Postal Services (Rural Areas)

Lindsay Hoyle Excerpts

Monday 2nd September 2013 Commons Chamber

[Sarah Newton (Truro and Falmouth) (Con)]

The hon. Lady is making a powerful point and obviously represents a constituency very much like my own. Does she agree that there will be cases in which remote rural communities need these services so much that, although it will not be possible for them to develop commercially, they will need continued public subsidy? Will she join me in asking the Minister to commit to—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I ask the hon. Lady to sit down? Questions must be brief.

[Ms Ritchie]

I take the hon. Lady’s point. In remote rural areas, where there is little access to broadband, there must be an alternative in the form of the rural post office, with all its attendant services.

As we have seen with other privatisations, once the horse has bolted and the rationale of market practices has been enforced, it can be very difficult to reverse or even moderate the impacts. Despite assurances to the contrary, the end result is likely to be a reduced and more expensive service, and the fear is that rural services will be the canary in the coal mine.

We have received lukewarm reassurances that the universal service obligation will be retained, but it is feared that once private owners are placed under financial and competitive pressure, they will re-examine it and seek to change the terms of that important social compact, or be forced to contract their service. It would be completely unacceptable at any point for rural customers to have to pay more for that service. I ask the Minister to reassure us today that that will never happen, and that we are not on a slippery slope towards the erosion of the universal service obligation. I should also like to hear from her a more detailed explanation of how the Government and Ofcom will prevent a private operator from ever altering the terms of the agreement.

Let me reiterate that I do not oppose the modernisation of the service. Indeed, the initial plans for modernisation met a degree of approval. It was hoped that more Government functions and business would be returned to the Post Office, and that the plans would return post offices to the centre of local life and diversify the service to meet the needs of all in the community. Over the last 10 months, I have been pleased to be asked by the Post Office to open rebranded branches in my constituency, which have been open for more hours and have offered a broader range of services. It is important for such services to be retained in hard-to-reach rural communities. There is clearly a public demand for more of them to be provided, primarily through local post office branches. In response to a recent ICM poll, 89% of people said that they wanted a face-to-face service, and 73% said that they preferred the post office.

I believe that, following the recent review of banking and financial services, the Government have missed an opportunity to put the Post Office at the centre of a restructured retail banking sector. I believe that there is enormous potential for post offices to offer high-street banking services that would provide income for the Post Office while also bringing customers through the door to use their other services. That would apply particularly in rural areas that are currently experiencing a wave of bank branch closures. In Northern Ireland, Ulster bank, RBS, First Trust—part of Allied Irish Banks—and the Bank of Ireland are closing branches in rural communities.

If high-street banks were compelled, or encouraged, to offer access to a wide range of transaction services in local post office branches, and to make customers aware of that, we could see a revolution in the functioning of our post offices, and a revitalisation of the rural economy. What we need from the Government is an approach that aims to develop and support our postal services, bringing them into line with the 21st century while supporting their invaluable social function, but instead there is the fear that they will sell in haste and repent at leisure.