Postal Services (Rural Areas)

Jesse Norman Excerpts

Monday 2nd September 2013 Commons Chamber

[Katy Clark]

My hon. Friend makes an incredibly important point, one that has been made to me by many who run post offices in my constituency.

The post office is vital, not only for individuals, but for many rural businesses—that is another point that many people in my constituency have made. I believe that those who work for Royal Mail have a strong public service ethos. They provide a vital service in many parts of the country, and in rural areas nobody else is going to provide it. There are real concerns about the impact that the privatisation of Royal Mail will have on not just Royal Mail itself, but our post office network. I suspect that many issues associated with that will be explored in this debate by many hon. Members from all political parties.

The background to this debate is, of course, the Postal Services Act 2011, which was passed by this House and allows not only for the privatisation of Royal Mail, but for competition for postal services. The Government have not, as yet, specified what form the sale of Royal Mail will take—whether it will be an initial public offering or a sale to private equity—although they have said that an IPO is their preferred method of sale. There is a great deal of concern throughout the country that the Government are rushing their timetable for political reasons. They have said that the sale will take place within the 2013-14 financial year. If that is the case, we will be hearing further details on the privatisation very soon.

The Government have framed their argument for privatisation in such a way as to suggest that Royal Mail is in imminent danger and that privatisation is the only solution, but that is not the case. Royal Mail is doing very well at the moment, and profits more than doubled in the past year, to more than £400 million. That is partly because the Government have taken over the assets and liabilities of Royal Mail’s pension scheme, saving the company £300 million each year. I congratulate the Government on taking that step. Of course Royal Mail needs access to capital for investment, but the urgency of the Government’s case seems to be driven more by a political timetable. There are many ways to get access to capital. For example, Network Rail is a public body that is authorised to access private capital, without affecting Government borrowing. This House has the right to expect the Government to look at other ways in which Royal Mail could get this access without going down the privatisation path.

The privatisation path is deeply unpopular, with not only the public, but Royal Mail staff. When the Communication Workers Union consulted its staff, it found that 96% opposed privatisation. Unite, which represents managers in Royal Mail, has also come out strongly against privatisation. The National Federation of SubPostmasters was originally sympathetic to some of what the Government were saying but it is now calling on them to halt the privatisation of Royal Mail, because of what it says is the Government’s failure to provide new work to post offices. In the briefings that it has been providing to Members throughout the country, which have been given to me by my constituents and when I have visited post offices over the past few days, the NFSP says that no new work has been awarded to post offices since May 2010 and that the new services that have been introduced are one-off transactions available only at a small number of post offices. It says that without the promised new Government work Post Office Ltd and individual post offices do not have a viable future and that a close relationship with Royal Mail is vital and will be jeopardised by privatisation.

One reason people are so opposed to privatisation is the fear that the universal service obligation will be under threat. The affordable six days a week service that is so valued in the United Kingdom is expensive to provide, particularly in rural areas. Rural post offices and rural postal services are most vulnerable because they are the most costly, and private parcel delivery companies routinely charge a high premium for delivering to remote or rural areas or to islands—or simply refuse to deliver at all.

A report by Citizens Advice Scotland in 2011 found that 83.8% of people surveyed living in remote parts of Scotland had been refused delivery altogether by a retailer using a carrier other than Royal Mail and that increased charges are normal. That is, of course, a problem not just in Scotland but throughout many parts of the UK.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

The hon. Lady mentions the universal service obligation. Is it not the case that the obligation is now better protected than ever as it has been written into primary legislation by Parliament?

[Katy Clark]

There is not a short answer to that question, but I will try to explore it. My point is that the legal protections are inadequate, as there is a great deal of uncertainty about where we will go. The 10-year agreement that has been entered into is not good enough and does not last long enough. I expect that we will explore those issues as we continue the debate.

--- Later in debate ---

[Sir Paul Beresford (Mole Valley) (Con)]

I noted the time limit, Mr Speaker, and demolished about two thirds of what I intended to say.

I congratulate the hon. Member for North Ayrshire and Arran (Katy Clark) on introducing the debate, and I agree with many of the points that she made. I particularly agree about the need to create opportunities for sub-post offices in rural areas to provide more services, and I intend to discuss exactly that and one other key point. My constituency is bordered by the south-west edge of the M25. It is close to London, but it is rural or semi-rural. Many people will have seen the London Mayor in the recent broadcast of the Surrey cycle race, and some may even have seen Mayor Boris puffing up Leith hill on his bicycle—not a Boris bicycle, but his own bicycle—and the beautiful countryside that is to be found throughout my constituency.

I want, however, to concentrate on something that is on the table. The mainstay of my rural post office services—and this was touched on in the opening speech—is provided by sub-post offices. My constituency has two main towns and perhaps 30 villages. A considerable number of villages have at their core a pub, if not two pubs, and a village shop, which generally incorporates a sub-post office. Between 2001 and 2012, Mole Valley lost a number of sub-post offices, which in turn threatened, sometimes fatally, the associated village shops. I understand that there are 11,800 post offices in the United Kingdom, and approximately 750 are what could be called main post offices. Logically, therefore, the remainder are sub-post offices, of which 55% are in rural areas. In the United Kingdom, 31% of those post offices are the only retail outlets in the area, and 58% provide some of the very few shops in village areas.

Sub-post offices are absolutely key to my villages. The viability of these sub-post offices is what I want to concentrate on, and I shall look at one particular angle. The Government can help us, because there is a move by Post Office Ltd to centralise a key front-office service: the system for the acceptance and checking of the printed photo ID market. Post Office Ltd is the front line in over-the-counter processing of digital photographs for licences issued by the Driver and Vehicle Licensing Agency, passports and other ID photos. This service is being cramped by Post Office Ltd. It is being moved to the 750 main post offices, where Post Office Ltd is installing at considerable expense what are called Cogent cameras, which will take the photograph and transmit it to the DVLA or Passport Office, as appropriate.

I have in my constituency the head office of Photo-Me. This is a business with which many of us are familiar because there are a couple of Photo-Me booths downstairs. There are many such booths throughout our small towns and, in my area at least, some sub-post offices have them. If the proposal to use Cogent cameras proceeds, my constituents will have to travel from their villages to a centre such as Guildford. It does not look far on the map and it is not far as the crow flies, but my constituents do not fly. I am aware that the trend is for on-line services, but according to a recent estimate, 40% of households in my constituency do not have a computer, let alone broadband. For many, the internet is so complicated that they prefer to use the printed form with the printed photograph. These folks will have go to Guildford, with some difficulty, or one of the other 750 main post offices, rather than the 11,500 sub-post offices that could be available. That is inconvenient and takes time. It means time off work and, at various times of the year for various people who work in rural areas, this is impossible.

A proposal has been put to Post Office Ltd by the chief executive of Photo-Me on behalf of a considerable number of photographers who currently produce ID photographs. There are about 1,500 independent photographers nationally, including well-known names such as Photo-Me, Jessops and Snappy Snaps, and a number of small outlets in small towns. The proposal is for the sub-post offices to have a relatively cheap scanner so that the sub-postmaster or staff can go through the transaction and scan the printed photograph into digital form to be sent online to the DVLA, Passport Office or whichever Government Department needs it.

For some years long and technical discussions, in which I have participated, have been taking place, first with the DVLA, which now accepts that that would be possible and is a very good idea. We have now reached the Post Office, which seems to have put up a brick wall. Having got technical acceptance from the DVLA, I hope we can persuade Post Office Ltd to put this cheap and simple system into our rural post offices. I am having difficulty with that. The benefits to the sub-post offices are obvious. They would provide a new, better and increased service, which would also increase the footfall in sub-post office shops, which has a knock-on effect, similar to the system that supermarkets work. If people want to go to the pharmacy in a supermarket, they have to walk past absolutely everything before they get there and on the way back as well. They look and they tend to buy, so they use that service. It is vital, as the hon. Member for North Ayrshire and Arran said, that we keep those sub-post offices in shops going.

[Jesse Norman]

My hon. Friend is making a powerful case on behalf of sub-post offices, a shining example of which is Hopes of Longtown in my constituency, which has a shop alongside it. Does my hon. Friend share my view that many of these sub-post offices are also rural sorting offices and that it is equally important to preserve that aspect? He may wish to join me in asking the Minister to dwell on that in future reflection and when closing the debate today.

[Sir Paul Beresford]

I thank my hon. Friend. I would love to be able to do so, but as he knows, we are short of time. He has made the point and the Minister appears to be making a note of it.

I am sure the Minister is as anxious as we are that rural post offices and sub-post offices continue. I would be grateful for an opportunity for two or three of us working in this area to have a meeting with her to discuss progress or, rather, the lack of progress. The chief executive of Post Office Ltd has offered to discuss the matter with me. I accepted her invitation some weeks ago but I await notice of time and date from her.

The importance and vitality of a rural post office and postal service must not be underestimated. Having seen the evidence in my constituency, I believe that the previous Government damaged that, but as many of their Ministers were urban they probably did not realise it or they turned a blind eye. In essence, I am looking forward to the Minister’s agreement and support at a meeting to try to persuade Post Office Ltd to see this as an opportunity to expand a service and increase footfall in the sub-post offices in our rural areas.