of local people. Will the Minister say whether that petition has been taken into account? I have not met anyone locally who wants to see the doors of the Crown post offices close.
On parliamentary scrutiny, I have been asking for months for some sort of debate. I am pleased that my hon. Friend succeeded in securing this debate, but there has been a lack of debate. I requested a meeting with the Minister, but I was not successful. I also requested a meeting with her predecessor, who sits in the House of Lords, and was again unsuccessful. Will the Minister pledge today to meet those of us who are affected so we can each have a few more minutes to go into detail about this urgent issue?
Margaret Greenwood (Wirral West) (Lab)
I refer Members to the fact that I received tremendous support from the Communication Workers Union during my 2015 general election campaign. Does my hon. Friend agree that as we approach Christmas, the importance of the post offices at the centre of communities is heightened? Although I understand that her constituency is densely populated, that is particularly important in constituencies with rural areas.
Catherine West
My hon. Friend makes a very good point. Regardless of whether they are in rural areas or urban areas, post offices are places where people can meet friendly faces, so they do not necessarily have to do everything over the internet. We all treasure that kind of community service.
Will the Minister also tell us whether the Government’s consultation is genuine? Time and again, we have had an announcement by the Post Office, a rather anodyne meeting and then a sense of resignation—a sense that “We’re just going to close them anyway.” If the consultation were real, we would have a genuine dialogue and a genuine sense that what we as Members of Parliament said was actually going to make a difference. Sadly, there is a fog of resignation over this issue. I fear that that is why many people tell us that they feel disconnected from national politics. They spend hours lining up to see us at surgeries to tell us something and then we do not get a result. It is not through lack of trying. Thousands of petitioners stand outside in the snow, hail and rain, collecting signatures that their MP cannot even get a response to. I am sounding a bit frustrated because that is how we feel—those of us stood outside the post office, Saturday after Saturday, getting signatures for petitions but not getting a response. I want an assurance from the Minister that the voices of Members of Parliament will be heard and that the consultation is not just a sham.
I always want to be a positive Member of Parliament, so I want to give the Minister some ideas. Suggestions were put forward in “Securing the Post Office Network in the Digital Age” in November 2010 to make it the front office for Government and to grow financial services. We know there is a crisis in the general high street banks. After all the banking scandals, people cannot trust whether the bank is on their side, but people do trust the Post Office as an emblem, a community symbol and a friend.
I hope the Government will look again and genuinely consider what we have to say. We are here not because we want to spend more time with each other, but because people want our voices to be heard. Will the Minister give us a reassurance—as a new Minister, there is a new opportunity—that she will listen to us genuinely and give us a positive hearing? People want their Crown post offices, so listen to our voices and think again rather than implementing these foolish and unpopular proposals.
Tom Tugendhat (Tonbridge and Malling) (Con)
I pay tribute to the hon. Member for Luton North (Kelvin Hopkins), with whom, unusually, I found myself agreeing quite a lot. It is a pleasure to be here in the interests of the community I have the privilege to represent. Just over a month ago, the Post Office told me it was opening a short consultation on the proposed closure of a Crown post office in Tonbridge. That is a post office that many people rely on. I wrote to the Post Office on 14 October asking for details and the reasons for the closure. I wanted to know exactly which services it was to discontinue and which it was to carry on providing in a nearby stationer’s. After a month, they had not responded, and when I finally did get a response it did not answer the questions I had asked.
That was particularly disappointing because the Tonbridge Crown post office, like many around the country, as we have heard—indeed, as far afield as Northern Ireland and the Cotswolds—is essential to the community, just as post offices are across our land. They are, of course, the very beginning of our true national identity, when the Post Office really did tie the nation together, with the penny post, linking it through the train network and creating one truly United Kingdom.
For too many, that idea has gone. That is wrong, because the post office sits as an important part of our newly refurbished high street in Tonbridge. It is not just important for the elderly; it is particularly important for those with accessibility needs. My community is privileged to have a post office that is near to disabled parking bays and which has good accessibility, appropriate seating and wide enough aisles. It is therefore suitable for people with accessibility issues. In the proposal, such services would not be offered and the narrower corridors and seating would cause problems.
Kelvin Hopkins
I strongly agree with the hon. Gentleman. The survey I mentioned in my speech about WHSmith franchises said that they do not provide for people with disabilities in the same way as Crown post offices.
Tom Tugendhat
The hon. Gentleman is right, and that is what we may see in Tonbridge if the decision is not reversed. I will ask the Minister to raise her voice in support of the petition.
I would like to quote Gordon Lawrence, a resident of Tonbridge who wrote to me last night. He said:
“As you have rightly said, the town is undergoing a transformation, certainly since I arrived here in 1984, almost unrecognisable in the way the character has changed. The building programmes that have been initiated over recent years, with those still to come, have increased and continue to increase the local population”.
In the context of a growing town with an increasing population, it baffles me that the Post Office feels that a site that it only recently spent an awful lot of money redeveloping to make more accessible and approachable should now close when it is clearly being heavily used. Indeed, when I go to the post office, as we and many of our constituents do, to send large numbers of letters, I notice clearly how many people are using it at many times of the day.
Having failed to get satisfactory assurances from the Post Office to address the concerns I first raised at the start of the consultation, it has become clear that this move is not in the best interests of the people. That is why I launched a petition just over a week ago calling for the Post Office to change its decision, and already 1,500 people have signed it. From Tonbridge, a town of 30,000-odd people, 1,500 is a significant number—it is 5%. As we all know from petitions in our communities, that is a hell of a return. Indeed, 99% of the people I spoke to indicated that they were unhappy with the closure.
The proposed location is another WHSmith, as the hon. Member for Luton North identified, with narrow corridors and without seating or accessibility. The point the Post Office seems to make is that that will lead to longer opening hours. Well, opening hours are not everything, especially for those who cannot get inside or get the services they want. Opening hours are certainly not everything if the services needed, whether biometrics or parcel post, are not available.
Sadly, I have seen that not only in Tonbridge—I know many people are talking about the same in other communities—but in another area I have the privilege to represent: the village of Hadlow. The community has benefited from a local post office, but again that is being squeezed. The term “local” has a specific meaning in the Post Office business model that I would like to explore a little more. According to the Post Office, a local post office is one with extended opening hours. That sounds good, but the House of Commons Library tells us that a local post office does not have all the services of a traditional Crown post office. That is why I am campaigning in my community, as I know many others are in theirs, to have stand-alone Crown post offices defended, because for so many of us they offer that essential link not only to keep the nation together, but to keep people in touch with their families and enable all the wonderful trade that we have seen grow—in internet packages and all the rest of it—to develop even further.
In villages from Cowden to Mereworth, which have lost post offices over the last century, it is essential that we reinforce the need for the stand-alone Crown post office. I will lodge a petition on that with the House this evening, and I would welcome the Minister’s support in changing the Post Office’s decision.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I thank the hon. Member for Luton North (Kelvin Hopkins) for bringing the debate forward. I really wanted to speak in the debate because I recall the round of post office closures in 2008 and 2009. I remember going door to door with others gathering hundreds and thousands of signatures on a petition to save local Crown post offices in towns around what came to be my constituency. That was done in response to the anger and despair so many felt about the closure of the local Crown post offices. I remember speaking at public meetings when I encountered at first hand the sense of resignation felt by too many people that what they wanted and their community felt it needed was simply not valued—it did not matter to the powers that be. In the event, five vital and much-beloved post offices were closed.
We often hear politicians talking about community—how it is important, how it matters and how it should be valued. It should also matter when a community comes together to express its concern about a valued asset, the local Crown post office, which in so many ways is the beating heart of a community, if not one of its ventricles. Post offices provide a lifeline: they are the lifeblood, even, of our communities. That is even more true of our rural communities. For such communities, post offices boost their diversity and resilience as well as protecting jobs and customer service.
The decline of the Crown post office is a matter of great sadness. Over the years, this trusted institution on our high street—perhaps it is the most trusted institution on our high street—has been stripped of too many of its functions. That is despite its highly trained staff and its perfect position to provide banking and other services. However, instead of modernisation, increasingly we see decimation.
More and more services are being outsourced to retailers such as WHSmith, with that chain installing its wee counters at the back of its stores, meaning poorer service as well as the loss of a beloved community asset. WHSmith and other outlets do not want to match the terms and conditions that the Post Office offers its employees. Even if it did, the income that the post office counters offer those retailers would not cover that cost, so there is now the absurd situation of the Post Office using tens of millions of pounds to pay off long-serving staff, so they can be replaced by part-time workers on the minimum wage, which has led to uncertainty and understandable industrial unrest across the whole network.
The Scottish National party firmly opposed the privatisation of Royal Mail. However, at the time it was privatised the UK Government said that the Post Office would be kept wholly in the public sector. Instead, a new 10-year deal with WHSmith to relocate yet more post office branches into those stores was announced. Will the Minister tell us where this is leading? Will she give us assurances that the promise to keep post offices in public ownership will be honoured?
Franchising is quite rightly viewed as soft privatisation, and the Minister needs to address that point to reassure Members. We need to know that our post offices have a future, and that that future is in the public sector, as promised. We need a plan for our post offices, and we could do worse than explore the measures France undertook for its post offices when it established La Banque Postale— excuse my pronunciation. Alongside those problems, we have seen high street banks gradually withdrawing and retreating from our high streets, so that must be a reasonable option.
Like in France, our post offices could make a plan to grow revenues in areas such as financial services, with which France has had huge success. Our post offices need not be in managed decline, and I am very interested to hear the Minister’s response and how she views the future of what remains of our post offices, which are community assets held in deep affection, and how they can be secured.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
There are five questions that the Minister should answer. Before raising them, I join other Members in praising my hon. Friend the Member for Luton North (Kelvin Hopkins), and I echo his declaration of interest.
First, it would be helpful to hear from the Minister why she thinks Post Office income from financial services have grown so slowly? It was heralded as part of the great future for the Post Office by Vince Cable when he launched a document on its future back in November 2010. Secondly, why has Government business going through the Post Office been allowed to plummet? Ministers promised the reverse, again back in 2010.
It is not only the French who seem to be able to run postal services better than the current Government. The Italians have also made a huge success of getting a post office bank up and running. Similarly, New Zealand has a highly successful post office bank, which was established in the past 15 years. There are successful models involving financial services. What is striking about the debate is the cross-party concern about the crisis in the Post Office at the moment.
Thirdly—I ask this as a Co-operative Member as well as a Labour Member—whatever happened to the idea of the Post Office becoming a mutual, with a more involved workforce and local community involvement to help to plot a more co-operative future for the Post Office? The last ministerial mention of that vision from November 2010 that I can find was in November 2013. It would be helpful to know whether the Minister still adheres to that possibility. Fourthly, is the Post Office’s 2018-19 funding package, which I understand is being negotiated in Whitehall at the moment, going to lead to more closures and to more full-time employees being pushed out of the door, or is it going to be a genuine opportunity for serious investment in new services?
Fifthly, and lastly, as I understand it, the 10-year contract that the Post Office has with Royal Mail can be reviewed from January next year. It would be good to hear reassurance from the Minister that Royal Mail intends to stick absolutely to the terms of its contract with the Post Office going forward.
Post Office revenues from Government services have fallen by almost 40% since 2010, as no new Government services are using the Post Office. Of those that still are, many Departments are promoting online alternatives. Again, it would be useful to hear from the Minister what discussions she has had with other Government Departments to encourage them to use the Post Office. I ask that question because the Post Office being the front office for the Government was the first part of the great vision that Vince Cable set out in November 2010. If revenues from Government services have declined by 40%, it raises some fairly alarming questions. There are rumours that Government insiders themselves accept that that option for the Post Office’s future has largely been a failure.
The second objective that Vince Cable set out was the expansion of financial services. The Post Office’s revenue from financial services has grown by just 2% over the past six years. Why does it still not offer a business account? In one of the district centres in north Harrow in my constituency, there is no bank, and there has not been for some time. The Post Office is the only financial services player still in existence there. The option of a business account would be hugely beneficial to small businesses in that one district alone.
I am told that the Post Office is trialling a current account. Indeed, we are apparently four and a half years into the trial; it was supposed to launch in 2014. Why has it taken so long before that product could possibly be launched? There is no dedicated children’s product either. I am aware of the junior individual savings account, but £500 has to be put into that account up front to get it up and running, and that money cannot be accessed until the child turns 18. Given that many people stick with the financial services provider that they start with, it would surely make good economic sense for the Minister to insist that the Post Office quickly gets its act together on a dedicated children’s product.
All of those problems suggest a business that is not taking seriously the ambition of substantial revenue growth from financial services, as Vince Cable once promised. The hon. Member for Yeovil (Marcus Fysh) rightly praised the contribution of postmasters and postmistresses—particularly those who are members of the Federation of Small Businesses. The FSB published a report in October called “Locked Out”, which said:
“Business banking services provided at some Post Office branches and franchises are too limited. Some services, such as cash and cheque clearing facilities, also appear to be processed more slowly than in bank branches. Other services, such as inter-account transfers and currency exchange, are not available. As the future of the network moves away from full-service post offices to franchises there is concern about the impact on small business access.”
It is not just the Communication Workers Union and staff that want change in terms of financial services; it is small business that have genuine concerns. I hope that the Minister will act.
Mr Mark Williams (Ceredigion) (LD)
I will be very quick. In many ways, I will reiterate many of the messages that we have heard in the Chamber this afternoon. I will reflect specifically on the position of the Crown post office in Aberystwyth in my constituency.
Many Members have talked about the inadequacy of the consultation process and the complete inability of the Post Office to listen to the many representations that have been made. That is certainly the case with the campaigning that we undertook in my constituency. We were not surprised that WHSmith emerged as the franchisee in Aberystwyth. Of the 28 branches where franchise partners have been announced this year, 27 have been with WHSmith. I have to say that, since the announcement of a consultation in March, nothing more than lip service has been paid to that word.
Neil Coyle
It is very difficult for Post Office representatives to listen to local communities when they do not even attend a meeting. The Walworth Society in my constituency set up a public meeting with councillors and myself, and the Post Office did not even turn up.
Mr Williams
I have had exactly the same experience in my constituency. We had two public meetings. The Post Office came to the second one, but not the first. We had petitions and demonstrations. We made representations to everybody, with four political parties working together on the streets of Aberystwyth. It was a very good experience, but it has had absolutely no effect on WHSmith whatsoever. Individual managers have been courteous and polite, and have occasionally answered the phone and come to see me but, on the substance of the case, we have been well and truly ignored.
The Post Office still has not addressed the fundamental concerns we have raised. The research undertaken on the record of WHSmith by Consumer Focus—a very good organisation that existed at the time—concluded that queue times, services times and customer advice are all worse under WHSmith than they were under the Crown post office regime. There are also genuine concerns about disabled access, the number of counter positions open and congestion in the shop. Of course, there is also the impact of losing good, hard-working staff who have years of experience.
The CWU has said—this is worth noting, and I hope the Minister will convey the concerns about the consultation process to the Post Office—that it is unaware of a single case where public consultation has overturned the Post Office’s proposals in recent years. My constituents in Aberystwyth are convinced, as I am, that the whole process is an utter sham.
I want to talk a little about the staff and how they have been treated. They were given three options, which seems clinical and very kind to be given three options. They were given the opportunity to take redundancy. In peripheral parts of Wales, if we go as far as we can to the west, the opportunities for good, well-paid jobs are few and far between. Secondly, staff were given the opportunity to redeploy—this is the option that really got to the emotions of many staff—to the nearest Crown post office. If we picture Aberystwyth on the weather map on the news, it is in the middle of the west coast of Wales. The nearest Crown post offices that my constituents could relocate to were in Port Talbot or in Shrewsbury across the border in England. That is not an option for my constituents at all. The third option was for my constituents to go down the route of TUPE agreements, which we have heard many concerns about. I am genuinely concerned. We might seem to have lost the battle, but like the hon. Member for Tonbridge and Malling (Tom Tugendhat), I appeal to the Minister at this late stage to get involved in this case and to do what she can to influence things.
I am conscious that my friend, the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), wants to speak, so I will finish by saying this. We have lost post office after post office in rural communities. We can wax lyrical about the emotions of it and the effect on rural communities, but they are very real. We are talking about some of the most scattered, remote rural communities. When the pub, the church and the school have been taken out, the final blow is when that community loses its post office, which has a galvanising role. That has been the record of successive Governments, including coalition ones in which Liberals were involved, the current Government and preceding ones. We have to reverse that trend. We have to look at a sensible level of subsidy to sustain the network in rural areas, because once it is gone, it will not come back.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It is a pleasure to serve under your chairmanship, Mr Wilson. I too will be brief, because I am conscious of time. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this important debate.
Post offices provide an essential service to communities right across the UK. It is important that, through any potential future changes, that service remains rooted in our communities and that we keep the public at the heart of the services provided. The Post Office has been described as a national institution that is at the heart of society. Many post offices, like the ones in my constituency, are more than just a post office; they are a hub for the community. Most are also shops or a place to buy confectionery or stationery. In my constituency, there are many isolated communities, and many people who go to the post office to post letters or collect pensions also benefit from the social interaction there.
We know that lifestyles have changed. I am sure we all understand that, although in the past post offices were used for a multitude of services, many of those services are now available elsewhere or indeed online, so it has become increasingly difficult for post offices to remain viable without diversifying. However, changes to the delivery of post office services need to be carried out in consultation with and with the support of local residents, who are, after all, the customer.
I have particular concerns about the process of making major changes to the delivery of post office services. Following an extensive consultation process, the Post Office recently announced that it is proceeding with the relocation of a post office at Elliots Town in my constituency under the modernisation and transformation programme. Those proposals are bitterly opposed by the local community. In this case, the consultation process involved two public meetings attended by more than 100 local residents on each occasion; representations from local councillors, myself and the Assembly Member; and a petition signed by more than 1,000 local people, who raised common issues of concern about the suitability of the proposed new location in terms of access, privacy, parking and so on.
In addition, proposals were put forward without the support of the current post office operators, who wish to maintain the current location and are likely to lose their jobs as a result of the post office being franchised. I am deeply concerned that many of my constituents in that area feel that the Post Office has not listened to their concerns. Many feel that the current popular post office meets their needs and they do not understand the need for change at this time. A large number of local residents have threatened not to use the post office in future if proposals are implemented.
For post offices to remain a viable part of community life, the Post Office needs to be responsive to and understanding of the concerns of its customers. Will the Minister comment on the general principle of the Post Office’s response to public consultation? Does she agree that the Post Office must ensure that consultation is meaningful and that any decisions it takes about the future of post offices should be in line with what its customers want and expect?
Phil Wilson (in the Chair)
Before I call the Front Benchers, I remind Members that I would like to leave a couple of minutes for the mover of the motion to sum up at the end.
Mhairi Black (Paisley and Renfrewshire South) (SNP)
It is a pleasure to serve under your chairmanship, Mr Wilson. I commend the hon. Member for Luton North (Kelvin Hopkins) for bringing this debate to the forefront today.
As we have heard, post offices clearly provide a lifeblood for so many communities. Sometimes, that is easy to forget in the age of texting and emails, but the fact remains. Paisley has a population of 76,000 people. It is the fifth largest place in Scotland. I know that some Members have spoken about post offices far out in rural areas, but I want to talk a wee bit about urban post offices like one in my constituency. The post office is located in the Piazza, which is one of Scotland’s most successful shopping centres in terms of occupancy levels. Most, if not all, of its units are in use. It has its own security guard service. People feel safe and appreciate the fact that vulnerable customers feel at ease when they go to collect important documents, their money, pension or whatever else. The location is absolutely perfect. It is located straight on the high street, which is right beside the bus stops. The doors and lifts from the car park are literally right beside the post office.
Andy Furey from the CWU, who is here today, told me that Paisley was the golden standard of post offices. It provided a specialist service. It had staff with 20 or 30 years’ experience behind them. It was accessible, and it was spacious. That post office has shut today. As we debate this right now, that post office has closed its doors. That will have devastating consequences for Paisley as a town.
Currently, we are endeavouring and bidding to become the city of culture for 2021, and we are trying to shine a light on the culture and level of community that we have in Paisley. Despite all we have to offer, most would agree that Paisley is not without its problems. We are desperately trying to get the high street reinvigorated and re-energised and to boost the local economy a wee bit, yet at no point was there any consideration or assessment of what damage this closure would have on the high street or the Piazza. My office and I organised a public meeting in Paisley to discuss this. The owners of other units in the Piazza said that they benefited most from the post office because it brought in a large footfall of people who then visit their shops.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
In East Kilbride, we are also fighting to save the Crown post office in our town centre, which is crucial to the local community. If it is sold off, it will not have the specialist staff, the same service or the inclusivity for the most vulnerable. Does my hon. Friend agree that the Post Office must be accountable and that we must retain these valuable assets for our communities?
Mhairi Black
I could not agree more. An hon. Member who is no longer in her place—I cannot remember her constituency—highlighted the issue perfectly when she said that in reality we are going to lose people with special skills acquired over 20 or 30 years, who will be replaced by WHSmith staff on the minimum wage who have not had adequate training necessarily.
At the public meeting that I mentioned, the Post Office admitted that it had not considered the economic impact of the post office’s closure. Most concerning are the wider impacts for my constituents. As Members may be aware, quite a few refugees and asylum seekers have been located to Paisley. The post office in the Piazza was the only place where they could realistically have access to the Home Office’s digital application services. Now that it is losing that service, those people will be expected to travel to West Nile Street, nine miles away in Glasgow, with no money or means of travel.
The worst thing about the closure is how little sense it makes. The plan was to move this first-class post office into the wholly inadequate WHSmith—right to the back. There is no clear route from the shop’s front door to the back, which immediately restricts people with mobility problems. It is now situated on a hill, which may not seem like a big deal, but for someone aged 80 it is a considerable challenge. It is located in a pedestrian zone, so you cannot even drop someone off at the door.
At the public meeting, I blessed the folk from the Post Office who had to come along to argue for the change because they were eaten alive. Their figures were wrong and they could not tell us basic facts for ridiculous reasons. They could not tell us whether the post office was making a profit or a loss, or how big the loss was. They could not tell us what the footfall was. It was embarrassing, if I am honest.
We were told that there would be a consultation. Consultations can be a good thing—I am doing one now for my private Member’s Bill—but to be good they have to be genuine. This one seemed to be total lip service. At the end of it, despite the fact that I have genuinely yet to meet anyone in favour of the proposed change, as with so many others we have heard about, the Post Office said that the change would happen anyway.
I know that many healthy suggestions were made—I know because I made many of them—such as that the post office currently has three units in the Piazza, so why not close one or two if they were costing money. The CWU rightly pointed out that, if the Post Office is seeking a franchise partner, the most obvious candidate is surely Royal Mail. It was almost as though it did not matter a jot what suggestions were made because the move was happening. Lo and behold, I then discovered that WHSmith was advertising jobs for the new post office two weeks before the consultation finished. The whole thing was a sham.
I tried repeatedly to have a meeting with the Post Office’s chief exec, but that was refused point blank. My request went backwards and forwards. Eventually, I said, “I will go anywhere at any time for a five-minute meeting. Just tell me when.” There was no reply. The lack of accountability during the process was incredible. The whole thing was a done deal from the start.
In the Chamber a couple of months ago, I asked the Minister how much money had been spent on refurbishing the post office in Paisley since 2010. He said that nearly £500,000 of public funds had been spent doing it up, only for it to be sold off to WHSmith. The reality is that this is privatisation through the back door.
What does WHSmith know about postal services? It is falling behind in terms of quality of service and the different things it sells in its shops. If it is already struggling, what is its motivation for taking on a post office that is apparently haemorrhaging money left, right and centre? Why would it want that post office if it is losing so much money? If the sale of Royal Mail did not result in the expected profit, how will the franchising of post offices be any different?
In June 2015, the Government sold the remaining 30% stake in Royal Mail. The fact is that taxpayers have been short-changed yet again. The Government sold the shares for far less than they were worth. The whole thing stinks and it is off the backs of my constituents and those of every Member here. We must not tolerate it. It is clear that the whole separation has been a massive mistake. The Government must bring both Royal Mail and the Post Office back into the public sector.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure to serve under your chairmanship this afternoon, Mr Wilson. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this debate and all my hon. Friends who have spoken. I pay tribute to the many postal workers and the CWU who have brought many of the issues to our attention. As constituency MPs, we are all keen to ensure that the Post Office has a long-term future for the benefit of the communities we represent, and we want to know what the Government’s plans are for making the vision of a 21st century Post Office a reality.
It has practically become a cliché to say that post offices are at the heart of our communities, but it is a cliché because it is true. From city high streets and suburbs to villages up and down the country, the local post office is a landmark and an essential part of life. It is not just a place to buy stamps and send parcels; it provides a host of services. My hon. Friends the Members for Wirral West (Margaret Greenwood) and for Merthyr Tydfil and Rhymney (Gerald Jones) pointed out that, in rural areas, they can often be the only place where some services are available. It is no exaggeration to say that they are a lifeline.
I recognise that we are living in an ever-changing, increasingly digital world in which access to services online is undermining some of the Post Office’s traditional role. That is simply a fact of the times we live in. What concerns me is that the Government have apparently accepted the challenge as insurmountable and have embarked on a programme of managed decline, instead of looking at how we can make one of our proud national institutions fit for the 21st century.
My hon. Friend the Member for Wakefield (Mary Creagh) made a good point when she said that last year 50 Crown post offices—the larger branches, usually in prominent high street locations—were franchised and moved into the back of many WHSmith shops. There are plans to do the same with 59 more this year. That may seem like a pragmatic way of keeping post offices going through trying times, but the impact of that franchising on the quality of service provided and on the terms of employment offered makes me question the underlying rationale.
When Consumer Focus, as it then was, looked at the quality of service being provided by franchised branches in WHSmith a few years ago, it found that they consistently ranked below normal post office branches for queue times, the time taken for transactions at the counter, the number of counter positions staffed, customer services and advice on products. There were also big issues with disabled access, as many have said.
The Post Office’s own monitoring suggests there is no drop in the quality of services following franchising. However, as we have never seen its monitoring figures, I take that with a pinch of salt. The consumer organisation Which? is doing its own research on the matter, which it is hoping to publish in the next few weeks and which will no doubt make interesting reading for all of us.
When looking at what happens to jobs when branches are franchised, it is not hard to see why the quality of service drops.
Neil Coyle
Is there a question here not just about poorer service, but about taxpayer-funded poorer service? The lower pay usually offered by companies such as WHSmith is subsidised by taxpayers in tax credits and housing benefit. There have also been upfront subsidies, such as the £500,000 spent in Paisley and more than £100,000 being spent on Walworth Road. Other Members have referred to taxpayers’ money being used to tart up formerly dingy post offices before they were franchised.
Gill Furniss
My hon. Friend makes a very good point. This is not what taxpayers were expecting. We were looking at something for the future—a lot of taxpayers’ money to make this the gateway to a fully functioning Post Office service. We have heard representations in the Chamber today that that has not been the case.
Jobs with good terms and conditions are being replaced all too often with part-time, minimum wage roles. There is little to attract long-serving, experienced staff to transfer to a franchised branch. My hon. Friend the Member for Luton North made the good point that last year just 10 staff out of 400 in Crown offices being franchised chose TUPE; the rest took compromise agreements to leave. Those agreements cost the Post Office £13 million. So much for the Government working for everyone. What a waste of public money. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) also mentioned that experienced staff are leaving in droves. That means that the quality that the Post Office stands for is undermined and a community asset is hollowed out—and make no mistake: these are community assets.
Franchising is done in the face of public opposition. Consultations on individual branches are exercises in public relations rather than proper public engagement. The branches targeted for franchising tend to be in more urban areas, disproportionately affecting the services available to already disadvantaged groups and harming the general health of our high streets.
The Post Office is clearly facing a crisis. My hon. Friend the Member for Harrow West (Mr Thomas) has an excellent article in the Daily Mirror laying all that out today. Since the Post Office was split from Royal Mail, it has struggled to keep its head above water. Traditional revenue streams are shrinking; plans to make it a “Front Office” for Government have disappeared into the ether; and an expansion of financial services has slipped off the agenda. One thousand jobs were lost last year, and another 2,000 are under threat this year.
The Government must take action now to halt the decline, and work with all those concerned to come up with a plan for a better future than the one currently on offer. Although I welcome the consultation document that has been published, I am concerned that it does not go far enough, and I urge the Minister to be bold in formulating a strategy for the future.
Will the Minister revisit the plans to make post offices the front office for Government that has been promised for so long? Post office revenues from Government services have fallen by 40% since 2010. Will she commit to expanding the financial services on offer? After all, the Post Office current account is not matched by either the children’s or business accounts. Surely that is an obvious starting point for expanding services. With the retreat of banks from the high street, the demand for a postal bank has never been greater. Will she explore how our post offices really can be the front office of Government and provide all the services that people require?
I ask the Minister with all sincerity whether she will call for a moratorium on any further franchising of Post Office branches until there has been proper engagement on what the future of the service will look like. This proud institution, its employees and the communities that it serves deserve better than a slow slide into oblivion.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
It is a pleasure to serve under your chairmanship, Mr Wilson. I congratulate the hon. Member for Luton North (Kelvin Hopkins) on securing today’s very important debate on the future of the Post Office.
The Government recognise the crucial role that post offices play in communities across the country. I echo the numerous tributes that we heard in the debate to the sub-post offices and management and staff who work in the post office network, including our own excellent post offices here in the Palace of Westminster. They do a wonderful job.
Between 2010 and 2018, the Government will have provided nearly £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country. The Government set the direction for the Post Office. That means that we ask it to maintain a national network of post offices that is accessible to all, and to do so more sustainably, with less need for taxpayer subsidy over time. That includes the maintenance—this was a manifesto commitment of my party at the last election—of 3,000 rural and semi-rural branches, about which we have heard little this afternoon and which would otherwise be uneconomic to run. Post Office Ltd delivers that strategy as an independent business; we do not interfere in its day-to-day operations or decisions about the provision and location of branches.
Today, as I said, there are more than 11,600 branches in the UK and the network is at its most stable for decades—although people would not know that from the debate. That is because the Post Office is transforming and modernising its network, thanks to the investment that the Government have been willing to make. The Government support has enabled almost 7,000 branches across the UK—more than half the entire network—to be modernised, offering a better experience for customers and more sustainable retail propositions for postmasters.
Catherine West
Can the Minister explain the logic whereby a lot of public funds are put into a branch of the Crown Post Office and then it is promptly closed?
Margot James
The hon. Lady mentioned the Crouch End post office in her speech, and I made a mental note to look into that. I cannot comment on that particular branch. Occasionally in business, someone makes an investment, it does not work out and they have to cut their losses. That happens in any business. I cannot comment on the specific branch, but I will look into the matter.
Margot James
No, not for a few minutes. I have very little time and I am going to make some progress.
Customers benefit from an extra 200,000 opening hours every week and the largest Sunday retail network in the country. Indeed, the network in the constituency of the hon. Member for Luton North is in fine shape as a result of the modernisation programme. Across the 10 branches in his constituency, customers now have an additional 297 hours a week when post offices are open, with more than half his local branches open on Sundays.
The subsidy needed to sustain the network has dropped from a peak of £210 million in 2012 to just £80 million this year, and should continue to fall. The business continues to reduce its losses: it has gone from a loss of £120 million in 2012-13 to £24 million in 2015-16.
I would like to reassure my hon. Friend the Member for Yeovil (Marcus Fysh), who is not in his place now, that the number of branches is almost unchanged since 2011. In that year, there were 11,820; there are now 11,643. That is a very small difference. In fact, I would like to make the point, because I have been quite outraged by some of the comments made in the debate, that during the last Labour Government, virtually half the entire post office operation in this country was closed. Conservative Members were always outside with petitions in those days, and this Government and the coalition Government before them have stabilised the network with minimal losses. I congratulate the board, management and staff of Post Office Ltd on all they have achieved.
All that has led, of course, to customer satisfaction remaining high, at 95%. Also, the Association of Convenience Stores produced its local shop report, completely independently of the Post Office, a couple of months ago, and the post office was rated the No. 1 service on the high street. It was voted the most desired amenity by the public. People would not think that—[Interruption.]
Margot James
People would not think that from the tone and tenor of the debate this afternoon. [Interruption.]
Margot James
I will now answer a few of the points that were made. My hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Tonbridge and Malling (Tom Tugendhat) understandably paid tribute to their Crown post offices, in Cirencester and Tonbridge respectively. I am very sorry that I am unable to join them in their campaign against franchising of their local Crown post offices, because both are currently running at a loss. For every pound that is spent in the post office in Cirencester in the constituency of my hon. Friend the Member for The Cotswolds, £1.30 has to be spent on running it. We have to be mindful of that. I say to the hon. Member for—I apologise for forgetting her constituency. [Hon. Members: “Paisley.”] I say to the hon. Member for Paisley and Renfrewshire South (Mhairi Black) that the Crown post office there was losing almost £2 for every pound that was spent. That is really why that unfortunate decision had to be made. I was sorry to hear what she had to say about the effect on some of her constituents.
Margot James
I am sorry, but I have to stop shortly to leave time for the hon. Member for Luton North.
As I said earlier, we cannot keep these Crown post offices open and losing money and stick to our commitment to keep post offices open in the rural and semi-rural areas, where often it is the only service left. Really, with some of these Crowns that are closing, walking a short distance away, sometimes to a more convenient location, to a WHSmith, is a small price for customers to pay to keep this network operating across the country, which has not proven to be economic.
Margot James
I am really sorry not to be able to give way again, but I have got to stop in two or three minutes’ time. I want to answer a couple of points made by the hon. Members for Sheffield, Brightside and Hillsborough (Gill Furniss) and for Harrow West (Mr Thomas).
Use of Government services at post offices is down by 40%, which is disappointing. I do not really foresee a huge improvement in that, because with so many Government services—for instance, on the motor vehicle front—so much is now done online that any operation in that sector would have experienced similar losses. I am much more hopeful about financial services. That sector has grown by 17% since 2012. It is steady, albeit slow, growth year on year. The Post Office has an arrangement with the Bank of Ireland and will be offering more services. Hon. Members have pointed out that bank branches around the country are closing at a swift rate, and that does create an opportunity for the Post Office. I will be lobbying, alongside Members, for the Post Office to embrace this opportunity even further, but I do think that it is doing a good job. I will sound a note of caution that unfortunately—well not unfortunately; it is just a development that we are all part of—more and more banking is now done online as well, but I do see some grounds for hope in that sector.
I want to talk a bit about WHSmith. A great many WHSmith branches are now either hosting or franchising post office services. Virtually all the services remain on offer to the public in convenient locations. I accept that some—a minority, I think, of 11 out of 61—post offices that operate in WHSmith branches are on the first floor. That does present issues for people with disabilities, but they are issues that the WHSmith branches have resolved in conjunction with local groups representing people with disabilities. They have managed to provide lifts and also, in case of lift breakdown, mobile tills so that people with disabilities can be welcomed into the branches.
Margot James
On the mutualisation that the hon. Gentleman mentioned, yes, the Postal Services Act 2011 requires that the Post Office be maintained either in public hands—public ownership—or in a mutualised setting. At the moment, it continues in public ownership and we have no plans to change that. Indeed, for it to be mutualised the model would have to be based even greater financial sustainability than it is at the moment. Currently, the Post Office is making losses and we would not be able to mutualise it, but the plan is for it to become more and more financially sustainable over time.
The hon. Member for Luton North also made the point about Royal Mail, and various Members have called for Royal Mail and the Post Office to be reunited. I do not see that happening—Royal Mail is now an independent public company—but thanks to Government investment, the Post Office is now in a far stronger position for its impending negotiations with Royal Mail about its business arrangements. That is thanks to the huge investment that we have made in Royal Mail.
Margot James
I am. Is it time for me to give way? Yes, I do apologise; I was looking at the wrong digit. I will give way now to the hon. Member for Luton North, and I apologise to him.
Kelvin Hopkins
I thank the Minister for giving way. I have very little time, but thank you for chairing the debate this afternoon, Mr Wilson. I also thank all the hon. Members who made such fine, compelling and passionate speeches this afternoon. We are all speaking with one voice. There is a serious threat to the Post Office and to its future, and it has to be rescued now by stopping the cuts. May I ask the Minister that we have a meeting to discuss these things in more depth, with the Front-Bench representatives from each of the Opposition parties and myself, to try to iron out some approach for the future? I have to say that I am rather disappointed with the Minister’s response, because she constantly talked about post offices as though they were businesses rather than public services and community assets. If they are to be made more commercially viable, the Government have got to make—