Crown Post Offices: Franchising

Gordon Marsden Excerpts

Thursday 10th January 2019 Westminster Hall

[Lisa Nandy]

My hon. Friend is absolutely right, and that is the view expressed very strongly by my constituents in Wigan. Over in Oldham, Members have had a significant response to a public petition that they set up for precisely that reason.

A Citizens Advice report showed that in those post offices that have been franchised, the result is longer queues, reduced counters and a significant loss of experienced staff. No wonder disability groups and pensioners groups have been critical of such plans.

[Gordon Marsden (Blackpool South) (Lab)]

My hon. Friend is making a powerful case. I wish her campaign in Wigan every success, as I do the campaigns of my hon. Friends the Members for Oldham West and Royton (Jim McMahon) and for Ashton-under-Lyne (Angela Rayner) in their constituencies.

For us in Blackpool, sadly, the boat has already sailed. Our Crown post office, which was a grade II listed building, now lies empty, while my constituents have to go down stairs, which is not easily accessible to people with disabilities, to an unprepossessing place in the middle of the shopping centre. Does my hon. Friend agree that, besides the intimidation she described, the Post Office is on a hiding to nothing purely in commercial terms if it continues to outsource branches in that manner to WHSmith, which is widely regarded as one of the worst retailers on the planet?

[Lisa Nandy]

I agree, and I think that my hon. Friend the Member for Reading East (Matt Rodda) might have an issue from his constituency that is relevant to that point.

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[Liz McInnes (Heywood and Middleton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. I pay tribute to my hon. Friend the Member for Wigan (Lisa Nandy) for her thorough and eloquent opening speech, which set out very clearly why this is such an important subject. It means a lot to my constituents, particularly in the Middleton area, where in October last year we learned of the plan to move our busy town centre Crown post office into a branch of WHSmith. My constituents are extremely concerned about the potential loss of their post office from its current site and its proposed move into a struggling retail outlet in the town. If I was told that the branch of WHSmith was moving into Middleton post office, to increase its footfall, that would have made a lot more sense. I might have supported the move as mutually beneficial, but to do it the other way round is simply farcical.

WHSmith faces an uncertain future. Last year it announced the closure of six of its high street stores, plus the planned closure of 24 of its budget Cardmarket outlets, over the next three years. It is well known that WHSmith’s high street stores have struggled and that they are shored up by overpriced airport, railway station, motorway service and hospital outlets.

[Gordon Marsden]

My hon. Friend is absolutely right. It is not the time of year to promote chocolate or other consumables, but would she agree that some of the prices that WHSmith charges at the outlets in railway stations and other places are scandalous in terms of the mark-ups?

[Liz McInnes]

My hon. Friend is right. There was a scandal last year about a particular hospital outlet that was charging eight times the high street price for toiletries, and getting away with it because it had a captive audience. Last year, a 7% rise in trading profits at WHSmith’s hospital and travel stores helped to offset a 3% fall in sales and profits at its high street stores, so we clearly have a business that is struggling. It is a huge risk to relocate vital post office services into a business that is closing stores and might lose more.

Over the past five years, the Post Office, which is entirely owned by the Government, has announced the closure of 150 flagship Crown post offices. The announcement that a further 74 Crown post offices are to be closed and franchised, including the one in my constituency, means that the Crown network will have been cut by 60% since 2013. Closing flagship branches, getting rid of experienced staff and putting counters in the back of a WHSmith is not the plan for growth or innovation that the post office network so desperately needs, and does not offer the level of service that the public should expect. At best, the relentless closures point to a lack of vision; at worst, they suggest the managed decline of a public asset.

My constituents have shared their concerns with me about the potential closure of our post office, and a local petition to save Middleton post office has so far attracted nearly 1,000 signatures. Our high streets are already struggling, and the loss of our flagship post office will be a major blow to Middleton town centre. Many constituents have made the point that it makes no sense to move the post office counter service to WHSmith 500 metres away, disconnecting the counter service from the sorting office, which will remain where it is. We are assured that public consultation on the future of Middleton post office will be happening at some point but my constituents are quite rightly concerned that this is already a done deal and that their responses will be ignored. I would like reassurance from the Minister, which I can pass on to my constituents, that she will ensure that any public consultation is meaningful and that the concerns of the general public will genuinely inform and shape any final decisions.

The chief executive of WHSmith, Stephen Clarke, has said that the franchising of post offices into his stores is attractive to the Post Office because his stores cost less to rent and run. It is wholly unacceptable that this is used as justification for backdoor privatisation of our Government-owned post offices. In the absence of a business plan for the Post Office, it would seem that saving money is the only motivation for the move. It seems odd that a party that claims to be the party of business has no clear plan for improving the performance of the post offices it runs. It is also highly significant that the so-called party of business cannot turn out a single Back Bencher for this important event.

I end by asking the Minister to put a stop to the process of privatisation by the back door and to begin a review of how the Post Office can grow its business through new products and innovation. We expect nothing less from the self-styled party of business.

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[Mr Reed]

My hon. Friend makes an important point; clearly that has not been taken into account at all. My hon. Friend the Member for Wigan referred to an attempt to site a post office in a retail outlet called Bargain Booze. How inappropriate is that for many people—children, for instance, who might be going to a post office to use its services, but are walking through aisles of cheap, low-quality alcohol? That is entirely unacceptable.

[Gordon Marsden]

I endorse what my hon. Friend has just said. We had exactly the same situation in Blackpool, where a very well used sub-post office was transferred into that position. We managed to get some amelioration of the presentation of the booze, if I can put it that way, but it is not a welcoming environment for people to go into late at night to get the services of a post office branch.

[Mr Reed]

I agree completely with my hon. Friend’s important point.

Of course, it is not just customers who are suffering from the current franchising model. Many staff lose their jobs, only to be replaced in due time by lower paid staff. That, fundamentally, is how franchise partners deliver a service more cheaply. They cut staff numbers, they cut staff pay and they cut staff terms and conditions. In all seriousness, we are not going to protect our high streets or tackle growing levels of in-work poverty through a race to the bottom.

My final point is about the lack of a real forward vision for our post offices. Of course services have to change as society changes, but change does not only mean closure. The CWU has called for the Government and Post Office Ltd to set up a “post bank”, which my hon. Friend the Member for Wigan referred to earlier, along the lines of those seen working effectively in other European countries. Thornton Heath is an important district centre in my London constituency. Like many towns outside our cities, it no longer has a bank at all since Barclays closed its branch last year. Many small businesses in such areas trade in cash, and they need a bank in the locality—in the neighbourhood—to deposit the day’s takings. Not all businesses are digital and not all businesses are online. We are driving small businesses into ruin by allowing basic facilities like banking to be withdrawn. What a fantastic opportunity a post bank would be to revitalise our Post Office and our hard-pressed high streets at the same time—and what a crying shame that we lack a Government with either the ambition or the vision to seize it.