Backbench Business

Phil Wilson Excerpts

Thursday 17th November 2016 Westminster Hall

[Geoffrey Clifton-Brown]

I have given way an awful lot. I might give way a little later in my speech, if I may say that gently to the hon. Gentleman.

For the estimated 1.5 million adults in the UK without a bank account, an affordable service, such as a post office bank account that offered responsible deals on personal loans, would help to tackle the problem of payday lenders that charge huge annualised sums. It would be of great benefit to some of the poorer people in our society. After all, if Tesco opened a wholly owned bank eight years ago, notwithstanding its recent hacking problems, why cannot the Post Office do the same? Tesco has innovatively expanded a range of financial services. As has been mentioned, across the channel, La Banque Postale has a mandate to increase access to financial services and offer microcredit loans to those who have previously been financially excluded.

[Phil Wilson (in the Chair)]

Order. May I respectfully remind the hon. Gentleman that he has been on his feet for nine minutes, and quite a few other Members want to get into the debate? If he is nearing the end of his speech, I think that everyone will appreciate that.

[Geoffrey Clifton-Brown]

I am grateful, Mr Wilson; I have taken rather too many interventions, so my speech has become rather too long.

The Post Office ought to look at innovative ways to improve its services. Its post offices are dull and dingy places, but perhaps it could spruce them up and think about such improvements. There are all sorts of ways it could improve what it offers, such as internet hubs and internet cafés, business hubs and collection points for local authorities, and subletting if the premises are too large, as has been done in Penge.

I pay tribute to postmasters and postmistresses and their staff throughout the land, who do an incredible job. Often they go way beyond what their employers require, to help their communities. The post office is the glue that holds this country together. I appeal through the Minister for the Post Office to reconsider, among other things, its decision to close the Crown post office in Cirencester. It must be highly profitable, so why is it being closed? The Minister needs to look carefully at the closure process, to see whether it is the right thing for the country.

[Phil Wilson (in the Chair)]

As quite a few hon. Members want to take part in the debate, I ask them to restrict their comments. I do not want to introduce a time limit, but it might come to that, so hon. Members need to be careful about interventions.

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[Danny Kinahan]

That is exactly the point; the Post Office is not listening, but it needs to. At least it has put a consultation out, in our case; but it should listen before decisions are made. I make my plea—let us all talk to each other, consider towns and the centres of communities, and work together.

[Phil Wilson (in the Chair)]

If hon. Members keep their remarks as brief as that, we may get everyone in.

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On resuming—

[Phil Wilson (in the Chair)]

Because we donated 15 minutes to the Division, we will now finish at 4.45 pm. I want to bring in the Front Benchers at a quarter past 4. I reiterate that if people limit the time that they take, everyone should get in. I call Marcus Fysh to continue his speech.

[Marcus Fysh]

Thank you, Mr Wilson. I was saying that it is often only when a community faces the loss of its post office that it realises what a wonderful service the post office system provides. I speak in support of not just the customers but the postmasters who provide that service.

Post offices are often owned by hard-working families who constantly look for ways to improve their flagging profitability and get more footfall. Postmasters run 97% of the country’s 11,500 post office branches, but they lack any meaningful union membership or collective voice. They are represented only by the National Federation of SubPostmasters, a trade association that is funded in part by Post Office Ltd. NFSP chief executive George Thomson recently said that “without serious changes” to the Post Office Ltd business,

“there may not be a network to fight for in the future.”

Successive Governments have spent billions subsidising Post Office Ltd. Some £2 billion of taxpayers’ money has been used on the latest network transformation programme, which has not yet proved able to make the network sustainable and profitable. The Post Office has halved its losses in the last financial year, but that seems to have been done at the expense of postmasters’ pay and increasing branch closures and redundancies. The front-line service has suffered: the queues remain and extended opening hours are sometimes inconsistent and quite unpredictable. We must ask why. In many cases, postmasters are struggling to staff and operate their branches on the money that the Post Office now pays. The reduced revenues from core services simply make many things that post offices do unprofitable, and I know from speaking to postmasters up and down my constituency that they are genuinely concerned about whether they will be able to keep going with those things.

Hon. Members have made several useful proposals during the debate, and I urge the Government to consider them carefully, because Post Office Ltd itself does not seem to have any obvious plans to introduce new services or increase revenue in a way that could help. A growing number of post office branches are up for sale—there are currently more than 730 advertised on the Daltons Business website alone.

One of the key issues with the franchise model that we need to look at is that the computer system on which the whole network relies is well and truly overdue for replacement. It is, in fact, at the centre of an ongoing High Court action. Thousands of postmasters have been blamed for losses that may in fact have been caused by the use of that computer system. Some of those postmasters have been convicted and some have been made bankrupt by the Post Office, and losing that court action may pose a major solvency problem for the Post Office itself. I call on the Government to look into that with some urgency.

In that context, it should not be a major surprise that the unions are taking action, although the Post Office’s move away from a defined-benefit pension scheme is possibly not the right point to complain about, given that there has been a major move away from such schemes in almost every other walk of life in recent years. We need to look at the Post Office; it is in danger of running out of control and its governance issues require serious work and attention. I urge the Government to take an active role in that, because postmasters and their customers up and down the land really depend on the Post Office.

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[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Wilson. I too will be brief, because I am conscious of time. I congratulate my hon. Friend the Member for Luton North (Kelvin Hopkins) on securing this important debate.

Post offices provide an essential service to communities right across the UK. It is important that, through any potential future changes, that service remains rooted in our communities and that we keep the public at the heart of the services provided. The Post Office has been described as a national institution that is at the heart of society. Many post offices, like the ones in my constituency, are more than just a post office; they are a hub for the community. Most are also shops or a place to buy confectionery or stationery. In my constituency, there are many isolated communities, and many people who go to the post office to post letters or collect pensions also benefit from the social interaction there.

We know that lifestyles have changed. I am sure we all understand that, although in the past post offices were used for a multitude of services, many of those services are now available elsewhere or indeed online, so it has become increasingly difficult for post offices to remain viable without diversifying. However, changes to the delivery of post office services need to be carried out in consultation with and with the support of local residents, who are, after all, the customer.

I have particular concerns about the process of making major changes to the delivery of post office services. Following an extensive consultation process, the Post Office recently announced that it is proceeding with the relocation of a post office at Elliots Town in my constituency under the modernisation and transformation programme. Those proposals are bitterly opposed by the local community. In this case, the consultation process involved two public meetings attended by more than 100 local residents on each occasion; representations from local councillors, myself and the Assembly Member; and a petition signed by more than 1,000 local people, who raised common issues of concern about the suitability of the proposed new location in terms of access, privacy, parking and so on.

In addition, proposals were put forward without the support of the current post office operators, who wish to maintain the current location and are likely to lose their jobs as a result of the post office being franchised. I am deeply concerned that many of my constituents in that area feel that the Post Office has not listened to their concerns. Many feel that the current popular post office meets their needs and they do not understand the need for change at this time. A large number of local residents have threatened not to use the post office in future if proposals are implemented.

For post offices to remain a viable part of community life, the Post Office needs to be responsive to and understanding of the concerns of its customers. Will the Minister comment on the general principle of the Post Office’s response to public consultation? Does she agree that the Post Office must ensure that consultation is meaningful and that any decisions it takes about the future of post offices should be in line with what its customers want and expect?

[Phil Wilson (in the Chair)]

Before I call the Front Benchers, I remind Members that I would like to leave a couple of minutes for the mover of the motion to sum up at the end.

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[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.]

[Phil Wilson (in the Chair)]

Order.

[Margot James]

People would not think that from the tone and tenor of the debate this afternoon. [Interruption.]

[Phil Wilson (in the Chair)]

Order.

[Margot James]

I will now answer a few of the points that were made. My hon. Friends the Members for The Cotswolds (Geoffrey Clifton-Brown) and for Tonbridge and Malling (Tom Tugendhat) understandably paid tribute to their Crown post offices, in Cirencester and Tonbridge respectively. I am very sorry that I am unable to join them in their campaign against franchising of their local Crown post offices, because both are currently running at a loss. For every pound that is spent in the post office in Cirencester in the constituency of my hon. Friend the Member for The Cotswolds, £1.30 has to be spent on running it. We have to be mindful of that. I say to the hon. Member for—I apologise for forgetting her constituency. [Hon. Members: “Paisley.”] I say to the hon. Member for Paisley and Renfrewshire South (Mhairi Black) that the Crown post office there was losing almost £2 for every pound that was spent. That is really why that unfortunate decision had to be made. I was sorry to hear what she had to say about the effect on some of her constituents.

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[Margot James]

On the mutualisation that the hon. Gentleman mentioned, yes, the Postal Services Act 2011 requires that the Post Office be maintained either in public hands—public ownership—or in a mutualised setting. At the moment, it continues in public ownership and we have no plans to change that. Indeed, for it to be mutualised the model would have to be based even greater financial sustainability than it is at the moment. Currently, the Post Office is making losses and we would not be able to mutualise it, but the plan is for it to become more and more financially sustainable over time.

The hon. Member for Luton North also made the point about Royal Mail, and various Members have called for Royal Mail and the Post Office to be reunited. I do not see that happening—Royal Mail is now an independent public company—but thanks to Government investment, the Post Office is now in a far stronger position for its impending negotiations with Royal Mail about its business arrangements. That is thanks to the huge investment that we have made in Royal Mail.

[Phil Wilson (in the Chair)]

Order. Is the Minister going to leave any time?

[Margot James]

I am. Is it time for me to give way? Yes, I do apologise; I was looking at the wrong digit. I will give way now to the hon. Member for Luton North, and I apologise to him.