Post Office Network

Debate between Eilidh Whiteford and Nia Griffith

Tuesday 2nd November 2010 Westminster Hall

[Nia Griffith (Llanelli) (Lab)]

I congratulate the hon. Member for the Cotswolds (Geoffrey Clifton-Brown) on securing the debate. It is clear from the turnout and the speeches that hon. Members on both sides of the House have high regard for the post office network.

Our post office network is much more than a network of businesses. Post offices are the lifeblood of our communities and an essential part of our social network. For many people, particularly those who do not have bank accounts or access to the internet, they are the only means of accessing services, withdrawing pensions and paying bills. We all know sub-postmasters who frequently go that extra mile, those who will notice that Mrs Jones has not turned up to collect her pension and will make discreet inquiries to see if anything is amiss.

When we were in government, we established access criteria for the first time, in recognition of the business and social importance of the post office network. The access criteria developed by the Labour Government ensured that 99% of people living in deprived urban areas, and 90% of people nationally, would be within one mile of a post office. That is extremely important, because it provides the access that some of the most vulnerable in our society need. We then put in money to keep open 11,500 post offices, whereas a purely commercial network would have been reduced to some 4,000. We put in £150 million per year up to 2011 to subsidise that network, with an increase to £180 million for 2011-12. We welcome the recent Government announcement that there will be continued support for post offices.

Anyone who runs a business knows that it is necessary to be constantly prepared to change and adapt. Post offices need to attract new customers, and offer new products to existing customers. Sub-postmasters retire and new people come in. When someone first decides to take over the running of a local post office, they need to know that their business will be viable. When sub-postmasters retire, they sometimes decide to keep the premises as their home. That means that newcomers have not only to identify premises and find the funds to start up, but also find the funds to install the counters and facilities to meet post office requirements. To make that sort of commitment they need the confidence that they can make a go of it, and absolutely fundamental to that confidence is the inter-business agreement with Royal Mail. That is why the National Federation of SubPostmasters wants the guarantee of a minimum 10-year agreement signed and sealed between Royal Mail and Post Office Ltd. Anything less would be a betrayal. It would be a death sentence hanging over all but the busiest of our post offices.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I share the hon. Lady’s concern about the impact on business start-ups and business innovation. I represent a very rural constituency, and one thing that we have seen over recent years is new businesses springing up and using the internet to sell goods further afield than the isolated rural areas in which they are based. I am very concerned that the loss both of the universal service commitment and of post offices is inhibiting business growth. That will absolutely undermine existing small businesses and disincentivise new ones, not only in the post office network but in the wider rural economy.

[Nia Griffith]

Indeed. The hon. Lady makes reference to the important role of post offices in rural communities, but those very post offices are the ones that would be most threatened if the inter-business agreement were not in place. It is absolutely vital, as the National Federation of Sub-postmasters suggests, that we have some sort of 10-year agreement to guarantee that business.

Proceeding to privatise Royal Mail without such guarantees for Post Office Ltd would also call into question the wisdom of investing considerable sums of taxpayers’ money in a business that had no chance of being viable—a bit like redecorating flood-prone properties without shoring up the flood defences. It is not sufficient for there to be vague assurances and assumptions that somehow Royal Mail would automatically choose Post Office Ltd for its counter services. No astute business person would be satisfied with anything less than protection through written contracts and legislation. The Postal Services Bill does not provide that protection, and the Opposition will be tabling amendments that would provide Post Office Ltd with the necessary certainty that a privatised Royal Mail will continue to use the post office network for its counter services.

It is very worrying to hear the National Federation of SubPostmasters report that the Government are very resistant to its requests for the guarantee of a 10-year agreement. That is no way to treat sub-postmasters who have invested considerable sums of their own money in the local post office network, and it will certainly not encourage new entrants to take over when sub-postmasters retire. That is one area in which the Government can, and should, take action to safeguard the third of Post Office income that derives from Royal Mail.

Furthermore, one in seven rural post offices provides premises, facilities and supervision for Royal Mail delivery staff. Sub-postmasters running the 900 mail-work post offices are paid according to the number of postmen and women they supervise. That pay is frequently about 25% of the income of such post offices. They need a guarantee that the income will continue. There is no guarantee that a privatised Royal Mail, quite possibly owned by foreign interests, would honour or renew the inter-business agreement, and without determined Government action in that respect post offices will lose their core business.

In addition, we need to know what other specific proposals the Government have to increase footfall in our post office network. As I have said, all businesses need to attract new customers and identify new services that will interest their customers. One notable success story is that post offices have become major suppliers of foreign currency.