Post Offices (Sutton and Cheam)

Part of the debate – in the House of Commons at 11:13 pm on 5th June 2000.

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Photo of Paul Burstow Paul Burstow Shadow Spokesperson (Health) 11:13 pm, 5th June 2000

I am very pleased to have the opportunity to debate this subject. I sought the debate because sub-postmasters in my constituency have genuine concern and anxiety about their very future. I hope that some of their concerns can be aired through this debate and that the Minister will be able to go some way towards allaying them.

Like many hon. Members, I was greatly impressed by the lobby of Parliament organised by the National Federation of Sub-Postmasters on 12 April. Before the lobby, I undertook a survey of the 16 sub-post offices in my constituency, to test the pulse and see what the views and concerns were. I found a group of hard-headed, realistic business men and women who were struggling to survive and keep their businesses as going concerns. Many of them have seen the value of their assets collapse, and it is getting harder and harder for them to make a decent return on the investment and commitment that they have made to providing a postal service.

Over the past 10 years, my constituency has lost four Crown post offices, in Sutton, Cheam village, North Cheam and Worcester Park, although I concede that they were all lost during the previous Conservative Government's term in office. Fortunately, those post offices were replaced by agency post offices, but those business men and women who took on those agencies now find that the investment and commitment they put in are beginning to turn sour.

What those business men and women need, and what my constituents expect, is the Government to act to protect the sub-post office network. As things stand, the switch from pension book to credit transfer will mean that at least one in three of the 16 sub-post offices in my constituency will be under threat, because more than 40 per cent. of their business comes from work for the Benefits Agency. When the Government tabled their amendment to the Postal Services Bill earlier this year to empower the Secretary of State to introduce a subsidy scheme for the public post offices, that initiative was generally welcomed. The Government have recognised the need for some action.

The Government's acceptance that they had a role to play in securing the future of the network was welcome. I read with great interest the Minister's recent speech to the conference of the National Federation of Sub-Postmasters. It was an under-reported speech and I could find only one article in the national press that did any justice to it. I was not present, but on the subject of closures, the text of the speech read: unless we find a lasting solution that is acceptable across Government; finds favour with the Post Office; and offers your members a secure future—it won't be the last. The Minister was right when he said that and a consensus must be found that secures the network not on the basis of a narrow financial assessment, but on a wider appreciation of the social and economic value of the sub-post office network.

The national federation has described its members as the general practitioners of government. They are a one-stop shop for Government services and much potential exists for the development of that role with the expansion of e-government. However, the network is not just a group of small business men and women struggling to make an honest return; it also plays a vital role in sustaining the vitality and viability of smaller, more marginal shopping parades. The closure of sub-post offices can create a domino effect, with other businesses suffering the knock-on consequences of a loss of trade, following the demise of their local sub-post office.

I have already referred to the uncertainty felt by sub-postmasters in my constituency. It could even be described as a crisis of confidence. Only last week I learned that the sub-post office on the London road in North Cheam is due to close on 7 June. It will close its doors because the temporary sub-postmaster has resigned and nobody has expressed any interest in taking on the agency permanently. That post office provides an important service to residents in the Cheam Park Farm and Brocks estate. Its closure will leave many of my constituents, especially the elderly and disabled, with the prospect of a long walk or bus journey to the next nearest sub-post office at Stonecot Hill or the Queen Vic in the North Cheam district centre.

One of the greatest strengths of the network is its accessibility. In my constituency, the local branch of Age Concern contacted my office in the past day or so to express its concern about the closure. The Post Office retail network manager for the area, Elaine Wright, has told me that the Post Office is trying hard to restore services to the locality as soon as possible. I know that the Government are committed to convenient access to all post offices—as the Minister told the national federation at its conference in Bournemouth—and I hope that the Minister will do all that he can to ensure that the restoration of that particular sub-post office is carried through expeditiously and is seen as a top priority by the Post Office.

The closure of sub-post offices contributes to the growing financial exclusion suffered by pensioners and people in other low-income groups. The decision to press ahead with plans to pay pensions and benefits directly into bank accounts from 2003 makes the search for the lasting solution to which the Minister referred even more urgent.

Post Office network managing director Dave Miller told the National Federation of Sub-Postmasters conference that the decision to proceed with direct payments to bank accounts would take away something like a third of the income of Post Office Counters Ltd., and reduce customer visits by almost a half. Ministers have been at pains to reassure sub-postmasters that claimants would be able to draw cash out of post offices, but post offices—and Post Office Counters Ltd.—are still waiting to hear how that will happen in practice. The Minister's conference speech does not make it clear how the Government intend to proceed.

Clearly, although there is no coercion, there is undoubtedly Government encouragement for the way in which the Benefits Agency offers to pay benefits, which leads people to see automatic credit transfer as the only option available. It is important to make it clear that a choice does remain, and to show how it will be secured in the long run. People need to know that there is a choice about how they can gain access to their pensions and benefits entitlements, but it is also important to make it clear how an exclusive payments system at post offices will mean that people who cannot have or do not want bank accounts can get their money.

Sutton and Cheam is neither rural nor urban, but suburban. Its leafy image of wealth and affluence masks many pockets of deprivation. It also hides the fact that a growing number of elderly people are often asset rich—in that they own a home—but are income poor.

I said that the Minister's speech did not attract much press comment. However, The Guardian of 17 May carried a report by Patrick Wintour. Its introductory paragraph rang alarm bells for me when it stated: Tony Blair is planning to pour cash into inner-city and rural post offices to protect them from the impact of a huge loss of revenue caused by the automation of benefits payments. That might be considered to be a good introduction to an article on this matter, but it mentioned inner-city and rural post offices. The article went on to mention the Minister's speech, which I rude a point of reading in preparation for this debate.

In his speech, the Minister shared with sub-postmasters some of the highlights of the performance and innovation unit's examination of the network. It is clear that rural post offices have a place in the Government's plans, as do offices in deprived urban areas, but what about suburban post offices? Where does that network fit into the Government's plans? It did not feature in the Minister's conference speech and, given the content of the various speeches made in the House on the matter, it is not clear that that question has been addressed.

Do the Government accept that sub-post offices in my constituency, and other suburban post offices, have an important role to play and are an important part of the fabric of the local community? They need a clear and unambiguous guarantee that they will not be left out in the cold.

The Minister has talked in the past of the need for the post office network to achieve a soft landing. The previous Government's desire to privatise the Post Office meant that a better analogy would have been with the landing made by a kamikaze pilot. Under that Government's stewardship, nearly 4,500 post offices closed, but the achievement of a soft landing now will require a comprehensive and fair package that supports the whole network.

The lobby on 12 April demonstrated the strength of feeling on this matter, as the Minister recognised. Many of my constituents signed petitions organised by the sub-postmasters, and I shall be presenting 4,500 additional signatures later this week to the House. Those signatures came from customers of sub-postmasters and also from the Sutton seniors forum in my constituency. I know, from talking to members of that forum, that they feel strongly that the network must be safeguarded.

I hope, for the sake of residents in my constituency, particularly on the Brocks estate, and for many others in Sutton and Cheam, that suburban post offices will continue to feature on the Government's agenda, along with those in deprived urban areas and rural post offices. I hope that the Minister can give us some reassurance on those points.