Post Office Services: Burncross

Angela Smith Excerpts

Monday 30th October 2017 Commons Chamber

[Angela Smith (Penistone and Stocksbridge) (Lab)]

rose—

[Mr Speaker]

Order. The full words of the hon. Lady should be heard. In the inexplicable circumstance of colleagues not wishing to hear her observations, we shall wait until all who are present clearly do, and until they are attending to the Adjournment debate speech, rather than—I say this to the hon. Member for North Wiltshire (James Gray) and the right hon. Member for New Forest East (Dr Lewis)—engaging in their own private conversation.

[Angela Smith]

Thank you, Mr Speaker. That is very kind. I know that we have plenty of time for this debate, but I will not detain the House for longer than is necessary.

Tonight I raise an issue that is unlikely to attract a great deal of parliamentary attention. However, for many people in Burncross in my constituency, the loss of their post office is a major issue that threatens serious disruption to their everyday lives. Indeed, it is such an issue that within days of the announcement that their well-used post office was to close, I received a petition from more than 1,400 local residents asking me to help.

Burncross is situated between the small town of Chapeltown and the old pit village of High Green. It is a residential area characterised predominantly by semi-detached homes of mainly private tenure, along with a smattering of local authority homes and some sheltered housing. The area is mixed demographically, but one of its principal characteristics is a higher than average proportion of residents who are eligible for an old age state pension. In other words, those who are most likely to need accessible postal services, and least likely easily to traverse large distances over Sheffield’s renowned hills to access them, are most likely to be hit by the closure. That is especially true in view of the comparatively poor public transport connectivity in the area.

The area, nestling as it does between High Green and Chapeltown, suffers from a lack of retail establishments of its own. For years, however, Burncross has enjoyed the presence of a Costcutter, which has also housed the post office. The supermarket has become an important part of the fabric of the area. It has been there for all the years that I have been the Member of Parliament for Burncross, and it was there for many years before that.

The post office has been well used, with some 1,200 transactions a week. It operated at a profit, and in 2014 it was upgraded in the network transformation programme into a new “main style” branch. I believe that that reflects its importance to the post office network. In July this year, however, it was announced without warning that the post office would close imminently, and not because the Post Office considered it to be a failing outlet, as is often the case. This debate does not represent a criticism of the Post Office, or, one may be surprised to find, the Government.

The reason for the closure was that the freehold owner of the building that housed both the supermarket and the post office decided to redevelop the site and construct a new, larger premises. That, one would imagine, could only be a good thing. Costcutter, however, decided at that point not to renew its lease arrangements and has opted out of running its business from the new premises. The upshot is that the Co-op has entered into an agreement with the owners of the building to run one of its supermarkets from the location, but its plans for the store do not include a post office.

Like any good constituency MP, I have spoken to both the Co-op and Post Office Counters about the loss of the service. While Post Office Counters is sympathetic and supports the ongoing provision of postal services in the area—it totally understands the distance that local people will have to travel if they can no longer enjoy the service—its view is that there is nowhere large enough or suitable in the area, apart from the premises soon to be taken over by the Co-op. I am afraid that my conversations with the Co-op—I say this as a member of the Co-op movement—have been very disappointing.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on her campaign to try to retain the post office. I have been involved in many such cases across the water in my own constituency, and we have tried very hard to find alternative premises for post offices. On occasion, the Post Office can give grants to the potential shop owner to increase the size of a property and make it more acceptable. Has she been able to follow that up as a possible solution to her campaign?

[Angela Smith]

I do not think that that is an option, given that the new premises are already larger than the old one in which the post office was housed. That is not really the issue, as I shall establish in a moment.

As I have said, my conversations with the Co-op have been very disappointing. The company allows many postal concessions in its stores throughout the country, and it has such an arrangement in a store in the town of Stocksbridge in my constituency, but it has flatly ruled out giving a concession to run a post office in the new store, which opens next month.

At this point, we need to remember that the post office in the old store was profitable and would no doubt continue to be so, with 1,200 transactions a week. I suspect the reason for the Co-op’s decision is related to a calculation that profit margins for grocery items outweigh those that can be gained from postal services. While I appreciate that the Co-op is a business that has to make a profit in order to be sustainable, it is important to bear in mind the unique selling point of the brand in communities up and down the country. This USP is, of course, its collective roots and its unique position in our social history as a retail business firmly established in the ethics of serving the interests of its customers, who are of course its shareholders, too.

Indeed, given the depth of feeling made so palpable by many of my constituents about the threat to their postal service, I think the Co-op may well succeed in scoring an own goal. Many Burncross residents are saying that they will never forgive the Co-op for, as they see it, taking away their post office. I warn the Co-op now that when Sheffielders decide they are going to dig their heels in, they really dig their heels in. My constituents feel neglected by movements beyond their control: an owner of a property who sees an opportunity to increase profits by redeveloping the premises; a leaseholder in the form of Costcutter not wanting to pay the extra rent that will no doubt be due because of the redevelopment, which is fair enough; and a new leaseholder who intends to use the extra space for what it sees as more profitable purposes, no doubt in part to service the extra rental charges due on the redeveloped store.

The real tragedy of all this, however, is that the customers of Costcutter and the old post office were satisfied with the store that was there. It provided all the services the local community wanted. Now they have lost perhaps some of their most cherished services—the collection of their hard-earned pensions being one of them—in the pursuit of higher profit margins.

To bring my remarks to a close, I appreciate entirely that the Minister will probably say that these are commercial decisions and there is therefore very little she can do, but I am not sure we should just settle for that. My constituents stand to lose permanently what they know to be a vital service—not for the normal reasons of the service not being sustainable, but because a business does not want to allocate space for it since it sees a better opportunity for the use of that space. In such circumstances, surely there should be a role for Government, national or local, to intervene. Ideally, the Government need to be able to act as brokers, incentivising partnerships between organisations to secure the amenities that communities such as Burncross so desperately need. In this instance, of course, it would be something as simple as a post office counter in a grocery store—the very provision that we have often decided is the most sustainable way to make sure that postal services continue to be delivered in a given area.

Can I ask the Minister, therefore, if she will review how concessions, such as those found in supermarkets, are awarded? Can she examine what help Government can give to make sure postal services are provided in circumstances such as those in Burncross? Given that postal services often and increasingly have to compete for space alongside other uses, how can public authorities, working with the Post Office, make sure the public good element of postal services is taken into account when commercial retail decisions are made? My constituents are losing their postal services and cannot possibly be expected to access alternative post office outlets easily, given the distance involved and the particularly hilly nature of the area—and that is particularly the case for the elderly population. Surely Parliament and the Government should be about giving a voice and a say in society to such people, giving the voiceless a voice. I hope the Minister takes note of that in her responses.

Although the circumstances of Burncross losing its post office are local and not that important to the rest of the world, similar stories are being played out across the country, with profit being put before the public good. It is only when those are added together that they start to look like something more important, and then often it is too late for us politicians to do something. Today it might be a community post office in Burncross that loses out; tomorrow it will be another one in another constituency, until eventually the network starts to look like a pale shadow of its former self. Then it will be too late. I look forward to the Minister’s response.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

I congratulate the hon. Member for Penistone and Stocksbridge (Angela Smith) on securing this debate on post office services in Burncross and for the hard work that she has done in trying to secure their continuation. She has clearly set out the importance of post office services to her community and I fully appreciate the concerns that she has raised.

The Government recognise the important social role that post offices play in communities across the country, and that is why we will have provided nearly £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country, far from all of which are profitable. Today, the 11,600 post office branches in the UK form the most stable network that the Post Office has enjoyed for some time. That is because the Post Office is transforming and modernising its network, thanks to that investment from the taxpayer, which has enabled the modernisation and transformation of more than 7,000 branches.

The network is at its most stable for a generation, and customer satisfaction has remained high. I understand that apart from the critical problem in this particular area, the hon. Lady’s constituency has benefited from four out of its 15 branches now opening on a Sunday and almost 1,000 additional opening hours a month—[Interruption.] I understand that that is no comfort to the particular constituents she has mentioned, and I will come on to address the points that she made about that locality.

Post offices are crucial to the many millions of customers, including hundreds of thousands of small businesses, who use the service daily to access the Post Office’s diverse range of services, including banking services. I completely understand the difficulty and the frustration that communities face if there is a loss of post office services. We of course hope that the loss we are debating tonight is temporary.

The hon. Lady spoke passionately about her concerns for post office services in the Burncross community. I fully understand the points she made about the local area having many older people who would find it difficult to travel to Chapeltown or High Green, particularly given the limited public transport in the local area. I know that the Post Office apologises to its customers and the community for the huge inconvenience caused by what I hope is a temporary closure. Both I and the Post Office recognise the need to restore post office services to her community as soon as possible.

Hon. Members will be aware that the vast majority of post offices in the network are now independent small businesses operating as agents of the Post Office, so while the overall network position is very good, individual small businesses can face problems like any other. These sometimes lead to temporary closures. As the hon. Lady acknowledged, temporary closures are often beyond the direct control of the Post Office. The Post Office has not chosen to close this branch, but local development and the demolition of existing premises has resulted in the current position. The Post Office is working hard to find a solution that will allow it to restore services to the community. I will certainly work with the Post Office and the hon. Lady to redouble efforts to find an alternative site for the post office service her residents deserve. I am aware that the Post Office met the hon. Lady to discuss the matter and that it has also met local councillors.

It is very unfortunate that the Co-op has indicated it no longer wants to take on the post office. I share the hon. Lady’s deep disappointment in the decision made by the Co-op, especially, as she said, considering its founding principles. Unfortunately, the Post Office cannot force a business to take on a post office if, for whatever commercial reasons, it does not wish to do so. However, the Post Office has and will continue to look for willing partners who are keen to take a post office on as a part of their business in her community.

The hon. Lady spoke about the unique public good of the Post Office in communities up and down the country. This is absolutely one of the key points the Post Office makes when it advertises its branches and when it speaks to potential new operators. The strength of its history and social purpose cannot be underestimated, and it can have a very positive impact on a business. It is also taking steps to develop its business offer, with particular reference to banking services, which it is improving all the time. Considering the large numbers of high street bank branches that are closing around the country, this has the potential to sharpen up the offer the Post Office makes not just to its customers and small businesses that patronise its branches, but to the business partners that take on a post office branch or counter. This is also something we must push.

The Association of Convenience Stores recently published the “Local Shop Report 2017”, which ranked post offices first in terms of having a positive impact on their local areas. These are all selling points that we have to make to potential new partners. There are, of course, commercial benefits too. It offers day-to-day banking for 99% of personal account customers, as well as businesses. It is also the UK’s number one for foreign exchange and the leading provider in the mails market. Some 73% of customers say that the post office is their main reason for visiting a partner store and 78% of people using the post office bought something else in the retail outlet that played host to the post office counter.

To keep post offices in our communities or—as in the hon. Lady’s case—to reopen a service, we must ensure that running a post office continues to be an attractive and commercially sustainable proposition. The Government believe that this is the case. More than 90% of branches are now run by independent business operators and retail partners. The success of the network’s transformation programme, which has seen 2,000 new operators taking on and running post office branches, demonstrates that operating a post office continues to be an attractive offer to many independent and retail businesses. I can only assume that she and the Post Office have been unable to get that message across to the Co-op in her constituency.

[Angela Smith]

The Minister has got to the crucial point: the Co-op has refused to listen to the argument that post office services benefit stores such as the one it will soon be operating in Burncross. Its point-blank refusal to accept that it is good for the community and potentially for the itself is incredibly frustrating.

[Margot James]

I quite agree with the hon. Lady. Working with a retail partner brings the benefits of shared overheads across the combined post office and retail business, including property and staff costs, while the host retailer also benefits from increased footfall, to which I alluded earlier, and the income from post office products. There is also the evidence in terms of the number of transactions that customers perform in post offices. I think she said that there were 1,200 transactions in her post office per week before it closed. For all these reasons, it makes not just social but huge commercial sense.

I can only assume that the arguments with the Co-op in her constituency have been exhausted and that there is no chance of changing its mind, but if in her view that changes, she must please contact my office immediately, and I personally will do everything I can to augment the arguments she is making to the Co-op. I know that the Post Office will join us in that endeavour.

The Post Office is still advertising the opportunity, and its field team visited the local area last week to explore possible opportunities and further engage with other local businesses. The Post Office will always consider all possible options for replacing a branch and restoring a service to the community. If it concludes that it is not feasible to restore a main-style branch, such as the one run by Costcutter, it will explore other options, such as the possibility of introducing one of its smaller “local plus” models, which actually offer at least 95% of post offices’ most-used products and services. Those opportunities are also in the frame.

The Post Office welcomes and considers applications from any suitable retailer following its advertising process. Post offices across the UK are run successfully in many varied businesses and locations, including farm shops, local authority offices, fish and chip shops, garages, pubs, libraries and community hubs. We need to think outside the box if we are to benefit the hon. Lady’s constituents.

I assure the hon. Lady that the Post Office is committed to finding a solution to restore the services to her community. It does not give up on communities, even if these issues take time to rectify. I will be attending the reopening of a post office service in my constituency, in Quarry Bank, where the post office has been shut now for seven years. I do not think she will have to wait that long to get her service restored, but it is wonderful when a service is restored. It is perfectly doable.

Our commitment to the network and the support that taxpayers and the Government have given it will help to ensure that post office services remain in our communities. I encourage the local Co-op to reconsider the benefits to itself and the community of running a post office. As I have explained, the Post Office works hard to set out all the benefits to potential partners. It has assured me that it will continue to explore possible solutions to restore a service to the hon. Lady’s constituents in Burncross, and I have asked it to keep her informed of any developments. I know that she will keep abreast of any developments anyway, but I also know that Post Office representatives will be happy to continue to work with her. She is fighting for a service which is of great social value to her constituents, and which can be of commercial value to the prospective partner that I truly hope will be found so that a post office service can return to the Burncross community.

Question put and agreed to.