Post Offices (Islington)

Jo Swinson Excerpts

Tuesday 29th October 2013 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I welcome the opportunity to discuss post offices in Islington with the hon. Members for Islington North (Jeremy Corbyn) and for Islington South and Finsbury (Emily Thornberry), and I congratulate the hon. Member for Islington North on securing this debate on proposals to change the Crown post office network and the impact on branches in Islington in both constituencies.

The hon. Gentleman eloquently set out his concerns and all MPs understand the real issues and worries that constituents feel when changes are proposed to the post office network because it is such a vital part of our local community infrastructure. That is why we want to ensure that it is preserved and looked after so that it has a positive and sustainable future. We all know that there is heightened local concern following the previous closure programmes in 2003 and 2008. That certainly affected my constituency, and those of both hon. Members, where four and seven branches respectively closed in Islington North and Islington South and Finsbury. That is why it is important to take a different approach and protect the post office network.

We have announced investment of £1.34 billion over the current Parliament to maintain the post office network at a level of at least 11,500 branches and to modernise up to 6,000 existing branches by 2015, ensuring that we improve the service that we offer to customers by addressing some of the issues that both hon. Members have raised, such as the size of queues and the time people must spend in them. As the hon. Lady rightly said, people do not have 45 minutes to stand in a queue at a post office. That is why some of the changes we are making, including longer opening hours, should help to put the Post Office on a much firmer and more sustainable footing. That will enable people to go to the post office at a time that suits them, and spreading the points at which people may go to the post office will have an impact on queuing times.

[Jeremy Corbyn]

Will the Minister confirm that there is no reason on earth why existing Crown post offices cannot open for longer hours and that the Communication Workers Union is happy to negotiate terms and conditions to accommodate that?

[Jo Swinson]

Obviously, all operational matters are for discussion between Post Office Ltd and the relevant unions, but longer opening hours are welcome and could be implemented in the existing Crown post office network. With the post office local and the post office main models, longer opening hours are being rolled out in the rest—and, by far, the bulk—of the network. The investment that is being put into those branches is being used to secure longer opening hours as part of an overall new negotiation and deal with those sub-postmasters. They will receive investment and a new way of working with their branch, but the quid pro quo for that has to be that the opening hours are enhanced, which has an additional customer benefit.

We know that customer satisfaction statistics for the new post offices that have been opened show that customer satisfaction is significantly increased. The hon. Lady mentioned the newly refurbished post office in Essex road, which she opened just last Friday. I am sure that she found—as I have, when I have opened post offices in my constituency and have been to others around the country—that the feedback from customers shows that they are incredibly welcome. What often happens is that a post office, which perhaps was dark, cramped-looking and not fit for the 21st century, is taken and turned into something that is much more akin to modern shopping and retail environments, and it will therefore attract more customers and be more successful.

[Emily Thornberry]

The Minister is right, and may I plug Essex road post office? It is a fantastic post office and well saved. However, why is the Essex road part of my constituency fit for a proper office, yet we cannot get one on the A1, which is the main street that goes through my patch?

[Jo Swinson]

Obviously, the post office network is complex, with a wide range of outlets across the country. In working out the best locations for all those post offices, Post Office Ltd has to take into account a wide range of factors. The post office that the hon. Lady recently opened in Essex road is under a different kind of model of ownership from those at Highbury and on Upper street, which are part of the Crown network. The Essex road post office, which has become a main office, is obviously not part of the Crown network.

Most customers would be blissfully unaware of the different structures of different parts of the network. However, of the some 11,800 branches that exist now, about 370 are part of the Crown post office network and therefore directly operated by the Post Office. The vast majority of post offices are run as sub-post offices either through franchise agreements, such as through multiple chains—WH Smith has been mentioned, but there are many convenience store multiples—and also by many individual, independent sub-postmasters who run their own post offices in their communities, effectively, as their small businesses. Trying to manage such a diverse network brings its own challenges.

In particular, I want to turn to some challenges facing the Crown part of the network. Numerically, about 370 post offices out of 11,800 is a small part of the network, but none the less, it has been responsible for a significant proportion of the network’s losses in recent years. Of the post offices that we are discussing today, those on Holloway road, Highbury corner and further down Upper street are in the Crown network. In the last full financial year, that part of the network sustained losses of £37 million, which is a third of the overall losses for the whole network. Those 370 branches are, by and large, in busy town and city centre locations, and that situation is unfortunately not sustainable. Ultimately, any retailer that was losing significant money on branches in such prime locations would be looking seriously at how to cut costs to ensure that that part of its network and operations were, at the very least, breaking even.

[Emily Thornberry]

The Minister is being generous in allowing me to intervene again. Is she able to inform us how much money the Post Office made when it sold off the Almeida site? Surely, that could subsidise post offices in Islington until the next century.

[Jo Swinson]

As I am sure the hon. Lady will understand, I do not have that figure in front of me, but I will endeavour to find that information out from Post Office Ltd and ensure that it is forthcoming to her, if that is possible within the bounds of commercial confidentiality. However, the overall picture for the Post Office in terms of revenue is that it is not possible to continue operating a Crown network that has the kind of losses that have been sustained over many years. That is why we are transforming the Crown part of the network with £1.34 billion of Government investment until 2015. We also want to ensure that we put the Post Office on a firm footing and eliminate the losses in the Crown network by 2015. That is only fair to the taxpayer, who is also providing significant subsidy, and it is also about good commercial practice.

The franchise plans are part of the overall plan to get the Crown network to break even. We have chosen 70 individual locations that Post Office Ltd thinks are less likely to be able to become commercially viable without franchising. Those proposals have been put out for franchise opportunities. The hon. Member for Islington North mentioned Archway, which is not in the list of 70, so there are no plans to franchise that at the moment. He also mentioned Finsbury park—I am not certain whether that is a Crown office or a different model.

[Jeremy Corbyn]

It is a Crown office.

[Jo Swinson]

In that case, it is also not on the list of 70, so, again, there are no plans to franchise Finsbury park post office either. I hope that that reassures the hon. Gentleman. On the point about Holloway road, he mentioned that nearby there are no WH Smiths, which is not the only possible franchise partner, but any franchise-specific proposal that will be undertaken in relation to the local situation will also be subject to a further six-week consultation period when a proposal is brought forward. The hon. Gentleman and his constituents will have the opportunity to contribute to that. If the proposal is not sensible for that location, Post Office Ltd should take that into account.

[Jeremy Corbyn]

I thank the Minister for giving way; she is being generous with her time. In the event that no franchisee comes forward for Holloway post office—I understand that none has come forward so far—will she guarantee that the post office will remain open and that the staff will retain their jobs at that post office?

[Jo Swinson]

I am not certain whether no franchisee has come forward—my understanding was that there had been interest in all the individual branches—but there will not be a sudden withdrawal of the service if a suitable franchise is not found. The Post Office has a responsibility to ensure that it continues providing the service where it exists, so it is looking for franchise partners to see whether something suitable can be found. However, if no suitable partner is forthcoming, the Post Office will not be able just to get rid of the existing post office. It would not be possible for it to do that. I hope that that reassures the hon. Gentleman.

I turn briefly to the merger of the two Crown post offices at the Highbury and Upper street sites. I have seen photographs of them, and hon. Members have pointed out that the temporary portakabin nature of the Highbury site is not ideal. The hon. Member for Islington South and Finsbury talked about disabled access issues for the existing—and very beautiful—old Victorian building in Upper street. Looking to merge those Crown services into a new, much more purpose-built facility elsewhere on Upper street and between the two—about 420 metres from one post office and 150 metres from the other—should provide much better customer service.

I highlight, however, that that is currently subject to a 12-week consultation, which opened earlier this month and closes on 27 December. I urge any relevant constituents or people who are interested to respond to the consultation. The fact that the lease for the building on Upper street runs out in March 2014 is relevant, because clearly, we want to ensure continuity of service provision. I understand that the council has made offers, but there is an issue about when some of those offers have been forthcoming. The information that I have shows that that has happened incredibly recently, and clearly, plans need to be put in place to ensure that the provision is ongoing.

I hope that people respond to the consultation and that customers in Islington have a new opportunity for better services from the Crown network, as well as from the other modernised part of it, such as in Essex road, where the change has clearly been shown to be very positive—actually, I think that I visited Essex road post office some years ago. I hope that my comments have been helpful to both hon. Members here today.