Crown Post Offices: Franchising

Jim Shannon Excerpts

Thursday 10th January 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate. I congratulate the hon. Member for Wigan (Lisa Nandy) on bringing this debate to the House. The fact that so many people are here indicates our interest in the subject and the importance of post offices to every constituency. I am pleased to bring—as I often do in Westminster Hall—a Northern Ireland perspective to this debate. I will speak about some of the success stories that we have had recently in post offices and their strategy. I am pleased to see the Minister in her place. She looks very lonesome in that top corner, but from my discussions with her, I understand that she is very much interested in the views we are putting forward. I know her response will be positive and I look forward to hearing it.

I will also make some comments about the high street, because it is important to have a high street. I was just talking to the hon. Member for Ynys Môn (Albert Owen), and I said to him that if a shop goes vacant and stays vacant for a while, it almost becomes infectious. It is important to ensure that somebody comes in quickly; otherwise, it will lead to the problems we are seeing across the UK mainland.

I hail from a rural area that has seen the closure of every rural bank in the last five years. The Scottish National party has highlighted the issue of rural banks closing, which is something I have seen in my constituency in the last five years. Any change or alteration of the post office greatly concerns me. We have no banks at all in the Ards peninsula, where I live. Almost every bank that has pulled out—except Ulster bank, which has created a mobile banking service and has a customer adviser in the area once a week—has pointed to the post office and urged people to make the most of the ability to lodge money and lift money through the post office. I have to say that that strategy has been successful in the Ards peninsula for a number of reasons. First, the post offices are there—I will explain how we have been able to keep them over the years—and secondly, two credit unions have opened in Portaferry and Kircubbin, which give some banking opportunities and supplement other facilities.

The figures in the background information may be a wee bit deceptive—I say that gently and with sincerity to those who did it. Some 111 Crown post offices have closed and 1,008 agency post offices have closed. Attempts have been made to build that up by using the outreach service, which can help a bit, but does not take away from the main issue. The role of a post office is not just to do monetary things. Other hon. Members have said that post offices should be doing more where they can, and that is one of the things that I want to look at. What can they offer? Can I do my driving licence there? Can I do my passport there? Can I pay some bills there? Can I do other things? That is what we need to do. I am not sure that the outreach service makes that happen. Therefore, I suggest very gently that the outreach alternative is not really where we are. A well-run network of rural post offices is needed.

I am very aware of any changes to the services offered and I am supportive of colleagues who are losing branches to what has been described to me as privatisation by stealth. That is why I support this debate. I am here to register my support for the post offices and to support those hon. Members who are probably having more difficulties in their constituency than I have in mine because of some of the success we have had.

The briefing from the Communication Workers Union, which I am sure we all received, is clear:

“The Post Office Ltd uses public money to finance the closure and franchising programme.

Everything from compromise agreements to get rid of existing staff (£13 million in 2014-15 alone), to refurbishments on stores it then franchises (£4.6 million was spent on 39 branches), and installing post office counters in franchisees’ premises (the post office refuses to disclose this expenditure), are met by the public. Yet, in return, the public receive a reduced service.”

That is the concern we all share, as hon. Members have said. It continues:

“While Crown offices represent a small share of the overall network, they have historically brought in between 10-20% of the Post Office’s overall revenue”—

a significant amount that cannot be ignored—

“and so any further closures could jeopardise the future of the network.

There is no evidence of respite from the slash and burn approach either, as the Post Office Ltd announced in July that they want to attract new applicants to set up ‘New Network Locations’ in 450 postcode areas throughout the UK.”

That perhaps unsettles the present franchise and network of post offices, as well.

“This initiative will have a substantial and far-reaching implication on the future of every flagship Crown office and Crown office job, as well as impact on Postmasters in sub Post Offices across the network many of whom are already reporting they are struggling financially.”

The two independent reports to which some hon. Members referred—one by Consumer Focus from 2012 and another by Citizens Advice from 2016—concluded that the previous franchising of Crown offices to WHSmith resulted in longer queuing and service times, inferior customer service and advice, poorer disabled access and a reduced number of counter positions. Those facts tell the story. If a service is going to be provided, it should be a good service. If the service is run down and secondary, by its very nature, that leads to the further reduction of the Post Office.

Alongside that, the closure and franchise programme results in the loss of experienced staff, as hon. Members have said. The sub-post office managers in the peninsula that I represent have historically been second to none and we have been truly blessed, but part of that is that they have invested in their businesses. It is not the big firms such as WHSmith that have been offered the franchises, but the smaller shop groups. That has enabled post offices to be retained, because there is an investment, but there also has to be a wage for the sub-postmasters or sub-postmistresses to be able to continue running them.

Having post offices in shops and garages across the peninsula is one way that we have made it work. Someone signing on to work for another company and not as a postmaster or postmistress may not affect quality of the service, but it means the loss of what people see as a community asset. I think all hon. Members have referred to and understood the importance of the community asset that we have.

I have lived on the Ards peninsula for all but four years of my life. It is a close community that has grown, with many people coming to live and retire there. Over the years, the post office has been the cog at its core—a central point for meeting friends. It is also a central point for saying, “You know something? Mrs Jones hasn’t come in this week to collect her money or make a transaction.” The people at the post office know that and then, as they often do, they will call out to see if she is okay. There is a critical community aspect to the post office that cannot be ignored, which is neighbour looking out for neighbour, as we do in this House as representatives.

[Albert Owen]

The hon. Gentleman is absolutely right to talk about the social service as well as the postal service. There are also cash-handling services that post offices provide for small businesses. Wherever they transfer to, that service is not available.

--- Later in debate ---

[Jim Shannon]

The hon. Gentleman is absolutely correct. Small businesses are another aspect that I want to mention. When the banks closed, they said, “You can do your business through the post office,” but people need to have that opportunity for lodging money and for getting cash out to pay staff wages. That is really important for small and medium-sized businesses, and that is why the intervention that the hon. Gentleman referred to is critical.

The closure and franchise programme means that the relationships that customers have with staff are lost, and it limits the Post Office’s ability to expand into the new services that customers want it to provide, which is another thing we need to make sure happens. Moving to a model with less space, fewer specialist staff and fewer experienced staff is not a model that customers want or that will bring future growth.

In the short time I have, I will set out how the post office counters have developed in conjunction with small and bigger shops. I will mention some of those places, because it is important for the evidential base—probably no one will know where they are, but hopefully the Minister will get to know them shortly, when she comes to visit my constituency sometime in April, after we get Brexit out of the way. They include Ballywalter, Ballyhalbert, Greyabbey and Kircubbin; Ards town, where Scrabo post office closed but was moved to the Ards shopping centre, which is only a couple of hundred yards away; Stratheden, where the post office was moved out to one of the larger shops; and West Winds, where the same was done. Those examples worked because the shops were big enough to absorb a post office and a counter, and to give a service, but the person who took it on had to have a wage that justified them looking after it, which is important as well.

The Minister knows the pressure on the high street well, as do all hon. Members present. The news stories in the media are always full of negativity—“This store has done well. That store hasn’t done well.” We want to make sure that post offices can play their role. The Crown post office in Newtownards in my constituency is critical to the future of the high street, and we are pleased to report that it has been retained.

Although I am thankful for businesses such as the Spar in Carrowdore, which has incorporated a post office in its shopping outlet that carries out all the post office functions, including foreign currency, and whose staff are certainly highly trained, that does not seem to be the case for all franchises on the mainland, as hon. Members have said. As an MP for a rural area, I give my wholehearted support to those wanting to preserve the skill and make-up of post offices in areas that rely on them as the only monetary exchange.

Earlier, someone said that privacy is sometimes needed for financial transactions. I want that to be recorded in Hansard. That is perhaps the one thing I would like to see more often in a post office. We live in an age where everyone overhears conversations about other people’s monetary transactions in the post office, but we do need privacy for some things.

The Post Office was not designated for privatisation and I sincerely oppose an attempt to privatise it by stealth—I put that on the record. The service it provides is truly a lifeline in rural communities and that service must be first class. For that reason, it must be retained. I look forward to the Minister’s response. I know that in her response, we will hear some of the reassurance we need.