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The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
It is a pleasure to serve under your chairmanship, Mrs Gillan. I congratulate my hon. Friend the Member for Torbay (Kevin Foster) on securing this debate on the closure of Torre post office, and on his comprehensive and well-argued contribution to the proceedings. He clearly set out the importance of Post Office services for the Torre community dating back to 1832, and the concerns that he, the community, business representatives, and local residents across the board have raised in respect of the proposed new location on Lymington Road. I fully appreciate the concerns that he has outlined.
The Government recognise the important role that post offices play in communities across the country. Between 2010 and 2018, the Government will have provided nearly £2 billion to maintain, modernise and protect a network of more than 11,500 branches across the country. Today, the Government announced a further £370 million to be made available as an investment over the next three years for Post Office to continue its successful modernisation, and to meet the challenges of a changing market. Today, there are over 11,600 Post Office branches in the UK, and the number of branches in the network is at its most stable for decades. That is because Post Office is transforming and modernising its network, thanks to the Government investment.
More than 4,400 branches are now open on Sundays. Nearly 1 million additional opening hours per month have been added to the network. The modernisation has also meant that losses in the business, excluding any subsidy, have reduced from £120 million in 2012 to a profit of £13 million, announced today—the first profit in 16 years. That has allowed Government subsidy to be reduced by more than three quarters since its peak back in 2012. The Conservative party has committed in successive manifestos to securing the future of the Post Office network, which is now at its most stable, with customer satisfaction remaining consistently high.
I understand that my hon. Friend has benefited from 422 additional opening hours across his constituency, with 11 of the 18 branches in his constituency now open on a Sunday. Post Office is offering more for customers, doing so more efficiently for the taxpayer, and ensuring that its services remain on our high streets throughout the country. Make no mistake about the Government’s commitment to Post Office.
Turning to the situation in Torre, I fully appreciate that there can be uncertainty and disquiet in communities when a change to Post Office services is proposed, and that those communities, like the community in Torre, hold strong views and perfectly valid concerns regarding planned changes. My hon. Friend has spoken passionately about his concerns regarding the existing proposal to relocate to the McColl’s store on Lymington Road. I fully understand the many points that he has made, including about the local area having many elderly and vulnerable people who will find it difficult to travel to the new location, especially given the limited direct bus services and parking in that area.
Of course, Post Office needs to continue to take steps to ensure that its branches remain sustainable for the future, as it is doing for Torbay. It does not propose such changes if it does not consider them necessary, and I want to make a couple of points about why some change, at least, is necessary. The current post office in Torre is run on a temporary basis, following the resignation of the previous postmistress. It is costly to maintain, and there are concerns about its long-term viability given its limited supporting retail offer and the fact that its lease is up for renewal in 2019. The relocation proposal seeks to find a permanent and more sustainable way to provide Post Office services to the community, which I am sure my hon. Friend will agree must be the best outcome for all concerned.
Kevin Foster
I am finding the Minister’s comments very interesting. Does she agree that given that the lease is not up until 2019, even given interim arrangements that would give an opportunity for Post Office to engage properly with other providers to keep the service in Torre? As she said, we need to keep the services on the high street.
Margot James
I will answer that question directly. I agree that the timing of the lease renewal affords a little more time to get the best possible outcome for my hon. Friend’s constituents, but I slightly take issue with the implication that Post Office has not been properly consulting to date. I know it has been working very hard to find the best possible solution, and is taking on board the concerns that he and his constituents have raised.
For example, my hon. Friend mentioned the latest positive development, which is some interest expressed by a shop called Carters. Post Office has visited Carters twice. The management at Carters initially did not want to take on a post office counter, but it is marvellous that they are now undergoing a change of heart, and Post Office will conduct meaningful discussions with them.
Given the challenges faced by the current branch, Post Office acted proactively by putting out advertisements looking for operators willing to take on the post office. Advertisements have been running intermittently since October 2016, but sadly there have been no applicants from the Torre community. Post Office tried its best to make people aware by visiting local businesses and engaging with the community but, as with many such situations, the implications of the proposed outcomes are often realised only belatedly by others in the business community. Post Office recognises many of the points that my hon. Friend made and is delighted at the increased level of interest from the community.
McColl’s Retail Group showed interest and successfully completed the application process, and that is why it was selected as the proposed retail partner for the Torre community. The selection was not for want of trying to find a retail partner that met the aspirations so well put by members of the Torre community and by my hon. Friend this morning.
Kevin Foster
To be clear, there was no contact with myself or the community partnership on trying to identify an alternative prior to the consultation. The first we knew was when I received the letter notifying me, as the MP, about the start of the consultation.
Margot James
I am glad my hon. Friend has put that on the record. There may well be a case for Post Office to undertake more contact, certainly with colleagues, prior to issuing consultations, but considerable work was done behind the scenes and during the consultation. It has run a consultation process because it does want people’s views; that is why it organises meetings and attends public events—to engage with the community to help it shape its plans. It consults in line with its code of practice on changes to the network, and that code has been agreed with Citizens Advice. I am aware that Post Office representatives have met, albeit possibly belatedly in his view, with my hon. Friend to discuss the matter, as well as with business and community leaders.
The consultation period on the proposed change has now ended and Post Office is now carefully considering all feedback received, of which I know there was a considerable amount in relation to this proposal, before it finalises its plans. I very much agree with my hon. Friend that it is vital that Post Office engages with the local community when planning for the future, but the decisions must ultimately be commercial ones for the business to take, within the parameters laid down by Government, to ensure that we protect our network across the country. Post offices operate in a highly competitive retail environment and we need to allow the business to assess how best to respond to the challenges it faces and secure Post Office services for communities in the future.
I understand that interest has been expressed by community partnerships and other interested local businesses in taking on the post office, including the example of Carters that we have already discussed. I am delighted to announce that Post Office has decided to pause its process in order to explore that interest fully, without prejudice to anyone involved. I reassure my hon. Friend that, thanks to his efforts and those of his community, no final decision has yet been made on the proposal to relocate the service to the McColl’s store.
Kevin Foster
I just want to say how welcome the news is that the process has been paused to allow for the exploration of alternatives that would keep the service in Torre.
Margot James
I thank my hon. Friend for his remarks, and I am sure Post Office will be delighted to hear them as well. Post Office has been undergoing a successful transformation programme across its network. The consultation process has been a positive and effective way of engaging with local communities. Current discussions between the Post Office and the community show that that process is working, and I am delighted that it is working in Torre.
Citizens Advice recently reported that the process has become increasingly effective, with improvements agreed or reassurances provided in most cases. In the last year, that has been the case after nine out of every 10 of Post Office’s consultations. I assure my hon. Friend that Post Office is committed to maintaining services to the community and to finding a permanent solution that best meets the needs of the business, its customers and the overall community.
I echo the note on which my hon. Friend started his speech and congratulate Post Office on the fact that it is now at its most stable for years. More than 3,000 “last shop in the village” branches in rural areas have been protected. After a decade of underinvestment and closures up to 2010—my hon. Friend detailed several of those years—the network is now increasing its number of outlets. As I reported earlier, it is now in profit and able to make the investment in new technology that it will need and in new banking services that it now offers by virtue of an arrangement with Lloyds Bank.
Post offices will now be able to meet 95% of the banking needs of small and medium-sized enterprises and 99% of those of consumers across the country. That is a huge achievement. I pay tribute to the hard work of Paula Vennells, the chief executive, her leadership team, members of the Communication Workers Union, sub-postmasters and sub-postmistresses and all staff working in the Post Office, who have effected that marvellous turnaround over the last decade.
Question put and agreed to.