Post Offices (North Yorkshire)

Rachael Maskell Excerpts

Tuesday 6th November 2018 Westminster Hall

[Andrew Jones (Harrogate and Knaresborough) (Con)]

I beg to move,

That this House has considered Post Office provision in North Yorkshire.

It is always a pleasure to serve under your chairmanship, Sir David. Let me begin by saying up front that I strongly support post offices and want to see them thrive. Everything that I will say about how we can make our post office network more sustainable for the future is to be taken in that positive way.

I sought this debate because of the closure of the Cold Bath Road post office in Harrogate and the proposed relocation of the Crown post office in Harrogate from its location on Cambridge Road to WHSmith. However, it is not just Harrogate in North Yorkshire that is affected. We are seeing the same relocation to WHSmith being proposed for York, Scarborough, Selby, Northallerton and, more widely in Yorkshire, in Beverley and Pontefract. We are seeing it in other parts of our country, too.

This debate has attracted attention from other parts of the UK. We are being followed by sub-postmasters up and down the country. I have had emails from the west country, Wales and much closer to home. They confirm that the underlying points I will raise are of wider concern. That was also clear from the meeting last week of the all-party parliamentary group on post offices, which discussed the relocation issue.

Post offices are an important part of our national infrastructure. They provide access points not only for post office services, but for banking and Government services. We are seeing huge growth in the parcels business through internet shopping, and the Post Office has developed very good products. We are seeing increasing use of post offices for their banking services. That is particularly important as the number of high street bank branches has fallen. That point has been highlighted to me by smaller, often independent traders. We are also seeing increasing use of the gov.uk Verify scheme. That service matters, as it helps to tackle the growing issue of identity fraud. The passport and driving services have been highlighted by local residents in Harrogate and Knaresborough as being valuable. The services matter, so post offices matter. The question with the relocations then is about how we ensure that the people of Harrogate can continue to access the services.

[Rachael Maskell (York Central) (Lab/Co-op)]

The hon. Gentleman is making a very good speech. In York, we too face the challenge of a post office closure. The post office has been there since 1884. It is on the main thoroughfare for tourists and residents coming into the city, and it is due to relocate to an area where footfall is falling massively—it is 15% down in the past two years. Does he agree that we need to look at the business case and the impact on the local community and local businesses when assessments are made of the future viability of a post office?

[Andrew Jones]

The hon. Lady makes an important point. I entirely agree that as these relocations are considered, the implications for business and the community must be considered in the round. I am aware of the location of the post office—York is a very near neighbour to Harrogate and Knaresborough—and its importance, and I strongly agree with the point that she has made.

Post offices matter and the services matter. The access point is absolutely critical, and I am not happy with the proposals. I have enormous reservations about the relocation of a Crown post office to a WHSmith. In Harrogate’s case, it is moving from Cambridge Road to the Victoria Centre. My key reservations are about access and security. On access, both locations are in our town centre, but parking in the immediate proximity is easier at the existing location. Disabled parking in particular is good at Cambridge Road, whereas for the Victoria Centre it is across the A61, a very busy road.

I did not know how the proposed location in WHSmith would work until I received an email from WH Smith at lunchtime today with significantly more information, followed by a six-page letter from the Post Office a couple of hours ago. Having been in meetings today, I have not had the chance to go through it in detail yet, but I will do so directly after the debate. Clearly it will answer some questions, but I think it will raise even more.

We now know that the proposal is to locate the post office on the first floor of WH Smith. There are lifts, escalators and stairs in the store, and the shopping centre entrance will be flat, but first-floor retailing inevitably has a lower footfall than ground-floor retailing. I spent many years in retail before I came to Parliament, so I know that first-floor and ground-floor locations are very different. I am sure that the email that I received at lunchtime was trying to help, but in reality it has made my fears worse. However, at least the Post Office has confirmed that all the staff in the very good Crown post office team will be TUPE-ed across and have some security, which is reassuring news for everybody.

On products and services, the Post Office has confirmed that all existing services will transfer with the location, but that Home Office passport services will not transfer. That is a loss. It feels as if the Post Office is in retreat, both physically and in its offer, when the opposite should be happening.

I must draw the Minister’s attention to the nature of the Post Office consultation. When it first got in touch with me, its email said that

“any proposed changes will be subject to a public consultation”.

However, at the all-party group meeting last week, it announced that the franchising decision has already been made and that it is a private commercial matter. I am not sure that those two comments are in any way consistent. We need a proper, wide consultation.

[Rachael Maskell]

I am grateful for the opportunity to intervene again. I, too, was at the APPG meeting. The Post Office made it very clear that its consultation was more about information exchange, rather than being a proper consultation. It said that it had already looked at access issues, but does the hon. Gentleman share my concern that it will not take note of those crucial issues?

[Andrew Jones]

That was indeed a very disappointing part of the Post Office’s response at what was otherwise a very good APPG meeting. I want the consultation to be much more wide-ranging. I want it to consider the views of the people of Harrogate; I am sure the hon. Lady wants the same for the people of York, and my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) wants the same for his constituents. The issue affects locations right across north Yorkshire.

--- Later in debate ---

[Kelly Tolhurst]

I will make some progress first.

Post office banking services enable 99% of personal and 95% of business banking in any one of 11,500 branches, supporting consumers, businesses and local economies in the face of accelerated bank closures. Financial performance has improved, as my hon. Friend the Member for Harrogate and Knaresborough outlined, from a loss of £120 million to a trading profit of £35 million in financial year 2017-18, thereby reducing Government funding from £415 million in 2013-14 to £50 million by 2020-21.

I encourage the House to look objectively at those facts. They clearly show that the network is at the most stable it has been in a generation. All that has been achieved notwithstanding increasingly challenging trading conditions in the Post Office’s core markets and in the wider retail sector. The Post Office offers a huge range of products and services to the UK public, while ensuring that those services remain at the heart of towns and villages throughout the country. In doing so, it offers great value for money for the taxpayer.

Finally, we recognise that changing consumer behaviour presents a significant challenge for small retailers, including the many postmasters up and down the country. In the Budget last week, therefore, we announced a one-third reduction in small retailers’ business rates bills for two years from April 2019. A retailer could save up to about £8,000 per property per year, which will benefit a range of retailers, including post offices.

[Rachael Maskell]

Will the Minister look specifically at the case of York’s Crown post office? It is in a prime location in our city for both residents and tourists. Will she look at it in the light of it being a profitable post office, so that the whole business case is properly reviewed?

[Kelly Tolhurst]

As I said before the debate, I am happy to look at York specifically in the future, asking any questions that the hon. Lady might have of Post Office Ltd directly.

I appreciate that the proposed changes to the delivery of post office services can cause much concern to the communities affected. Post office branches, however, are not closing but are being franchised, whether on site or to be relocated to high streets. Franchises typically provide the same range of post office services as those offered at Crown branches.

Working with a retail partner is a sensible response to the challenges faced by our high street retailers, with the benefit of shared overheads across the combined post office and retail business, including property and staff costs. Franchising is a part of the Post Office’s strategy to ensure that the network is secure, sustainable and successful in the long term. In fact, more than 90% of post offices throughout the UK are operated successfully by independent businesses and retail partners.

Moving the directly managed Crown offices to retail partners has helped to reduce the losses in part of the network from £46 million as recently as four years ago to break-even today. I must stress that franchising is not about closing branches, but about moving a branch to a lower-cost model while continuing to offer high-quality service, more convenient hours and better locations. I understand that my hon. Friend the Member for Harrogate and Knaresborough has questioned location, and we can look at that, but Citizens Advice found that franchised branches deliver the same or better standards of service to the customer.

Regarding the recent WHSmith announcement, the communities of Harrogate and Knaresborough, as well as other communities in North Yorkshire, are not losing their post offices, which will be relocated to WHSmith branches, making services more accessible to customers.