Postal Services in Scotland after 2014

Russell Brown Excerpts

Wednesday 10th July 2013 Westminster Hall

[Jo Swinson]

rose—

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

That’s the wrong name.

[Mr Davidson]

I am sorry. I meant Royal Mail.

--- Later in debate ---

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

It is a pleasure, Mr Hood, to see you back in your place this morning. It is good to see you back among us. I congratulate my hon. Friend the Member for Glasgow South West (Mr Davidson) on securing this debate. As chair of the all-party group on post offices, I want to concentrate more on our post office network in Scotland, and what is going on out there.

I know that today is a big day for Royal Mail, with the statement that we will hear in the House later. However, to people right across the UK, and particularly in Scotland, the post office network is a vital part of day-to-day life, keeping in mind also that the Post Office depends heavily on generating a significant percentage of its work through Royal Mail. The Government, with a fanfare, introduced a subsidy to the network and embarked on what they have claimed is a programme of no closures, but the picture out there is somewhat different in many of our communities. I will quickly go through some figures, and towards the end, I will raise one or two issues with the Minister.

We have just over 1,400 post offices in Scotland, which has 12% of the UK’s 11,800 post offices. Some 67.6% of post offices in Scotland are rural, whereas in the UK, 54.6% are rural. Some 32.5% of urban post offices are urban deprived, compared with just under 25% in the UK, and 28% of Scottish post offices are the only retail outlet in the area. Work done by what used to be Consumer Focus—now Consumer Futures—shows that 49% of the population in Scotland visit a post office once a week, while 58% of residents in accessible rural areas do so. Scottish post offices are visited once a week by some 60% of residents in remote rural areas, 63% of people aged 65 and over, and 63% of disabled people.

The Government produced plans for safeguarding the post office network, as I said. The social and economic changes, along with a withdrawal of Government services and growing competition from alternative service providers, have put serious financial pressures on the post office network in recent years. Between 2001 and 2012—I appreciate that the bulk of that time was under a Labour Government—26% of Scottish post offices closed. The figure UK-wide was 34%. Concerns about the future viability of the post office network led to Government proposals for the modernisation of the network. Published in November 2010, those plans were designed to make the network more financially secure and to prevent further closures. We need to keep in mind that all those businesses are small businesses, and people endeavour, as best they can, to produce a livelihood from the work that they are doing.

Let me deal with sub-postmasters’ income. The net Post Office pay is used to pay for the running of the post office, including the sub-postmaster’s own drawings, staff salaries, rent or mortgage, and any other overheads. In Scotland, the average net Post Office pay was just under £2,000 a month last year, which was down from £2,377 in 2009. That is a drop of some 19%.

The post office has traditionally been the key local outlet where the public can interact with government. I know that there has been a great fanfare of more government work—that is, local government, as well as central Government—but the income from providing government services across the UK fell from £576 million in 2005 to a mere £167 million in 2010. The Scottish figures reflect that massive reduction. The Government have, I would say—I am sure that the Minister will say differently—failed to deliver on their pledge. The few new services that have been introduced are one-off transactions available only in a small number of post offices. No new major government services have been awarded to post offices since May 2010.

I will provide some additional figures, for which I want to thank the National Federation of SubPostmasters. Research has shown that the overwhelming majority of Scottish sub-postmasters are making no income at all from certain services: 92% earn nothing from ID-checking services; 71% earn nothing from the passport check-and-send service; 59% earn nothing from Driver and Vehicle Licensing Agency transactions; and 92% earn nothing from payment services. Other services, such as the benefit cheques, or “green giros”, and national savings and investment products have recently been withdrawn from post offices.

Each and every one of us in this Chamber was delighted when, in November last year, the DVLA contract was awarded, or re-awarded to the Post Office, but the picture out there is somewhat different. Sub-postmasters are seriously worried that there is a precedent of falling rates of pay for transactions directly linked to all of that, and income is undoubtedly dropping even after having been re-awarded that contract. What lies ahead, later this year, are benefits and universal credit. The system that will be introduced contains no mechanism to allow some of the poorest and most vulnerable in our society to access their money—their benefits. We all realise that we have a job of work to do, as elected representatives, to protect some of the neediest and most vulnerable people in our communities and in society in general. If that money is finding its way into a Post Office account, will there be some way to ensure that peoples’ rent, utility bills and council tax is actually paid? Nothing is in place at the moment, and we are about to embark on that system.

I will tie up my comments quickly, but I want to come back to the point that I raised with the Minister yesterday, because I am deeply concerned that we do not appear to have the full facts and figures on what is happening out there with post offices. I will repeat what I said—I know that she has promised to come back to me in writing, but she has not done so yet, unless she has done some writing overnight. Will she share with us the number of sub-post offices that are temporarily closed or have had to move to an alternative, temporary service delivery system? Communities are desperately seeking answers.

Finally, I want to say that we did have another fanfare in the past two or three years, about the delivery of credit union services through post offices. That has disappeared; no one seems to know where it is. If there is about to be an announcement on the matter, it has been a long time in the making. I recognise full well that, under the previous Government, there were two closure programmes. I say to the Minister that I supported those programmes, because they were about service delivery across communities, with people having access. What we are seeing at the moment are temporary closures, with the Post Office desperately looking to find someone else to take on a post office that is sitting vacant. However, it needs to be understood that the income of sub-postmasters and sub-postmistresses has been so badly hit over the past two or three years that there is little wonder that no one wants to take up that offer of opening a business under the terms of a post office. We may not have seen a programme of closures under the current regime, but I worry that if we have another Conservative or Conservative coalition Government in 2015—heaven forbid—we would undoubtedly see a programme of closures like we have never seen before.