I am pleased to have this half-hour debate on post offices in Islington. With the agreement of the Minister, my hon. Friend Emily Thornberry will also contribute, so we will divide the time up between us.
My borough, to describe it briefly, is one of fast-rising population, with a combination of employment patterns. Most people commute out of the borough to work in central London, or elsewhere; many work for the local authority or for education and health employers locally; and a very large number work in very small businesses, or work at home, and are therefore the kind of people who make a big usage of our local post office facilities. If people went from the debate to visit any of our Crown post offices, they would find large queues of people accessing a large variety of services, not necessarily postal-related, but some financial and other such services.
We value our post offices greatly. The local authority, my hon. Friend and I, the local representatives from the Communication Workers Union and Post Office management have had a number of meetings—round-table discussions—convened by the leader of Islington council, formerly Councillor Catherine West, now Councillor Richard Watts. There was also a public scrutiny committee on the issue, which is obviously a live one and heavily debated locally. It is of great importance to us.
I have a photocopy of a document, “Modernising the Post Office”, in which the Post Office discusses investment in, support for and the modernising of branches, to secure post offices and communities throughout the UK. The document also points out that the Post Office is the fastest growing financial services company in the UK, the No. 1 travel money provider and the sixth largest telephony provider, with almost 0.5 million customers, and talks about a sustainable Crown post office network. That all sounds fine until we get to the reality of the situation of local post offices in any one area.
We have Crown post offices on Upper street, Highbury corner and Holloway road, and in Archway. My hon. Friend will talk mainly about the ones on Upper street and Highbury corner, and I will talk about the others. The local authority has tried its damndest at every turn to co-operate with the Post Office to improve the services and to provide a better quality of post office buildings, to the extent of offering a site across the road from the existing Highbury corner post office, which is in an unsatisfactory temporary building—temporary for as long as I can remember, which is more than 35 years. That site is still available for development into a new post office, but the Post Office seems unable to take up what is an amazingly generous offer by the local council to ensure that there is a good-quality service.
I hope that the Minister, when she replies, will bear in mind what my hon. Friend and I have to say on such initiatives. Furthermore, the leader of Islington council, Councillor Watts, has written a letter to the Post Office—I will quote from the last part, although my hon. Friend may quote more—in which he stated:
The local authority is as co-operative as possible, so tribute should be paid to it for that.
One problem is some dispute about the figures for losses or profits made by local branches. The Holloway branch, which is in my constituency, opposite the Odeon on Holloway road, at the end of Tufnell Park road—sometimes known as Tufnell Park post office—is a very busy building, and queues frequently come out of the door on to the street. Bizarrely, the Post Office claims that that branch loses money, which is hard to see when the building is completely full the whole time. The Post Office also claimed that the only way in which a post office could be retained on Holloway road—the Holloway post office—is if it is franchised out to someone else. In other words, it would become the rear counter of a supermarket, a WH Smith or someone else. There are, however, no WH Smith branches anywhere in the whole borough, so it is hard to see how it might want to be involved. Inevitably, that would mean fewer postal facilities, fewer staff available, even longer queues and much more business lost by the Post Office.
I have a constant frustration on meeting with the Post Office: a lack of imagination and ambition for the development of the post office network. It seems to have an agenda of closing down branches and diminishing the network, and there is the looming threat—in five year’s time—of what happens if the contract with Royal Mail is not renewed. I hope that the Minister, despite the Government’s default position that the Post Office is nothing to do with them—that it is someone else’s responsibility—will say that she or the Secretary of State is prepared to intervene.
To take the example of Holloway post office, as I said, it is a popular, successful and busy local branch. At the moment, it has seven full-time and seven part-time people working there, alongside two managers. They are paid according to the terms and conditions agreed nationally between the CWU and the Post Office. The local staff do a good job—they are very knowledgeable and popular with the local community. When we have had demonstrations outside the post office, the number of customers who come up to say thank you to the demonstrators for supporting their local post office is impressive.
What happens to the staff during the franchising process? They lose their jobs, or they get moved somewhere else. The Post Office keeps telling us that everything is okay and that all the staff have been moved to another, remaining Crown post office somewhere else. That seems to me to be a circle to nowhere, a descent from one Crown office to another, until there is none left and the staff have no choice but to go and work for a franchisee. The franchisees, however, pay staff much less than the Post Office. I have reports of some cases in which they are paying the minimum wage, or slightly above, for what is extremely skilled work at handling a variety of different transactions that the Post Office staff already do well. One can only form the impression that what is really happening is a race to the bottom—losing jobs, losing facilities and ending up with a post office counter at the back of a supermarket.
I will quote from a document given to me by the CWU:
“At the Communities Committee meeting”— of the council—
“Simon Burman was asked about, but refused to confirm, property costs for Holloway Road. In 2011/12 the branch reported a ‘loss’ of £315,500…£215,000 of this came from property costs; we think these are excessive… To put these in context, property costs for London Bridge were £109,000, for Finsbury Park they were £107,000, for Highbury they were £68,000 and for Islington they were £40,000.”
It is strange to have that inflated loss figure being offered for the post office on Holloway road, with much different figures for other branches. Will the Minister look at the detail of the figures that we have been given?
Before I hand over to my hon. Friend, I want to draw attention to two other post offices and ask the Minister for confirmation about them. First, the Crown post office at Archway—as far as I am aware, the freehold of the land is in the hands of the Post Office, although that remains to be confirmed—is a popular, effective and good local post office. It does not seem to be in a radically different position from the other three Crown post offices in the borough. We have had confirmation that that post office is secure in the immediate future. I should be grateful if the Minister confirmed that and that there is no threat whatever to the Archway post office.
Secondly, the Finsbury Park post office, which is about 100 metres outside the Islington boundary in the borough of Hackney but clearly affects many people living in Islington, is incredibly busy, and we are all worried that it could be at risk in the closure and franchising programme. In short, we are speaking on behalf of the people of Islington who want to use, enjoy and support Crown post offices. I wish the Post Office would show the same determination by providing good-quality local services with dedicated staff who are paid at the proper rate to deliver those services, instead of reducing us to a counter at the back of a supermarket, which seems to be its current overall agenda.
I thank my hon. Friend Jeremy Corbyn for securing this debate, which is important for Islington. I am delighted, Mr Dobbin, to serve under your chairmanship today.
What has been happening to our post offices in Islington is a sorry story, and I shall start with the Almeida street site. It is a large site in the heart of my constituency. It is bounded on one side by Upper street, and surrounded by Moon street, Milner place and Gibson square. It is a very large development area. The Post Office somehow managed to sell the site without securing a proper site for another post office. It kept the post office on Upper street, but is only renting it back. The post office does not have disabled access and its remaining time on that site is limited. It is a Victorian building; it has been there for ever; it is in the heart of my patch; and it seems that it will just go. That is the first problem.
The post office on the Upper street site needs to move. We accept and understand that, but the question is, where will it move to? The other big Crown post office in my constituency, which borders my hon. Friend’s constituency, is the Highbury Corner site. As hon. Members have heard, it is only temporary, so the council offered £2 million and a site for a Crown post office across the road. In its wisdom, Post Office turned that offer down. Having sold off one site and not secured another, and having turned down £2 million that the council had offered, it is telling us that it does not know where to move to or what it can do.
We are told that the post office can move to a site opposite the garage on Upper street by the town hall. I have said several times that one reason why it needs to move is the lack of disabled access at the Upper street site. Yet, I understand that on the site that it is moving to the door is of limited size because it is in a conservation area. It will not be able to have double doors that open electronically, which is the ideal for any new site, particularly when it serves a large disabled and elderly population, as it does. Thankfully, people today do not have ordinary wheelchairs; they have electronic wheelchairs and can get about. I have grave doubts about disabled access at the new site, which the post office is moving to, not least because of the lack of disabled access now, and I wonder whether there will be disabled access for everyone or only some people. If the Post Office expects someone in an electronic wheelchair to push open a door, it is on another planet; it will not work.
There has been one bad decision on the Almeida site and another on the Highbury Corner one. In addition, the council has not given up. It is saying, “Okay, you have refused our £2 million; we are now in a time of austerity and the £2 million has been spent elsewhere. But guess what? We are prepared to give you anther £750,000 for another site at Highbury Corner.” The gauntlet is down, but the Post Office will not accept that offer either. The council has also said. “In the meantime, if you are trying to build another post office, we can provide you with accommodation.” The council has offered accommodation near empty council buildings on Upper street, but the Post Office does not seem to want to move there either. How much more can it try to destroy its business than it has done over the past five or 10 years in Islington? If I sound fed up, Mr Dobbin, you should hear what my constituents have to say.
The situation is not hopeless. Some post offices work perfectly well. I fought hard to save Essex road post office, as some of the Minister’s officials know, and we secured its future. It has been refurbished and has just reopened with extended hours, five counters and disabled access. It will do very well and it is exactly the sort of post office we want. If that can be done in one corner of my constituency, why can it not be done in its backbone, where we need a Crown post office that will function properly.
My last complaint—I have more, but I am being selective—is that even if a new Crown post office is opened opposite the garage, whether it has disabled access is a moot point, and there will be only seven counters. There are seven counters at the current post office in Upper street and at Highbury Corner. The Post Office intends to try to put a quart into a pint pot with the same number of counters at Upper street. People already queue outside in the rain at both Highbury Corner and Upper street post offices. People do not go to the post office because they do not have 45 minutes to queue. The Post Office is cutting off its nose to spite our face. It must get a grip and show some leadership and vision. It must move on and build a proper Crown post office on Upper street that is worthy of the people of Islington.
I welcome the opportunity to discuss post offices in Islington with the hon. Members for Islington North (Jeremy Corbyn) and for Islington South and Finsbury (Emily Thornberry), and I congratulate the hon. Member for Islington North on securing this debate on proposals to change the Crown post office network and the impact on branches in Islington in both constituencies.
The hon. Gentleman eloquently set out his concerns and all MPs understand the real issues and worries that constituents feel when changes are proposed to the post office network because it is such a vital part of our local community infrastructure. That is why we want to ensure that it is preserved and looked after so that it has a positive and sustainable future. We all know that there is heightened local concern following the previous closure programmes in 2003 and 2008. That certainly affected my constituency, and those of both hon. Members, where four and seven branches respectively closed in Islington North and Islington South and Finsbury. That is why it is important to take a different approach and protect the post office network.
We have announced investment of £1.34 billion over the current Parliament to maintain the post office network at a level of at least 11,500 branches and to modernise up to 6,000 existing branches by 2015, ensuring that we improve the service that we offer to customers by addressing some of the issues that both hon. Members have raised, such as the size of queues and the time people must spend in them. As the hon. Lady rightly said, people do not have 45 minutes to stand in a queue at a post office. That is why some of the changes we are making, including longer opening hours, should help to put the Post Office on a much firmer and more sustainable footing. That will enable people to go to the post office at a time that suits them, and spreading the points at which people may go to the post office will have an impact on queuing times.
Obviously, all operational matters are for discussion between Post Office Ltd and the relevant unions, but longer opening hours are welcome and could be implemented in the existing Crown post office network. With the post office local and the post office main models, longer opening hours are being rolled out in the rest—and, by far, the bulk—of the network. The investment that is being put into those branches is being used to secure longer opening hours as part of an overall new negotiation and deal with those sub-postmasters. They will receive investment and a new way of working with their branch, but the quid pro quo for that has to be that the opening hours are enhanced, which has an additional customer benefit.
We know that customer satisfaction statistics for the new post offices that have been opened show that customer satisfaction is significantly increased. The hon. Lady mentioned the newly refurbished post office in Essex road, which she opened just last Friday. I am sure that she found—as I have, when I have opened post offices in my constituency and have been to others around the country—that the feedback from customers shows that they are incredibly welcome. What often happens is that a post office, which perhaps was dark, cramped-looking and not fit for the 21st century, is taken and turned into something that is much more akin to modern shopping and retail environments, and it will therefore attract more customers and be more successful.
Obviously, the post office network is complex, with a wide range of outlets across the country. In working out the best locations for all those post offices, Post Office Ltd has to take into account a wide range of factors. The post office that the hon. Lady recently opened in Essex road is under a different kind of model of ownership from those at Highbury and on Upper street, which are part of the Crown network. The Essex road post office, which has become a main office, is obviously not part of the Crown network.
Most customers would be blissfully unaware of the different structures of different parts of the network. However, of the some 11,800 branches that exist now, about 370 are part of the Crown post office network and therefore directly operated by the Post Office. The vast majority of post offices are run as sub-post offices either through franchise agreements, such as through multiple chains—WH Smith has been mentioned, but there are many convenience store multiples—and also by many individual, independent sub-postmasters who run their own post offices in their communities, effectively, as their small businesses. Trying to manage such a diverse network brings its own challenges.
In particular, I want to turn to some challenges facing the Crown part of the network. Numerically, about 370 post offices out of 11,800 is a small part of the network, but none the less, it has been responsible for a significant proportion of the network’s losses in recent years. Of the post offices that we are discussing today, those on Holloway road, Highbury corner and further down Upper street are in the Crown network. In the last full financial year, that part of the network sustained losses of £37 million, which is a third of the overall losses for the whole network. Those 370 branches are, by and large, in busy town and city centre locations, and that situation is unfortunately not sustainable. Ultimately, any retailer that was losing significant money on branches in such prime locations would be looking seriously at how to cut costs to ensure that that part of its network and operations were, at the very least, breaking even.
As I am sure the hon. Lady will understand, I do not have that figure in front of me, but I will endeavour to find that information out from Post Office Ltd and ensure that it is forthcoming to her, if that is possible within the bounds of commercial confidentiality. However, the overall picture for the Post Office in terms of revenue is that it is not possible to continue operating a Crown network that has the kind of losses that have been sustained over many years. That is why we are transforming the Crown part of the network with £1.34 billion of Government investment until 2015. We also want to ensure that we put the Post Office on a firm footing and eliminate the losses in the Crown network by 2015. That is only fair to the taxpayer, who is also providing significant subsidy, and it is also about good commercial practice.
The franchise plans are part of the overall plan to get the Crown network to break even. We have chosen 70 individual locations that Post Office Ltd thinks are less likely to be able to become commercially viable without franchising. Those proposals have been put out for franchise opportunities. The hon. Member for Islington North mentioned Archway, which is not in the list of 70, so there are no plans to franchise that at the moment. He also mentioned Finsbury park—I am not certain whether that is a Crown office or a different model.
In that case, it is also not on the list of 70, so, again, there are no plans to franchise Finsbury park post office either. I hope that that reassures the hon. Gentleman. On the point about Holloway road, he mentioned that nearby there are no WH Smiths, which is not the only possible franchise partner, but any franchise-specific proposal that will be undertaken in relation to the local situation will also be subject to a further six-week consultation period when a proposal is brought forward. The hon. Gentleman and his constituents will have the opportunity to contribute to that. If the proposal is not sensible for that location, Post Office Ltd should take that into account.
I thank the Minister for giving way; she is being generous with her time. In the event that no franchisee comes forward for Holloway post office—I understand that none has come forward so far—will she guarantee that the post office will remain open and that the staff will retain their jobs at that post office?
I am not certain whether no franchisee has come forward—my understanding was that there had been interest in all the individual branches—but there will not be a sudden withdrawal of the service if a suitable franchise is not found. The Post Office has a responsibility to ensure that it continues providing the service where it exists, so it is looking for franchise partners to see whether something suitable can be found. However, if no suitable partner is forthcoming, the Post Office will not be able just to get rid of the existing post office. It would not be possible for it to do that. I hope that that reassures the hon. Gentleman.
I turn briefly to the merger of the two Crown post offices at the Highbury and Upper street sites. I have seen photographs of them, and hon. Members have pointed out that the temporary portakabin nature of the Highbury site is not ideal. The hon. Member for Islington South and Finsbury talked about disabled access issues for the existing—and very beautiful—old Victorian building in Upper street. Looking to merge those Crown services into a new, much more purpose-built facility elsewhere on Upper street and between the two—about 420 metres from one post office and 150 metres from the other—should provide much better customer service.
I highlight, however, that that is currently subject to a 12-week consultation, which opened earlier this month and closes on
I hope that people respond to the consultation and that customers in Islington have a new opportunity for better services from the Crown network, as well as from the other modernised part of it, such as in Essex road, where the change has clearly been shown to be very positive—actually, I think that I visited Essex road post office some years ago. I hope that my comments have been helpful to both hon. Members here today.