Postal Services Bill

Debate between Lord Young of Norwood Green and Lord Whitty

Wednesday 4th May 2011 Lords Chamber

[Lord Whitty]

My Lords, I shall speak also to the earlier amendments that were previously grouped with this amendment, and the amendment to which my noble friend has just spoken. They deal with the criteria for access to the post office network. I very much welcome the noble Baroness’s reiteration of the commitment to maintain a level of post office network and her comments on the criteria in relation to what the Post Office rather bizarrely calls “business as usual” closures, whereby a sub-postmaster gives up or the post office has to close for another reason. The criteria there are much tighter.

I am a veteran of the last stage of the previous closure programme, which was in many ways unsatisfactory and ended in anomalies. I am familiar with the territory in Vauxhall to which the noble Lord, Lord Jenkin, referred, and the effect of what happened on the other side of the river. That experience has been repeated in rural areas and in deprived suburbs up and down the country. The determination to maintain a minimum network is very welcome.

The jury is still out on the move to Post Office Local. There are significant advantages, particularly in relation to opening hours and the flexibility that that provides. Consumer Focus has heard varying reports on the first batch of Post Office Locals, and that the range of services they provide is differentiated. For example, the USO for the parcel service refers to a 20 kilogram parcel service being available in all post offices, but a lot of locals were not doing that until about this time last year, when the Post Office advised them to do so. It is still not the case that all Post Office Locals, or some other post offices, are providing that service. I am not saying that there should be an absolutely rigid range of services available under Post Office Local, but we need to know that what will happen as a result of normal retirements and closures, new post offices opening, post offices opening in host premises will provide something like the previous minimum access criteria.

The new access criteria will be a matter for the Secretary of State and for Ofcom, but the amendments would require that there be a reporting mechanism which indicates not only how good the access is, in terms of mileage in rural and urban areas, to the nearest post office but what range of services is available. In other words, there would be a matrix that would indicate the services available as well as the number of outlets. In order to be able to monitor over time the effectiveness of post office services and the accessibility to them for communities who have, over the past two rounds of closures, seen some diminution in the number of outlets and now some diminution in the range of services, we need reporting criteria roughly along the lines that I propose here, which are the criteria which were broadly agreed at the end of the last round of closures.

I shall not press the amendments tonight, but the Government and the regulator will need a clear reporting process which covers not only the number of outlets but the range of services provided. As others have said, that range of services needs to include some enhanced commitment across Whitehall and local government to provide a wider range of government services—and digital access to them—than currently exists. Unfortunately, over the past 15 years, we have seen a diminution of government business going through post offices. Some of that has been due to technological and behavioural change; some of it has simply been due to false economies. Post offices have missed out there. The post offices should in most communities be the front office of government. In rural communities and more deprived outer suburbs, they are the point at which the community has access to the range of state services. We need to retain that, we need to build on it and we need to know under laid-down reporting criteria how well we are doing.

Although I welcome much of what the Government are committed to in enhancing the number of services that go through post offices as well as preserving the number of post offices in the network, we need to be able to monitor that. That is what my two amendments are about, and I will be interested to hear the noble Baroness’s comments. I will not press the amendment tonight, but we may need to return to it. I beg to move.

[Lord Young of Norwood Green]

I shall briefly support my noble friend Lord Whitty. He has made all the key points about the importance of the additional information that the amendments would provide.

I tend to agree with the points made by the noble Lord, Lord Jenkin, in a previous debate about the potential for locals. They have to get the formula right; they have to get the transition payments right as well. The managing director, Paula Vennells, has assured us that they are learning quite a lot from the 60 or so pilots that are currently running. Interestingly, I received an assurance that they have all been instructed to accept parcels of up to 20 kilograms in weight. Clearly, the message has not filtered through to all of them but the intention is clear. Amendments 40 and 41 pose some important questions and I, too, will be listening intently to the Minister’s response.

Postal Services Bill

Debate between Lord Young of Norwood Green and Lord Whitty

Wednesday 16th March 2011 Lords Chamber

[Lord Whitty]

My Lords, we have reached this amendment slightly quicker than I had thought we would. Although the amendment looks complicated, it is, in essence, an amendment to probe how the Government intend to fulfil the commitment made in the paper to which I previously referred—and to which the noble Baroness referred twice—that they will maintain a network of approximately the present size. The noble Baroness stated that even more precisely in her reply to my noble friend Lord Lea.

I have tabled the amendment from the perspective that my previous organisation, Consumer Focus, and its predecessor, Postwatch, have been through two alleged rationalisations of the post office network, the first of which was based on no objective criteria at all. It worked from where sub-postmasters were finding it difficult to maintain a post office, were retiring, or had some other reason for not wanting to continue. The second round of rationalisation worked on substantial and clear issues of access that were specified in crude distance terms, but nevertheless gave rationality to the assessment of whether one post office or another should change.

I must say, having inherited this situation at three-quarters of the way through, that I found it difficult for a consumer organisation to be forced to choose between the post offices in any particular town. Nevertheless, the criteria against which we operated— access to post offices among different populations, distance to travel to a post office, and so on—are reproduced in the paper from which I quoted earlier, but which I unfortunately gave to Hansard for verification. However, the document includes a table that sets out the current criteria.

My concerns are twofold. Those criteria would arithmetically allow for a network that is significantly smaller, particularly in towns and suburbs, than the current network, and I therefore need to square the assurance given by the Government that they are looking for and are in effect subsidising for the next few years a network at its current size, with the fact that theoretically, using the same criteria, they could reduce it to a size of between 7,000 and 8,000. I hope that the Government reaffirm their commitment to retaining a network of the current size.

The calculations in proposed new subsection (1) in the amendment, according to my former colleagues in Consumer Focus—I did not do the arithmetic—would sustain a network of roughly the present size. In other words, the first four criteria are considerably more stringent than those used in the previous round of rationalisation and specified in the Government’s document on the future of the network. This would not mean that every post office would need to remain open. There would obviously be temporary closures and what the Post Office somewhat euphemistically calls business-as-usual closures. There would also be movements of sites within particular areas. However, one would arrive at roughly the same number of post offices, were these criteria to be followed.

It would be interesting to know whether the Government intend to tighten up the criteria or to add different criteria that would produce figures similar to those in the amendment, or whether their commitment to the current size of the network is irrespective of particular criteria because they envisage that the moves they claim to be making to improve the volume of post offices’ business—to sustain and inculcate a different sense of purpose through mutualisation—will mean that we will end up with a network of roughly the current size.

I see that the noble Lord, Lord Skelmersdale, is once more in his place. When we were discussing the IBA, he raised a pertinent question as to whether any failure to commit to the IBA—and, I would add, to direct other government work to the post office network; an earlier debate today demonstrated that we were moving away from that—threatens the Government’s commitment to the size of the network. There is a circle to be squared, and I am not entirely clear how the Government intend to square it.

One option would be to reassure consumers, sub-postmasters and the staff of the post office network that the criteria would be tighter. Another option would be a more detailed way of reassessing those criteria. In fact, proposed new subsections (3) to (6) in the amendment would allow the Government systematically to assess the criteria of access and the nature of services provided.

Another dimension that has been mentioned is that part of Post Office Ltd’s plan is to reduce the range of services provided in some post offices. There was the experiment of Post Office essentials outlets that provided a reduced range of services. Some have worked and some have not. That is not necessarily entirely consistent with the government commitment to maintain the network broadly as it is, but it may mean that different gradations of post office outlets appear within the total. It would also be useful to know about that.

Although I do not expect the Government to accept the amendment, it gives them options in adopting criteria that would sustain more or less the present network or having a process whereby they redefined the criteria for access and the services provided. It would be useful to know what the Government’s strategy was in this respect. Obviously, we take great heart from the reassurance that the present network will remain in place, but the question of how that will happen and how we square that with certain other developments that were referred to earlier remains. I will be interested to hear the Minister’s comments. I beg to move.

[Lord Young of Norwood Green]

My Lords, I speak to my noble friend Lord Whitty’s “omnibus” amendment and to Amendments 22C and 22E.

They all seek to introduce new clauses to strengthen access criteria to prevent the further erosion of the post office network, to ensure the provision of a wide range of services at all post office branches, and to ensure a fair distribution of the Post Office's proposed new main post offices.

Amendment 22A writes into the Bill the current level of access to post offices in the UK. As part of the 2007 changes to the post office network that included an investment of £1.7 billion and incorporated the Network Change Programme, resulting in the closure of 2,500 post offices, the Government introduced a series of distance-based access criteria. These remain applicable but are not included in Royal Mail's licence and are not set out in law. The minimum access criteria introduced by the previous Government state that 99 per cent of the total UK population should be within three miles of their nearest post office; 90 per cent of the population should be within one mile; 99 per cent of the total population in deprived urban areas across the UK should be within one mile; 95 per cent of the total urban population across the UK should be within one mile; 95 per cent of the total rural population across the UK should be within three miles; and 95 per cent of the population of the postcode district should be within six miles.