Post Office Closures

Oral Answers to Questions — Business, Enterprise and Regulatory Reform – in the House of Commons at 10:30 am on 3 July 2008.

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Photo of John Barrett John Barrett Shadow Minister, International Development, Shadow Minister, Work & Pensions 10:30, 3 July 2008

What recent representations he has received on post office branch closures; and if he will make a statement.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

Again, the Department regularly receives representations on a wide range of issues in relation to the network, including the current closure programme and the establishment of new outreach outlets under the Post Office's network change programme. To date, the Post Office has published and put out to local public consultation 34 of the 41 area plans in the current programme.

Photo of John Barrett John Barrett Shadow Minister, International Development, Shadow Minister, Work & Pensions

I thank the Minister for that answer. Previous post office closure plans decimated the post office network in Edinburgh, under both the previous Conservative Government and the present Labour Government. All the post office closures—we are expecting the next wave in August—have been done without any strategy or any plan in mind for the entire city. Why should it be any different this time, and what reassurances can he give the residents of Edinburgh that that will not happen again?

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

One of the differences between the programme that we are in the middle of and previous programmes is that the previous one, for example, was entirely voluntary for sub-postmasters leaving the network. Perhaps that caused less local protest, but as a strategy to plan the network it may not have been the best option; such an approach could leave holes in the network in the hon. Gentleman's city. This time, access criteria will broadly mean that people in urban areas should be within a mile of a post office and people in rural areas within 3 miles. That will help with planning the future shape of the network. It means that some sub-postmasters who do not want to leave the network are being asked to leave, and I understand that that is difficult for them, but it also means that the network is being planned in both urban and rural areas.

Photo of Gavin Strang Gavin Strang Labour, Edinburgh East

Does my hon. Friend agree that a worrying aspect of the last closure programme was that, no doubt for business reasons, a disproportionate number of the closures were in working class areas, often in major cities and near former council schemes, some of which had a high proportion of elderly people? As John Barrett said, we do not have the Edinburgh proposals yet, but is there any prospect that that will not happen this time around? We had quite a hammering last time, not least in Edinburgh, East.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

My right hon. Friend makes a fair point about the importance of the post office network to people on lower incomes, and that is why this Government have put so much public funding into supporting it. The network faces major changes in how people do business, but we are supporting it with up to £1.7 billion over the next few years. Without that public support and strong commitment from the Government, thousands more branches would be under threat. We have put that support in place precisely because we appreciate the value of the network to the constituents whom my right hon. Friend mentions.

Photo of Andrew Selous Andrew Selous Shadow Minister (Work and Pensions)

Is it not the case that we would not be in this sorry mess and having to close about a third of the network if the Government did two things? First, they should allow a much greater range of Government services to be provided through post offices, and secondly they should allow and indeed encourage the Post Office to be far more entrepreneurial in the range of services that it provides.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

I quite agree that the Post Office needs to be entrepreneurial in the range of services that it provides. It has successfully expanded into foreign currency and insurance, for example. In terms of Government work, I know that the Post Office is highly interested in biometric identity management for passports and driving licences and, possibly in the future, identity cards. Of course, if the hon. Gentleman's party has its way, the Post Office will not even get the chance to bid for that Government work.

Photo of Linda Gilroy Linda Gilroy Labour, Plymouth, Sutton

A moment ago, the Minister said that this process was very difficult, and he will know from the Adjournment debate that I had last week that I understand that. However, may I commend for his further consideration the point that I set before him then? When we have a Devon cluster that includes one of the most sparsely populated counties in the country together with an urban area with some of the most deep-seated poverty, perverse proposals emerge, such as the closures of Pennycomequick, Beaumont road and St. Leven's valley post offices. Does he really think that he is getting value for money from the £1.7 billion when it produces such perverse proposals to close busy post offices?

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

My hon. Friend has made her point, and it is clear that she believes that it is wrong for her city to be in the same closure plan as a major rural area such as the county of Devon. Of course, that has happened in several places around the country where urban and rural areas have been combined for this purpose. It is difficult, but the access criteria are intended to ensure that we have a stable network for the future in both rural and urban areas.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

May I make a plea to the Minister to have a further discussion with the Post Office about these closures, bearing in mind the representations that he is receiving from both sides of the House? This is not a party issue: we are talking about an important public service. In my constituency, six post offices face closure and that is under consultation now, but they are profitable enterprises. Why should profitable enterprises be closed, and why should rural areas be put at a further disadvantage by the access criteria? I am deeply concerned: will he not have further talks with the Post Office about its proposals?

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I believe at least some of the proposed rural closures may breach the Government's own access criteria, one of which requires that: "for each individual postcode district, 95% of the population of the postcode district to be within 6 miles of their nearest Post Office branch" Using multimap, I have identified that Wildboarclough is 4.96 miles from our local post office...

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Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

My hon. Friend Linda Gilroy thinks that urban areas are being put at a disadvantage; the hon. Gentleman thinks that rural areas are being put at a disadvantage. He should perhaps be cautious about saying that the post offices that are closing are profitable. The post office network is losing £0.5 million a day. When we take into account not just the costs to sub-postmasters but the central costs borne by Post Office Ltd for services such as cash handling, IT and so on, we see that three out of four post offices in the country run at a cost to Post Office Ltd. That is why it is so important that we have stepped in with a large-scale public subsidy, which did not exist under the last Government.

Photo of Joan Walley Joan Walley Labour, Stoke-on-Trent North

May I confirm that my hon. Friend is aware of my concern about the way in which the consultation has been done in deprived urban areas? Let me also tell him that the closure programme that we have seen so far will be as of nothing if something is not done about the Department for Work and Pensions issuing the Post Office card account to the Post Office. Will he do all that he can to ensure that the Post Office retains that card account?

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

I fully understand the importance of the Post Office card account to the future of the network. The National Federation of SubPostmasters has made its views on that matter very clear to me and to right hon. and hon. Members from all parties. My hon. Friend will understand, too, that this is a commercial tendering process and the DWP will consider bids from around the country. I am sure that the Post Office has put in a very strong bid, but the decision will be announced later this year.