Crown Post Offices: Franchising

Rachael Maskell Excerpts

Thursday 10th January 2019 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Evans. I thank my hon. Friend the Member for Wigan (Lisa Nandy) for opening the debate so powerfully. I certainly echo many of the comments that she made. If the Prime Minister did not underestimate the power of Government to intervene, I see no reason why the Minister should not intervene on behalf of all our constituents to ensure that this franchising process is halted. It is absolutely clear that it is riddled with problems. I shall reflect on the situation in my constituency in York and some of the challenges that are being placed at the door of people there because of the decision to franchise the service.

The first issue is the consultation process taking place over the Christmas period—it closed on 28 December—the busiest and most stressful time for post office staff. I pay tribute to them, but to have this situation hanging over their head over the Christmas period is nothing short of cruel. It also ignores the input that they would have wanted to have into the consultation. The issue is not just them and their jobs, but their customers, whom they care deeply about.

I want to highlight two particular issues: the impact on the local economy in York, and the location of and access to the post office. The post office has been at 22 Lendal since 1884. It has survived two world wars and still stands proud today. It is a busy and profitable Crown post office, which is a real advantage for our city centre which, like many high streets, is struggling. It is at the entrance to our city—a city that attracts 7 million people every year and a city that people will come into on a Saturday or during the week to use the facilities of the post office.

It is in a prime location for transport links, whether people are using the train or the bus to come into the city. Crucially, disabled people are able to pull up outside the post office to access the services, and for those who cycle, there is parking space for bikes outside. The post office is in the most profitable and accessible part of our city. It is boosted by having opposite to it Britain’s best pie shop—Appleton’s. People have a dual pact whereby they buy their pie and use the post office.

[Lisa Nandy]

As the Member of Parliament for Wigan, I am duty-bound to assure my hon. Friend that the best pies in the country are found in my constituency.

[Rachael Maskell]

My hon. Friend may say that, but by all judgment, Appleton’s has won the prize for the best pie shop in the nation.

To get back to business, the reality is that York’s post office is a profitable post office that works for my constituents. It is in the prime location. If the post office could choose its location, it would still be exactly where it is. However, the post office will be moving to WHSmith in Coney Street. That is not far, but the post office will be going into an area of the city that is struggling and where shops are shutting. The number of empty retail outlets that we see as we walk around is growing year on year and month on month, which is of great concern. People will not be able to pull up in their vehicle outside the post office because it is a pedestrianised area. That means that the post office will be inaccessible, particularly for disabled people but also for older residents.

The area will also have tighter controls in future. Mail vans will not be able to pop by because of the counter-terrorism measures that our city is taking—the Post Office was not even aware of that during the consultation process. If a van were to go there, it would have to be well out of hours because of the new counter-terrorism plan. It would have a very precarious route down a dark alley, which leads down towards the river and has been deemed unsafe under health and safety inspections, let alone if someone were to be in that alley with money—they just would not go there. It is deeply concerning for staff, who would have to use that as the only means of accessing the building other than going through the shop itself.

The post office will be located at the back of WHSmith. It will not be the first business to try to succeed there. Costa Coffee had a business at the back of WHSmith and it failed. In its current location, just down the road, Costa Coffee is thriving, but at the back of WHSmith it did not work. This does not make sense for the future of the post office. Therefore, its current location is the right place for it.

[Jo Stevens]

I am glad that my hon. Friend has raised this situation where the post office is transferred and shoved right at the back of an existing WHSmith store, which is exactly what is proposed in Cardiff Central. We know that very few people are going into WHSmith because it is an ailing retailer. Walking right to the back of an ailing retail shop will not make it easy for people to access the postal services they need.

[Rachael Maskell]

My hon. Friend has made a powerful point. This has to make business sense and, where it does not, it should not proceed. I also highlight the fact that custom will be lost from retailers in the city who bank and place deposits within the post office. They do not feel safe having to walk through and then queue in a retail outlet. They have already said that they will be transferring their business away from the post office. That has to be taken on board. This does not make business sense or economic sense, nor does it make sense for our high streets or my city.

[Albert Owen]

As my hon. Friend knows, I know the branch she refers to very well from my student days and I use it at Christmas when I visit my daughter. It has excellent services, including an exchange bureau, which can compete with the best. Those kinds of services, which are working in purpose-built buildings, need to be maintained and enhanced. She is making an excellent case, but she makes it for the rest of the country, as well.

[Rachael Maskell]

It is so important that we do not sell off our family silver, which is exactly what this process will achieve, certainly with regard to my city.

Finally, I want to raise the issue of the war memorial placed in our post office, where 16 fallen men from the first world war and ten from the second world war are honoured. It is unknown today what will happen to that war memorial. I reflect on the words of Harold Wood, who today is 95. In 1942, he defended our city as part of the Home Guard. He said:

“The Luftwaffe couldn’t destroy it. It would be sad to see the Post Office do it.”

Our post office survived two world wars, so it would be a shame to close the doors, thereby ensuring that its profitability, service and access will be lost to my constituents.

--- Later in debate ---

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

It is a pleasure to serve under your chairpersonship, Sir Graham. I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this debate and delivering an impressive and eloquent speech. Passions have risen high today, which illustrates the value of the post office network to hon. Members present and to people in the community, so it is hugely disappointing to see the empty seats on the Conservative Benches.

Post offices are a vital community asset that serve as an anchor for individuals and local businesses, as many hon. Members have highlighted. Citizens Advice surveys have shown that half of Britons say that a post office branch is the most important service in their local community. In rural areas, the importance is even greater: one rural resident in five says that without their local post office they would lose contact with friends or neighbours. Post offices are hubs rooted in community and history, and they have innovated: services have grown and now cover some Government services, while postmasters have been innovative in providing new products to accommodate the rise of online shopping.

At the same time, it is not a revelation that our high streets are struggling. In October, the Chancellor took a “too little, too late” approach to the crisis, showing the Government’s lack of commitment to our town centres. Although they shirk responsibility for the collapse of our high streets, the Government are too eager to discount their own role in overseeing the managed decline of a long-established and vital part of our high street: our post offices.

Our debate today has focused on Crown post offices, the large flagship post offices that are in prominent high street locations and are directly owned and managed by Post Office Ltd. Over the past five years, the Post Office, which is entirely owned by the Government, has announced the closure of 150 Crown post offices—40% of its 2013 Crown post office network. The closure and franchise programme has come in three waves, and the latest announcement in October 2018 stated that a further 74 Crown post offices were being closed, with an estimated 700 jobs at risk.

There is a strength of feeling about the closures across all parts of the country. I anticipate that the Minister will argue that this is not a privatisation process, but franchising is by definition a model part of privatisation. This Government drove the disastrous privatisation of our Royal Mail, many of the consequences of which we are seeing today, with private shareholders creaming off millions in dividends while services are on the decline. I am afraid that the franchising programme appears to be an incremental step in the same direction, privatising our Post Office one Crown at a time.

The impact of the closure and franchise programme is significant for the public purse, for the accessibility, quality and breadth of the service provided to the public, and for the sustainability of the network. Our high streets face a crisis and it is being compounded by the Government-managed decline of the Post Office. As I wrote in a recent article:

“The Government may continue to peddle the myth that it has no agency over our high streets—the truth is they are willingly letting a proud institution and the public down.”

They are letting the Post Office fall by the wayside in an appalling act of negligence.

Plucking post offices out of the heart of business hubs, as the closure of local Crowns does, is bad for local business and bad for the Post Office. It exacerbates financial exclusion in deprived areas, where—in the light of the significant bank closures in recent years—local people may have no access to financial services. My hon. Friend the Member for York Central (Rachael Maskell) has been vocal about the proposed relocation of her local Crown away from the town centre and into an area that has seen a 15% decline in footfall over two years. It is an economic fallacy to suggest that shifting a post office to a quieter part of town, away from the economic activity, will be in any way helpful to the long-term sustainability of the network.

Indeed, in allowing the transfer of counters into WHSmith, the Government risk the viability and sustainability of communities’ access to post offices. It has been suggested that WHSmith is shifting its priorities away from the high street, as highlighted by its acquisition of InMotion, a US company known for airport services. That is worrying and raises serious questions about the retailer’s long-term viability and its desire to be on the high street. As my hon. Friend the Member for Heywood and Middleton (Liz McInnes) told us, there has recently been a 3% decline in profits. It is therefore surprising not only that Post Office is choosing to partner with WHSmith in this way, but that when pressed during a meeting of the all-party group on post offices, Post Office representatives provided no reassurance about any contingency plans that they may have prepared for the event of a collapse.

My hon. Friends the Members for Hove (Peter Kyle), and for Cambridge (Daniel Zeichner) spoke eloquently about the lack of meaningful consultation in their constituencies. Indeed, during the all-party group meeting, we learned that decisions on closures had already been made and that the consultation process was merely asking for little bits of information about whether people thought they had disability access—someone in the senior management actually said that. I challenged him, saying that the consultations should be asking the public about the closures, and that responsibility for disability access should lie with the management of the post office in question.

[Rachael Maskell]

I am grateful to my hon. Friend for raising the issue of access, because clearly many disabled people use post offices. Does she agree that if the proposal will mean less access to post offices, it should surely be stopped?

[Gill Furniss]

I very much agree, and I will go into that point in more detail later.

Post Office management claim that they will have six months’ notice if a retailer that hosts a Post Office counter collapses, but in reality a collapse could be immediate and would risk the total closure of the counter. It seems reasonable that contingency planning should be done to prepare for all eventualities. Has the Minister had any discussions with the Post Office about the matter? Can she assure us that she is aware of reasonable contingency plans for any of those scenarios?

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) referred to the independent reports published by Consumer Focus in 2012 and by Citizens Advice in 2016, which looked at the impact of closing and franchising former Crown post offices and locating them in WHSmith branches. They concluded that it has led to an increase in queuing and service times, a deterioration in customer service and advice, poor disabled access, and a reduction in the number of counter positions. As hon. Friends have pointed out, the retailer has been voted as providing some of the worst customer service in the UK—surely not a ringing endorsement.

The impact of these changes on local communities is significant, and vulnerable people, the disabled and the old suffer the most. The general secretary of the National Pensioners Convention, Jan Shortt, has said:

“Older people are some of the biggest users of the Post Office, and many rely on being able to talk to expert staff, but the move to franchise services to WHSmith is going to be bad for customers...pensioners will find some of the offices are no longer easily accessible or particularly private. This will become a second class service if we don’t stop these plans immediately.”

Similarly, the chief executive of the deaf and disabled rights charity, Inclusion London, and representative of the UK-wide Reclaiming Our Futures Alliance of disabled people and their organisations, Tracey Lazard, said:

“Replacing accessible Post Office premises with a post office counter squeezed into the back of a WHSmith store can leave Disabled people at a significant disadvantage, particularly people with a mobility impairment. Post Office Ltd should be taking action to maximise the accessibility of its premises and services rather than taking this retrograde step that cannot be justified and will instead further Disabled people’s exclusion.”

--- Later in debate ---

[Kelly Tolhurst]

The programme of franchising is moving Crown postal services. Our objective is to ensure that, when the post offices are moved, they deliver better services and that constituents have better access to them. Part of the franchising programme is about ensuring we have a post office network for today, which suits the modern retail environment and consumers’ changing habits.

[Rachael Maskell]

Will the Minister follow up the question of my hon. Friend the Member for Wigan (Lisa Nandy) and meet a group of us? I am seriously concerned about the reduced access—not necessarily to the building but to the high street in front of the post office—and the impact on my high street and the local economy. Will she meet us to discuss those detailed issues?

[Kelly Tolhurst]

As I have said—I thought I was quite clear—I am always willing to meet Members who have issues relating to post offices in their constituencies. I said that earlier. I reiterate that I will listen, hold Post Office Ltd to account and take those things forward. That does not necessarily mean that I will agree with some hon. Members’ positions, and they will not always be achievable, but I will make Members’ cases on their behalf.

The UK visa and immigration biometric enrolment services for the Home Office were available to a mix of 99 directly managed and WHSmith branches nationwide. However, as was mentioned earlier, the Home Office recently awarded that contract to Sopra Steria, which now runs the service in new locations. On the Post Office being in a position to deliver services for our constituents, I will always ensure that we work together to strengthen the services and add value to the services that the Post Office will deliver for the Government.

WHSmith has been operating post offices since 2006 and has proven to be a reliable and dependable presence on the high street. There are some misplaced concerns about the Post Office’s contingency plan should WHSmith go into administration. The latest financial results show that the company’s high street businesses recorded their third-highest profit in more than 15 years despite the well-documented challenges on the UK high street. The Post Office is not complacent; it regularly meets with all franchisees to ensure they are delivering on the terms of their agreements. That is an ongoing process.

I am concerned that we are running out of time, Sir Graham, and I think the hon. Member for Wigan may want to wind up—or I can carry on. Post Office staff at franchise branches will have the opportunity to transfer to new franchises under TUPE employment protection, which means that they will benefit from the same terms. Alternatively, staff can leave with compensation, and there may be opportunities available elsewhere in the network. WHSmith’s post offices are currently performing well, and I have every confidence that the recent deal will help to secure Post Office services on a sustainable, profitable basis in communities across our country.

I hear the concerns about the consultation process, and I have said that I will take them forward with the Post Office. As the Minister, I will not call on Post Office Ltd to stop the franchising process, but I will work with it to ensure that it delivers its business in the best way possible and benefits our communities.

We need a sustainable network. It is not correct that the Post Office owns all the Crown branches—the buildings are not all freehold and some are leasehold. It is right that the taxpayer holds the Post Office to account and, as the Minister, I will do everything in my power to harness opportunities and to increase services in the post offices. There will be many opportunities and, as the high street changes—I am also the Minister with responsibility for the retail sector—I will continue to work with the Post Office to ensure that we are delivering for our communities and that we increase the services that post offices provide.