Crown Post Offices: Franchising

Debate between Gill Furniss and Rachael Maskell

Thursday 10th January 2019 Westminster Hall

[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

It is a pleasure to serve under your chairpersonship, Sir Graham. I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this debate and delivering an impressive and eloquent speech. Passions have risen high today, which illustrates the value of the post office network to hon. Members present and to people in the community, so it is hugely disappointing to see the empty seats on the Conservative Benches.

Post offices are a vital community asset that serve as an anchor for individuals and local businesses, as many hon. Members have highlighted. Citizens Advice surveys have shown that half of Britons say that a post office branch is the most important service in their local community. In rural areas, the importance is even greater: one rural resident in five says that without their local post office they would lose contact with friends or neighbours. Post offices are hubs rooted in community and history, and they have innovated: services have grown and now cover some Government services, while postmasters have been innovative in providing new products to accommodate the rise of online shopping.

At the same time, it is not a revelation that our high streets are struggling. In October, the Chancellor took a “too little, too late” approach to the crisis, showing the Government’s lack of commitment to our town centres. Although they shirk responsibility for the collapse of our high streets, the Government are too eager to discount their own role in overseeing the managed decline of a long-established and vital part of our high street: our post offices.

Our debate today has focused on Crown post offices, the large flagship post offices that are in prominent high street locations and are directly owned and managed by Post Office Ltd. Over the past five years, the Post Office, which is entirely owned by the Government, has announced the closure of 150 Crown post offices—40% of its 2013 Crown post office network. The closure and franchise programme has come in three waves, and the latest announcement in October 2018 stated that a further 74 Crown post offices were being closed, with an estimated 700 jobs at risk.

There is a strength of feeling about the closures across all parts of the country. I anticipate that the Minister will argue that this is not a privatisation process, but franchising is by definition a model part of privatisation. This Government drove the disastrous privatisation of our Royal Mail, many of the consequences of which we are seeing today, with private shareholders creaming off millions in dividends while services are on the decline. I am afraid that the franchising programme appears to be an incremental step in the same direction, privatising our Post Office one Crown at a time.

The impact of the closure and franchise programme is significant for the public purse, for the accessibility, quality and breadth of the service provided to the public, and for the sustainability of the network. Our high streets face a crisis and it is being compounded by the Government-managed decline of the Post Office. As I wrote in a recent article:

“The Government may continue to peddle the myth that it has no agency over our high streets—the truth is they are willingly letting a proud institution and the public down.”

They are letting the Post Office fall by the wayside in an appalling act of negligence.

Plucking post offices out of the heart of business hubs, as the closure of local Crowns does, is bad for local business and bad for the Post Office. It exacerbates financial exclusion in deprived areas, where—in the light of the significant bank closures in recent years—local people may have no access to financial services. My hon. Friend the Member for York Central (Rachael Maskell) has been vocal about the proposed relocation of her local Crown away from the town centre and into an area that has seen a 15% decline in footfall over two years. It is an economic fallacy to suggest that shifting a post office to a quieter part of town, away from the economic activity, will be in any way helpful to the long-term sustainability of the network.

Indeed, in allowing the transfer of counters into WHSmith, the Government risk the viability and sustainability of communities’ access to post offices. It has been suggested that WHSmith is shifting its priorities away from the high street, as highlighted by its acquisition of InMotion, a US company known for airport services. That is worrying and raises serious questions about the retailer’s long-term viability and its desire to be on the high street. As my hon. Friend the Member for Heywood and Middleton (Liz McInnes) told us, there has recently been a 3% decline in profits. It is therefore surprising not only that Post Office is choosing to partner with WHSmith in this way, but that when pressed during a meeting of the all-party group on post offices, Post Office representatives provided no reassurance about any contingency plans that they may have prepared for the event of a collapse.

My hon. Friends the Members for Hove (Peter Kyle), and for Cambridge (Daniel Zeichner) spoke eloquently about the lack of meaningful consultation in their constituencies. Indeed, during the all-party group meeting, we learned that decisions on closures had already been made and that the consultation process was merely asking for little bits of information about whether people thought they had disability access—someone in the senior management actually said that. I challenged him, saying that the consultations should be asking the public about the closures, and that responsibility for disability access should lie with the management of the post office in question.

[Rachael Maskell]

I am grateful to my hon. Friend for raising the issue of access, because clearly many disabled people use post offices. Does she agree that if the proposal will mean less access to post offices, it should surely be stopped?

[Gill Furniss]

I very much agree, and I will go into that point in more detail later.

Post Office management claim that they will have six months’ notice if a retailer that hosts a Post Office counter collapses, but in reality a collapse could be immediate and would risk the total closure of the counter. It seems reasonable that contingency planning should be done to prepare for all eventualities. Has the Minister had any discussions with the Post Office about the matter? Can she assure us that she is aware of reasonable contingency plans for any of those scenarios?

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) referred to the independent reports published by Consumer Focus in 2012 and by Citizens Advice in 2016, which looked at the impact of closing and franchising former Crown post offices and locating them in WHSmith branches. They concluded that it has led to an increase in queuing and service times, a deterioration in customer service and advice, poor disabled access, and a reduction in the number of counter positions. As hon. Friends have pointed out, the retailer has been voted as providing some of the worst customer service in the UK—surely not a ringing endorsement.

The impact of these changes on local communities is significant, and vulnerable people, the disabled and the old suffer the most. The general secretary of the National Pensioners Convention, Jan Shortt, has said:

“Older people are some of the biggest users of the Post Office, and many rely on being able to talk to expert staff, but the move to franchise services to WHSmith is going to be bad for customers...pensioners will find some of the offices are no longer easily accessible or particularly private. This will become a second class service if we don’t stop these plans immediately.”

Similarly, the chief executive of the deaf and disabled rights charity, Inclusion London, and representative of the UK-wide Reclaiming Our Futures Alliance of disabled people and their organisations, Tracey Lazard, said:

“Replacing accessible Post Office premises with a post office counter squeezed into the back of a WHSmith store can leave Disabled people at a significant disadvantage, particularly people with a mobility impairment. Post Office Ltd should be taking action to maximise the accessibility of its premises and services rather than taking this retrograde step that cannot be justified and will instead further Disabled people’s exclusion.”