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Crown Post Offices (London)

– in the House of Commons at 2:36 pm on 18th May 2007.

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Photo of Simon Hughes Simon Hughes Shadow Attorney General, Party Chair, Liberal Democrats 2:36 pm, 18th May 2007

I am grateful to Mr. Speaker for selecting this subject, and to the Minister for Trade for attending. I greatly appreciate his interest, and the way in which he always engages constructively with Members throughout the House. I say that most sincerely.

The debate was prompted by the sudden appearance on the radar of the uncertain future of the Borough High Street post office in the London borough of Southwark, in my constituency. I received a letter about it, dated 19 April this year, from Alan Cook, managing director of Post Office Ltd, setting out the general plans as they affect Crown post offices across the country.

I stress that this is separate from the decision announced this week by the Secretary of State for Trade and Industry, to which my hon. Friend Susan Kramer responded on behalf of my colleagues and myself. That decision related to the general outcome of the review of post offices across the country. Within a matter of weeks it has been announced that many Crown post offices in Greater London are to be franchised to WH Smith, and that others—including the Borough High Street branch—face an uncertain future. Then, this week, it was announced that thousands of other sub-post offices around the country would be similarly affected.

The proposal that came to us first—the London proposal—stated:

"We will continue to run, and invest in, 373 Crown Post Offices"

—referring to post offices in town and city centres. Those 373 offices would be

"alongside those branches run by private subpostmasters and mistresses...As part of the plan...a further 70 branches are expected to move to nearby WH Smith stores under a new partnership agreement, also announced today."

I was also told:

"For the remaining 15 Crown Post Office branches, including that at Borough SE1, further work to identify a franchise partner to own and manage the branch will be undertaken."

A letter that I received last week, dated 14 May, dealt more specifically with post offices in my borough and constituency. I expect that other Members representing seats in Greater London and beyond have received similar letters. The letter confirms the figures that I read out earlier, and also states:

"The following Crown Post Offices within your constituency are included within the 373 flagship Crown branches"

—that is, the protected branches. The other branches are clearly not deemed to be "flagship Crown branches". The "flagship" branches are listed as

"Blackfriars Road, London Bridge and Walworth Road."

Many colleagues whose London homes are in my part of the world will know and use them. Happily, I was told:

"We wanted to confirm to you personally that these branches remain within the Crown network and that Post Office Ltd will continue to own and directly manage these branches, thus ending a lengthy period of uncertainty for our customers and our people."

That statement was in a letter from Melanie Corfield, head of external relations, with whom I have regular dealings on the postal delivery service in London SE1 and other areas, about which my constituents and I are still not fully satisfied.

I am grateful that colleagues representing other London constituencies are present, and in order to be fair I want to list the affected London offices, as the issue is broader than just a Southwark issue. According to my calculations, 16 Crown offices in 13 London boroughs are being told that they will be relocated in nearby WH Smith stores. I should add that the first six offices that went through a period of consultation did not include any Greater London ones, but the remaining 64 are subject to consultation between April and July.

The following offices in London will be affected: in Bexley, the Crown post office in Bexleyheath; in Bromley, the Bromley Crown post office; in Westminster, the Charing Cross post office and the Oxford Street/Poland Street Crown post office; in Newham, the East Ham Crown post office; in Lewisham, the Forest Hill and the Lewisham post offices; in Hammersmith and Fulham, the Fulham Crown post office; in Hillingdon, the Hayes and the Uxbridge Crown post offices; in Hounslow, the Hounslow Crown post office; in Redbridge, the Ilford Crown post office; in Richmond, the Richmond Crown post office; in Lambeth, the Streatham Crown post office; in Waltham Forest, the Waltham Cross Crown post office; and in Greenwich, the Woolwich Crown post office. I am grateful to my colleagues Robert Neill and my hon. Friend the Member for Richmond Park for being present and for their interest in this matter.

In addition, one post office has already been passed over to a franchise with WH Smith: Hammersmith Crown post office in Hammersmith and Fulham. A further six, including the Borough post office, are "up for grabs" in that they have an uncertain future. The other five are: the Enfield Wash post office in Enfield; the 238 Essex Road post office in Islington; the Ludgate Circus post office in the City of London; the Tottenham post office in Tottenham; and the Maida Hill post office in Westminster. I never knew that there was a Maida Hill before; I only knew that there was a Maida Vale, but I am reliable informed that that is nearby.

That is the full list. Thirteen boroughs are affected. Westminster will suffer two losses, as will Lewisham—or two transfers, to be fair. Hillingdon will have two transfers as well, other boroughs will have one, and six boroughs might or might not have an office transferred to a franchise operation.

In all our communities there have been significant numbers of closures of offices. There have been a series of closures in Southwark over the years. Offices have closed at the Elephant and Castle, the Bricklayers Arms, Bermondsey Street and Abbey Street. The result is that there is much greater demand for the existing Crown offices. All those in my constituency have experienced increased demand: the Walworth Road office is often packed, with queues of people both inside and out; the London Bridge and Borough High Street offices are very busy; and the Blackfriars Road office is in the middle of a big commercial development. They are all in areas where building is going on—where there is regeneration and redevelopment. The result is that people who used to use their sub-post office are now having to use the Crown post offices that are left, as the sub-post offices no longer exist.

Photo of Bob Neill Bob Neill Conservative, Bromley and Chislehurst

I am grateful to the hon. Gentleman for giving way, and for raising this very important topic. Does he realise that his point is hugely reinforced by what is happening in Bromley, where we have precisely the same history? We are deeply concerned about a proposal to relocate the Crown post office in the centre of Bromley, which already has queues stretching on to the pavement outside because of increased demand, to the first floor of WH Smith, which also has queues stretching outside. There is only one escalator, going up, with stairs going down and a very limited lift, so it will be much harder to access than the current Crown post office, which is at street level and readily accessible by the disabled, the elderly, people with young children and so on.

Photo of Simon Hughes Simon Hughes Shadow Attorney General, Party Chair, Liberal Democrats

That is exactly the sort of thing that persuaded me to raise this issue. I have no objection in principle to the Post Office sorting out its major financial difficulties through a variety of alternative methods. My hon. Friends the Members for Kingston and Surbiton (Mr. Davey) and for Richmond Park (Susan Kramer) and I have argued for alternative ways for the Post Office to raise money, such as selling a minority of its shares. It should try to be more solvent, although there is an argument that the Government could put in more money, which they have so far refused to do.

However, if the outcome of pursuing such alternatives is a less good service—a reduced chance of a speedy service, and one that is not as convenient—we will be seriously underselling our constituents. There will be local consultations in all the boroughs affected. Not all my London colleagues are directly affected as my hon. Friend the Member for Richmond Park and I are. However, they are certainly concerned, and they and my local government colleagues across London want to make sure that no such proposal in the boroughs that we represent leads to a good accessible service moving out of the general area where people normally congregate, or into a shop, thereby providing customers with a lesser service. To be fair, WH Smith stores are generally in the places where the population go, but that is not necessarily case. Normally, Crown post offices are ideally positioned and well established, and people are well used to using them.

I turn to my specific concern ahead of the game, as it were, which is the Borough High Street post office. Not long after I was elected, the then Conservative Government proposed to close that post office. In conjunction with all the community groups, Labour and Liberal councillors—it was not a party political matter—trade unions and pensioner groups, we fought a campaign. The other day I was shown a photograph of me in that campaign—looking considerably younger—with Ms Harman. She looked a little younger too, although she is, of course, wearing very well.

The reality is that we kept the Borough High Street post office only because there was such a vigorous community campaign. That campaign was important; history has shown how important it was to win that battle. The post office has been, and is, very well used, and once the recent announcement was made, the community's strong and immediate response was to express great concern at the idea of its being moved. The problem for the Post Office is that it cannot enter into a franchise with WH Smith because there is no branch of WH Smith anywhere near the Borough High Street post office. My guess is that the others on the list—the Enfield Wash, Essex Road, Ludgate Circus, Maida Hill and Tottenham post offices—are all in the same boat: there is no WH Smith partner to move conveniently to.

It is no answer to say that the post office can be moved to the Elephant and Castle—that would be nonsense, even though there is a WH Smith at the Elephant and Castle. There is not one at London Bridge, except on the station, and it is too small to be a practical option. It would be complete nonsense, having closed the Elephant and Castle post office last year, to close another one and move it to the Elephant and Castle branch of WH Smith, which is in a shopping centre that is about to be knocked down and redeveloped anyway. That is not an option.

The post office's location in Borough high street is extremely convenient. It is opposite Borough tube station. It is on many bus routes and it serves two local authority wards—Cathedrals ward to the west and Chaucer ward to the east. It is also an area with many businesses, shops and institutions. The Commission for Racial Equality is based up the road, as is the College of Occupational Therapists. South Bank university is just down the road, and there are large hostels for students from the London School of Economics and King's college, so it is very well located.

Is the Minister making it clear to the Post Office that if there is not an obvious neighbourly franchise partner who can provide as good a service or better in the same sort of location, it would not be acceptable to move the service significantly further away to a less convenient place, or to move it to a location that is inappropriate in terms of its catchment area? I believe that the Crown post office is listed. I may be wrong, but it is certainly an attractive and handsome building that has been there for a long time. It is part of the civic streetscape of Borough high street—the old high street of the old borough of Southwark, before the metropolitan borough was abolished. It is an important building in the community, and it is great that it is used as the post office. There are many buildings like it, and nobody has suggested that it is not fit for purpose. It has two main doors for access, a large space at the front, it is visible from the main road and it is very convenient. I would be grateful if the Minister could reassure me that that Crown post office, and others like it—I do not know the geography of the whole of Greater London—will not be moved and put into premises of franchise partners where that is not appropriate. I hope that the Minister can reassure me that if a Crown post office's future has not been decided, it does not necessarily mean that a franchise will be granted to WH Smith or anybody else. I hope that all or some will be kept as flagships.

I am glad that there are three flagship Crown post offices in my area. This is a plea that, if humanly possible, the fourth can be made a flagship. It has been a great flagship. People have rallied round it and used it well, and I hope that it can continue well into the future. We value the post office. I use it and my constituents use it, and I hope that the Crown post office network in Greater London can be strengthened, not weakened. I am sure that this will not be the last that the Minister or the people at the Post Office will hear from colleagues in London or from me.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office 2:52 pm, 18th May 2007

I congratulate Simon Hughes on securing today's debate. He spelt out, in no-nonsense fashion, the importance of postal services to his constituents as well as, in general, the arrangements across Greater London as a whole and, specifically, some issues that affect inner London. The Under-Secretary of State for Trade and Industry, my hon. Friend Jim Fitzpatrick, who would normally answer this debate, apologises to the House. He has an urgent matter to attend to in his constituency. I will report back to him on Monday on the debate and whether he needs to follow up anything in particular with the hon. Gentleman.

This debate is déjà vu for me, as my first job in government 10 years ago was as Minister with responsibility for the Post Office. One could say that everything was fine when I was the Minister, but I had better not say that. We are having a debate about Crown post offices for one simple reason. I was the Minister who stopped an instruction by the previous Conservative Government to get rid of them all. Within a week of becoming a Minister I placed a moratorium on that policy and we changed it. Although we are having a debate about their structure, this Government saved them.

Photo of Susan Kramer Susan Kramer Shadow Secretary of State for Trade & Industry, Trade & Industry, Shadow Secretary of State, Liberal Democrat Spokesperson (Trade and Industry)

With the Minister's experience of Crown post offices, is he aware that there has been no consultation on whether this move will be made? In Richmond we have received a letter that states that there is no consultation on whether it will happen, only—possibly—on facilities. The information on the start of that consultation came to me by email one day after the official consultation had apparently started. It was later followed up by a letter. Is that any way to engage constituents in a process that may take their Crown post office, sell the building—because of its location—and put it on the first floor of WH Smiths, where it will be far less accessible?

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I will come to the general issues, including the hon. Lady's Crown post office, in a moment. I am increasingly frustrated by comments made in this House about Crown post offices. The whole purpose of franchising is to save the Crown post offices.

I have a Crown post office in my area, but now that the town centre is being redeveloped it is in the wrong location because its customer base has moved. It seems to me that the post office should move nearer its customer base, although that has not yet happened. The whole purpose of the review is to ensure that the Crown post office network is protected and invested in, which means that occasionally—I stress, occasionally—entering a franchise. I shall get to the figures in a moment.

The future of the post office network is a subject of great relevance to all Members of the House, regardless of the type of constituency we represent, be it urban, rural or, as in my case, a mixture of both. I have already participated—and will no doubt do so again—in consultations in my area about the review announced by my right hon. Friend the Secretary of State for Trade and Industry yesterday. Today's debate shows the need to answer specific questions relating to the Crown network and to the Borough office, in particular, but first I emphasise the fact that the Government share Members' concerns about securing a sustainable future for the network. That was the whole purpose of my right hon. Friend's statement.

The figures are stark; there is no way of getting around them. That is why the National Federation of SubPostmasters accepts the need to do something about the current size of the network. It is unsustainable. An average of 16 people a week use each of the 800 smallest post offices, at a loss of £17 per visit. Losses have risen to £4 million every week, despite an annual subsidy of £150 million and total investment of £2 billion since 1999. The hon. Member for North Southwark and Bermondsey said that we had not been investing in the network. That is not true.

Less than a third of the 14,300 post offices are commercially viable. Increasingly, people want to access services in different ways—using direct debits, ATMs, the phone and the internet. More than 5 million Driver and Vehicle Licensing Agency customers renew their car tax either online or by phone; a decade ago the number would have been nil.

Yesterday, my right hon. Friend the Secretary of State announced the Government's decisions, having considered the views put to us during the 12-week national consultation that closed on 8 March. The strategy to put the network on a stable footing will include investment of £1.7 billion, subject to state aid clearance, to support the network and keep it national, with a continuing annual subsidy of up to £150 million until 2011 and recognition of the need for ongoing subsidy beyond that date. Minimum access criteria will be introduced and will apply to all 2,800 postcode districts without exemptions to ensure that there is a national network with comprehensive coverage for customers in every part of the country. Overall, nationally, 99 per cent. of the population will be within 3 miles—at most—of a post office and 90 per cent. will be within 1 mile. Additional access criteria will protect deprived urban areas, some of which will be in the hon. Gentleman's constituency, and will apply to 15 per cent. of the most deprived urban areas, rather than only 10 per cent., as previously proposed.

In applying the criteria, Post Office Ltd will be required to consider the availability of public transport, alternative access to key post office services, local demographics and the impact on local economies. The company will draw up plans, to be put to local consultation, for an expected 2,500 post office closures, within the access criteria. Postwatch, local authorities and sub-postmasters will have input in the plans, which will be implemented over an 18-month period starting this summer. However, the fact that the remaining post office network of about 12,000 will still have more branches than the entire UK banking network should not be forgotten.

Postwatch, and subsequently the new National Consumer Council will monitor future decisions on the shape and size of the network to ensure that Post Office Ltd complies with the national framework. All the other decisions announced by my right hon. Friend yesterday related to investment and opening the network for services to rural and urban communities that suffer social stress.

The network of 450 Crown post offices is heavily loss-making; overall, it lost about £70 million last year alone. We support Post Office Ltd's policy for reducing the losses, which includes maintaining a core network of Crown post offices while continuing to drive efficiencies and to franchise branches where suitable opportunities arise. We welcome the commercial deal between Post Office Ltd and WH Smith, announced on 19 April, to franchise 70 Crown offices, which will secure the retention of the main post office service in each of those areas. The franchises are an investment, not a disinvestment.

Almost 14,000 post offices are already run by private business—either individuals or franchise chains—including about 900 of the 1,400 large, town centre main post offices. The network has always relied on private business for the majority of its outlets. The offices set to be franchised under the deal with WH Smith represent a tiny fraction of the network as a whole—less than a half a per cent. For the people and the communities concerned, had this deal not been done, it would have been at risk. Therefore, there has been 100 per cent. success in retaining the services by the franchising arrangement.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I shall do so in a minute, but first I shall deal with the issues in the hon. Gentleman's constituency. He clearly has particular concerns about the future of the Borough post office. Indeed, along with his Liberal Democrat colleagues, he has launched a petition, as we saw today, to save it, despite the absence of any proposals to close it—there is no proposal to close it.

Photo of Ian McCartney Ian McCartney Minister of State (Trade & Investment), Department of Trade and Industry, Minister of State (Trade & Investment), Foreign & Commonwealth Office

I just thought that we should get that on the record, as it was not quite clear when the hon. Gentleman introduced his petition.

There are 115 Crown post offices in London, seven of which will be part of the arrangement with WH Smith. Post Office Ltd has also stated that the company will continue to run 373 Crown offices, 102 of which are in London. The Post Office has committed to keep three of the four Crown offices in the hon. Gentleman's constituency under its direct management: those in Blackfriars road, London Bridge and my old stomping ground of Walworth road. He will surely welcome the certainty provided in these cases. We recognise that, at this stage, Post Office Ltd is not able to confirm the future of the branch at Borough one way or the other, so inevitably some uncertainty is involved for customers. He is rightly raising the issue in that regard, and he deserves a response.

I know that the Post Office has written to the hon. Gentleman to explain the situation, but I do not think that that is sufficient, so I shall ask it to arrange a meeting with him—and any other London Members that he wishes to bring—to discuss its intentions, and the issues of consultation and WH Smith's engagement with local Members of Parliament.

I think that WH Smith has a responsibility to engage, so I shall give another commitment. Either myself or the Minister who has direct responsibility for this will write separately to WH Smith to ensure that it carries out its responsibilities to meet elected Members of Parliament and their representatives to discuss the process of the changeover—the taking over of the franchise—and ensure that hon. Members feel engaged and involved, and that they understand what is happening. I give the hon. Gentleman that commitment.

I know that the Post Office is working hard to deal with the issue of greater certainty over the future of the network. The fact that the company has already set out a clear position on the majority of the post office network is a welcome and significant step forward. So, I hope that the assurance that I have given about meetings with the Post Office and WH Smith will start the process of consultation and discussion.

Susan Kramer raised the lack of consultation. There should, and will be, consultation, and I shall ensure that it takes place. I cannot make comments about the specific branch of WH Smith that she mentioned, because I have no knowledge of it, but I can say that any arrangement that is made is not about reducing access to post office services—whether or not that relates to disability; it is about improving access, the quality of access and footfall, which is what happens in the main.

A number of years ago, one of my local post offices closed, but we were able to get it put into an Asda superstore. People were up in arms at Asda running the post office, but the footfall increased from about 80 a month to about 80 an hour. Why did that happen? Because to shop at Asda, which has a turnover of more than £1 million a week, people had to go through the post office. This has been a boost and a boon to the village. This is about explaining things and engaging people, and it is about a sense of ownership: doing things with people rather than doing them to people. Again, I give an assurance about discussions on the particular branch that has been mentioned.

The hon. Gentleman raised the issue of the Charing Cross branch announced as part of the deal. May I just say for the record that we are talking not about the Charing Cross branch in London, but about Charing Cross in Birkenhead? I did not know that there were two Charing Crosses of such significance. Birkenhead is certainly significant in terms of the north-west.

Franchising is not about a closure programme. Franchising and conversions are not about reducing the number of post offices; they are about trying to improve and sustain the network. One thing that Post Office Ltd has is expertise in negotiation about franchising. It has lots of experience of that. A decade ago, that was taken from it, and some of the post offices have gone. Who knows whether they would have remained open as a commercial enterprise or whether the sites would have been cleared for other commercial purposes? However, the fact that we have been able to save these means that we have the opportunity, over the next 10 years, to ensure that each of the Crown post offices is in a place that will be accessible to the existing customer base and will allow that customer base to increase. That is certainly true in urban areas, where a great deal of public and private investment is regenerating shopping centres, building new places for shopping and putting in place new transport infrastructure. It is important that we can take account of the impact of that, which is sometimes negative. If that means reaching a genuine arrangement whereby the Post Office gives a franchise that maintains and improves services and increases access to them, hon. Members should move forward sensitively with their constituents. However, as the hon. Member for North Southwark and Bermondsey said, constituents need to be consulted and engaged with so that they are brought into the programme of work. I repeat that I give the hon. Gentleman a commitment on that.

I will write to the hon. Member for Richmond Park about the specifics of the Richmond post office and arrange a meeting with her about WH Smith. I will make the same arrangements for the constituency of Robert Neill. Having been here all day, the very least that he can get is something out of the Minister.

Question put and agreed to.

Adjourned accordingly at six minutes past Three o'clock.