Postal Services (Rural Areas)

Baroness Ritchie of Downpatrick Excerpts

Monday 2nd September 2013 Commons Chamber

[Ms Margaret Ritchie (South Down) (SDLP)]

I would like to pay tribute to and thank Members, particularly my hon. Friend the Member for North Ayrshire and Arran (Katy Clark), for bringing forward this important debate on the Floor of the House through the Backbench Business Committee.

The mail and postal service plays a key role in the lives of my constituents, and stands at the centre of much that is good in the local community. The local post office and the mail service are central to both the economic and the social life of South Down. Some 55% of post offices are in rural areas and 31% represent the only retail outlet in their area—a situation with which I am very familiar in my constituency, particularly in hard-to-reach areas in the rural communities—a point to which my right hon. Friend the Member for Neath (Mr Hain) has already referred.

The postal service plays a vital role in connecting our society: it is the central hub and is an essential part of the rural infrastructure, especially for the elderly and many vulnerable people who may be excluded from other forms of communication. Further cuts to our postal service and network risk isolating many in our society by creating a two-tier network that separates the connected and the dislocated. Such a development would be bad for our society and for our economy.

To express support of our existing position is not to say that we cannot develop and modernise the service for the 21st century, and we should indeed be looking at ways to reinvigorate this institution as part of the drive to develop and regenerate the rural economy—a theme to which I will return later. As many Members have mentioned today, however, the fear is that the privatisation of the Royal Mail and its impact on the relationship with the Post Office will place a further strain on the Post Office’s ability to survive, especially in rural areas, and that it will not revitalise the service, as some have suggested it will, but leave it to wither on the vine. I am worried that the inevitable market pressures from privatisation will place further strain across the postal services and that the parts that are not as profitable, especially in remote or rural areas, will have to be closed. We should not and cannot let this happen.

[Sarah Newton (Truro and Falmouth) (Con)]

The hon. Lady is making a powerful point and obviously represents a constituency very much like my own. Does she agree that there will be cases in which remote rural communities need these services so much that, although it will not be possible for them to develop commercially, they will need continued public subsidy? Will she join me in asking the Minister to commit to—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I ask the hon. Lady to sit down? Questions must be brief.

[Ms Ritchie]

I take the hon. Lady’s point. In remote rural areas, where there is little access to broadband, there must be an alternative in the form of the rural post office, with all its attendant services.

As we have seen with other privatisations, once the horse has bolted and the rationale of market practices has been enforced, it can be very difficult to reverse or even moderate the impacts. Despite assurances to the contrary, the end result is likely to be a reduced and more expensive service, and the fear is that rural services will be the canary in the coal mine.

We have received lukewarm reassurances that the universal service obligation will be retained, but it is feared that once private owners are placed under financial and competitive pressure, they will re-examine it and seek to change the terms of that important social compact, or be forced to contract their service. It would be completely unacceptable at any point for rural customers to have to pay more for that service. I ask the Minister to reassure us today that that will never happen, and that we are not on a slippery slope towards the erosion of the universal service obligation. I should also like to hear from her a more detailed explanation of how the Government and Ofcom will prevent a private operator from ever altering the terms of the agreement.

Let me reiterate that I do not oppose the modernisation of the service. Indeed, the initial plans for modernisation met a degree of approval. It was hoped that more Government functions and business would be returned to the Post Office, and that the plans would return post offices to the centre of local life and diversify the service to meet the needs of all in the community. Over the last 10 months, I have been pleased to be asked by the Post Office to open rebranded branches in my constituency, which have been open for more hours and have offered a broader range of services. It is important for such services to be retained in hard-to-reach rural communities. There is clearly a public demand for more of them to be provided, primarily through local post office branches. In response to a recent ICM poll, 89% of people said that they wanted a face-to-face service, and 73% said that they preferred the post office.

I believe that, following the recent review of banking and financial services, the Government have missed an opportunity to put the Post Office at the centre of a restructured retail banking sector. I believe that there is enormous potential for post offices to offer high-street banking services that would provide income for the Post Office while also bringing customers through the door to use their other services. That would apply particularly in rural areas that are currently experiencing a wave of bank branch closures. In Northern Ireland, Ulster bank, RBS, First Trust—part of Allied Irish Banks—and the Bank of Ireland are closing branches in rural communities.

If high-street banks were compelled, or encouraged, to offer access to a wide range of transaction services in local post office branches, and to make customers aware of that, we could see a revolution in the functioning of our post offices, and a revitalisation of the rural economy. What we need from the Government is an approach that aims to develop and support our postal services, bringing them into line with the 21st century while supporting their invaluable social function, but instead there is the fear that they will sell in haste and repent at leisure.

[Lady Hermon]

Before the hon. Lady closes her remarks, I am sure that she would like to join me in paying tribute to all those in Royal Mail and the postal services in Northern Ireland who served the entire community, without fear or favour, through the awful years of the troubles. We owe them a sense of loyalty and dedication now, when they feel that their jobs and their services are in jeopardy.

[Ms Ritchie]

I thank the hon. Lady for her intervention, with which I fully agree. I commend all those—past and present—employed in Royal Mail and postal services throughout Northern Ireland, because through the dark days of the troubles they had to go to hard-to-reach communities, both rural and urban, in very difficult circumstances. They often risked their lives to ensure that people had proper access to a postal service. It is important that we commend them and that this House records that.

The postal service and the post office lie at the heart of rural life and the rural economy. While remaining open to new opportunities, modernisation and reform of these vital services, we must not let the driving logic of privatisation destroy part of the fabric of rural life. It is important to emphasise that the National Federation of SubPostmasters, a representative of which I met recently, has made it clear that in practice it is very much not opposed to modernisation or to getting more services, but it is opposed to any contraction or withdrawal of services. There has certainly not been enough to counteract the fall in income from Government services from £576 million in 2005 to £167 million in 2010. I am happy to commend the motion standing in the name of the hon. Member for North Ayrshire and Arran (Katy Clark). I fully support it, but we must show our determination to retain postal services and Royal Mail.