Post Office Closures

Margot James Excerpts

Tuesday 25th April 2017 Westminster Hall

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) on securing this crucial debate. Today’s attendance and the passion with which Members have spoken about the value of post offices in their local areas shows what an important topic this is. I suspect that, for several of us, this will be our last debate in this Parliament.

The Government certainly recognise the crucial role that post offices play in communities across the country. Between 2010 and 2018, we will have provided almost £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country. My hon. Friend talked about post office closures. There are more than 11,600 post office branches in the UK, and the network is at its most stable for decades. The number of branches declined substantially in the 13 or so years before 2010, but since then it has been kept absolutely stable. Graphs show that that is absolutely accurate. That is down to the transformation and modernisation of the network, thanks to taxpayers’ investment.

I thank my hon. Friend for his positive remarks about that network transformation programme, which has secured the transformation of more than 7,000 branches. I am sure that I am not alone as a constituency MP in having felt and seen the benefits of that transformation in the branches in my constituency. More than 4,300 branches now open on Sundays, nearly 1 million additional opening hours are to be added to the network every month, and losses have been reduced from £120 million to £24 million. That is a substantial result achieved by management and workers in the Post Office network. The subsidy that the taxpayer is obliged to put in has fallen by 60% since 2012. That is why the network is more stable than it has been for a generation. The Post Office has managed that transformation while maintaining customer satisfaction at more than 95% throughout the programme.

[Alex Cunningham]

rose—

[Andy Slaughter]

rose—

[Margot James]

I will give way once—I only have 10 minutes.

[Alex Cunningham]

The Minister boasts of the 60% reduction in taxpayer subsidy. Would it not be better for the taxpayer to invest in Post Office services, perhaps prevent some closures and downgrading and therefore maintain services for our communities?

[Margot James]

I agree that we need to invest in the postal service, and we are doing that. I hope that we shall continue to do so. However, I am afraid that one aspect of investment is making the existing structure of Crown post offices more efficient and affordable. Through the process of modernisation and franchising of Crown post offices, we have been able to reduce losses. That is a way for us to uphold our promise to keep post offices open in poorer and more rural areas that are not economically sustainable. I hope that the hon. Gentleman will at least understand that we are not just closing branches; we are franchising them and making them more efficient. We are then able to fulfil our promise to areas that need a postal service but would not have one if we continued to invest in loss-making Crown post offices.

[Andy Slaughter]

Will the Minister give way?

[Margot James]

I will not give way. I accept that not all Crown post offices lose money; but the majority of those that have been franchised did.

My hon. Friend the Member for Bexhill and Battle (Huw Merriman) put the case very well for the investment made by taxpayers and the Post Office in the service in his constituency; I join him in congratulating Mr Sanjiv Patel on taking the risk, as many others around the country have done. They have then found that it was good not only for their business but for the consumer. The Post Office is doing more for customers and doing it more efficiently for the taxpayer, and it is ensuring that post office services remain on our high streets throughout the country.

Franchising or hosting some Crown branches is part of the Post Office’s long-term plan to ensure that the network is sustainable. It is not about closing services; it is about moving a branch to a lower-cost model, often in a better location for customers, and securing and improving delivery of services. The change from a Crown to a franchise or host branch has been undertaken previously in many locations and is a proven success in terms of sustaining services, as post offices share staff and property costs with a successful retailer. We have heard examples of that this morning. As I was saying, Crown branches have moved from a £46 million annual loss in 2012 to a break-even position today. That is no mean feat. There are still loss-making Crown branches, which is why I do not think we can stand in the way of the Post Office as it makes its service more efficient and sustainable and more accessible to a wider number of people.

[Gill Furniss]

The Chamber is packed. What the Minister believes to be the facts, as she has given them to us, do not ring true with the concerns and experiences that even Conservative Members have described. It seems bizarre that when so many of us tell her there are problems she says the Government should not stand in the Post Office’s way; it does not seem the correct response. It seems to me that we have the responsibility; the Government must provide a proper service for all communities. Clearly, the figures that many eloquent Members have given today are at odds with the Minister’s view.

[Margot James]

I have talked so far mostly about financial issues. It is undisputed that the Crowns were losing £46 million and are now breaking even. There are still some loss-making ones to deal with. I appreciate that changes of the kind we are considering are not easy, especially when they involve staff who have worked in a place for many years. I know that the hon. Lady has had a briefing from the Communication Workers Union, and I have had meetings with it on several occasions; I sympathise with its position. However, it is essential that the business should continue to manage its costs to ensure that it can meet the challenges faced by high streets, let alone the Post Office, now and in the future, as the way we shop and get access to services continues to change.

Several hon. Members made points about Government services, and I agree that in 2010 the Government had hopes that the Post Office could take over many more such services; but the rapidity with which some of them migrated to the internet meant that that hope did not bear enough fruit. The staff in Crown branches that are being franchised have the opportunity to transfer to the franchisee in line with the TUPE process; or they can choose to leave the business. The Post Office offers a generous settlement agreement, which reflects the hard work, commitment and dedication that many employees have shown over the years. However, I reiterate the point that a more efficient Post Office is able to support and supplement thousands of small businesses, as my hon. Friend the Member for South East Cornwall (Mrs Murray) noted; she spoke with great authority about the needs of people in her largely rural constituency. The Government take those needs seriously and have honoured a commitment to maintain a service, even where it is not viable on a financial basis, to people living in the rural parts of her constituency.

[Mr Alistair Carmichael]

Will the Minister give way?

[Margot James]

I will not give way; I have no time left, really.

I agree with the hon. Member for Washington and Sunderland West (Mrs Hodgson) that poorer urban areas also have a great problem with access to local services—it is not just rural areas. I am pleased to tell her that the Post Office is now focusing on that issue. The Post Office is revisiting some poorer urban areas where it closed branches 10 years ago, to talk to retailers about setting up a local post office counter. I hope that that will succeed in the hon. Lady’s area.

[Andy Slaughter]

Will the Minister give way on that point?

[Margot James]

No; I have very little time.

I want to reassure the hon. Member for Motherwell and Wishaw (Marion Fellows); I listened to her heartfelt concerns about an accessible post office in the town centre in Motherwell, and I will ask the Post Office to meet her again to discuss the most sustainable option for a service there.

Many hon. Members talked about banking, and I agree that that is an opportunity for the Post Office. However, the Post Office bank idea was looked at closely in 2010-11, and it was decided at that time that the money that the Government had would be better invested in the transformation of networks to secure sustainable access to services.

[Albert Owen]

Will the Minister give way, on that very point?

[Margot James]

I cannot give way now; I have no more time.

The Post Office banking services are increasing now. They have grown 6% in the past 12 months. Credit unions are also being looked at.

[Stella Creasy]

They are not.

[Margot James]

They are. I will write to the hon. Lady, if I am returned, and tell her what the Post Office plans on credit unions are.

[Albert Owen]

On a point of order, Sir Edward. As we are at the end of term, and as many of us have raised issues, which the Minister is refusing to give way to answer, can you give me some guidance as to whether the Department will be able to give us the information as quickly as possible?

[Sir Edward Leigh (in the Chair)]

That, I am afraid, is not a matter for me. I am sure that in the remaining 30 seconds of her speech the Minister will do her best to answer any points.

[Margot James]

I am not refusing to take interventions; I am trying to conclude my response to Members’ legitimate concerns. I think that I have responded to quite a number; but I must allow time for my hon. Friend the Member for East Worthing and Shoreham to conclude the debate.

[Tim Loughton]

I am happy for the Minister to take it.

[Margot James]

Okay, but I am not going to fill it with interventions; I am going to carry on.

Hon. Members have said that post offices do not have click and collect services, but I want to reassure them that there are 10,500 local post offices that do provide those services. That is another area of potential growth. I invite Members to write to me if their constituency branches do not have them; we will look into it. As to the allegation about hours being reduced in convenience stores, I am pleased to confirm that that is not the case. Opening hours are not decreasing in the fullness of time.

[Stella Creasy]

The Minister has just told the House that the Post Office is working with credit unions, but that is not what they tell us; they say that they are open to doing so, but that nothing has happened in the past five years. The Opposition are all talking about financial inclusion; will the Minister commit to revisiting the issue and actively working with alternative providers who will deliver?

[Margot James]

The Post Office does work with credit unions where it can, but there is a common link through the Co-op in some transactions. The difficulty has been—and as the hon. Lady is an expert on credit unions perhaps she can help us to solve the problem—not having a common banking platform. When a common banking platform has been developed, further inter-working with credit unions should be possible. We take financial inclusion seriously.

I want to talk a little more about banking; I think that my hon. Friend the Member for East Worthing and Shoreham is happy for me to continue.

Motion lapsed (Standing Order No. 10(6)).