Crown Post Offices: Franchising

Jim McMahon Excerpts

Thursday 10th January 2019 Westminster Hall

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Sir Graham. You will get the idea that today, tempers are fraught and passions are running high. There is genuine concern about the impact of these policies on our communities, which are met with a Government who are stubbornly pursuing a course of action that has no support. You would be forgiven for believing that you are still chairing the 1922 Committee, but no: this is a debate on post offices, with MPs who are genuinely concerned about the impact of these changes on the fabric of our communities and the future of our high streets. We can dismiss post offices as places where people go just to post a letter or send or collect a parcel, but they are more than that: they are the community. They are part of our collective identity, secure a sense of belonging, and are also important to our sense of place. They are critical to the fabric of our community.

Oldham has seen more than its fair share of changes, and more than its fair share of taking the burden of modernisation and austerity. It has seen every single one of its day care centres and every single one of its council-run youth centres closed. It has seen thousands of staff sacked from the local authority. It has seen its police stations in Chadderton, Royton and Hollinwood closed; it has seen every single custody cell in a town of 250,000 people closed. It has seen the magistrates court closed; it has seen the county court closed. It has seen the taxpayer-supported Royal Bank of Scotland close every single branch in a community of 250,000 people, and when RBS decided to close its high street bank, what did it say? It said, “Part of our consideration is how close our existing branch network is to the post office network, because that will provide an alternative banking function for the local community.”

In these types of consultations, the organisation contacts the MP for the constituency where the branch is based. Ironically, however, Ward Street, where Oldham post office and the Royal Bank of Scotland sit, is on the boundary between Oldham West and Oldham East. My hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams) was contacted and consulted about the closure of the Royal Bank of Scotland branch, and I was consulted about the closure of the post office across the road, but never the two shall meet. There was no consideration of the impact that the Royal Bank of Scotland closing would have on the post office, and the Post Office gave no consideration to the impact on the high street and local community of the closure and relocation that it was proposing. That post office has just undergone a significant modernisation programme, with far more self-service facilities to free up staff time and so provide for a wide range of services that will not be transferred to the WHSmith branch in Oldham’s Spindles shopping centre. That is important—the branch is heavily used. We have not been given the exact usage numbers, but the Post Office admits that the Oldham branch is one of the largest and most heavily used branches in the north-west. That branch is extremely valued by the community.

Critically, the branch is located on one of our main streets, where buses drop people off. There are 62 drop-offs every hour on that road outside the post office. Interestingly, just beyond it is one of the steepest inclines in Oldham, which is quite a steep town anyway—anyone who has been there knows that it is a big hill with a town plonked on the top of it. That is the steepest incline down to the shopping centre, so to get from the string of bus stops to the shopping centre where WHSmith is located, elderly people and those with limited mobility will have to go down one of the steepest inclines in Oldham. At the moment, they can park in the loading bay, or on the yellow lines if they have a blue badge, and pop straight in without any problem. They cannot do that in the shopping centre: a blue-badge holder visiting Oldham shopping centre pays the full price, the same as every other car park user. Straightaway, people who rely on transport and their blue badge to use a post office will be hit with a charge that they currently do not have to pay, just for using that essential facility.

Oldham has a far wider range of services than neighbouring Rochdale town centre, where the beautiful, stunning Crown post office was closed with the promise that one would reopen in future. We are now years on and the replacement has not followed. In Ashton-under-Lyne next door, the Crown post office, in a beautiful Victorian building, was closed and then relocated to WHSmith in the shopping centre. Many of the services provided in Oldham are not provided in our neighbouring towns, so Oldham provides services for nearly 700,000 residents who need, for instance, to use a biometric enrolment service. If a non-EU national needs a residence permit or a permit to work, they have to go and use the biometric enrolment service there. If they do not use the current post office facilities—I understand the contract has been let out elsewhere—the nearest venue to go to from Oldham is Sheffield. How does that make sense when we are just about—potentially; who knows?—to leave the European Union and we do not know what immigration arrangements will be in place and what permits might be needed in future.

The idea of downgrading and changing the service is an absolute nonsense. Even now, particularly in Oldham, where we have a large Bangladeshi, Pakistani and Indian community, a very heavily used service will be taken away from local people and will be transferred.

What about the Care Quality Commission ID services? If someone working in the health and social care industry needs their ID checked to make sure that they are fit to work, they have to go to the post office to get it checked. If that service is not transferred from Oldham into WHSmith, people will have to go to Gorton or to Harpurhey, and there is not a single direct bus route to either of those places.

What about CRB checks if someone wants to work with young people? Teachers and youth workers have to get their ID checked. The service is currently provided in Oldham’s Crown post office, but is not provided in neighbouring Rochdale or Ashton town centres. The idea of downgrading those services for such a large body of the population is an absolute nonsense that shows the lack of co-ordination across Government. Has any consultation taken place with a Home Office Minister on the contractual change for the biometric enrolment service? Has any conversation taken place with the Department of Health and Social Care on the changes to the CQC ID services and the CRB check services if they are not transferred to WHSmith? Financial services, ID checking and current and credit card accounts are currently provided in Oldham, but not in neighbouring Rochdale or Ashton town centre, but they have the potential to be lost during the move, too.

We hit the ground running with the campaign in Oldham and started an online petition. Between our street petition that started in December and the online petition, we have about 2,500 signatures of local people. The hallmark of every one of the conversations that took place concerns how baffled people are that the move is even being proposed. People have been told that all the closures and the downgrading of the high street is because of austerity. They have been told how difficult it is for retail and how everyone needs to take their fair share of austerity and that is why they are losing all these other public services. People have been told that and for quite a long time they accepted that that is just the way it is—times are very difficult and that is the impact. Not a single person can explain why the move makes sense. It makes no sense to the community and the people who use the post office. It makes no sense for the high street to lose a vital anchor to support that part of the town centre and our Market Hall and the traders who operate there.

What about the fabric of our community? We have heard many fantastic contributions about the social role that a post office plays apart from the commercial transactions that are provided. When we hear people defending the modernisation programme—I use “modernisation” loosely—they say, “Things have to change. Things will never stay the way they are. You have to keep up with a changing world.” The post office modernisation programme is a good example of how it has tried to keep up with demand. The number of branches in the 1980s was 22,000. It is now down to 11,000, so we have lost half the network over the past 30 years. That is modernisation—if you like closing stuff—but it has taken on a far wider range of services, trying to be more commercial and trying to attract footfall in its premises. By and large, it has done a reasonable job and the community has benefited.

The Crown post offices have shouldered the burden. When we look at the closures across all the post offices, agency post offices are down by 9%, but Crown post offices are down by 29%. We have lost a third of our Crown post office network as a result of successive closures, but still the public pay into the post office network as a vital public facility. What is the deal? There was no public payback with the Royal Bank of Scotland. Taxpayers bailed out the bankers, and what thanks did they get? They walked away from every one of our towns, cities and high streets. What is the payback for the taxpayer with the post office network? What is the community dividend for the investment that we collectively make in essential public services? It cannot be a repeat of the Royal Bank of Scotland’s “to hell with the community, turn your back on the community”, simply because the Minister would not take responsibility and says, “This is just all commercial.” Such decisions are not commercial when generations of facilities that have been built up to provide that infrastructure in our community will be gone and can never be replaced.

Finally, I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this debate. She has seen the passion in the room today. I also congratulate the CWU trade union for the work that it does in leading the charge against the changes. The Minister has an opportunity. She is a young new Minister looking to set out on her ministerial career and to make her mark. Let everything that we have learnt over the past two to two and a half years be a lesson for everybody. If we pursue stubbornly a narrow direction that does not have support, ignoring what those with concerns say, we will end up in a cul-de-sac and people will be marked by that. I do not believe the Minister wants that mark on her reputation. I believe she wants a reputation as a Minister who understands that we are all here to represent our communities and to listen and to act on the legitimate concerns raised. Let that be her ministerial reputation and not one of stubbornness and closed-mindedness.

[Several hon. Members rose—]

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[Kelly Tolhurst]

What is definitely Government policy is to make sure that we have a network of post offices that offer a wide range of services to our constituents, and that that is sustainable into the future. Franchising is not a closure programme. It is a way to secure better sustainability for the future of our post offices, and it is a good thing that Post Office is working with high street retailers to recognise that.

The performance of the Post Office over the past decade shows that the network is at its most stable in a generation. Between 2010 and 2018 we provided nearly £2 billion to maintain and invest in the national network of at least 11,500 post offices.

[Jim McMahon]

I thank the Minister for her comprehensive response so far, but it would be good to get confirmation that this will move on, because we cannot keep having these debates every few months. Does she realise that the outreach service counts each and every stop that a mobile post office makes as a branch? A single vehicle travelling to a village for half a day each week or every two weeks would class each stop as a branch, which is where the figure of 11,500 branches comes from.

[Kelly Tolhurst]

I recognise some of the concerns about mobile branches that the hon. Gentleman raises. I can assure him that I am moving on to it, and obviously I have had the opportunity to listen to hon. Members this afternoon. I am sure hon. Members will agree that we do not want to go back to the days when we saw over 7,000 post offices shut, as was unfortunately the case under the previous Labour Government.

The post offices meet and exceed all the Government’s accessibility targets at the national level. Government investment in the network enabled the modernisation of more than 7,500 branches, adding more than 200,000 opening hours per week and establishing the Post Office as the largest Sunday trading network.

The Post Office’s agreement with high street banks enables personal and business banking in all branches, providing vital access to cash and banking services to consumers, businesses and local economies as bank branches continue to close. It is right to say that the agreement held with the Post Office and banks benefits our communities, which, as the Minister responsible I have made very clear to Post Office Ltd, to my colleagues in the Treasury and to the financial institutions that I have spoken to. The Post Office is providing a vital service to our constituents, and it should be remunerated for that—in doing so, hopefully that will ensure that our postmasters are also remunerated correctly for the service they provide to our constituents.

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[Kelly Tolhurst]

Absolutely, but that has not been done prior to today. We will take those things forward. I have met other Members about other issues in their constituencies.

It is right that the Post Office is commercially independent, because that enables us, as the major shareholder, to hold it to account at a ministerial level, and I am always happy to do that. I assure the hon. Lady that the proposed changes would add six hours a week to the Wigan branch’s opening times. She is correct—this goes back to an earlier point—that the ATM will not transfer over to the new site, so I understand her concerns about her constituents relating to that service, which would change in that situation.

[Jim McMahon]

Post offices are not the same from one street to the next; branches provide very different services. If these are not closures but relocations, is the Minister saying that the services provided by the post offices today will be entirely transferred across to WHSmith, and that there will be no loss of service?

[Kelly Tolhurst]

The programme of franchising is moving Crown postal services. Our objective is to ensure that, when the post offices are moved, they deliver better services and that constituents have better access to them. Part of the franchising programme is about ensuring we have a post office network for today, which suits the modern retail environment and consumers’ changing habits.