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Post Office Closures

Part of the debate – in the House of Commons at 4:40 pm on 15th May 2002.

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Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 4:40 pm, 15th May 2002

So we have yet another debate on the Post Office, or Consignia, as we have come to know it. I congratulate Dr. Cable on securing the discussion. It is unusual to hold regular debates about a company in the private sector; it is even more unusual when that company is doing well. However, despite the hot air about commercial freedom, the Post Office remains mired in the public sector and its attitudes to innovation and service.

The Independent got it right when it stated:

"The problem is that this Government has spent too much of its time trying to make public entities like the Post Office behave like private companies and private companies such as Railtrack behave like the old nationalised industries. Such contortions suggest at the very least that, for all their unhealthy closeness to businessmen and wealth entrepreneurs, New Labour does not really understand business and enterprise."

I am sorry to see that the Post Office's sole shareholder has left us, doubtless for something that she considers more important.

Another reason for continually holding such debates is that the Post Office is, sadly, in deep trouble. It is a failing company. That was not always so: the Post Office made a profit in every year of Conservative government. As The Guardian stated:

"Less than 10 years ago, the Post Office was perceived as the best of its kind in the world. Unlike its European competitors it was profitable, its delivery performance was top of the international league table and its then Chief Executive boasted of the workforce as his '200,000 in-house consultants' and 'ambassadors to the public', for whom the 'postie' was trusted and respected."

The postie continues to be trusted and respected, but the Post Office is in deep trouble.

The Post Office loses £1.5 million a day and plans to shed at least 30,000 jobs. It has endured dreadful industrial relations and continues to miss its delivery targets. Some parts of the country go for days on end without a delivery. The Post Office is scrapping the second delivery and the early collection. If that were not bad enough, it is losing 1 million items of mail a week, according to the watchdog. It has been suggested that only one delivery a day should be made to private addresses at or around lunch time. That will affect hundreds of thousands of small businesses especially badly.

One of the most worrying aspects is the deterioration in the network of sub-post offices, which have been closing at an ever increasing rate with a record number of closures—547—last year. An average post office branch could lose 40 per cent. of its turnover overnight when benefits payments cease next April. The closure rate has decreased in the year to April 2002, and that is welcome, but the Government should not take too much comfort from that because there are problems of disposal and sale, and people are hanging on in the hope of receiving compensation. Of the 262 post offices that closed, 194 were rural sub-post offices. This is therefore a network in decline.

What has the Government's reaction been? They have set up a programme of so-called reinvention of the urban network. They have not, of course, fulfilled conclusion 6 in the PIU report, which proposed the production of a report by autumn 2001 about the future of the rural sub-post office network. I would like the Minister to tell us when we can expect those proposals to be brought forward.

The sad truth is that most of the money that has already been earmarked, particularly for the urban network, is actually being used to close it down, rather than to keep it open or even to expand it. The most serious problem, however, is that the Government have, as yet, no clear strategy to deal with the future of that network.