Postal Services Bill

Lord Cope of Berkeley Excerpts

Wednesday 16th February 2011 Lords Chamber

[Lord Cope of Berkeley]

My Lords, I will not begin by congratulating the two maiden speakers. It is a written rule in the Companion that that should be done only by the speakers following the maiden speakers and by the Front Bench. It was extremely effectively done by the noble Lords, Lord Low and Lord Hunt, respectively, so I shall reserve my congratulations to the maiden speakers for outside the Chamber.

I support this Bill and the changes that are proposed for Royal Mail, the pension fund and so on. My concern, like that of the noble Viscount, Lord Tenby, is about the post office aspects of the Bill, particularly for the sub-postmasters—the archetypal small business people in our country. We need them to flourish for all the reasons that the noble Viscount touched on and which others spoke about earlier in the debate. It is not obvious from the report and accounts of the Royal Mail holding company but sub-post offices—not the Crown offices that we often think about—are, by different measures, the largest part of the Post Office. The two types of business are, in some respects, in direct competition.

I live in the beautiful city of Bath. Not long ago, the Post Office drew a circle that centred on the Crown office in the middle of the city and compulsorily closed all the sub-post offices within that circle. The result is that now we all have to queue at the Crown office. I am glad to say that the Crown office has installed a sophisticated electronic queueing system, which is a great help. I am very thankful for that but the wrong decision was made earlier. Fortunately, the Minister repeated the coalition Government’s pledge to maintain the network. It is a most important pledge, to which I am certain they will be held by many people, not only me.

One important point is that a Crown office can lose money and still keep going, whereas a sub-postmaster who cannot make money will see his business collapse and close. He loses not only his job but his own money and investment, and his staff also lose their jobs. Sub-postmasters cannot keep going if they are not flourishing. Sub-post offices are not the poor relations of the Crown offices; they are the real engine of the Post Office itself. They are the part that works financially and, incidentally, the part that is popular with the public.

I said that the annual report and accounts do not distinguish between the contributions of the two types of post office, but I understand that about 80 per cent or 85 per cent of the Post Office’s turnover comes from the sub-post offices, of which there are around 11,000. The rest comes from the 373 Crown offices. It is clear that the Crown offices collectively make the loss that the Post Office has suffered in the past year or two—or longer than that—and the sub-post offices make a profit over and above what is retained by the sub-postmasters as their income.

We all know, as has been said several times this afternoon in various forms, that the way forward for both Crown offices and sub-post offices lies in new types of business, particularly government business—the government front door, as it were—and financial and banking business, which my noble friend Lady Wheatcroft and others have spoken about. This should in my view be available to all types of post office. More flexible franchising arrangements are desirable. Some pilots are being run of what I understand is called the Post Office Local model. That is a fairly ridiculous name as all sub-post offices are local, but I let that pass. The terms of the new franchises are said to be very restrictive. Post offices should in my view—they are not, apparently—be allowed to have more flexible opening hours. Why should all sub-post offices not be allowed to open and close when they and their customers wish them to do so? Not all offices at present offer all post office services. That is fine; I understand that. The vast majority run alongside a shop offering far more than the things a Crown office will offer, from cornflakes to whatever they like. The decision about whether a particular office should offer a particular service on the terms that are allowed to it is for the sub-postmaster concerned in my view, just as it is his or her decision whether to offer to sell every other type of product in the shop part of the business.

All this is the background, as it were, to the post office aspects of the Bill. The Bill provides in Clause 4 and the related clauses a framework for the mutualisation of the Post Office. I support employee involvement in general, including share ownership. However, as the noble Lord, Lord Christopher, indicated, the sub-postmasters and their staff are not in a comparable position to the employees of the Post Office in the Crown offices and in the headquarters and the regional offices, and the same arrangements will not be applicable to both groups of people. I believe that the Post Office has some 5,000 staff in total. There are twice as many sub-postmasters and sub-postmistresses and each employs their own staff. They may employ four or five members of staff, depending on the size of the office. They are not employees of the Post Office and it would not be right to provide for employee participation without providing for the participation of the franchisees comprising sub-postmasters and their staff who far outnumber the Post Office employees and who actually generate the profits.

I find it difficult to see how you can mutualise through a share scheme on the lines of the BT scheme—that was mentioned earlier, particularly in connection with the Royal Mail, where different considerations apply—in respect of the Post Office. How can you equate someone who has a job in the Post Office with someone who has their own business, is responsible for the staff they employ, has invested their own money and money they have borrowed, and for whom, in most cases, post office business is only part—admittedly, a vital part in many cases—of the service that they provide to the public? How do you measure what value of shares to give to one compared with the other? What about the staff of the sub-post offices? They are doing the same job as the Crown office staff; they are serving behind a post office counter. Will they get the same treatment under the mutual arrangements whether they are standing behind a Crown office counter or a sub-post office counter? It is difficult to see how you can work out a share scheme which will be fair in all these circumstances. That, of course, has led to the idea of a Post Office trust above the Post Office board, owning the shares of the Post Office itself, if that is the way it is arranged, with the duty of ensuring that the whole enterprise flourishes and that the interests of Post Office customers, staff, franchisees and the sub-postmasters and their staff are properly balanced.

The Bill does not settle these matters and I am by no means suggesting that it should. I have been a legislator for more than 35 years so I understand the limits of legislation and how much harm can be done by trying to cover all the eventualities in detail, trying to anticipate trends in a fast-moving world and, above all, by its unintended consequences. Legislation in a field such as this should provide an enduring framework within which detailed arrangements can be made and, if necessary, varied over years to come. However, I am concerned to ensure that the Bill enables the sort of solution that I have been speaking about, through some sort of trust, and we will look further at that.

I welcome the Bill and urge the Minister to do her best, as I am sure she will, to ensure that sub-post offices and their staff are treated well in all this. They are, in a wider sense, part of the decentralisation of power and services that is part of our much wider aims for this country.