Backbench Business

Neil Coyle Excerpts

Thursday 17th November 2016 Westminster Hall

[Kelvin Hopkins]

My hon. Friend makes a good point. The union and I support the idea of having proper pay for all staff so that sort of discrimination and inequality does not occur. All staff should be TUPE-ed over as they wish. They should not just be bought off with public money to enable WHSmith to make more profit.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

I thank my hon. Friend for securing this important debate. This is a big issue in my constituency, in which Blackfriars Road and Walworth Road Crown post offices are set to be franchised. Does he think that the fact that the incomes and pensions of the current staff are being put at risk completely undermines the commitment that the Prime Minister made at the Conservative conference to a more responsible capitalism?

[Kelvin Hopkins]

I will come on to talk about the fact that the Post Office is abandoning its defined-benefit pension scheme. That should be resisted and opposed.

The Government said that they would keep the Post Office in public ownership when they privatised the profitable Royal Mail, but franchising to private retailers is not public ownership. The public interest has been put at risk while Royal Mail is paying out more than £220 million a year in dividends. The Post Office’s revenues are falling, the “Front Office for Government” plan never actually got off the ground and Government funding is reducing.

I have a number of suggestions for the way forward. First, discussions about the Post Office’s future must be subject to parliamentary scrutiny and approval. Secondly, the Post Office must commit to making no threats of compulsory redundancy. Thirdly, the Government must deliver on their pledge to make the Post Office a “Front Office for Government” and set up a UK Post Office bank. Fourthly, the Government should stop using public money to subsidise the outsourcing of Post Office services to retailers. Fifthly, the plan to close the defined-benefit pension scheme should be abandoned; the scheme has a surplus of £130 million at the moment. Sixthly, the Post Office must be required to use the remaining Crown post offices to drive the growth of the new services and to give a secure future for the whole post office network.

The Post Office must remain as a vital public service and a community resource for the long term, with secure jobs and good terms and conditions for all its employees. My own preference is that a future Labour Government should bring Royal Mail back into public ownership and create a comprehensive integrated postal industry using internal cross-subsidies where necessary and appropriate. I imagine that may be expecting too much of the present Tory Government, but it would undoubtedly be massively popular with the public and serve us all well for the long term.

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[Mr Mark Williams (Ceredigion) (LD)]

I will be very quick. In many ways, I will reiterate many of the messages that we have heard in the Chamber this afternoon. I will reflect specifically on the position of the Crown post office in Aberystwyth in my constituency.

Many Members have talked about the inadequacy of the consultation process and the complete inability of the Post Office to listen to the many representations that have been made. That is certainly the case with the campaigning that we undertook in my constituency. We were not surprised that WHSmith emerged as the franchisee in Aberystwyth. Of the 28 branches where franchise partners have been announced this year, 27 have been with WHSmith. I have to say that, since the announcement of a consultation in March, nothing more than lip service has been paid to that word.

[Neil Coyle]

It is very difficult for Post Office representatives to listen to local communities when they do not even attend a meeting. The Walworth Society in my constituency set up a public meeting with councillors and myself, and the Post Office did not even turn up.

[Mr Williams]

I have had exactly the same experience in my constituency. We had two public meetings. The Post Office came to the second one, but not the first. We had petitions and demonstrations. We made representations to everybody, with four political parties working together on the streets of Aberystwyth. It was a very good experience, but it has had absolutely no effect on WHSmith whatsoever. Individual managers have been courteous and polite, and have occasionally answered the phone and come to see me but, on the substance of the case, we have been well and truly ignored.

The Post Office still has not addressed the fundamental concerns we have raised. The research undertaken on the record of WHSmith by Consumer Focus—a very good organisation that existed at the time—concluded that queue times, services times and customer advice are all worse under WHSmith than they were under the Crown post office regime. There are also genuine concerns about disabled access, the number of counter positions open and congestion in the shop. Of course, there is also the impact of losing good, hard-working staff who have years of experience.

The CWU has said—this is worth noting, and I hope the Minister will convey the concerns about the consultation process to the Post Office—that it is unaware of a single case where public consultation has overturned the Post Office’s proposals in recent years. My constituents in Aberystwyth are convinced, as I am, that the whole process is an utter sham.

I want to talk a little about the staff and how they have been treated. They were given three options, which seems clinical and very kind to be given three options. They were given the opportunity to take redundancy. In peripheral parts of Wales, if we go as far as we can to the west, the opportunities for good, well-paid jobs are few and far between. Secondly, staff were given the opportunity to redeploy—this is the option that really got to the emotions of many staff—to the nearest Crown post office. If we picture Aberystwyth on the weather map on the news, it is in the middle of the west coast of Wales. The nearest Crown post offices that my constituents could relocate to were in Port Talbot or in Shrewsbury across the border in England. That is not an option for my constituents at all. The third option was for my constituents to go down the route of TUPE agreements, which we have heard many concerns about. I am genuinely concerned. We might seem to have lost the battle, but like the hon. Member for Tonbridge and Malling (Tom Tugendhat), I appeal to the Minister at this late stage to get involved in this case and to do what she can to influence things.

I am conscious that my friend, the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), wants to speak, so I will finish by saying this. We have lost post office after post office in rural communities. We can wax lyrical about the emotions of it and the effect on rural communities, but they are very real. We are talking about some of the most scattered, remote rural communities. When the pub, the church and the school have been taken out, the final blow is when that community loses its post office, which has a galvanising role. That has been the record of successive Governments, including coalition ones in which Liberals were involved, the current Government and preceding ones. We have to reverse that trend. We have to look at a sensible level of subsidy to sustain the network in rural areas, because once it is gone, it will not come back.

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[Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Wilson. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this debate and all my hon. Friends who have spoken. I pay tribute to the many postal workers and the CWU who have brought many of the issues to our attention. As constituency MPs, we are all keen to ensure that the Post Office has a long-term future for the benefit of the communities we represent, and we want to know what the Government’s plans are for making the vision of a 21st century Post Office a reality.

It has practically become a cliché to say that post offices are at the heart of our communities, but it is a cliché because it is true. From city high streets and suburbs to villages up and down the country, the local post office is a landmark and an essential part of life. It is not just a place to buy stamps and send parcels; it provides a host of services. My hon. Friends the Members for Wirral West (Margaret Greenwood) and for Merthyr Tydfil and Rhymney (Gerald Jones) pointed out that, in rural areas, they can often be the only place where some services are available. It is no exaggeration to say that they are a lifeline.

I recognise that we are living in an ever-changing, increasingly digital world in which access to services online is undermining some of the Post Office’s traditional role. That is simply a fact of the times we live in. What concerns me is that the Government have apparently accepted the challenge as insurmountable and have embarked on a programme of managed decline, instead of looking at how we can make one of our proud national institutions fit for the 21st century.

My hon. Friend the Member for Wakefield (Mary Creagh) made a good point when she said that last year 50 Crown post offices—the larger branches, usually in prominent high street locations—were franchised and moved into the back of many WHSmith shops. There are plans to do the same with 59 more this year. That may seem like a pragmatic way of keeping post offices going through trying times, but the impact of that franchising on the quality of service provided and on the terms of employment offered makes me question the underlying rationale.

When Consumer Focus, as it then was, looked at the quality of service being provided by franchised branches in WHSmith a few years ago, it found that they consistently ranked below normal post office branches for queue times, the time taken for transactions at the counter, the number of counter positions staffed, customer services and advice on products. There were also big issues with disabled access, as many have said.

The Post Office’s own monitoring suggests there is no drop in the quality of services following franchising. However, as we have never seen its monitoring figures, I take that with a pinch of salt. The consumer organisation Which? is doing its own research on the matter, which it is hoping to publish in the next few weeks and which will no doubt make interesting reading for all of us.

When looking at what happens to jobs when branches are franchised, it is not hard to see why the quality of service drops.

[Neil Coyle]

Is there a question here not just about poorer service, but about taxpayer-funded poorer service? The lower pay usually offered by companies such as WHSmith is subsidised by taxpayers in tax credits and housing benefit. There have also been upfront subsidies, such as the £500,000 spent in Paisley and more than £100,000 being spent on Walworth Road. Other Members have referred to taxpayers’ money being used to tart up formerly dingy post offices before they were franchised.

[Gill Furniss]

My hon. Friend makes a very good point. This is not what taxpayers were expecting. We were looking at something for the future—a lot of taxpayers’ money to make this the gateway to a fully functioning Post Office service. We have heard representations in the Chamber today that that has not been the case.

Jobs with good terms and conditions are being replaced all too often with part-time, minimum wage roles. There is little to attract long-serving, experienced staff to transfer to a franchised branch. My hon. Friend the Member for Luton North made the good point that last year just 10 staff out of 400 in Crown offices being franchised chose TUPE; the rest took compromise agreements to leave. Those agreements cost the Post Office £13 million. So much for the Government working for everyone. What a waste of public money. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) also mentioned that experienced staff are leaving in droves. That means that the quality that the Post Office stands for is undermined and a community asset is hollowed out—and make no mistake: these are community assets.

Franchising is done in the face of public opposition. Consultations on individual branches are exercises in public relations rather than proper public engagement. The branches targeted for franchising tend to be in more urban areas, disproportionately affecting the services available to already disadvantaged groups and harming the general health of our high streets.

The Post Office is clearly facing a crisis. My hon. Friend the Member for Harrow West (Mr Thomas) has an excellent article in the Daily Mirror laying all that out today. Since the Post Office was split from Royal Mail, it has struggled to keep its head above water. Traditional revenue streams are shrinking; plans to make it a “Front Office” for Government have disappeared into the ether; and an expansion of financial services has slipped off the agenda. One thousand jobs were lost last year, and another 2,000 are under threat this year.

The Government must take action now to halt the decline, and work with all those concerned to come up with a plan for a better future than the one currently on offer. Although I welcome the consultation document that has been published, I am concerned that it does not go far enough, and I urge the Minister to be bold in formulating a strategy for the future.

Will the Minister revisit the plans to make post offices the front office for Government that has been promised for so long? Post office revenues from Government services have fallen by 40% since 2010. Will she commit to expanding the financial services on offer? After all, the Post Office current account is not matched by either the children’s or business accounts. Surely that is an obvious starting point for expanding services. With the retreat of banks from the high street, the demand for a postal bank has never been greater. Will she explore how our post offices really can be the front office of Government and provide all the services that people require?

I ask the Minister with all sincerity whether she will call for a moratorium on any further franchising of Post Office branches until there has been proper engagement on what the future of the service will look like. This proud institution, its employees and the communities that it serves deserve better than a slow slide into oblivion.

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[Margot James]

The hon. Lady mentioned the Crouch End post office in her speech, and I made a mental note to look into that. I cannot comment on that particular branch. Occasionally in business, someone makes an investment, it does not work out and they have to cut their losses. That happens in any business. I cannot comment on the specific branch, but I will look into the matter.

[Neil Coyle]

Will the Minister give way?

[Margot James]

No, not for a few minutes. I have very little time and I am going to make some progress.

Customers benefit from an extra 200,000 opening hours every week and the largest Sunday retail network in the country. Indeed, the network in the constituency of the hon. Member for Luton North is in fine shape as a result of the modernisation programme. Across the 10 branches in his constituency, customers now have an additional 297 hours a week when post offices are open, with more than half his local branches open on Sundays.

The subsidy needed to sustain the network has dropped from a peak of £210 million in 2012 to just £80 million this year, and should continue to fall. The business continues to reduce its losses: it has gone from a loss of £120 million in 2012-13 to £24 million in 2015-16.

I would like to reassure my hon. Friend the Member for Yeovil (Marcus Fysh), who is not in his place now, that the number of branches is almost unchanged since 2011. In that year, there were 11,820; there are now 11,643. That is a very small difference. In fact, I would like to make the point, because I have been quite outraged by some of the comments made in the debate, that during the last Labour Government, virtually half the entire post office operation in this country was closed. Conservative Members were always outside with petitions in those days, and this Government and the coalition Government before them have stabilised the network with minimal losses. I congratulate the board, management and staff of Post Office Ltd on all they have achieved.

All that has led, of course, to customer satisfaction remaining high, at 95%. Also, the Association of Convenience Stores produced its local shop report, completely independently of the Post Office, a couple of months ago, and the post office was rated the No. 1 service on the high street. It was voted the most desired amenity by the public. People would not think that—[Interruption.]