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Post Office Closures

Part of the debate – in the House of Commons at 5:16 pm on 15th May 2002.

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Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire 5:16 pm, 15th May 2002

My hon. Friend makes an important point. All Members have visited their local post offices and sorting offices and have seen the bank of knowledge, good will and caring for the people of this country. The staff there know when somebody is not answering their door or taking their mail, and they will call the emergency services. I do not want that to be destroyed, and neither does any other hon. Member.

We must find the right way forward. Unfortunately, five years on, with the privilege of this Labour Government, we are no further forward. The post office system seems to be collapsing around our ears. I do not know what to believe. Going back to 14 May 1998, the Minister for Pensions, who was then the Minister with responsibility for the Post Office, said:

"The terms of reference are unequivocal. The Post Office will remain in the public sector".—[Hansard, 14 May 1998; Vol. 312, c. 505.]

My hon. Friend the Member for Eastbourne says, however, that there were negotiations to try to do a share swap deal with the Dutch post office. If that is trying to remain in the public service, I am a Dutchman—[Laughter.] That came to me on the spur of the moment. I apologise for it. Unfortunately, we cannot go back.

As my hon. Friend the Member for Eastbourne said, both sides of the House agree that sub-post offices are an essential part of the fabric of our society. They supply all the services that we need to drive ourselves forward. They help the older as well as the less-well-off customers. As I said, I want to pay full tribute to the daily work of sub-post offices.

A vital concern is that sub-post offices continue to expand and develop, but as we all know, they have been contracting over the past 20 years. That has been partly due to changes outside the control of the Post Office—new technologies and new patterns of work, the difficulties of finding new recruits when a sub-postmaster decides to retire, and the lack of profitability of operations in some rural and urban areas. All those factors come into play. No Government or postal provider could have compensated for or counterbalanced those factors entirely. The process of contraction, however, is now taking place at an unacceptable rate.

Despite the Government's promises back in 1997, the Minister for Employment Relations, Industry and the Regions, in his former capacity as the Minister for Competitiveness, commented more than once on the fact that the network was under-utilised and not properly promoted. He told the House in January 2000 that the measures that the Government had in mind would attract new business to the post office network. He did not mention the fact that they would remove 35 per cent. of the income of sub-post offices through the introduction of ACT. In a debate in the same month in Westminster Hall, he said that attracting banking back to rural areas and taking advantage of computerisation would allow the random effects of the previous 20 years of erosion to be tackled. He was equally clear in the Committee that considered the Postal Services Act 2000, on which I had the privilege to serve, about how that would be achieved. I have great respect and affection for the hon. Gentleman, but I do not share his faith in the Government's powers of prophecy or their ability to deliver.

One has only to consider the number of sub-post offices that closed last year to realise that the organisation is in meltdown. Sub-postmasters and sub-postmistresses cannot sell their sub-post offices when they want to retire because no one has any confidence in the levels of income that they will earn. People who have sunk their savings and their pensions into the business or who have borrowed money are now saddled with a sub-post office. There is nothing that they can do. The measures in which they put their trust—the creation of the universal banking service with post office card accounts for people receiving state benefits, basic bank accounts and access to current bank accounts via the post office, the provision of information on Government services, the routing of transactions through the "your guide" scheme and so on—look more like a coherent strategy in theory rather than in practice. The sub-post office network is melting away.

I understand from the National Federation of Sub-Postmasters that the Government are working on the assumption that 3 million people will opt for post office card accounts. When I asked the hon. Member for Twickenham whether that would be the figure and what would happen if it were even higher, he expressed the alarm that I share. People might say, "This is a useful method. I will transfer out of the banking system and have a post office card account because it is a system for which I do not pay any charges." However, the pressure is on the clearing banks to provide the moneys to subsidise the service. Unless the banks are careful, they could face considerable difficulties.

How will the Post Office be able to offer basic bank accounts to the several million people who have poor credit histories and perhaps county court judgments or bankruptcy orders set against them? Will those people be able to set aside the orders and take money out? Is it true, as the National Federation of Sub-Postmasters alleges, that the Department for Work and Pensions will actively discourage people from opening post office card accounts?

If the sub-post office is to become the vehicle for basic and current bank accounts, we want to know who will be the beneficiaries. Will it be the people who open the accounts or will it be the banks? Perhaps the service will cost the banks so much money that they will call a halt and the whole system will collapse like a pack of cards.