Crown Post Offices: Franchising

Liz McInnes Excerpts

Thursday 10th January 2019 Westminster Hall

[Liz McInnes (Heywood and Middleton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. I pay tribute to my hon. Friend the Member for Wigan (Lisa Nandy) for her thorough and eloquent opening speech, which set out very clearly why this is such an important subject. It means a lot to my constituents, particularly in the Middleton area, where in October last year we learned of the plan to move our busy town centre Crown post office into a branch of WHSmith. My constituents are extremely concerned about the potential loss of their post office from its current site and its proposed move into a struggling retail outlet in the town. If I was told that the branch of WHSmith was moving into Middleton post office, to increase its footfall, that would have made a lot more sense. I might have supported the move as mutually beneficial, but to do it the other way round is simply farcical.

WHSmith faces an uncertain future. Last year it announced the closure of six of its high street stores, plus the planned closure of 24 of its budget Cardmarket outlets, over the next three years. It is well known that WHSmith’s high street stores have struggled and that they are shored up by overpriced airport, railway station, motorway service and hospital outlets.

[Gordon Marsden]

My hon. Friend is absolutely right. It is not the time of year to promote chocolate or other consumables, but would she agree that some of the prices that WHSmith charges at the outlets in railway stations and other places are scandalous in terms of the mark-ups?

[Liz McInnes]

My hon. Friend is right. There was a scandal last year about a particular hospital outlet that was charging eight times the high street price for toiletries, and getting away with it because it had a captive audience. Last year, a 7% rise in trading profits at WHSmith’s hospital and travel stores helped to offset a 3% fall in sales and profits at its high street stores, so we clearly have a business that is struggling. It is a huge risk to relocate vital post office services into a business that is closing stores and might lose more.

Over the past five years, the Post Office, which is entirely owned by the Government, has announced the closure of 150 flagship Crown post offices. The announcement that a further 74 Crown post offices are to be closed and franchised, including the one in my constituency, means that the Crown network will have been cut by 60% since 2013. Closing flagship branches, getting rid of experienced staff and putting counters in the back of a WHSmith is not the plan for growth or innovation that the post office network so desperately needs, and does not offer the level of service that the public should expect. At best, the relentless closures point to a lack of vision; at worst, they suggest the managed decline of a public asset.

My constituents have shared their concerns with me about the potential closure of our post office, and a local petition to save Middleton post office has so far attracted nearly 1,000 signatures. Our high streets are already struggling, and the loss of our flagship post office will be a major blow to Middleton town centre. Many constituents have made the point that it makes no sense to move the post office counter service to WHSmith 500 metres away, disconnecting the counter service from the sorting office, which will remain where it is. We are assured that public consultation on the future of Middleton post office will be happening at some point but my constituents are quite rightly concerned that this is already a done deal and that their responses will be ignored. I would like reassurance from the Minister, which I can pass on to my constituents, that she will ensure that any public consultation is meaningful and that the concerns of the general public will genuinely inform and shape any final decisions.

The chief executive of WHSmith, Stephen Clarke, has said that the franchising of post offices into his stores is attractive to the Post Office because his stores cost less to rent and run. It is wholly unacceptable that this is used as justification for backdoor privatisation of our Government-owned post offices. In the absence of a business plan for the Post Office, it would seem that saving money is the only motivation for the move. It seems odd that a party that claims to be the party of business has no clear plan for improving the performance of the post offices it runs. It is also highly significant that the so-called party of business cannot turn out a single Back Bencher for this important event.

I end by asking the Minister to put a stop to the process of privatisation by the back door and to begin a review of how the Post Office can grow its business through new products and innovation. We expect nothing less from the self-styled party of business.

--- Later in debate ---

[Andy Slaughter (Hammersmith) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham.

[Liz McInnes]

Follow that.

[Andy Slaughter]

I will, but in my own manner and style. [Interruption.] Do not worry, there is no risk of passion. It is good to see you in the Chair, Sir Graham. We have not quite had 48 Members talking about posting letters today, but I hope you feel at home nevertheless. Labour Members are much less fractious, which is helpful.

We have had such a high turnout because of the excellent timeliness of the debate. We have had a good debate, and that is thanks to my hon. Friend the Member for Wigan (Lisa Nandy), who always captures the zeitgeist. As a former Hammersmith Broadway councillor, she will know how much we have grievously suffered in Hammersmith and Fulham from the depletion of the post office network. Indeed, the Crown post office in her ex-ward moved some years ago and was franchised into WHSmith. In the past few weeks and months, I have had complaints about the service operating there.

One by one, we have lost every Crown post office through closure or through their being stuffed into a WHSmith branch. Last year, we had one left, which was the Shepherds Bush post office on Shepherds Bush Green. It is a good site and a dedicated building, and it is quite famous, because one of its frequent customers was the comedian Richard Herring. When he had his Metro column, he used to write about the Shepherds Bush post office and the more eccentric members of the constituency who he used to meet on his almost daily travels there. It was a good, friendly place, and it had wonderful staff with long service there. It was a busy branch, made more so by the fact, as is often the case in town centres nowadays, that banks were closing branches and referring people to the post office. We thought it was good.

Last year, we were told that the post office had to move because the lease was up on the building and the landlord was redeveloping. Reluctantly, we accepted that. I spent a long time helping to look for another site in the town centre. I spoke to the local shopping centre and we tried to provide something else, but talking to the Post Office is like banging one’s head against a brick wall, because the only deal in town is WHSmith. I do not know what the commercial terms are, but I suspect that the Post Office gets the space for free, or something like that, because WHSmith is so desperate to increase footfall in its pretty lousy shops. The Post Office is made an offer it cannot refuse on those terms. That is what happened.

The post office closed and moved a five or 10-minute walk away, depending on mobility, to the Westfield shopping centre. As we have heard, the office is hidden away in the back of a WHSmith with no natural daylight. Because it is the largest shopping centre in Europe and has a good footfall, the office has survived and kept its busyness and activity, but with a completely different clientele. I am glad to see that we have the support of the National Pensioners Convention and many disability rights groups in pointing out that it is not just about the facilities in the post office, but about the accessibility. Most of the elderly and local people who used to use that post office now go to sub-post offices half a mile or a mile away because they are more accessible than where the Crown post office has moved to. None the less, things continued.

The one thing we were told was that, despite the disruption and despite moving to a less favourable and less convenient location, the branch would remain a Crown post office. In all the meetings I had with the Post Office—this was only a year ago—it said that the branch would be a Crown post office with all the advantages of that. Guess what? When the wholesale franchising and closure programme was announced last year, we found out that, no, the branch would become franchised and part of the WHSmith network.

Like my hon. Friend the Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) and many others, I pay tribute to the CWU, which has run an effective campaign drawing attention to the issue. The Post Office thought it could get away with it because the public would not notice a change in ownership. The changes were not necessarily, as was the case with Shepherds Bush, about moving the facility, so the Post Office thought there would no apparent change. The CWU has done an excellent job in drawing attention to the matter, because the implications are severe.

To take the example of Shepherds Bush, the manager will leave and retire after more than 20 years’ service. She has been excellent. Half the staff are similarly going to take the settlements on offer and go. The others all want to move elsewhere in the post office network, to those few Crown post offices and other services that remain open. Not one wants to join WHSmith, even though some of the staff at Shepherds Bush have already moved there from other Crown post offices closed in the recent past, including the Acton post office in the seat of my hon. Friend the Member for Ealing Central and Acton (Dr Huq).

Why do people not want to work for WHSmith? It is not too difficult to work out. When I looked at the new rosters, sometimes less than half the number of staff will be on duty. I was there just before Christmas, and it is a busy office with queues, yet WHSmith thinks that where five staff are on at the moment, it can manage with two in future. That is bad for the customers and for staff, too. The terms and conditions are appalling in terms of pensions, holiday and pay. People will be on the minimum wage and could be on half the pay they would have earned as an experienced postal worker working for the Post Office. I am sure that many of the staff at WHSmith try to do a very good job, but as an employer it is appalling. Anyone who does not believe me should follow the Twitter account, @WHS_Carpet, which is a rather tongue-in-cheek look at the extraordinary way in which that business conducts itself. We do not know whether it will have a future. What a risk to take, putting post offices into those stores.

I am afraid that Post Office Ltd has shown a contempt for very loyal staff, who have often stayed with it over many years. It has also shown an attitude of defeatism. Where is the leadership? Where is the confidence in the services that it provides? There is none. It is all about cutting back.

That comes on top of a number of other initiatives that have depleted the network. I know that we are not talking about sub-post offices today, but within the last two to three years I have also had three sub-post offices—two of which were the nearest ones to Shepherd’s Bush Green—close “temporarily”. I think one has been temporarily closed for more than three years now, on the basis that we cannot find anywhere for it to go.

Overall, the service that is available is becoming worse, and for those who rely on it, which is still many people, there are longer distances to travel and longer queues to stand in. I would like to know from the Minister what the justification is for paying out quite large sums from the public purse to try to induce members of staff to retire, move on or take redundancy at this point. Presumably that only helps WHSmith, because it does not have to inherit those staff under TUPE conditions.

I would like to know what happens to all the equipment in the post offices. Very expensive and often quite new equipment has been fitted there. Is that simply handed over to WHSmith, or are payments made? I would like to know why senior managers in Post Office Ltd have received 7%—in some cases 9%—pay rises this year, given what they are presiding over. The staff have received less than 3%.

I feel that I have been misled over what has happened in relation to the post office network in my constituency. I also think that the Communication Workers Union and the staff have been misled, because they have worked in good faith over many years to try to ensure that the business is profitable. That has meant, in some cases, reducing staffing—by agreement and in the proper way, through collective bargaining—in a joint effort and in the belief that the management were sincere in their efforts to ensure that this viable Crown network would survive. All they have actually achieved is to do the dirty work of the Post Office, which now has fewer staff that it has to pass over to WHSmith. That makes it easier to do, but even so, it is relying on money.

There has not been a proper public consultation. I was struck by the comment from Post Office Ltd to the all-party parliamentary group that this is

“a commercial decision for us, not them”,

“them” being the public. This is a matter of great concern to the public, and it has not been given proper consultation or publicity.

I end by asking the Minister to consider, even at this late stage, a moratorium on the closures and changes. Please can we look again at the network, and have a proper review of services before we proceed in this way? Otherwise we will stumble through this and be back here again in six months to a year facing more closures of Crown post offices, until the network does not exist at all. It is part of our heritage, and part of something that we can be very proud of in this country. It still provides an excellent public service where it operates, and we are letting down not only the organisation’s staff, but all the customers who rely on post offices across mine and each one of our constituencies.

--- Later in debate ---

[Gill Furniss]

I very much agree, and I will go into that point in more detail later.

Post Office management claim that they will have six months’ notice if a retailer that hosts a Post Office counter collapses, but in reality a collapse could be immediate and would risk the total closure of the counter. It seems reasonable that contingency planning should be done to prepare for all eventualities. Has the Minister had any discussions with the Post Office about the matter? Can she assure us that she is aware of reasonable contingency plans for any of those scenarios?

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) referred to the independent reports published by Consumer Focus in 2012 and by Citizens Advice in 2016, which looked at the impact of closing and franchising former Crown post offices and locating them in WHSmith branches. They concluded that it has led to an increase in queuing and service times, a deterioration in customer service and advice, poor disabled access, and a reduction in the number of counter positions. As hon. Friends have pointed out, the retailer has been voted as providing some of the worst customer service in the UK—surely not a ringing endorsement.

The impact of these changes on local communities is significant, and vulnerable people, the disabled and the old suffer the most. The general secretary of the National Pensioners Convention, Jan Shortt, has said:

“Older people are some of the biggest users of the Post Office, and many rely on being able to talk to expert staff, but the move to franchise services to WHSmith is going to be bad for customers...pensioners will find some of the offices are no longer easily accessible or particularly private. This will become a second class service if we don’t stop these plans immediately.”

Similarly, the chief executive of the deaf and disabled rights charity, Inclusion London, and representative of the UK-wide Reclaiming Our Futures Alliance of disabled people and their organisations, Tracey Lazard, said:

“Replacing accessible Post Office premises with a post office counter squeezed into the back of a WHSmith store can leave Disabled people at a significant disadvantage, particularly people with a mobility impairment. Post Office Ltd should be taking action to maximise the accessibility of its premises and services rather than taking this retrograde step that cannot be justified and will instead further Disabled people’s exclusion.”

[Liz McInnes]

Given that Crown post offices are Government property, and that Post Office Ltd is proposing a change that may well be detrimental to disabled people, does my hon. Friend agree that it is absolutely incumbent on it to carry out an equality impact assessment?

[Gill Furniss]

I completely agree. I am sure we will be asking the Minister whether she will address that, as it would seem that it is completely irresponsible of Post Office Ltd not to do so. It should be at the heart of any consultation with the public and the organisations I have referred to, which represent many of those people.

Despite fierce local opposition to the closures and the franchising programme, the Post Office has not undertaken serious and meaningful consultation and has been clear the closures will go ahead. At the meeting of the all-party parliamentary group for post offices in October, when asked that the consultation process consider the range of views on the matter, senior Post Office representatives were forced to admit that the decisions about the closures had been made, and that the consultation would merely be an exchange of information and a look at further details. Given the Post Office’s public mandate and the fierce opposition to the closures, that is astonishing.

My hon. Friend the Member for Oldham West and Royton (Jim McMahon) highlighted the particular impact that the closures will have on disabled constituents in our communities. There is also the impact on financial inclusion, as well as on the many other services, including the very important biometrics and essential Home Office information and documents that are issued in post offices. In the end, despite huge public opposition, a large amount of public funds have been used, with significant job losses and significant closures.

The Minister will no doubt repeat what she has said before about not having overview of Post Office structures and processes, referring to the fact that these are commercial decisions for the Post Office. However, I refer her to a petition that the current Prime Minister, the right hon. Member for Maidenhead (Mrs May), presented in March 2008. My hon. Friend the Member for Wigan cited it earlier, and it is worth mentioning again. That petition urged the Government to “instruct” the Post Office to halt the closure of the post office in Maidenhead and

“to listen to the views of local people in respect of their objection to the closure of this vital part of the local community.”—[Official Report, 6 March 2008; Vol. 472, c. 142P.]

Perhaps the Minister could take a lead from the Prime Minister under whom she serves, call in Post Office management and instruct them to halt the closures. Instead of investing in our post offices, maintaining expert staff and broadening the services available, the Post Office under this Government is going backwards.

I applaud the Communication Workers Union for its campaign, Save our Post Office, and its championing and protecting of workers’ pay and conditions of service. At the same time as post offices are closing, sub-postmasters are seeing a decline in remuneration. Many have written telling me they are just about breaking even but earning less than minimum wage, and services are declining. My hon. Friend the Member for Glasgow North East (Mr Sweeney) gave worrying examples of this trend of many sub-postmasters losing their livelihood and acquiring significant debt. I have had correspondence from a sub-postmistress who told me that she is likely to lose her home because the figures she was given when taking on that sub-post office have never been realised.

How is the Minister scrutinising the Post Office’s strategy and what it means for the service? Will she outline what consultation there will be to ensure the strategy brings in relevant stakeholders and the public in a proper wide-ranging consultation? I am quite astounded that the Minister did not once come to the House so that parliamentarians could have the opportunity to scrutinise these decisions and what they mean for our constituents.

The Labour party has been clear. We want to grow the service, end the closures of our Crown post offices, maintain good pay and conditions for staff and innovate into the future, because we believe in our public institutions and what they mean to the public. At last year’s election, we pledged to create a commission to look into setting up a post bank, which would be an important step forward in financial inclusion and would also provide important income streams to maintain, sustain and grow post office services more widely.

I am pleased we have had the opportunity to debate this important matter today. I urge the Minister to recognise the strength of feeling expressed in today’s debate and reconsider her position. I urge her to take a more considered approach with the Post Office—a publicly funded institution—first, by halting the closures and, secondly, by holding Post Office Ltd to account for the decisions it is making that are having a negative impact on our constituents.