Royal Mail Privatisation

Debate between Lord Evans of Rainow and Alan Reid

Tuesday 18th January 2011 Westminster Hall

[Mr Alan Reid (Argyll and Bute) (LD)]

It is a pleasure to serve under your chairmanship, Mr Dobbin. I too congratulate the hon. Member for North Ayrshire and Arran (Katy Clark) on securing this important debate. We both have rural constituencies that contain islands, and post offices are important in such rural communities.

Post offices are important in the communities they serve. No other retail outlet has such a range of shops that cover the rural parts of the country to the same extent as the post office network. Post offices provide an important social function and assist vulnerable people with help and advice. I am pleased that the Government have recognised that by making a big investment in the post office network, and I am delighted by the guarantee of a no closure programme, which is a complete reverse from the position of the previous Government. During the previous Parliament, debates such as this happened practically every fortnight as hon. Members tried to stop post offices being closed. This debate takes place in a completely different atmosphere as we have a Government who recognise the importance of post offices and back that up with investment.

For post offices to stay open, not having a closure programme is not enough. It is essential that as small businesses, post offices remain profitable for the sub-postmaster or sub-postmistress. Changing lifestyles mean that what was once one of the core businesses of post offices—people taking their pension book to collect their pension—is no longer so important. When people retire, they are more likely to have their pension paid directly into their bank account, as that is what currently happens to the vast majority of people of working age. Therefore, it is inevitable that business will decline. One postmaster put it to me succinctly when he said, “Many of my customers are dying off.” When people retire they do not collect their pension at the post office to the same extent, and that service must be replaced by other Government work.

It is essential that Departments, the devolved Administrations, local government and public bodies give work to post offices. Otherwise, in the long term we will see a gradual decline. There is no immediate threat to post offices, but unless the Government provide commitments to more work, in 10 or 20 years’ time we will see the gradual decline of post offices.

I am pleased to note the Government’s stated policy of giving more work to post offices, but it is vitally important that every Department follows that policy with action. Often, giving a contract to the Post Office will cost more than giving it to another provider, but that is because of the social benefits of post offices. Post office staff will take time to explain things to vulnerable people and give them help and advice that they would not often get in a supermarket or filling station. One can imagine the impatient queue at a filling station if people wanted to pay for their petrol but the assistant was taking time to give advice to an elderly person. Such advice is provided in a post office, but I cannot see it happening to the same extent in a filling station or supermarket. I hope that Departments will not be tempted to save money from their budgets by taking contracts from the Post Office.

[Graham Evans (Weaver Vale) (Con)]

I agree with what the hon. Gentleman says but when it comes to the crunch, sometimes a local post office will close, no matter how unfortunate that is. One of the biggest areas of growth is in supermarkets, whether metro stores or small stores. If a new supermarket contains a post office, would that not keep some of the services, even if they are in a supermarket?

[Mr Reid]

I agree with my hon. Friend; there is no problem with a post office being located in a supermarket and I was not saying that was a bad idea. My point is that a different type of outlet—PayPoint, for example—could be in a filling station but not in a dedicated post office that is part of a supermarket or filling station. In such situations, a person will not receive the same help and advice as they would in a post office located in a supermarket. I have no problem with a post office being located in another outlet—in my constituency, almost every post office is within a shop, filling station or supermarket. However, I would be concerned if the contract for benefit cheques was given to PayPoint, for example, because if an elderly person is in the same queue as people who are waiting to pay for their petrol, they might not receive the same quality of advice and help. A post office in another outlet is great, but if the facilities are simply part of that other outlet they will not offer the same social benefits to the customer.

The benefit cheque contract of the Department for Work and Pensions is for paying pensions and benefits to vulnerable people who are considered unable to use the Post Office card account. That contract was put out for renewal by the previous Government and I understand that the Post Office and PayPoint have bid for it. I hope that once the DWP has weighed up all the factors involved, including social factors and access criteria, it will keep the contract with the Post Office. PayPoint has a large number of outlets, including in my constituency, but nearly all those outlets are in towns and it does not have the same coverage throughout rural areas and islands as the Post Office.

If the contract were taken away from the Post Office and given to PayPoint, it would mean that on several of the islands in my constituency, there would be nowhere for people to cash the cheques. Also, in the rural areas of north Argyll, there would be nowhere for people to cash their cheques, because although there are plenty of PayPoint outlets in Oban, once people go outside Oban, they have to go all the way to Ballachulish or Inveraray to find another PayPoint outlet. It is therefore very important both for social reasons and for access reasons that the contract remains with the Post Office. I hope that the Minister will go away from today’s debate and knock on the door of the Secretary of State for Work and Pensions to tell him just that.