Backbench Business

Geoffrey Clifton-Brown Excerpts

Thursday 17th November 2016 Westminster Hall

[Kelvin Hopkins]

I thank my hon. Friend for her intervention. In fact, later in my speech I am going to say more or less what she just said. I thank her for reinforcing that point.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I congratulate the hon. Gentleman on securing this really important debate. Does he agree that, as a result of its decoupling from Royal Mail in 2013, the Post Office has lacked an overall strategy? It should now be rethinking its whole enterprise, which should be one of growth, rather than one of contraction.

[Kelvin Hopkins]

I agree with the hon. Gentleman. What is happening is the opposite of that, so I want the Government to put their weight behind the Post Office to enlarge, expand and improve it.

--- Later in debate ---

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am delighted to catch your eye, Mr Wilson, in this very important debate. I pay great tribute to the hon. Member for Luton North (Kelvin Hopkins), who secured the debate today. News of any organisation looking at the closure or franchising of 59 Crown post offices with a projected loss of 2,000 jobs should rightly be met with horror, as the hon. Gentleman described. This reduction in operations can only mean a worse service for customers, longer queues, fewer staff, worse disabled access and the loss of a crucial community asset. I am sure many hon. Members are here today because of a threatened closure in their own constituency and, sadly, I am no different. As the MP for one of the largest rural constituencies in the country, having easy access to the services that a post office provides is an utter necessity. Since 2000, the number of rural post offices has decreased by about 3,000. Likewise, the number of Crown post offices—the larger branches that have more services—has dropped by 1,200 in the past 25 years.

The largest town and principal economic and commercial hub in my constituency is Cirencester. Its branch is one of the 59 proposed closures. It operates from a leasehold property and offers a wide range of services, including access to pensions and benefits, tax payments, driving licence and passport renewals, lottery terminals and foreign exchange. The four counter positions and two self-service kiosks are often subject to long queues and high demand. For such a valuable service to continue to exist, we must look at ways for Crown post offices to diversify their services and grow their dwindling customer base. As I said in my speech on the Post Office’s future way back in 2010:

“The message that the Government need to give to the Post Office is not ‘closure, closure, closure’ but ‘opportunity, opportunity, opportunity”.—[Official Report, 2 November 2010; Vol. 517, c. 213WH.]

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I do not know whether the hon. Gentleman is aware, but there are rumours that a third round of franchise announcements and therefore closures of Crown post offices is due at any moment, with a potential loss of 190 jobs. Does he not think this debate might be an opportunity for the Minister to put some pressure on the Post Office to think again about that third round of potential franchises?

[Geoffrey Clifton-Brown]

I am grateful to the hon. Gentleman for bringing that to the attention of the House. I have not heard those rumours; I will simply respond with a line from later in my speech. If the Post Office were Tesco, it would be thinking not about closing profitable branches but about how to make those branches more profitable by providing a more attractive service for the customer. That is what I would like my hon. Friend the Minister to take away from this debate today. Let us see how we can make the Post Office work better for its customers.

What the Post Office needs is a proper business model for the future, which, above all, needs to consider how much of the business should be commercially profitable and which bits of it the Government, through the taxpayer, are prepared to subsidise. Although I do not agree with the hon. Member for Luton North that it should be wholly brought back into public ownership, there is no doubt, given the number of small suburban and rural branches, that it will inevitably need some form of public subsidy in future. That public subsidy should be clearly defined. The bits that can be profitable, such as the Crown post offices, should be made to operate as efficiently as possible.

[Kelvin Hopkins]

An internal cross-subsidy is appropriate where there is a public service component. When we had the Royal Mail and post offices effectively in one industry, cross-subsidy was possible. I think we should return to that principle of cross-subsidy.

[Geoffrey Clifton-Brown]

The hon. Gentleman and I are largely in agreement. I have clearly said that there will continue to be a need for an element of taxpayer-funded subsidy for areas that can never be profitable, such as some of the smaller rural and suburban branches, so there will inevitably be a mixture of the commercial, which needs to be exploited to the maximum, and an element of public subsidy.

The hon. Member for Ynys Môn (Albert Owen) mentioned the issue of banks closing. I have two important branches closing in small rural towns: Lloyds in Fairford and HSBC in Moreton-in-Marsh. Many of the services that those banks currently provide, such as depositing cheques and drawing benefits, pensions and so on, will be provided in future by the post office. If the post office then closes in those communities, my constituents in those communities will be left with a severe disadvantage.

[Albert Owen]

In addition to the banks closing and poor post office coverage, there is a lack of broadband and mobile coverage. So when people are asked to go online because they cannot physically get to these buildings, that is not available either.

[Geoffrey Clifton-Brown]

I entirely agree with the hon. Gentleman. I need to make progress now or I shall be reprimanded by the Chair for taking too long. There is so much to discuss in this debate and I have a little section in my speech about some of the innovative services that have been mentioned.

People view post office premises as dingy and out-of-date places that they do not want to visit. Clearly, the Post Office as a commercial organisation needs to do something about that. Branches needs to be attractive places that the public want to visit. The franchise model is not the nirvana that everybody thinks it is. Pizza Express, for example—I say this to my hon. Friend the Minister—was at one point 100% franchised, but the offering was so variable that the franchises were brought back into central management and it is now a highly profitable enterprise. If the likes of Pizza Express take the view that they do not want franchisees and they want to manage it themselves, I am surprised that the Post Office is not going down that path.

[Kelvin Hopkins]

Will the hon. Gentleman give way?

[Geoffrey Clifton-Brown]

I will give way one more time to the hon. Gentleman.

[Kelvin Hopkins]

I thank the hon. Gentleman for giving way; I will try to be brief. In many parts of industry now, insourcing is the buzz word rather than outsourcing. There may be a strong case for that across public services as well as in the private sector.

[Geoffrey Clifton-Brown]

I think it comes back to the Post Office maximising the opportunities that it has got. I want to come on to that a little later in my speech, but the hon. Gentleman is right. The Post Office needs to consider very carefully how it operates in today’s world.

When the Post Office decoupled from the profitable Royal Mail business in 2012, little was done to create a coherent strategy for the future. Now, in 2016, with the change in retail banking behaviour and the closure of more than 1,700 branches across the UK in five years, small businesses need a post office bank even more. Currently, the Post Office provides access to business accounts for some of the bigger high street banks rather than its own service. However, this is limited, slower and inconsistent in terms of provisions across the network.

[Mr Winnick]

Will the hon. Gentleman give way?

[Geoffrey Clifton-Brown]

I have given way an awful lot. I might give way a little later in my speech, if I may say that gently to the hon. Gentleman.

For the estimated 1.5 million adults in the UK without a bank account, an affordable service, such as a post office bank account that offered responsible deals on personal loans, would help to tackle the problem of payday lenders that charge huge annualised sums. It would be of great benefit to some of the poorer people in our society. After all, if Tesco opened a wholly owned bank eight years ago, notwithstanding its recent hacking problems, why cannot the Post Office do the same? Tesco has innovatively expanded a range of financial services. As has been mentioned, across the channel, La Banque Postale has a mandate to increase access to financial services and offer microcredit loans to those who have previously been financially excluded.

[Phil Wilson (in the Chair)]

Order. May I respectfully remind the hon. Gentleman that he has been on his feet for nine minutes, and quite a few other Members want to get into the debate? If he is nearing the end of his speech, I think that everyone will appreciate that.

[Geoffrey Clifton-Brown]

I am grateful, Mr Wilson; I have taken rather too many interventions, so my speech has become rather too long.

The Post Office ought to look at innovative ways to improve its services. Its post offices are dull and dingy places, but perhaps it could spruce them up and think about such improvements. There are all sorts of ways it could improve what it offers, such as internet hubs and internet cafés, business hubs and collection points for local authorities, and subletting if the premises are too large, as has been done in Penge.

I pay tribute to postmasters and postmistresses and their staff throughout the land, who do an incredible job. Often they go way beyond what their employers require, to help their communities. The post office is the glue that holds this country together. I appeal through the Minister for the Post Office to reconsider, among other things, its decision to close the Crown post office in Cirencester. It must be highly profitable, so why is it being closed? The Minister needs to look carefully at the closure process, to see whether it is the right thing for the country.

[Phil Wilson (in the Chair)]

As quite a few hon. Members want to take part in the debate, I ask them to restrict their comments. I do not want to introduce a time limit, but it might come to that, so hon. Members need to be careful about interventions.

--- Later in debate ---

[Margot James]

I will now answer a few of the points that were made. My hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Tonbridge and Malling (Tom Tugendhat) understandably paid tribute to their Crown post offices, in Cirencester and Tonbridge respectively. I am very sorry that I am unable to join them in their campaign against franchising of their local Crown post offices, because both are currently running at a loss. For every pound that is spent in the post office in Cirencester in the constituency of my hon. Friend the Member for The Cotswolds, £1.30 has to be spent on running it. We have to be mindful of that. I say to the hon. Member for—I apologise for forgetting her constituency. [Hon. Members: “Paisley.”] I say to the hon. Member for Paisley and Renfrewshire South (Mhairi Black) that the Crown post office there was losing almost £2 for every pound that was spent. That is really why that unfortunate decision had to be made. I was sorry to hear what she had to say about the effect on some of her constituents.

[Geoffrey Clifton-Brown]

Will the Minister give way?

[Margot James]

I am sorry, but I have to stop shortly to leave time for the hon. Member for Luton North.

As I said earlier, we cannot keep these Crown post offices open and losing money and stick to our commitment to keep post offices open in the rural and semi-rural areas, where often it is the only service left. Really, with some of these Crowns that are closing, walking a short distance away, sometimes to a more convenient location, to a WHSmith, is a small price for customers to pay to keep this network operating across the country, which has not proven to be economic.