Crown Post Offices: Franchising

Sharon Hodgson Excerpts

Thursday 10th January 2019 Westminster Hall

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate my hon. Friend the Member for Wigan (Lisa Nandy) on securing this debate—we can tell from the quantity and quality of the Members attending how important it is. She gave an excellent speech, as others have said, and set out the case so well. I will probably repeat some of what she said, but because it is so important I think it is well worth saying twice, or even three or four times. Maybe then we will get the message across to the Minister, who I am sure will be in no doubt about how strongly we all feel about this.

Over the last five years, 150 Crown post offices have closed, with the closure or franchising of a further 74 Crown post offices announced in October last year. Unlike many of my colleagues, I am fortunate that no Crown post offices in my constituency are scheduled to be closed or franchised under those plans. However, the Crown post office in Sunderland is one of the busiest in the country. I can only imagine the impact on the local community if it were to be closed in the next phase of franchising. I thought I had better get in there now and stake the claim for that one to be taken off any future list.

Post offices are at the heart of local communities and are more than just somewhere for people to buy stamps or post letters. They provide vital services for many across the country, and it is therefore right and perhaps obvious that proposed closures are taking place in the face of significant local and national opposition. That is why we are all here today.

The continued privatisation and closure of Crown post offices risks leaving vulnerable customers and rural communities without access to banking and postal services. In addition, a 2016 report from Citizens Advice concluded that franchising to retailers in the past has led to inferior services and poor disabled access, which is concerning given the number of disabled welfare claimants and pensioners who access payments via Post Office card accounts. Will the Minister please tell the House whether the Government plan to carry out equality impact assessments to ensure that any post offices that are franchised are accessible to all?

Franchising is often accompanied by substandard service, as we have heard. A constituent of mine who is a former Crown post office employee wrote to me recently to voice his concerns about the impact of franchising on the employment of trained, experienced staff. In fact, Citizens Advice reported that franchising leads to a deterioration in service and fewer staff with less experience. It seems that the economics of the franchise model are based on cutting staff numbers and reducing service provision. Franchise plans put in place by the Post Office in 2014 could work only if 50% of existing Crown post office staff left the service. This expulsion of experienced, knowledgeable staff is all done at a massive cost to the taxpayer, with £13 million paid in compensation agreements to redundant postal staff between 2014 and 2015. Then, after all these experienced staff are let go, their jobs are replaced with low-paid, temporary employment.

Recently announced plans show that many Crown post offices will be franchised to WHSmith, as my hon. Friends have said. Unions have raised concerns about the retailer’s employment practices, given that its business model is based on low-wage, part-time jobs paying little above the minimum wage, whereas the usual pay for a counter position at a Crown post office is way above that. How can the Minister justify the replacement of well-paid, quality jobs with low-paid temporary positions? It is exploitative of staff and residents in areas where Crown post offices will be franchised.

I wrote to the Minister recently to voice my concerns and those of my constituents, and I thank her for her quick response. She said in reply that franchising is not a process of privatisation or closure. However, when considering the staff cuts, substandard service provision and poor profits that the postal service has faced in recent years, it appears that this publicly funded service is going through a period of managed decline.

The Minister also told me that franchising was about reducing costs for taxpayers. However, the process of franchising is paid for by public money. Millions have already been spent on compensation agreements with Crown post office staff and on installing and furnishing new, franchised branches. The Post Office will not even disclose the magnitude of some of these costs and has refused to carry out a public consultation on franchising.

Does the Minister agree that the public should at least be consulted before they are billed for substandard service and the loss of publicly owned assets? There has been a serious lack of transparency throughout the process and it is wrong that significant sums of public money are being used to finance the privatisation of the post office network. Franchising leads to poor service, poor accessibility and job cuts. The Government must justify their use of franchising and acknowledge the effect on service provision in all our local communities across the country.