Post office provision

– in the Northern Ireland Assembly at 4:00 pm on 28th January 2002.

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Photo of John Dallat John Dallat Social Democratic and Labour Party 4:00 pm, 28th January 2002

I beg to move

That this Assembly notes proposals by Consignia to cut the number of post offices in Britain by half and calls for immediate action to protect the infrastructure of post offices in Northern Ireland, particularly those serving people in rural and disadvantaged urban areas.

I am grateful for the opportunity to bring the motion before the House. Since the threat of post office closures became a matter of concern and was debated in the Assembly some time ago, little, if any, progress has been made in planning a successful future for this essential service. The Post Office has a new name, Consignia, but we have precious little else, except mounting evidence that the Post Office is fast approaching meltdown for those who reside in rural and socially disadvantaged urban areas. These are not just my views; people much closer to the Post Office, who experience the problems every day, share these views.

Opportunities to develop the Post Office as a key centre for communications and public services, including new e-government initiatives, Internet access and many other possibilities have been missed. In the meantime, the closure of post offices, rural post offices and sub-post offices is increasing as postmasters retire and replacements cannot be found. As we speak, 28% of sub-postmasters in rural areas and 35% in deprived urban areas are actively considering leaving the Post Office. A third of rural sub-postmasters who wish to leave cited loss of income as the main reason. Many sub-postmasters actively seek new business opportunities and feel frustrated by constraints and what they see as the Post Office’s lack of dynamism with regard to developing new services and marketing those already provided.

All this is happening at a time when more than 90% of customers and residents in rural and deprived urban areas still firmly believe that post offices have a key role to play in the day-to-day life of our communities. A comprehensive survey, Post Offices and Community Needs in Rural and Deprived Urban Areas, which was carried out last September, states that 61% of deprived urban customers and 69% of rural customers use their local post offices to obtain what are called "free" community information and services. Up to 41% of customers obtain informal advice from sub-postmasters, and 29% obtain Government information. We cannot afford to lose this service, because we are committed to targeting social need (TSN), and the Post Office plays a vital role in delivering information about a variety of Government services that help to create equality of standard of living, which everyone is entitled to, but which not everyone receives.

We have been told that the Government are committed to keeping rural post offices open, but there is little evidence to show that anything practical has been done to make this a certainty. The fate of the post offices in socially deprived urban areas appears to be sealed. The decision to close post offices will be taken in the full knowledge that they provide a lifeline to many people, not least the elderly and families that cannot afford to travel to town centre outlets.

In Northern Ireland there is already worrying evidence of the decline in the standard of service offered by the Post Office and Parcel Force. This has been well publicised by the Northern Ireland committee of Postwatch, the consumer watchdog, in its news release of 5 December 2001. None of those failings is attributed to the postal workers, who do a sterling job. The failings were attributed to Consignia, which needs to be encouraged to comprehensively assess the needs of its customers and deliver a service to meet those demands. Today there is further criticism from the Federation of Small Businesses of Consignia’s plan to delay some deliveries until afternoons.

I suggest that the future of our post offices is a key element in delivering a service fit for the modern age. To date, the focus has been firmly on the necessity to get Consignia into shape to be sold to the private sector. Little serious regard has been given to the essential service which it provides for the whole community, and particularly for those who live in rural communities or socially disadvantaged urban areas.

Speaking last October, a Northern Ireland spokesperson for the National Federation of SubPostmasters warned that the restructuring of the Post Office would mean survival of the fittest for some postmasters. He predicted that many post offices would close, and that already it may be too late for some of them. We accept that efforts are being made to find new business. However, many of those outlets will be gone if and when decisive action is taken. By then, the network will have become eroded to offices in centres of high population only.

Next year, post offices will lose a huge chunk of their business when social security payments are due to be made by automatic credit transfers payable through banks. That will bring its own problems for many people who live in small communities, where there is a post office but no bank. It will also create problems for people who do not have, or want, bank accounts but who believe that they are entitled to their payments with the minimum of inconvenience and outlay.

Post offices often double up as mini-markets, providing essential items such as milk, bread, coal and other necessities. There is every possibility that when a post office closes, so too will the shop, thus compounding the isolation problems.

Progress on the development of a universal bank by the Post Office is disappointing, and its efforts to promote Post Office banking services in their current form is also to be regretted. Must they wait until the writing is on the wall for the more vulnerable post offices? The Prime Minister, Tony Blair, has pledged his support for the retention of post offices in rural and urban areas, but what will be the value of such a pledge when this public service is privatised, and the focus moves to maximising profits, which can be made only in areas of large population? Action is needed, but nothing is happening. My understanding is that no pilot study is taking place in Northern Ireland, where the needs of our people are quite different from those in Leicestershire and Rutland, where studies are taking place.

I would like the Assembly to take a direct interest in the future of the Post Office, and I look forward to hearing about any developments. I wish to see a task force being set up to define a strategy that meets the needs of the people of Northern Ireland. I would encourage much closer co-operation with the postal services in the Republic, where similar dilemmas are being experienced as a direct result of pressure from the European Union to free up postal services in order to encourage competition. Greater efforts must be made to define service standards, and clearly understood procedures must be put in place to deal with proposed post office closures. People must be made aware that the Post Office continues to exploit opportunities for new commercial services and pay for the cost of introducing those services. The problem of attracting new sub-postmasters must be addressed by the introduction of new and relevant financial and delivery packages. That is what is happening in other sectors of industry and commerce where, for whatever reason, there are recruitment problems, and there is no reason why the Post Office should not do likewise.

The Post Office plays a key role in the delivery of Government and community information. If that service is lost, the socially disadvantaged, the marginalised and the elderly will suffer most. There must be a clearer definition of post offices’ public, private and community information and advisory role, and a move away from indirect subsidy through the Post Office to more direct subsidies for this essential service which, to date, has not had a financial value placed on it.

I look forward to a stimulating debate, and I hope that those who have the future of the Post Office in their hands will listen and take what is being said seriously, because it is not simply a matter of post offices closing — the future of entire communities is at stake. We, and the Government Departments for which we now have responsibility, have a part to play. It would be unfortunate if all the efforts made to regenerate rural and socially disadvantaged urban communities were harmed in such a damaging way by the closure of sub-post offices on a grand scale.

Photo of Roy Beggs Roy Beggs UUP

I thank Mr Dallat for highlighting the plight of the existing post office network. While the closure plans of Consignia are reported to apply solely to England, Scotland and Wales, there should be no doubt that similar financial pressures exist in Northern Ireland and will apply to our sub-post office network. Consignia, whose postal services cover the entire United Kingdom, is reported to have lost £281 million during the first six months of the current financial year. It is clear that there are significant financial forces afoot, which are dictating the change to our existing post office network. It is not just a matter of making a report — there are real financial pressures at work here, which are forcing, and continuing to force, the closure of many sub-post offices against communities’ wishes.

I am concerned at the vagueness of some of the recent reports and comments from Consignia spokespersons. For instance, they have said that some of the 17,500 post offices are not viable. They say that they have no intention of closing 1,000 post offices, and then add the word "soon" — maybe not this week, but what about next week?

Finally, the network is making a loss, and something has to be done to make as many of these post offices as viable as possible. What is being done? I have not heard of any concrete work being done by the Post Office itself. We have heard hints about things that are going to happen and things that they are investigating. We have heard suggestions by the Labour Government for introducing alternative means of funding, but no concrete proposals as yet.

With particular reference to Northern Ireland, the ‘News Letter’ in a report on Consignia only last week said that Consignia had said that it was "too early to say" how many urban post offices would be affected by the restructuring programme and that

"The details of the programme are still being discussed".

Clearly there are moves afoot that will affect not only the largely rural population in Northern Ireland, but also much of the urban population, and it is the deprived urban population that is likely to suffer most.

There was a sustained decline in the post office network throughout the United Kingdom during the last decade. It has been reported that approximately 200 post offices closed each year, but 384 closed during 1999. According to the Postal Service Commission’s report in December 2001, the number of sub-postmasters who are resigning has not increased substantially over the last couple of years, but there is evidence of a reduction in the number of people showing an interest in replacing those who do resign, particularly in small rural communities. So, while existing postmasters are hanging on, replacing them is not an attractive option at present. Financial pressures are largely responsible for the closures, so taking a sub-postmaster’s job is not an attractive proposition at present.

In a House of Commons Hansard report of 12 April 2000, the Prime Minister indicated another pressure:

"Half a million more people a year choose to get their pension or child benefit through their bank accounts. That will carry on, so inevitably the post offices are faced with a process of change. The question is how to deal with it. The best way is make sure that people can get their benefits in cash, if they want to do so, but that we work with the post offices to provide a new range of services for the future."

That was said nearly two years ago, and I have not heard of any new services or new financial streams to keep our post offices sustainable.

The Post Office’s largest contract is with the Benefits Agency, and that is shrinking because people are choosing to take direct payments. The contract for paying benefits is up for renewal and this, in itself, creates huge doubt within the post office network. For the record, my preference is for the Post Office to get another contract, because, as well as providing a good social security benefit delivery service, there are many other benefits for the community.

At European level there is additional pressure, with the Directive on postal liberalisation, which is making postal deliveries increasingly more competitive. The Directive is also reducing the Post Office’s ability to transfer money and support sub-post offices. There is a range of financial pressures afoot.

I welcomed the announcement last year that shops and post offices in rural villages and hamlets would get a rate rebate of 50% to 100%. That has been a positive benefit, but is it enough? It appears not. The decline is continuing, and the Assembly must assess which particular services it would find beneficial to contract to post offices. This could take the form of providing access to Government information. Their existing telecommunications network provides them with an existing infrastructure, and I urge that serious consideration be given to a proposal that would make it possible to give financial assistance to sub-post offices.

I have some criticism of the Post Office itself. Its senior management is slow to react to market forces. The power card scheme, for example, which was operated by NIE, was subsequently replaced by a keypad system. The Post Office originally tendered for the business but was not successful. No subsequent tenders were submitted, and, as a result, that aspect of business was lost to other competitors.

In addition, the Post Office has been preventing sub-post offices from introducing other systems that would enable it to retain that aspect of the business. It is unhelpful that the Post Office — having lost contracts — still insists on developing its own wonderful system, which will come too late. Unless it reacts to market forces, that aspect of the business will be lost to competitors. There are enormous pressures from a variety of sources, and senior Post Office management must become more proactive.

Another aspect that is putting off potential new sub- postmasters is the large number of robberies that have occurred at post offices. One sub-post office in my constituency was robbed three times in the past year. This activity is putting additional cost burdens on sub-post offices; it puts a community facility at risk and must be deplored. If offices eventually close, there will be a huge public outcry. Can we not be more proactive? Are there any procedures whereby additional support can be given to those sub-post offices to assist them with security and ensure that they will remain in business and that their staff will feel safe?

Post offices, which are still a reserved matter, are not being handled well. The Assembly should apply pressure on the Government in London to ensure that the issue will be addressed, because no proposals have come forward about this in almost two years. It is time for concrete proposals, so that our existing post-office network can grow confident that it will have a future and will be able to see that investment will secure, in the long term, not only its existence, but benefits for the wider community too, because people rely on access to a post office.

Photo of Iris Robinson Iris Robinson DUP 4:15 pm, 28th January 2002

The news that Consignia is to dump around 30,000 employees to address spiralling company debts has sent a shock wave through the company from top to bottom and into every sector of its current operations. It is therefore inevitable that the repercussions of such a huge number of redundancies will be felt in every constituency, borough and town throughout Northern Ireland. The loss of 30,000 jobs represents an overall figure of one in six of the current workforce, which is absolutely staggering.

I have already contacted the Department of Enterprise, Trade and Investment. Its representatives are unable to make any comment on the crisis, as they claim that it is a reserved matter and that the Northern Ireland Office has responsibility. Neither that Department nor the NIO know the extent of the impact that these job losses will have in Northern Ireland — they simply know that job losses are inevitable. If the job losses are spread equally around the United Kingdom, as many as 850 people in Northern Ireland could find themselves without work. It is therefore impossible to imagine how services are to be maintained across the Province, and to assess the impact that the job losses will have, especially on rural life.

This is not just a straightforward case of a privately owned company being priced out of the market, but this is a publicly owned company that provides a service, which is in deep financial crisis. There is an obligation on the Government to maintain the level of services. The power to act is there; only the commitment and determination are needed to shore up this essential public service.

There are currently approximately 170 Post Office branches in Northern Ireland, employing around 4,500 people. Every employee of the Post Office not only provides a postal service for the citizens of the United Kingdom but fulfils a much greater social duty, especially in rural areas. Most post offices represent an integral part of local society, and they act as a focal point for many local communities. They act as a reassurance to many elderly citizens and are somewhere for people to meet and interact. In principle, they provide access to many services other than letters and parcels. That public service is currently being allowed to fade out and disappear in many areas.

Ever since Consignia took over the running of the Post Office, the company has never looked strong, and its operating costs increased by 500% to £100 million in the first six months to September last year, while losses at Parcelforce Worldwide were in the region of £200 million for the year 2001. The shocking reality is that the Post Office has, in the past, been a profitable business. In the past 10 years the Post Office made a profit of approximately £350 million every year, except for the last two.

Several factors, including the growth in e-mail, changes in competition rules and the freeze in stamp price, have contributed to the crisis. However, the company management must share a huge degree of the blame. It is estimated that the financial investment made by sub-postmasters across the country is around £1·5 billion, yet, even with that huge personal commitment, post offices are continuing to close on a weekly basis. The wage received by sub-postmasters is, in effect, the gross profit of their business — the transactions carried out on behalf of the Post Office, minus all their overheads such as salaries, rent, rates, electricity, et cetera. Over the past number of years the finance generated through the post office has either remained static or has decreased, while the cost of living and overheads have continued to increase. That has led to a question mark being placed over the viability of many post offices, and an ever-increasing number are no longer able to survive.

There is then the question of the support being given to the creation of the universal bank by the high street banking institutions. In mainland UK, all the banks have signed up, yet here in Northern Ireland only the Ulster Bank Ltd and the Northern Bank Ltd have signed up — the First Trust Bank and the Bank of Ireland have not signed up.

Unfortunately, to date, all that the Post Office has witnessed has been a decline in business, with the loss of the Northern Ireland Electricity Powercard contract alone costing Northern Ireland sub-postmasters between 4% and 12% of their annual salaries.

If the Government genuinely value the services of the Post Office as currently provided, why do they appear to remain acquiescent to the continued closures of offices across the country? It appears that offices are being allowed to deteriorate and disappear, and many feel that it is in an effort to minimise compensation payouts.

In all of this, Tony Blair’s Government appear very reluctant to act in order to protect this valuable service. The announcement from Consignia that 17% of its workforce is to be laid off has done nothing to provoke the Government into any kind of meaningful response. It only serves to reinforce the opinion that they are more than happy to watch the postal service crumble.

The Department of Enterprise, Trade and Investment does not have responsibility for this matter, so I have written to, and am awaiting a response from, Patricia Hewitt MP, the Secretary of State for Trade and Industry, on this urgent matter. I urge the Minister of Enterprise, Trade and Investment to use what influence he has to gain a satisfactory response from his Westminster counterpart.

If action is not taken promptly the situation looks predictably sure to deteriorate even further. We, as publicly elected representatives, have responsibility to those who put us here to do all in our power to maintain the levels and quality of the postal service in Northern Ireland.

Photo of Michelle Gildernew Michelle Gildernew Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I am taking a different approach to this debate. While I agree with other Members, I want to look at this matter from the Committee for Social Development’s perspective.

The National Federation of SubPostmasters wrote to the Committee on 11 September 2001 requesting a meeting to discuss the impact on local communities, both urban and rural, of the changes proposed by the Government and the Post Office. The federation identified three main areas of concern: the changes to the method of benefit payments; the network reinvention; and the treatment of the Six Counties as a region.

The Committee recognised the need to tread carefully in relation to improper interference in a commercial operation but saw merit in exploring the issue of changes to the method of benefit payments. The Committee was also mindful that the Post Office is a reserved matter, which falls within the responsibility of the Department of Trade and Industry. However, we agreed that it would be useful to meet a delegation from the federation, and an invitation to attend a future meeting of the Committee was extended. Subsequently the federation said that it wished to consider developments in England, Scotland and Wales before appearing before the Social Development Committee. It also referred to changes in personnel in the regional offices as a further reason for postponing its appearance before the Committee. The latest indication from the federation suggests that it will not be in a position to appear before the Committee until the end of February at the earliest.

The Social Development Committee is aware that automated credit transfer will be the normal method of payment after 2003. The Department for Social Development has informed the Committee that, in keeping with a public commitment given by British Ministers, benefit recipients will be able, if they wish, to continue to collect their benefits in full, in cash, at post offices.

The network of post offices in the Six Counties provides services to rural and urban customers. The elderly, and people who rely on local services because they have poor or no access to public or private transport, make use of many of those services. According to the National Federation of SubPostmasters, about one third of our post offices provide services to rural communities. The Committee understands that the Minister for Social Development is committed to using existing methods of payments from post offices until March 2003. However, given that we are all singing from the one hymn sheet, and that we have all agreed with the context of the debate, I am disappointed that the Minister is not here to listen to the contributions of Members. He would have benefited greatly from it. Post offices, especially those in rural areas, provide invaluable services for local communities. While commercial viability cannot be ignored, neither can the fact that post offices provide an absolutely critical lifeline for rural areas where there may be no public transport or any other public services.

In the light of the Social Development Committee’s interest in ensuring the timely and accurate payment of benefits to those who are entitled to them, we look forward to hearing from the National Federation of SubPostmasters. I intend to ensure that nobody is disadvantaged, regardless of who they are or where they live. I hope that the Minister for Social Development will join me in ensuring that everything possible will be done to ensure that people have easy access and freedom of choice when cashing their benefits cheques. Go raibh míle maith agat.

Photo of David Ford David Ford Alliance 4:30 pm, 28th January 2002

I welcome the motion and congratulate John Dallat on highlighting the issue. He and other Members already mentioned some of the threats to urban and rural post offices. Principal among those is the change to benefits payments that is due in April 2003. I regret that although the issue was raised before in the Assembly, the Minister was unable to give any assurance that the system in Northern Ireland would be any different. I cannot remember which of the "hokey-cokey" DUP Ministers for Social Development was involved; in their eyes, devolution did not involve doing anything to protect post offices. It is a major concern for all of us.

The £100 million half-year loss by Consignia, the threat of cost-cutting by 15%, and Consignia’s difficulties as a result of competition rules on cross-subsidy by Royal Mail, will create continuing problems for post offices in rural and urban areas, deprived or otherwise.

It was recently announced that An Post is expected to lose W30 million this year, having lost W7 million on a rather smaller scale of operation than Consignia had last year. The whole structure of traditional post offices, both counter services and deliveries, is under threat. Although deliveries are outside the scope of the debate, it is clear from the concerns raised by the Federation of Small Businesses today that many issues need to be addressed.

The post office in Crumlin serves a thriving and growing population of over 4,000. On an official visit to the village a couple of years ago, there were perceived threats to the viability of even an office of that size. Given that an office that serves a growing community of over 4,000 is under threat of closure, there is potential for closure in many other areas. It was suggested to me then that the borough of Antrim might end up with only one post office, in Antrim town centre. That would be unacceptable.

We need a much firmer response from the Government on how to develop services, and on how to promote measures to build on the Post Office’s strengths, which Consignia, or its previous incarnation, have already highlighted over the past three to four years. On information points, I do not suggest that every sub-post office should be a full-ranging citizens’ advice bureau, but branches now have the technology and the staff with the ability to deal with public bureaucracy and to provide related services. Such a public service would have to be funded; it could not be funded through the normal commercial activity of the Post Office.

As Iris Robinson said, there are problems with the concept of the universal bank. It has not yet developed as it should have done. On a personal note, however, I can recommend the co-operation between Post Offices Ltd and the Co-Operative Bank, which provides an excellent cheque-cashing service in this Building, for those of us who prefer not to queue to use plastic cards in the basement.

The start-up capital scheme is also being developed to ensure that post offices in rural areas are retained. I am not yet sure whether that scheme is applicable to Northern Ireland, because it is administered through the Department of Trade and Industry (DTI). DTI should be questioned about how it regards its responsibility for that reserved matter in a devolved region.

It is not just post offices in rural areas that will benefit from the start-up capital scheme. The role of the post office is as vital in many deprived urban areas as it is in rural areas. It provides a focus for a local community, and a centre to provide many services. Even if subsidies are being provided to assist the retention of offices in rural areas, there is a major threat to the urban network. These days, managers and decision-makers regard a distance of one or two miles as negligible, because they all drive cars.

Members all know —we have discussed them here often enough — of the inadequacies of public transport in many urban areas and the lack of car ownership among those who most need to use a post office. It is all very well saying that the average family has so many cars, but the level of car ownership is significantly lower for those who are living on benefits or retirement pensions. In my constituency of South Antrim the movement of an office in an area such as Carnmoney created major difficulties for a small number of clients. That was largely caused by the commercial difficulties of employing a new postmaster to take over the contract from a postmaster who was retiring.

There is no doubt that Consignia is being forced down a commercial road, which is very different from what we knew. However, the Government, and, at this stage, Westminster — though responsibilities may come to the Executive here — have duties to define and pay for matters of social obligation such as advice-giving and the payment of benefits.

I agree with Michelle Gildernew — there ought to be a Minister present to take note of the debate and to respond to it. The difficulty is that I am not sure which Minister should be here — perhaps several should be present. It is clearly a matter for the Department of Enterprise, Trade and Investment, given its liaison with the Department of Trade and Industry, the parent Department in London. It is also a matter for the Department for Social Development, given the importance of the benefits element of post office work. I also suggest that it is a matter for the Department of Agriculture and Rural Development, given that it seems to be a matter for rural- proofing. However, there is no doubt that a Minister should be present to represent the Executive and take responsibility for any possible action and negotiation on behalf of Northern Ireland with Whitehall Departments.

There seems to be some evidence that the threat to the post office network in Northern Ireland is less than it is in some parts of GB. However, when a town as significant as Llandudno has just lost its town centre post office because of this problem, it is clear that we are not talking about a threat that will easily be removed from Northern Ireland. The threat may be less in Northern Ireland than in GB, but it still exists, and the motion should be supported to highlight that.

Photo of Ms Jane Morrice Ms Jane Morrice NIWC

The starting point for the debate — and something that we should never lose sight of — is the value of the service offered by post offices in rural and other areas. People have talked about the post office as the hub of the village and a meeting place for the elderly and the isolated. That makes our post offices important, and we must remember that. Rather than looking at their demise, we should ensure that the energy of the Government is put into finding ways in which their work can be developed and enhanced, as David Ford has said, to make the service better. Attempts have been made to introduce new areas of work, and people have gone into detail on that. That is highly commendable, but it must not be a paper exercise.

"The reinvention of the network", as people are describing it, is to be welcomed, but only if its aim is to ensure that the excellent work carried out by post offices is secured, enhanced and not cut back. There is a commitment to ring-fence and protect offices in rural and disadvantaged areas in Northern Ireland, and I welcome that. However, as Mr Dallat’s motion says, there must be a guarantee that that is going to happen. With regard to the enhancement of the service, the pilot scheme that is being carried out in Leicester and Rutland, which gives the public access to Government services such as car taxes, dog licences and child benefit through the post office, is tremendously valuable. It is not quite a citizens’ advice bureau, but it allows people to walk into their post offices and get access to such information. We are told that the Office of the First Minister and the Deputy First Minister is looking at the pilot scheme with interest, but we should go for more than interest — we should have a pilot scheme in Northern Ireland to prove that this would be very valuable for our post offices. The network-banking plan will be valuable in this, and it will allow the Post Office to become the retail outlet for banks. It is a superb new form of access to be welcomed.

In the face of the financial losses we have heard reported, the question is how can we make the service better; not how can we make it less costly? We must always remember that a post office is not a business; it is a service provider, particularly for the elderly, the lonely, the isolated or just those in need of advice. How can you measure financially the value of the 20 minutes a postmaster spends with a pensioner consoling him about the death of a loved one? This is something that is hugely valuable in the work of post offices, especially those in rural areas. It cannot be counted, and it can never be discounted.

We hear grand words from the Government about support for the socially disadvantaged, the marginalised, the isolated and the elderly, about transparency, accessibility and open government. The local post office is surely the epitome of all these things. There is talk about the closure of post offices. They want to close them down if there is no longer a demand. I will take the opportunity to mention a case in my locality. For the past three and a half years, I have been banging on doors to no avail with petitions signed by hundreds of people in the locality of the Bloomfield shopping centre who want a new post office there. If someone at Consignia is listening to the debate, would they look at the possibility of opening a new post office there?

I am looking at the support being given to bring new sub-postmasters into the business. I am slightly confused, because I see that there is the new support for a sub-post office start-up capital subsidy scheme. Therefore I am thinking to myself that this is the scheme that postmasters in the North Down area should go for if they want to open a new post office. However, then I see that it is only for post offices that have been closed down and want to be reinstated. Is this the case? Conversely, is it possible that the people who are clamouring for a post office in my area could avail of this grant? My point is that perhaps it is worth looking at opening post offices in areas where there is a growing population, and recognising the value of that.

Mr Dallat mentioned talk about changing the service. The Federation of Small Businesses has warned of the danger of a change in the service to small businesses and of delaying delivery times to 3.00 pm. Small businesses need to get their post and cheques in the morning to determine operations for that day. Delaying the service until mid-afternoon will serve little valuable purpose.

Finally, Mr Beggs’s point about greater assistance for security at post offices is something that Consignia must look at. The Post Office is, without doubt, the acceptable face of bureaucracy. Every single post office that is closed is a door closing in the face of our community.

Photo of Mrs Annie Courtney Mrs Annie Courtney Social Democratic and Labour Party

I support the motion, and I congratulate my Colleague, John Dallat, for bringing it to the Floor of the House.

Over the past year, the local and national press have highlighted the issue of post-office provision.

What is the issue, and why has it been highlighted? The Post Office has been renamed Consignia, and perhaps people were not aware that it was their local post office which was being spoken about. Consignia has announced that it is making 30,000 staff redundant, which will affect postal workers and could lead to the loss of rural post offices. Post offices have been closing down at the rate of 200 a year, and the trend is accelerating. For example, in 1999-2000, 382 post offices closed.

The Government policy of changing benefit payments from cash over the counter to bank transfer will deprive post offices of so much income that a large new wave of closures is certain, unless that income is replaced. The Social Security Agency intends that all benefits will be paid through a bank account in a conversion programme running from 2003 to 2005, known as automated credit transfers (ACT), and efficiency savings of £400 million per annum are expected. The Prime Minister has stated that everyone will have a bank account but that people who find bank accounts difficult to comprehend will still be able to withdraw cash at a post office. It is not clear how that will happen. It is clear, however, that if post offices do not generate funds from transactions, they will have to close.

There are two kinds of post office — Crown post offices run by the Post Office itself, and the 97% of post offices — the smaller sub-post offices — run under the franchise of Post Office Counters Ltd, a body which is separate from the Post Office.

The post office network is vital, serving 28 million people each week. The current plan is to establish a universal bank to provide Internet access, exploit e-commerce and take an enhanced role in providing Government services. The universal bank will, of course, only be possible if the major banks support it, which does not seem to be happening at the moment.

Independent sub-postmasters and postmistresses run the vast majority of rural post offices and are paid from £5,000 to £20,000 a year, depending on the size of the sub-post office and the population that it serves. That sum has to cover rental, wages and heat and light, and individuals may find it difficult to cope without other income.

Post offices are seen as intrinsic to local communities. Coming as I do from a small rural community in County Derry, I have first-hand knowledge of the benefits that a post office can bring. The post office in that rural community is still located in the village, and it is, and was, accessible to everyone. In the days when only well-to-do people had bank accounts, it was a lifeline for our local community. It was used to buy stamps, post parcels, buy postal orders, cash giro cheques and open Post Office accounts. It was also a place for social exchange, where the elderly could meet and gossip or just exchange pleasantries. On the other hand, banks were perceived as remote and unnecessary to people’s daily lives. Usually banks were located in cities or larger towns, and transport was required. Even in this day and age, public transport for rural communities is extremely basic.

There is growing concern about the impending loss of further jobs, as it was recently announced that Consignia had lost the contract to handle TV licensing services for the BBC. Some 1,500 jobs are to be transferred to Capita, the successful bidder, next July. Assurance from Consignia that rural post offices will be safeguarded is of little comfort, when we see that there is a recommendation to close 1,000 post offices immediately in England and Wales, with a further 5,000 to be closed over the next five years.

I want to reiterate what Mr Roy Beggs said. Robberies — especially in remote rural areas — are a growing trend. I mentioned my home village; its small post office was robbed for the first time in my lifetime about two months ago. The nearby post office in Ardmore was robbed twice recently, with the result that no one is willing to reopen it — obviously because of concerns about their personal safety.

I also have grave concerns when I see the statement from the Federation of Small Businesses about Consignia’s plans to delay the delivery of services to small businesses until 3.00 pm. That will have a devastating effect on small business, particularly those that are run from home. According to Consignia, the plan will save it £1·2 billion a year through the prioritising of postal services. I am not sure that that is the correct way to safeguard a service such as the Post Office. I support the motion, and I ask the Assembly to take the necessary action to avoid closures and disadvantage to rural and urban areas.

Photo of Jim Shannon Jim Shannon DUP 4:45 pm, 28th January 2002

I support the motion. The Assembly debated this issue about a year or 18 months ago. We are even more concerned about the Post Office today, given that the forthcoming cuts could be more draconian than any previous cuts.

Post Office cuts are being introduced despite the problems faced by the workforce in the past year. When everything that has happened to the Post Office in recent weeks is considered, we can see the sort of thanks the staff get for putting up with death threats, letter bombs and the murder of one of their colleagues. The staff have been told that there will be cutbacks and redundancies to make savings of £1·26 billion each year.

Consignia’s annual report on the Post Office states:

"We will only grow and flourish as a business with the support and commitment of our people."

That commitment seems to go only one way; it is expected from staff, but is not returned by management. Postal workers have had to deal with people who are affected by the cutbacks, such as the elderly, the disabled and young mothers in rural communities.

According to Consignia’s report, every day 28 million people visit one of 18,000 post offices throughout the United Kingdom. Most of those people live in rural areas. A rural area is defined as a habitation of less than 10,000 people, which defines most of Northern Ireland. In my constituency of Strangford, only a handful of towns do not fall under that definition of rural area. In addition, the Strangford constituency has a proportionally larger population of pensioners. Those people will be affected greatly by the cutbacks that Consignia is trying to implement.

Consignia is trying to reduce the number of post offices by at least half. That will rip the heart out of many towns, villages and hamlets in the country. In most of the towns in the Strangford constituency, the post office is combined with the only grocery store. Post offices constitute the hub of society for those towns and villages. The pensioners can collect their pensions and buy essential goods in one shop. Consignia wants to computerise and digitalise its entire system, which will not work well for the elderly inhabitants of this country who do not want, or are apprehensive about, such a system.

In order to shut down many of the post offices, arrangements must be made for pensioners to receive their pensions. Consignia believes that everyone will be receptive to having payments made straight into their bank accounts by direct debit. Unfortunately, the focus groups have not informed Consignia that many senior citizens are suspicious of computerised systems and they do not like the thought of not being able to see their money, for which many have worked hard for over 40 years.

Consignia must have paid a fortune to a research company for their focus group results. However, those focus groups must not have told Consignia that for many elderly people pension day is a day out. Some people may not believe that, but it is true. Some elderly people are housebound, and the chance to go out to collect their pension means a great deal to them. It can be a chance to meet old friends and catch up on the gossip of the village or town. That is a lifeline for many pensioners. If it is taken away from them, they will be left stranded far from the main post offices, which could be in towns as far as 20 or 50 miles away.

For the same reasons young mothers will also be affected by the closure of rural post offices. Being isolated on a farm with young children sends some young mothers to the end of their tether. The weekly visit to the post office means that they can meet with other mothers in the same situation. The post office offers a rural network of support that is second to none. I cannot emphasise enough the support that a post office provides to everyone in a rural community.

Yesterday, ‘The Mail on Sunday’ revealed that Consignia wants to scrap the first post delivery in order to cut costs. The idea is to scrap the first post for those at residential addresses, who then must wait until three or four o’clock in the afternoon for their mail to be delivered. More than one million small businesses are run from residential addresses. They will be included among addresses that will have to wait until the afternoon for mail. Most of that mail will be important to their survival. Other Members have touched on that. We all understand the problems for small businesses.

A Member of Parliament across the water has called for "Same value, same price, wherever you live". That is what the Post Office and Consignia should be delivering. However, it will be difficult to achieve. The announcement came hot on the heels of reports last month that Consignia is going to charge us all £50 a year to have our mail delivered before 9 o’clock. Is that an attempt to cover up the adverse reaction that arose over speculation about the impending fee to have mail delivered before a certain time of the day?

The second part of the announcement in yesterday’s ‘The Mail on Sunday’ concerned two distinct mail delivery times. Does that mean that Consignia will reduce its staff to cut costs? Many believe that it is. If there are only two delivery times during the day, the same worker who did the morning route can do the same route in the afternoon, which eliminates the need for many postal workers in each area.

There were 2,000 redundancies during autumn 2001, and I believe that there are more to come. A document that Consignia has produced this year said that it is offering quality services, which represent value for money for both business customers and residential consumers. Does Consignia sound like a company that will deliver that? I think not, and residential and small business consumers will have something to say to the contrary about those new proposals.

Consignia aims to deliver 92·1% of its first-class mail the following day. However, it fails to do so. It manages to achieve 90% of its target. That may seem to be not too bad. However, Consignia handles 81 million items of post each day, so a lot of mail is not arriving by the next day. I sent a letter from my constituency office in Newtownards to Belfast that took 10 days to arrive. That delay was not due to the postal strike. I could have delivered it by hand more quickly.

Cutbacks are supposed to cut costs so that Consignia can make a profit. However, they have had an adverse effect on profits. Because there are fewer postal workers, the post arrives later and later each day. It is not the service that my constituents or I expect. Members will agree that to face more job losses when we have already had announcements from textile firms, and from Bombardier Shorts and their subcontractors in recent months is a blow that Northern Ireland cannot afford at this time. The last thing we need to hear of is job losses in an industry that has ever-increasing demands on its services. I urge Members to support the motion.

Photo of Gerry McHugh Gerry McHugh Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I support the motion and congratulate John Dallat for moving it. The issue has been discussed before in the Chamber and in council meetings. The threat to post offices not only affects rural areas but deprived urban areas. With regard to post office access, people can be "rural" in a large town if services are inaccessible because of a lack of transport.

The acceleration of closures is recent years is what concerns people most. The speed at which services in rural areas are disappearing puts pressure on those areas. Benefits are affected. I have always asked people not to transfer their money into banks. It is ironic that the people who will now be most vulnerable are those who avoided having bank accounts and the ensuing charges. Bank accounts tend to bring with them various extra expenses that may seem small to those with reasonable incomes, but that are quite a weight on those who receive pensions and benefits. Every transaction is costly, especially when an account is overdrawn.

That would happen to people on low incomes, rather than to people on reasonable incomes.

The issue is part of a Government policy change to move away from cash transactions to hi-tech facilities. Some 80% of Post Office income comes from benefit payments. There is a need for rural-proofing in areas such as Fermanagh and Tyrone on that, and other, issues. We want the Government Departments to do it, but there seems to be tremendous resistance. There must be rural-proofing if any sort of services are to remain. The issue has been debated on several occasions in the past few years by Fermanagh District Council, of which I am a member.

It is a powerful issue and one that is vital not only to the economics of rural areas, but to whether people want to remain, live or bring up a family in rural areas. The types of services, such as those offered by a post office, are vital in making that decision. That is as much part of the loss as the economic side of it.

We must ask how much money people will lose in making the transactions and whether public money will be saved. Will profits for banks increase? Are automated teller machines (ATM) all that accessible for those who are vulnerable? For example, old people find it difficult to use such machines, even when they are in town centres. There is a serious risk that the vulnerable may be robbed while using ATMs. That has not been considered. A weekly visit to a post office provides a much more friendly atmosphere for old people than a visit to a machine.

The cost of accessing cash in both rural areas and large towns is not always considered. People may have to spend some of their pensions on taxis or buses in order to access their cash. Taxis are the usual form of transport. They can cost a considerable amount, which represents a real cut in people’s pensions or benefits. The savings made by Consignia will have a tremendous social impact on both rural and deprived urban communities. Therefore, we do not wish to move in that direction, because those communities will be damaged considerably.

The decline in services is compounded by the fact that the provision of many other services, such as banking, is declining and, in some cases, is no longer available — in rural towns and the deprived neighbourhoods of built-up areas, for example. Banks are moving to locations where the most across-the-counter transactions are made. ATMs are put in rural areas as an excuse to remove local branches of banking. A situation could arise in the near future in which people in rural villages have no access to ATMs, banks or post offices. That would result in further travel. That is an environmental consideration for many people and for the relevant Government Department.

As I said, a cut in the number of post offices amounts to a cut in benefits and pensions. ATMs are not considered to be user-friendly. In the South, a debate arose over the Bank of Ireland’s decision to refuse across- the-counter exchanges of money. Older and more vulnerable people in the community instigated that debate.

Given the intensity of that debate, people in similar situations here will face the same difficulties. Although those difficulties may be outside their control, Assembly Ministers should consider them. The Government has pushed it to this point, and those Ministers will have a considerable say in the matter.

Consignia has had problems. It was in profit in 1999, but has made losses since then at unsustainable levels. Its core business has been neither developed nor enhanced, but attacked by the developments mentioned by previous contributors to the debate.

It has been mentioned already that Consignia should be a service provider and not a business. Management failures, staff relations and commitment to customer service have been cause for comment. Some 85% of people in rural areas live one mile from a post office; 99% less than three miles from one. That will change in the near future when those post offices are lost because they are no longer considered profitable. The problem arises when a service provider is privatised and becomes a profitable business. The original intention was that the Post Office should provide a service for all areas, wealthy or otherwise. Changes have destroyed that intention, and we do not want that.

Various management consultants have mentioned several matters. A code of practice has been requested to deal with prospective closures and any area reviews proposed by the Post Office. With regard to initiatives, the main issue is increasing pressure to form as a commercial organisation and not as a service. Opportunities and threats from technology and alternative service providers are another.

Transaction-based services, such as universal banking and ticket sales, are most likely to enhance incomes in post offices in which benefit payment transactions make up a significant proportion of turnover. That would be especially important in rural and deprived urban areas with limited commercial business opportunities.

Attracting new people to the post office is another difficulty to be faced, and that will become more difficult as time goes on.

The issue has already been discussed in the Assembly, and I want to see Ministers and Departments take all possible steps to address it. Go raibh maith agat.

Photo of Mr Eamonn ONeill Mr Eamonn ONeill Social Democratic and Labour Party 5:00 pm, 28th January 2002

I support the motion. I pay tribute to John Dallat, not only for this very good motion, but for introducing the previous one on the subject and for leading this campaign. He has captured the mood of the Assembly in a very nice way, and he has much support across the Chamber in respect of the value of service.

The trend since Thatcherism has been to introduce competition, business-style approaches and a business ethos into everything. There must be a ledger under which things are valued. What has happened to the sense of public service? Where has it gone? The change is apparent not just with the postal services but in many different walks of life, and in many of our Departments. It is a recurring theme; we concentrate on a line in a ledger, with no mention of public service.

Is it any wonder? If we construct our approach to how we organise our services on a business basis, a reduction in service will inevitably follow. Unprofitable businesses will be closed; that is business ethos.

We Members can be hypocritical. On the one hand, there is a considerable degree of support for the business ledger approach. On the other hand, there is weeping and gnashing of teeth about the diminution of service. Our approach must be more consistent. We must re-examine the value of public service; what it meant in its true ethos and what it meant for the people in the community for whom reliable service is a priority.

The need for post offices has been well highlighted. Coming from a rural constituency, I see it daily in my office. Many people who come to the office, with either social security or pension problems, do not have a bank account. They depend on their local post office.

Members referred to the fact that, if a local post office were to close, people who need that service must travel elsewhere to avail themselves of it. That results in an additional expense for those people. The cheapest taxi fare in my area is £3. People must pay £3 to go into town and £3 to travel home — a total cost of £6. The old-age pension is about £62. A £6 taxi fare amounts to almost 10% of that. As they do not have a local post office, those people must pay almost 10% of their pension each week to have it cashed.

Do not tell me about that other service — public transport. Where is its ledger line? Where has the public transport service gone? It does not exist in most rural areas. Therefore, the only mode of transport available is a taxi. That is what we are forcing on some old-age pensioners; that is the situation that we are creating for them.

When we heard that the Westminster Government were looking at the introduction of automation and other services for post offices, many of us thought that that was the solution and the saviour. We thought that it might actually work; post offices in rural areas might get banking services. It is a good idea, but, if it means a reduction in the number of rural post offices, it must be resisted.

Gerry McHugh mentioned the trend in rural banks. My local branch of the First Trust Bank closed some months ago. I admit that it was robbed twice, which was the reason given for its closure. However, although Northern Ireland may experience a great deal of trouble — indeed, we debated law and order issues earlier — I contest that cities in, for example, Italy can put up with some of the worst levels of bank robbery. Public service is the victim again.

Automation is the goal. However, not simply automation of any kind — online banking is the aim. Computer access is essential to the receipt of online services. Where are we going with that?

Consignia has come in for some criticism in the Chamber, some of which may be justified. In the townland of Ballyward, the post office closed down, and I know the lengths to which Consignia went to find a replacement sub-postmaster. That is one of the aspects that we have been talking about — the area really needed the service. I appreciate the efforts that Consignia made.

More importantly, we should be advocating the use of those services to our communities. If the services are not used they will not survive. In some cases, more use could have been made of the rural post office in order to keep it viable. We should highlight to our communities that they will lose those services unless they use them.

One difficulty in speaking this late in the debate is that others have already dealt with most of the main issues at length. However, I shall emphasise the social side of post offices again. Society in Northern Ireland is unique — we like to meet as a community. In a rural area, the post office, like the primary school, is a linchpin for the community. The value of the service is incalculable. We should continue to highlight that aspect of post office services. I hope that, in doing so, we can make people realise what they are losing and thus prevent the closure of rural post offices.

Photo of John Dallat John Dallat Social Democratic and Labour Party 5:15 pm, 28th January 2002

The debate has provoked a great deal of interest, and I hope, an awareness of the changes in the way that postal services are being delivered. I hope that Members’ contributions will be taken seriously and will not be ignored by Consignia or by the Government. I am delighted that members of Consignia are present to listen to the debate, and I hope that they will return to the company and report on our genuine contributions.

Roy Beggs spoke of the vagueness of Consignia’s plans and the lack of information. He is absolutely correct. He also pointed out that the closure of post offices is speeding up and that that is a cause for increasing concern. Iris Robinson reminded us that closures, if and when they happen, will affect every town and village. She also called for information. Michelle Gildernew informed us that the National Federation of SubPostmasters will appear before the Committee for Social Development, and I welcome that. She mentioned that payments can still be made at the post office, but it is a known fact that the commission earned under the new payment method will be only a fraction of that earned under the current one.

David Ford pointed out that Consignia is being forced down a particular road as a result of a European Directive that is true. Jane Morrice called for the development and enhancement of services, and the need to ring-fence the future of rural post offices. However, once the Post Office comes under private ownership, it is difficult to see how Government pledges will hold. Annie Courtney told us of the plight of some post offices that have been raided. Jim Shannon spent some time speaking about the plight of postal workers. In recent times, we know the price that they have paid for providing the service. Gerry McHugh spoke about the acceleration of closures. He said that closures created pressure on people to open bank accounts, which introduces the matter of bank charges. Those in rural areas may need to get taxis in order to collect their money.

Éamonn ONeill spoke of the need to re-examine the value of public service. I could not agree more. We all agree with his suggestion that the public use the post offices whenever possible to ensure that we get the message across that post offices, especially sub-post offices, are a valuable part of the community.

Of course, the changes that were spoken about today cannot be stopped, but we can direct the transition in a way that will enhance the Post Office, rather than destroy it. We cannot ignore what is happening, nor can we allow it to create further equality in a world that is already far from perfect. There is every reason to directly assist the development of postal services, given that it is right and proper to target social need. That is the Government’s function, which they exercise for public transport and many other essential services.

The Government must be regularly reminded that there are steps beyond which they should not sell off public services to the private sector. If they do, they have ceased to govern, and there is real concern that the closure of sub-post offices will not end the run-down of postal services. There is genuine worry that the quality of service will continue to deteriorate, which will eventually lead to differential costs of mail delivery in rural areas. Therefore, if we are to protect the needs of the people that we represent, there is a fundamental need for hands-on monitoring of postal services. We are fortunate that we have our own Assembly, and we have every right to ask questions about the basic infrastructure that affects our constituents. The Minister was criticised for not being present, but I understand that his absence was unavoidable. However, we cannot leave it at that; we must pursue our concerns through action. There must be direct interaction between Consignia and various Assembly Departments, because it is only through partnership that we can hope to save our post offices in this period of uncertainty.

I remind Members that one of the first actions carried out in the Building was to open a post office for our convenience. Let us redouble our efforts to ensure that what we know to be good for ourselves continues to be available for others.

Question put and agreed to.


That this Assembly notes proposals by Consignia to cut the number of post offices in Britain by half and calls for immediate action to protect the infrastructure of post offices in Northern Ireland, particularly those serving people in rural and disadvantaged urban areas.

Adjourned at 5.23 pm.