Post Office Closures — [Sir Edward Leigh in the Chair]

– in Westminster Hall at 9:30 am on 25th April 2017.

Alert me about debates like this

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham 9:30 am, 25th April 2017

I beg to move,

That this House
has considered Post Office closures.

It am grateful to the Backbench Business Committee for the opportunity to discuss this important subject. The number of right hon. and hon. Members present shows how important it is—who would have thought that there was an election on? I am aware that many Members wish to speak, so I will keep my comments as brief as possible. If hon. Members wish to intervene rather than making their own speeches, I will try to take some interventions. To help with the timing, I intend not to speak at the end of the debate.

I appreciate that the last debate on the subject, which was held as recently as November and was led by Kelvin Hopkins, aired many issues that I am sure hon. Members will wish to repeat today. There is concern that plans for the Post Office will be delayed by the forthcoming election, and there are also outstanding concerns from November’s debate—I think the Minister was rather rudely cut off by Divisions in the House—on which it would be good to get some clarity today. I will briefly mention, first, my local post office closures—I am sure that every hon. Member present wants to air a local post office closure —and secondly, the bigger picture of the long-term sustainability of, and game plan for, the whole post office network.

I recognise the good work done by the Government since 2011. The network has been stabilised, the number of closures has been reduced substantially and the subsidy to the network has been managed down from £210 million in 2012 to some £80 million this year as a result of flexibilities under some of the new arrangements. There are upsides as well as downsides. There are something like 200,000 additional opening hours every week, many of them at weekends when post offices would normally be closed, and some £2 billion has been invested in the network transformation plan since 2012. That stands in contrast to the previous 10 years or so, in which half the network branches were closed. My constituency lost more than half its post office and sub-post office branches. When I became an MP in 1997, there were nearly 20,000 branches, and that figure is now down to about 11,500. There are some encouraging signs, but also some very worrying signs when people are faced with the sudden closure of post offices in their own area. When the branches were being closed, we were promised that the Crown post offices were absolutely sacrosanct and would remain the main flagship of the Post Office on the high street.

Post office branches and Crown post offices are very important parts of the local community. Local businesses, including retail and other small businesses, rely on them heavily, because without an excuse to come to the high street to use the post office, people do not use the neighbouring shops. Post offices act as community hubs. They are well used by the elderly population, particularly in areas such as mine that have a high population of pensioners, and by those from disadvantaged backgrounds, particularly those who do not have conventional bank accounts. For those reasons, post offices remain popular and well used, with something like 17 million customers a week.

Photo of David Simpson David Simpson Shadow DUP Spokesperson (Business, Innovation and Skills), Shadow DUP Spokesperson (Environment, Food and Rural Affairs)

I congratulate the hon. Gentleman on securing this debate. Does he agree that the Government need to look at the services that post offices provide, which they are losing, and the return that they are getting on them?

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

That is a very important point that I would like to come on to; it is a question about why the Post Office is not growing rather than retrenching.

In 2016, the Post Office announced the closure of 31 Crown post office branches— even though the Crown offices are now breaking even, after making a £46 million loss four years ago. Some of those post offices have not been converted into the new type of post office and their future is still uncertain. In January this year, a further 37 Crown post offices were identified for closure, including the last two remaining Crown post offices in my constituency, which were in Lancing and Shoreham. That caused huge concern among my constituents and gave rise to lots of petitions and demonstrations by people from all parties. I found it particularly disrespectful that the first I heard of it was when a constituent rang me up to ask what I was doing about it; the Post Office had not even had the courtesy to let the sitting Member of Parliament or councillors know what it was planning.

I organised an urgent meeting with the Post Office and it went through the procedures. I was reassured that firms such as WH Smith had taken on more than 100 of the franchises and everything was supposedly working well. I gather that the other firms that have taken post offices on include a chain called Bargain Booze, an off-licence with some 30 post offices—some hon. Members may have concerns about how appropriate that is. I was told that both the Crown post office branches in my constituency were unprofitable, which was why they were to be franchised out, yet the Lancing branch, along with one very small sub-post office right on the fringe of the village of Lancing, now looks after a population of 27,000. Not surprisingly, queues are frequent. It also services the second largest business park in the whole of West Sussex, with 228 firms that employ more than 3,000 people. The village has lost almost all its bank branches; we were told that when we lost them, we could do all our banking at the post office, so there was no great concern. If the post office branches are not making a profit, that suggests that they are not being run very well—it is certainly not for lack of usage or lack of demand from the local population.

I was told today that one of those Crown post office branches is to be transferred to a nearby convenience store, which is much smaller than the existing post office and has operated since only 2013. On the upside, there will be extended opening hours on Saturdays and Sundays and new disability access, but on the downside, nobody believes that the store is big enough to house a replacement Crown post office. It will have fewer serving positions, when there are already serious concerns about queues, and it will not be able to offer the biometric enrolment service for Home Office applications. There are also concerns about staff transfer: we know that in the post offices that have so far converted, only 10 of the 400 staff have been TUPE-ed across and they are often going into minimum wage jobs. There are question marks over ongoing training for staff who now work in non-Crown post offices, which have tended to have a big turnover of staff. In many of these shops, staff hours get cut and, after initial promises about extended opening times, the shops tend to retrench.

What happens if the model fails? Some 8,000 sub-post offices are now in convenience stores, which have seen a 4% reduction in staff hours since the national living wage came in. Some 30% of businesses also face challenges with the revaluation of business rates. The Daltons website currently shows 705 post office branches for sale. There is a lot of change and churn in the sector, so longer-term questions arise about the viability and sustainability of the new arrangements.

Both my Crown post offices are co-located with sorting offices. Although the sorting offices are run not by the Post Office but by Royal Mail, they are very conveniently placed next to the post offices. Experience has shown that without those anchor partnership tenants, sorting offices are relocated to out-of-town sites, which are much less convenient for people who need to get their deliveries, particularly in places with many elderly people who may not be so mobile.

There is going to be a consultation on my post office. It will be extended because of the election, but we all know that not a single consultation has overturned any of the proposals to transfer these post offices, so I fear that it will be something of a token exercise. The measurements of an access door may be changed by a few inches or the sweet counter may be relocated because it gets in the way of guide dogs, but frankly the consultation will be a token exercise.

I am aware that Citizens Advice does a good job as the oversight body and that some of its research has suggested that in some cases there have been some improvements to access and to service with the new format, but overall the fears are that the queues will get longer, transactions will take longer and the service will be less consistent, people are dealing with different and new staff, and it is just not as good as it used to be.

So that brings me to my second point. Where exactly is the Post Office going? Everything that the Post Office has done—I have cited the statistics about making it more efficient, reducing losses and so on, and perhaps extending some opening hours—are all based on retrenchment, which is a policy that sees the Post Office, especially the directly owned Post Office, getting smaller and offering fewer services to its customers. There are now fewer than 300 post offices that are directly owned Crown post offices.

The financial services part of the Post Office, which should be a big money-spinner, is diminishing. At the beginning of the year, 150 financial specialists were made redundant. There was a specialist financial office in the Lansing post office, but it was closed earlier this year. I gather that the specialist mortgage advice that the Post Office gives, because of its relationship with the Bank of Ireland, generates a one-off payment of just £800 for brokering mortgages, and there is no ongoing revenue. The Post Office seems to be selling itself very cheap in that regard and it is caught in that relationship until 2023, and it does not sound as though it is a very profitable one for the Post Office.

My question to the Minister, which I hope she will be able to answer to enlighten us, is why the Post Office is not making more of banking and financial services in particular, given that it is a trusted name and a presence on the high street at a time when conventional banks are disappearing from high streets?

Post Office revenues roughly break down as follows. I gather that about 47% of the revenue of post offices is from stamp sales, but increasingly stamps are available to buy anywhere. There are also Government services, including Driver and Vehicle Licensing Agency services, fishing licences and the Department for Work and Pensions card account, but of course those services are all being squeezed and the revenue from them has been diminishing. The Post Office also offers access to current accounts. Banking protocols have been sorted out so that there can be cross-fertilisation of different bank services within a post office, which had been a problem. And then there are the Post Office’s financial services, but again that seems to be a declining market for the Post Office.

Why is the Post Office not copying of the challenger banks, for example? Banks such as Metro Bank and Handelsbanken are making a really good fist of expanding into new markets. Metro Bank now has 915,000 customers; it has taken £8 billion in deposits and has 110 branches, and it is growing. Alternatively, as hon. Members have asked in these kinds of debates before, why are we not doing what has been done in France? One thing that we might want to copy from France is La Banque Postale, which was founded in 2006 specifically as a tool to help to tackle financial exclusion and in 2016 had a turnover of €5.6 billion and a pre-tax profit of just over €1 billion. There are similar examples in New Zealand and Italy. There is surely a fantastic opportunity for the state-owned Post Office to take advantage of changing markets and changes in how we conduct our financial business, as a body that is trusted and that is already on the high street. For some reason, the Post Office is not taking that opportunity.

Similarly, why is the Post Office not making more of click and collect services? Everywhere I go now there are shops sprouting up on high streets specifically for people to collect their Amazon and other deliveries, because they are not at home to receive them. The Post Office is already on high streets and surely could offer that kind of service, and yet I gather that 80% of post offices do not have those kinds of facilities. There will be even fewer post offices with them if they are moved to smaller premises that just not do have the room to store and collect parcels.

The overall commercial revenue of the Post Office has been virtually stagnant in the last few years. So it is a great mystery why it is not expanding and becoming more profitable, which would be better for the taxpayer and customers, rather than following a long-term strategy that appears to be based on retrenchment and shrinkage.

Finally, I have some questions for the Minister, in addition to the bigger question of what the big game plan is for the Post Office. The network transformation programme is due to end by March 2018, by which time some 7,500 traditional sub-post offices will have been converted to the new model, but what comes after March 2018 in terms of subsidy and further transformation revenues? In opinion polls, 85% of the public have expressed support for the Government—the taxpayer—continuing to subsidise the Post Office, and not just to deal with the obvious challenges that face rural post offices, which will always face the sparsity challenge. Are any further reductions in Crown network offices planned for the next year? Citizens Advice has suggested that there should be an automatic break if 5% of branches announce that they are to be closed without breaking the access criteria, which is quite hard to do anyway. Will that happen?

The biggest question is why the Post Office is not taking current opportunities to expand instead of retrenching, particularly as it has the security of Government backing for its revenues and is a trusted name? In 2010, when the Government promised to transform the Post Office—

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

Order. I have a list of 12 Back Benchers who wish to speak.

Photo of Tim Loughton Tim Loughton Conservative, East Worthing and Shoreham

I am on my final sentence, Sir Edward. In 2010, the Government promised to transform the Post Office into a genuine front office for the Government and that there would be a significant expansion of the Post Office’s banking services, but they have failed so far to implement those measures, as the revenue from Government services has fallen by 40% and income from financial services has stagnated. Closing down flagship branches, getting rid of experienced staff and putting counters into the back of a WH Smith store or a Bargain Booze outlet is surely not a plan for greater innovation, which I think is what our constituents want to see.

Several hon. Members:

rose—

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

I have a problem, because I have got a list of at least 12 people who want to speak. I will have to impose a four-minute limit on speeches. If people intervene, then some other people will not get to speak.

I should probably choose first our most senior Member here today, David Winnick.

Photo of David Winnick David Winnick Labour, Walsall North 9:46 am, 25th April 2017

Thank you, Sir Edward, for calling me to speak.

I am pleased to follow Tim Loughton, who made some valid points. Because of time, I will simply concentrate on the Willenhall Crown post office in the Walsall Borough. A second attempt is being made to close it. The first attempt was in 2013, which led to an Adjournment debate. The town was unanimously opposed to closure, which should have come as no surprise, even in a place where, as in other areas, there is not normally unanimous opinion. I found no one in Willenhall who wanted to see the post office close.

Then came the welcome news, and it was indeed welcome, that the Post Office management had changed their minds. Instead of closing the Willenhall post office, it had decided to retain it and invest in it, which was part of—listen to these words—“building a modern, profitable and sustainable network”. Joy does not last long where the Post Office management are concerned; under the latest proposals for closures, Willenhall post office is due to face the axe.

The hon. Member for East Worthing and Shoreham was right to talk about public consultation. I am all for consultation, but as far as the Post Office is concerned there is as much consultation as there is in North Korea. There is as much choice as Henry Ford offered when he said of his cars, “You can have any colour as long as it’s black”. So there is no consultation. Indeed, when I received the original letter that stated there would be consultation, I asked, “If residents come along, or write, and make it clear that they are opposed, will it make any difference?” The answer was quite clearly no. There would be consultation on alternatives to the Willenhall post office, on whether there would be toilet facilities in any alternative location, on car parking, and so on, but on the crucial issue of whether the Willenhall post office should close, the decision had been made and there would be no change. So much for consultation.

What concerns me is not simply the closure of Willenhall post office. What I have found is that bank and post office closures tend to go together, whether the bank or the post office closes first. Such closures certainly have—as is bound to be the case—an adverse effect on local communities.

We had a demonstration the other week. The union was involved, along with elected representatives and, of course, the public. We were just outside Willenhall Crown post office staging our opposition to the closure. What was happening inside? I will tell the Minister, if she is listening: there was a lengthy queue. There was no lack of business. This post office is clearly central to Willenhall, but that does not seem to matter to the Post Office or to the Government. The Post Office management is acting under intense pressure from the Government; we should have no doubts about that.

What is happening is most unfortunate and I will continue to do my best with other people in Willenhall and with the unions to retain the Crown post office there. The chances are very slight, but I conclude with these words: I used the opportunity last time to have the Adjournment debate to make the voice of Willenhall heard in the House of Commons and I do so again today in the hope of a reprieve.

Photo of Iain Duncan Smith Iain Duncan Smith Conservative, Chingford and Woodford Green 9:50 am, 25th April 2017

I will be brief. I completely support my hon. Friend Tim Loughton, who initiated the debate. He has made all the basic national points. I also support much of what Mr Winnick said about his post office.

I am here because it has been announced, although I do not think I received any specific notice of the proposal, that the Crown post office in George Lane in my constituency is to be closed. Ironically, it is situated very close to a sorting office, which I understand the other side of the fence now wants to shut. We will therefore have a serious blight in the area. With the loss of the post office, people who want to pick up parcels will perhaps have to go all the way up to north Chingford, which is some distance away and the traffic is never that easy. We will have a real calamity on the high street.

It is worth reminding the Post Office and the Government that post offices are part of the chain of integral elements in a high street which, bit by bit by bit, are being removed. The banks have disappeared, and now, in many areas and even in my own, there is real pressure to get rid of small industrial estates, which are vital to the life of communities because people who work in them use the high street during the day, to find their food, to shop generally and so on. There is continuous life there. The post office is an integral element because it brings people into the community, particularly elderly people who do their shopping there. The high street will therefore suffer as a result of the closures.

As my hon. Friend the Member for East Worthing and Shoreham said, there are much better ways to do this. The absence of any sense of innovation in the Post Office is remarkable, given that it owns prime sites that could be used flexibly. When I was at the Department for Work and Pensions, I wanted to persuade the Government to allow post offices to be used for outreach. The Post Office was utterly negative about the idea and did not want to entertain it, but the Government need to press it again. With terminals where people, particular the elderly, could receive at the very least reasonable advice about benefit claims, post offices could easily be utilised for further Government activity, beyond all their other work.

The banking side is another consideration. About five years ago, the Post Office was told absolutely clearly by the Government that if it came back with positive responses about how to set up a banking facility, it would be given a reasonable hearing. It took a year for it to come back with absolutely no response whatsoever, except to say—this was connected with the Post Office card account or POCA—that it did not think it was feasible for the Post Office to do that. All along, there has been negativity from the Post Office regarding any ideas about using its facilities in ways that could genuinely increase its revenue and make it more flexible.

Nearly eight years ago in my community we lost a sub-post office in the high street. We were told, “Don’t worry, the Crown post office will be able to take all that business”, and now we find that that post office is about to close as well, leaving us with no postal service at all in the area. I, the community and the unions are absolutely adamant that that is the wrong way to go. The Post Office must think again, and I call on it be more flexible and reasonable.

Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Spokesperson (Home Affairs) 9:54 am, 25th April 2017

It is a pleasure to take part in the debate and to serve under your chairmanship, Sir Edward. I congratulate Tim Loughton, who introduced the debate, and his colleagues on obtaining time from the Backbench Business Committee.

It is almost trite to say that post offices, and sub-post offices in particular, are central to the life of many of our small rural and village communities, but that is very much the case. Indeed, as we see the withdrawal of other services, such as clearing banks, from such communities, they will only grow in importance. Maintaining a vibrant and viable network of sub-post offices across our smaller and more rural communities is therefore now more important than ever.

In my time in Parliament I have seen a large number of post office closures, although whenever there is a structured programme of closures we, in Scotland, generally do quite well out of it; we do not see very many post offices close because we have a small population spread over a large area of terrain. However, there has been a constant process of attrition. Time after time, sub-post offices have closed temporarily because the person running them has retired or moved away or is simply fed up with managing the business—and who can blame them? In fact, I have one post office that is about to reopen in the next month or two in the village of Finstown in Orkney. It has been a Herculean effort to find someone to take it on, but it shows that it is still possible to achieve that if there is willingness from a handful of people to make it work.

It is difficult now to make a sub-post office work as a stand-alone business, and for that reason the few businesses that are left are generally being folded into shops, garages, cafés and other places. That is good for those businesses, but it requires a bit more flexibility and sensitivity on the part of the Post Office. I am thinking of the example of Stromness, the second largest town in Orkney, which for years had a stand-alone sub-post office. When that sub-post office was no longer allowed to continue, it was moved into a bakers and general store. The community does not feel comfortable, despite the best efforts of the shop owner, to go along and get their pensions on one side of the counter while standing next to someone buying their messages on the other.

The Post Office needs to be more proactive in supporting people who are prepared to provide a sub-post office service. I spent an hour on Sunday night with the owners of the Palace Stores in Birsay in Orkney—a great little local shop that also includes the post office. They tell me that they have probably lost about a month of post office business because of poor connectivity. The broadband connection that is necessary to run a sub-post office is unreliable. That obviously has more to do with BT Openreach and Fujitsu, who provide the internet services for the Post Office, and their inability to speak to each other, but it is a good example of how the Post Office could make a real difference if it took a more proactive role in supporting its sub-postmasters and sub-postmistresses. A small country shop in Orkney going to talk to BT will get treated as if it were a small country shop, but a big organisation like the Post Office would be listened to and taken much more seriously and, in that very practical sense, it would be able to support people who provide one of the most important services in the communities I have been privileged to represent. For that reason, I hope that the Minister will take to the Post Office management the message that that should be its priority.

Photo of Richard Bacon Richard Bacon Conservative, South Norfolk 9:58 am, 25th April 2017

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend Tim Loughton on securing the debate.

I would like to raise the case of Diss Crown post office in my constituency, which is at the heart of the marketplace in Diss. In that geographically central area of Diss, 10,000 local residents—more than twice the number of people on the electoral role for the area at the time—turned up to welcome the Royal Anglian Regiment—the Vikings—home after its tours in Afghanistan and Iraq. The post office is very much at the heart of the community. In particular, it is not only at the heart of Diss, but it will be at the centre of the regenerated Diss following the newly reinvigorated Diss heritage triangle project. That £3-million regeneration that includes £1.65 million from the Heritage Lottery Fund. Part of the scheme will relocate some of the town’s facilities, including the tourist information office, further north towards the centre, away from the supermarkets on the fringes of the town. The proposal to close the Diss Crown post office cuts completely against that project.

WH Smith has expressed an interest in taking on the franchise, but the WH Smith branch in Diss must be one of the smallest in the country. It is up some very narrow steps through a narrow door. In fact, there are two narrow doors either side of the shop window, but they are not in the remotest bit suitable for disabled access and nothing that could be done would make a serious difference, because the footprint of the store is very small. My local district council, South Norfolk Council, has invested £400,000 of council tax payers’ money in the heritage triangle project. Indeed, paragraph 2.32 of the South Norfolk local plan refers to the need to protect primary shopping centres, including the Diss heritage triangle.

The proposal to transfer the post office further south to the WH Smith branch would, apart from the inaccessibility problems, put it on the wrong side of town. That would be to the clear detriment of public investment in restoring the old town centre. It would also mean that many public events, such as the welcome home parade to which I referred and the annual Remembrance Day parade, would, instead of taking place against the background of a heavily used, vibrant public building—as other Members have said, it is surprising that it is not possible for such branches to be profitable, and I find it almost impossible to believe that it is not—take place against the background of a closed, redundant, empty building, since there is no word on what Post Office Counters would do with it. In the case of Diss, it would have a damaging effect by counteracting significant public investment in a project that aims to revive Diss town centre.

The Post Office’s current proposal is to relocate the branch to WH Smith, which are the wrong premises in the wrong place. That goes against the trend of local public investment aimed at securing regeneration in one of our finest market towns, which has some of the oldest town records anywhere in the country. Diss could and should be a flagship example of the regeneration of our market towns, with the successful Crown post office at its heart. I hope the Minister will take these points to the Post Office. She should explain not only that we want a much more commercial and proactive approach, as my hon. Friend the Member for East Worthing and Shoreham said, but that there are certain Crown post offices where the proposals are wholly unsuitable. We need and deserve something better.

Photo of Albert Owen Albert Owen Labour, Ynys Môn 10:03 am, 25th April 2017

Tim Loughton, who moved the motion, was absolutely right in his thoughtful speech when he said that there would be repetition of many issues, but that we would concentrate on our local areas. Post offices are the heart of our communities and are vital for businesses and local communities.

The beautiful isle of Anglesey, Ynys Môn, is well known to Mr Duncan Smith. In 2014, the Post Office tried to close down the branch in the market town and put it out to franchise. There were no suitable premises and nothing has changed, yet the Post Office has come back, repeating exactly the same measures to close it down. The branch is purpose-built in the centre of town. It has access outside for buses and elderly people. It is perfect.

When there were sub-post office closures in rural areas in my constituency, we were told that the Crown post office was the hub of the whole area. Now the Post Office wants to close down the hub. The Post Office is not listening, and it needs to start listening to local communities and local businesses, because across the country we are seeing not only local post office closures, but mass bank closures as well. Local businesses are finding it difficult to do cash handling and run their businesses. When the Post Office closes down Crown post offices, we get empty buildings where lots of money has been spent on regeneration. That will be the legacy of the Post Office, and it is counterproductive. I know that the Minister is as anxious as we are that that should not happen, but we need a proactive Government and a proactive Post Office. We need to look at innovation. We need to look at the brand, to improve it and Post Office products. There are great opportunities.

We are going through a period of mass bank closures. I suggest that the Minister listen to the Communication Workers Union, which is proposing a Post Office bank, which would help with loans for local businesses. We have just been through global financial difficulty, where local banks were not facilitating local businesses in the way that they should. I believe in a mixed economy. When the Government have a stake in the Post Office, as they do, they should intervene in a sensible way through the Post Office with a Post Office bank.

People regularly go to do their business and their trade in Llangefni. It is an historic market town, but it is modern too. People do things in a more digital way these days, but as Mr Carmichael said, broadband facilities can be poor. We need to improve our infrastructure and our post offices. We need to begin listening to local businesses and local communities, because post office and bank closures are ripping the heart out of our local communities.

The Government rightly talk about localism, but local people and local businesses do not want this closure programme. They oppose it firmly. As representatives—this is not the first time I have stood up here for my constituents—we are making coherent points. We want the Post Office to work for our communities, our businesses and the future. I urge the Minister to look closely at the CWU proposals. Let us have the Post Office doing what it used to do when I was a kid: having savings banks and helping businesses in communities. That is the way forward, and I hope the Minister will take it on, on behalf of the people of Ynys Môn.

Several hon. Members:

rose—

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

Order. I am afraid that three more Members have put in a request to speak. I want to try to get everyone in, so I am afraid I have to reduce the limit again, to three minutes.

Photo of Sheryll Murray Sheryll Murray Conservative, South East Cornwall 10:07 am, 25th April 2017

Thank you, Sir Edward. It is a pleasure to follow Albert Owen. I want to talk about three post offices in my area, the first of which is in Lostwithiel. The post office closed, but it now half-opens, for two days a week. Sadly that announcement was made on social media for political gain before consultation with the local community, but it was welcome. However, Lostwithiel is due to lose its permanent bank, and it will have a mobile banking service for two sessions a week. There is no bus service. I am pleading for the Minister to do everything she can to ensure that my constituents in that town, which is bereft of vital public services, can have a permanent post office again. It is an ancient stannary town. It has a lot of antiques businesses and privately owned local businesses. They need a permanent post office service that is open for hours that serve everyone in the community, particularly workers.

We have had a bit of a reprieve in Looe, where my late husband was a fisherman. We saw the post office closed in East Looe. Fortunately, just like in Lostwithiel with its two days, a hard-working postmaster from another village has come in and taken over. Working very closely with my local councillors and local council candidates, we have secured a temporary reprieve, but we need a permanent solution. It is a major tourist town. Tourists do not want to come to a town where they cannot even access post office services.

Finally, in Torpoint, which is very close to my home town, we have had the bank close. People have been told that to use banking services they can go to the post office or make a three-hour round trip. Someone has looked on a map and measured the distance and not taken account of the fact that, on the Rame peninsula, it is an hour and a half’s bus ride to access the alternative bank. The post office is already heavily used and people are very worried that it will not be able to cope with the extra pressure. Will the Minister take account of rural post office services in places such as South East Cornwall to ensure that people get the service they want?

Photo of Carol Monaghan Carol Monaghan Shadow SNP Westminster Group Leader (Public Services and Education) 10:09 am, 25th April 2017

Drumchapel post office in Hecla Avenue is under threat of closure. Drumchapel is an area in the north-west of Glasgow with a population of about 13,000. It was developed post-war to move people from urban slums to the outskirts of the city, but much of the housing that was built was poor quality, and lack of amenities meant that Drumchapel experienced serious social issues, many of which persist. Digital literacy is low and one in every two children lives in poverty. Although there are one or two shops around the estate, the heart of Drumchapel is the small shopping centre where the Hecla Avenue post office is located.

There is a small post office counter at the opposite end of the estate, but it offers a much reduced service. A quick check shows that it offers Drop & Go and foreign currency, whereas our main post office in Hecla Avenue offers passport services, banking, car tax, travel insurance and bus tickets, to name a few things. This is of greater importance when we consider that, in Drumchapel, a high number of people are not able to access the internet. A recent study by Citizens Advice Scotland estimated that 50% of people in areas of deprivation do not have internet access. Many of the tasks that we can do at home are not possible for many of the residents of Drumchapel.

I have visited the Hecla Avenue post office numerous times in the past few months and have listened to residents’ concerns. They have said that it will be difficult to travel to the next-nearest post office—for some disabled people it will be impossible. The post office is busy with queues at the counter, so the locals feel strongly about its potential closure. I have a petition with 640 signatures and another 500 online, which I will present today.

The post office is at the heart of the local community. Its removal would be devastating for Drumchapel. This is about more than commercial viability. The post office is a key public service that must be protected. Will the Minister tell us whether there has been an impact assessment on the area of Drumchapel? Has the mobility of residents been considered when looking at closures? Closure of the post office must not go ahead. It would be devastating for the community.

Photo of Huw Merriman Huw Merriman Conservative, Bexhill and Battle 10:12 am, 25th April 2017

The title of this debate was the title of the first debate that I had in my name in Westminster Hall when I was elected in 2015. I vowed I would continue to speak on the subject, so I thank my hon. Friend Tim Loughton for giving me this chance.

For more than a year in my constituency, 8,000 constituents were unable to access a post office in Heathfield because the previous landlord had locked the doors and refused to allow trading. Alternatives were suggested during that time, but no business was willing to take the post office on. I therefore use this opportunity to thank Mr Sanjiv Patel from Unique Wines in Heathfield, who had vision and was willing to take the risk and take the post office on. Almost 12 months on, that business is thriving and I pay tribute to him for taking that risk. I hope other hon. Members will find entrepreneurs willing to do likewise in their constituencies to solve the problems that have been outlined.

At this juncture, I want to give credit to post office business. There are 25 branches in my constituency. As a result of a lot of co-operation, 17 branches have received investment to modernise, transforming into either a main post office or a local. I have six branches that have community status as the last shop in the village—they have received access to investment funding. I have 600 additional branch opening hours per week and 10 branches open on a Sunday. I wish our GP surgeries would follow suit.

I want to come back briefly to three points made during the debate, which are important for reform. First, despite not having a post office or a single business willing to put itself forward, and having only one option, Heathfield still had to run a consultation exercise, which delayed the inevitable decision to go with the one business willing to put itself forward. Secondly, the point has been made as to whether franchises such as Bargain Booze are suitable. Unique Wines is obviously an alcohol-selling business, but we have not seen any notable impacts as a result. Frankly, if such a business is willing to take a risk when no others will, I will support it.

Thirdly, the point was made about the post office as a financial services provider. My hon. Friend the Member for East Worthing and Shoreham had a great idea. Given that such a large part of the customer base is pensioners, and that we need more high street providers to provide equity release solutions to pensioners for social care, perhaps there is an obvious match.

Finally, in a settlement where there are more than 5,000 residents who have had no post office for six months, I would like to see the post office provide both the base and the postmaster for the future.

Photo of Stella Creasy Stella Creasy Labour/Co-operative, Walthamstow 10:15 am, 25th April 2017

Today’s debate is not about being against change. Those of us who have concerns recognise that the world is a very different place. I will wager there is nobody here who managed to do a degree with the help of Wikipedia. Indeed, some of us have jumpers older than the internet. [Interruption.] I have to say I have seen them on Mr Duncan Smith. However, the question is about what drives the changes. Opposition Members are concerned that changes driven by the market alone rarely deliver the best outcomes for the public and often end up hitting the poorest hardest. Of the changes and closures that we have seen in the past couple of years, 40% have been in poor urban communities such as my own. Indeed, under the latest proposal, two post offices in Walthamstow are threatened.

In the short time available, I want to flag up a couple of points with the Minister. First and foremost, closures are not happening in a vacuum, but against a backdrop of bank closures, as many of my colleagues have said. I caution Tim Loughton because, with the closure of banks and the services that post offices provide, it is simply not the same for residents. They might be able to get cash out or do a balance enquiry, but they can do precious little else. That matters in communities such as mine.

I disagree with Huw Merriman, who said he is happy to see franchises with anybody and everybody. I am not sure we want shots with our stamps, and I am certainly concerned about the evidence that services have deteriorated in franchises with WH Smith, particularly in terms of disabled access and queue times.

Photo of Vicky Foxcroft Vicky Foxcroft Opposition Whip (Commons)

I agree with my hon. Friend. I am concerned that I have been unable to get any figures on profitability for the New Cross Gate post office. The Minister needs to ensure that we get that information.

Photo of Stella Creasy Stella Creasy Labour/Co-operative, Walthamstow

I complete agree. For those of us facing closures such as in Walthamstow and on Lea Bridge Road—our main post office is in Walthamstow—the question is the alternative future. What could make them sustainable, not as white elephants in the provision of public services locally, but as jewels in the crown? For me, that comes with the role of financial services, particularly the missed opportunities with the link-up that could happen with organisations such as credit unions. I know that some Government Members did not think DWP services should be part of our post office system, but there is an opportunity when it comes to financial services.

We know that under-banking is still a major problem in this country. Some 2 million people have no access to a bank account, including 8% of all 18 to 19-year-olds. We know there is rising debt in our communities. We see it in our surgeries. In London alone, we see people who have too much month for their money and there are big increases in consumer borrowing, so the credit union is never more needed. It is a missed opportunity. I want to hear the Minister tell us why in six years of the Government talking about working with credit unions, we have not seen a link-up with post offices. We know that the trade unions, which have done fantastic work uncovering the impact of the closures on communities such as mine, would support such work. In my local area, the Government have not even asked the credit union whether they could work together, and they are talking about closing two local post offices. They now say the consultation is over and it is too late to start that conversation.

We must not lose the opportunity to build the financial inclusion that all of our communities need by bringing those two communities together. As the hon. Member for East Worthing and Shoreham has pointed out, there is a very different future for post offices in France, rooted in those financial inclusion services. What is the Minister doing to bring credit unions, not Jägermeisters, into our post offices, to give them a properly sustainable future that will serve everyone in our communities?

Photo of Ian Murray Ian Murray Labour, Edinburgh South 10:20 am, 25th April 2017

I am grateful to Tim Loughton for securing this incredibly important debate. I was the shadow Minister for Postal Services for most of the last Parliament and was told by many Ministers that this closure programme would be the last, in order to make the Post Office sustainable. It appears that that is not to be the case. I remember the phrase in the Conservative party manifesto of 2010—that dusty tome now on the shelves of political history—that said that the Government would make the Post Office the front office of Government. They have done little to do that, which has led to the situation today, where we have a number of post office and Crown office closures, including the incredibly popular Morningside post office in my constituency.

Having been in this place for seven years, I may be cynical, but I do not see the Morningside post office franchising system as being about franchising—it is about closing the post office. I remember doing a public meeting in Alloa when the first Crown post office franchising policies were going through. The Post Office was pressed on what would happen if a franchisee did not come forward to take on one of those post offices. The answer was, “We would probably have to invest in it.” I would suggest to the Government that they have perhaps got this a little bit round the wrong way. They should be investing in our post offices to make them places on our high streets that people can use, enjoy and access the services they need.

We have a crisis in our shopping streets and high streets. Clearing banks are closing their branches—incidentally, if a clearing bank closes its branch on a local high street, people get a letter to tell them they can use the post office for the services that it will no longer supply. Local shops are in trouble. Pubs are in trouble. The post office is the iconic place on the high street that drives footfall, drives pride in the high street and gives stability to the operations of retail units. As an aside, it is not just the franchising and potential closure of Morningside post office that is not helping in terms of the high streets in my constituency, but that the rates for some retailers in some of those shopping districts have just gone up by more than 100%. That is surely unacceptable if we want our high streets to thrive.

Photo of Ian Murray Ian Murray Labour, Edinburgh South

I would love to, but we are going to struggle to have enough time to get everyone else in.

I have seen the financial figures for the Morningside Crown post office. It is financially viable for the Post Office to run it, but it is financially unviable for anyone else to go in, given the capital and rental payments required to make it a sustainable business, which makes me suspicious that it is just a vehicle for closing the post office.

It is time to make the post office the front office of Government. The Minister has to abide by that phrase and do something that the previous 2010 to 2015 Government did not, and invest in our Crown post offices.

Photo of Clive Lewis Clive Lewis Labour, Norwich South 10:23 am, 25th April 2017

I am grateful to Tim Loughton for securing today’s debate on this extremely worthy subject, given that it could be one of the last debates we have in this Parliament. I declare an interest as a proud trade unionist. I believe that the Communication Workers Union has done as much as anyone. It has put post office closures at the forefront of political debate and campaigns in communities, such as the one I represent in Norwich South, to defend vital public services—the Post Office is a vital service.

The issue needs to be aired thoroughly, not least because of the job losses that sit behind the closures, and the substitution of good jobs with insecurity, and not just because it shows the Government’s contempt for those who responded to the closure consultations, who contributed time and expertise, and took the process seriously, only to be met with silence from the Government. Perhaps the Minister could today touch on the reason for that.

It needs to be aired not just because the closure of Crown branches is very likely to have a negative impact on the Post Office’s overall revenue—some might describe that as deliberate managed decline. For me, a key issue that draws the impacts together is this Government’s attitude to communities and those who live in them. When branches are closed or franchised, the lives of many of the people we are here to represent get a little bit worse. The small amount of research that we have points to a longer time spent queuing, lower levels of expert advice and poorer disabled access—in short, a poorer service.

I feel strongly that we must add to that a further erosion of what it means to live in vibrant community—a place that has resources and services that are not dependent simply on the ongoing existence of WH Smith; where people and the details and experiences of their lives count; where the expertise of those such as postal workers is valued; and where we can rely on their support to run our businesses, send parcels to our families, and send and receive goods. We do so in the knowledge that those serving us fully participate in our community, and that those with disabilities can be part of that normal life.

Every week we make 17 million visits to post offices. That is not a niche activity but part of ordinary life. Chipping away at that is yet another example of this Government’s thinning out of everyday life. Those are policy choices and those who make them erode the quality of peoples’ lives.

Photo of Andrew Slaughter Andrew Slaughter Shadow Minister (Housing) 10:25 am, 25th April 2017

We have seen the decline of a great British institution over a long period of time, and it is one that the public are very attached to, not just on sentimental grounds, but on practical ones. There has been a radical shift in the delivery of postal services—not for the good. There has been a contraction in the network of about a half over a period of time, and a withdrawal of support.

Ten years ago, there was a major closure of sub-post offices, but on that occasion, at least the Post Office listened. Eight sub-post offices were threatened with closure in my borough. With a very vigorous campaign, we managed to keep five open. That left us with a viable working network. Unfortunately, despite successive Governments promising that there will be no further closures, what has happened since then is almost as bad: main post offices are moving to less good sites because they are cheaper, and there are what are described as temporary closures, which sometimes run into months or years.

Let me explain what I mean with reference to what is happening at the moment in Shepherd’s Bush, the second main town centre in my constituency. At the moment, the last of our Crown post offices is very busy, with queues out of the door. The staff are incredibly good and have been there a long time—they are even quite famous because they often feature in the columns of the comedian Richard Herring, who is a regular user of that post office. That office is being forced out of its current premises. I spent many hours trying to negotiate another location in the town centre, particularly the West 12 shopping centre, but it is going to the Westfield regional shopping centre, which is very inaccessible to local people because it will go into the back of a WH Smith branch.

The WH Smith deal is good for the Post Office because it is cheap space. It is good for WH Smith because it increases footfall. It is not, on the whole, good for customers. Therefore, I am pleased that we are retaining our last Crown office, but it is in a much less satisfactory way. The Post Office’s concession—it has at least listened on this—is to provide a new sub-post office in the town centre of Shepherd’s Bush. Unfortunately, I see little prospect of it finding a location, because the two nearest sub-post offices have been closed—one in White City since last year and one on St Anns Road for two years. Both of them serve large, very deprived communities—the White City estate and Edward Woods estate. They are also growing communities because there is a lot of development in the area.

I fail to see what is going wrong. We must have a continuing network. We cannot have those temporary closures. They are happening because the offer made to shops and to existing sub-postmasters is simply not good enough. As other Members have said, this is part of the decline of our high streets—the loss of banks and markets and of everything that local people rely on.

Photo of Alex Cunningham Alex Cunningham Shadow Minister (Work and Pensions) (Pensions) 10:28 am, 25th April 2017

In 2014, the post office on Stockton High Street was downgraded from a Crown office to a lesser franchised branch buried away inside a WH Smith store. At the time, I likened that to privatisation through the back door. It ignored the public consultation that took place and put staff at risk of losing their employment. Last year, the Norton post office was franchised and moved half a mile away from the high street and main shopping thoroughfare, again to be buried inside a shop. Then in January this year, the Post Office announced that it would be closing the Billingham Crown office branch, making it yet another franchise. It is therefore more than a little ironic that, within the past few days, I received a briefing from the Post Office that talked about bank closures and about how it could help to fill the service gap. Tim Loughton talked about the opportunities, but if we do not have a robust post office network, branches will not be able to deliver their usual services, never mind others on behalf of the banks, which are axeing their branches on our high streets more and more.

Citizens Advice pointed out that 88% of people think that their local post office has the same or more importance to their local community than it had five years ago. The Government should adopt its recommendations by confirming appropriate levels of funding to maintain the current network and raising awareness about public consultations on the closing or franchising of branches.

The Communication Workers Union sent me a great brief outlining the key issues and wrote to me about the idea of a post bank, which I support. It talked about the impact on customers, queue times, service times, disabled access, customer service and replacing good jobs with insecure employment—the majority of staff in a Crown office will leave when it is closed and a franchise partner is found. The Post Office will not confirm how much public money is given to retailers such as WH Smith. Perhaps the Minister can enlighten us. There is also a wider social and economic impact with the loss of jobs and the physical removal of the shop from the high street. Those are all valid and strong points.

If we do not fight and challenge the proposed changes and closures—the post office in every single major community in my constituency has been downgraded—it will be to the great detriment to our constituents, who rely on us to speak out for them. I just hope the Minister will rattle some cages.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Equality) 10:31 am, 25th April 2017

I congratulate Tim Loughton on securing this debate and on setting the scene so well. I thank him for giving us all a chance to speak by curtailing his time.

I am an advocate of the Post Office. I represent a community that is both urban and rural, and I have long been concerned about the isolation of my constituents—my rural constituents in particular—who rely on the Post Office. That reliance is greater in the Ards peninsula and Strangford—the area I represent—because the banks are closing. As other hon. Members have said, when banks close, they always state that they have an agreement with the local post office, but when the post office closes, people have to jump on the bus and go on long journeys on already limited public transport to towns to access banking services.

The news in January that the Post Office would close 37 of its largest branches, leaving more than 300 people out of a job, was shocking and unexpected. Although I understand that the idea behind franchising branches is to keep services

“where customers want and need them”,

and to allow post offices to operate in rural areas, the fact that the large post offices are under pressure does not bode well for smaller post offices.

During the five-day strike, members of the Communication Workers Union referred to jobs and pensions. Branch closures, including the proposed closure of my local branch, have unsettled them. The fact that the Post Office is now seeking partners for 37 of its directly managed branches as part of its effort to secure its services in communities around the UK has added to workers’ job uncertainty.

The fact is that each and every one of us as MPs has fought hard to ensure that benefit payments are made to post office accounts. The number of post offices has reduced by some 50% in the past 30 years, and people are uncertain about where they will be employed. Staff must have more security. I have been told that staff confidence levels are at an all-time low, and morale levels are at a critical level. I call on the Government to respond as a major stakeholder and investor in the Post Office, and I urge the Minister to confirm that this rate of closure will not continue and that there will be investment to enhance, rather than cut, services.

Just before Christmas, I received word of the strike action that was to affect my area. The letter stated:

“As you may be aware, the CWU has called for further strike action, on 19th , 20th and 24th December, in 300 directly managed Post Offices and, on 22nd and 23rd December, in our cash distribution operation.

I would like to reassure you, and your constituents, that people working in 97 percent of our network—the 50,000 individuals who work in over 11,000 independently-run Post Office branches—will not be involved in this industrial action.”

Those are not accountancy figures. They are people who work hard to pay their mortgage and who need our support. That is what I am doing now, and I ask the Government to do the same and to offer the support that is needed, not just for the workers in post offices but for those who use post offices across Strangford, the Ards peninsula and the whole of the United Kingdom of this great nation of Great Britain and Northern Ireland.

Photo of Marion Fellows Marion Fellows SNP Whip 10:34 am, 25th April 2017

It is a pleasure to serve under your chairmanship, Sir Edward. I thank Tim Loughton on securing this debate. It is testament to how passionately people feel about this issue that so many Members are here fighting for their local community in the last week of this Parliament. I expected to walk into an almost empty room, but I am amazed and delighted that so many people are here.

This is the second time I have spoken on this issue. I could not possibly sum up everything that everyone has said, but I can give examples from my own area. Motherwell is about to lose its post office, which is situated in the town centre. The number of businesses that will be affected if the closure goes ahead is incalculable. People go to the town centre to go to the post office, to get their pensions and to spend money. We do not have a WH Smith in Motherwell any more. We do not have one in Wishaw, either: it closed very recently. The Wishaw Crown post office closed a number of years ago, and we saw the effect that that had. It was relocated into a nice, good shop which, unfortunately, was not designed to be a post office. Access is difficult and queues snake round what are effectively the old Woolworths long shelves. It does not work. We are really concerned.

The CWU has been out trying to save the Motherwell Crown post office. I conducted a survey of customers, and they are all absolutely incandescent: 84% of the people I spoke to said that they use the post office every week, and they have to queue. People said that if they lose that post office, small businesses that use the post office services will be hugely affected. They do not know where they will go, because we are losing banks in the area. Although there are still other banks, that is not what those small businesses want. They want to use banking services in the post office and do postal work at the same time, because many of them rely on the post office to get things out to customers.

It is really disturbing that, although the Government claimed that they would use post offices as the front office for Government, that has not happened. I have spoken to postmasters and postmistresses, and the loss of Government business has affected their business in general. I could not find any figures about Motherwell Crown post office’s turnover and why it was picked. I was told that it was all commercially confidential. If some Members have accessed that kind of information, why cannot all Members do so? It is not right.

At the end of the day, we need to keep our post offices. We have lost a number of sub-branches, which have moved from very accessible local places further out into estates and housing schemes that are not accessible for the majority of people. They suit the people who are there, who can go to their local convenience store, but they do not suit other people. In fact, a post office in the Motherwell civic square closed, right next to where the local authority has hundreds of workers. They cannot access a post office. If the one in the main town centre closes, there is going to be a loss of work for those in the post office and in the businesses around it.

I feel very strongly about this issue, and I am glad that there is such cross-party opposition to the recent round of closures and the effect it has on the poorest and most elderly in our communities, who use post offices the most. I ask the Minister to put pressure on the Post Office to halt this latest round of closures.

Photo of Gill Furniss Gill Furniss Shadow Minister (Business, Energy and Industrial Strategy) (Steel, Postal Affairs and Consumer Protection) 10:38 am, 25th April 2017

It is a pleasure to serve under your chairpersonship, Sir Edward. I congratulate Tim Loughton on securing this debate. I pay tribute to the Communication Workers Union, which helped us highlight these issues to the public and MPs.

The Post Office is a trusted national brand with a long history. It is instantly recognisable to people across the United Kingdom. It forms part of the everyday fabric of life, offering a wide range of products and services, but it also provides an anchor for communities, decent jobs and, importantly, access to services in rural or urban deprived areas. Instead of making the Post Office fit for purpose for the 21st century, the Government have let that well-loved and trusted institution fall by the wayside and contributed to its managed decline. The Government are intent on privatising our public services. They used to say that they would support a robust Post Office, which former Prime Minister David Cameron promised would be the front office for Government, but they have totally failed on that promise by overseeing a steadfast strategy of cuts to the service that have caused thousands of job losses as well as a decline in the services provided.

The Labour party has made it clear that it would halt further privatisation of the Post Office and instead invest the £80 million of public money that goes into it to ensure the long-term sustainability of branches and services. We will ensure that services are retained and promoted, click and collect facilities are expanded, and banking and financial services, which we know are vital to financially excluded people, are provided.

There were 62 closures and franchising programmes and 500 job losses from the Post Office’s cash handling section in 2016, and more than 2,000 jobs have been lost in total since 2016. On 10 January 2017, it was announced that a further 37 Crown post offices would go under the same franchising scheme, meaning that 300 experienced post office staff and some 127 financial specialist roles will be cut across the network.

Crown post offices typically are directly owned and run by the Post Office. They have directly employed staff and they are often located on prominent high streets. Although there are only 286 Crown branches, they bring in a significant amount—between 10% and 20%—of the Post Office’s overall revenue. Privatising Crown post offices and transferring them into shops such as WH Smith hugely compromises the services provided, causing overall consumer satisfaction to fall, longer waiting and servicing times and poorer access for disabled customers. There are 10% fewer counters per branch in WH Smith branches than in Crown post offices, and 17% fewer foreign currency and business banking positions. At least 30 postmasters have retail businesses in a Bargain Booze franchise.

Not all franchises have worse provision than before, but the overall trend is saddening. Recent independent research for the Government showed that the Post Office continues to deliver more than £4 billion in social value each year to people and businesses throughout the UK.

Photo of Sharon Hodgson Sharon Hodgson Shadow Minister (Public Health)

My hon. Friend highlights research that proves that the service deteriorates when post offices move into WH Smith branches. When we add the fact that 40% of closures are in the most deprived urban communities, we can see that the most disadvantaged people in this country are in dire straits when it comes to having access to a good post office.

Photo of Gill Furniss Gill Furniss Shadow Minister (Business, Energy and Industrial Strategy) (Steel, Postal Affairs and Consumer Protection)

I completely agree. It is saddening that people in deprived areas get further and further away from accessing the financial services that are necessary to them.

The privatisation of Royal Mail was, quite simply, the transfer of large sums of public money to the already well-off. Since that privatisation, the Government have promised a transformative vision for the Post Office as

“a genuine Front Office for Government”,

and a significant expansion in its banking services, but neither of those promises have borne fruit. Post Office revenues from Government services have fallen by some 40%, and its income from financial services has risen by only 2%—it has not even kept up with inflation. The Government talk about cost-cutting measures, but £3.3 million was spent on refurbishing branches that were then franchised in 2016, at an average cost of £100,000 per branch.

I was pleased that the Government initiated a consultation about the Post Office last December. At that time, the CWU delivered 75,000 postcards signed by members of the public calling for the Post Office—the “People’s Post”—to be saved. Only weeks later, before a consultation response had even been produced, the Post Office announced 37 more Crown post office closures. In fact, nearly five months later, we still await the Government’s response.

The Government’s track record shows that they have been happy to cut public funding at any cost. They have shied away from communicating with the people affected. The Government’s response to the consultation that closed on 21 December has been delayed. Will the Minister tell us when she planned to publish that response? Why have financial services been cut instead of being promoted? Why have we not looked at the example of the Banque Postale in France, which has successfully provided income for the Government and, crucially, financial services for those who need them most? What contingency plans are there for franchises that are coming up for renewal and new franchises? The Association of Convenience Stores has major problems with its members who, due to the hike in business rates, may no longer wish to provide franchise services.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 10:46 am, 25th April 2017

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend Tim Loughton on securing this crucial debate. Today’s attendance and the passion with which Members have spoken about the value of post offices in their local areas shows what an important topic this is. I suspect that, for several of us, this will be our last debate in this Parliament.

The Government certainly recognise the crucial role that post offices play in communities across the country. Between 2010 and 2018, we will have provided almost £2 billion to maintain, modernise and protect a network of at least 11,500 branches across the country. My hon. Friend talked about post office closures. There are more than 11,600 post office branches in the UK, and the network is at its most stable for decades. The number of branches declined substantially in the 13 or so years before 2010, but since then it has been kept absolutely stable. Graphs show that that is absolutely accurate. That is down to the transformation and modernisation of the network, thanks to taxpayers’ investment.

I thank my hon. Friend for his positive remarks about that network transformation programme, which has secured the transformation of more than 7,000 branches. I am sure that I am not alone as a constituency MP in having felt and seen the benefits of that transformation in the branches in my constituency. More than 4,300 branches now open on Sundays, nearly 1 million additional opening hours are to be added to the network every month, and losses have been reduced from £120 million to £24 million. That is a substantial result achieved by management and workers in the Post Office network. The subsidy that the taxpayer is obliged to put in has fallen by 60% since 2012. That is why the network is more stable than it has been for a generation. The Post Office has managed that transformation while maintaining customer satisfaction at more than 95% throughout the programme.

Photo of Alex Cunningham Alex Cunningham Shadow Minister (Work and Pensions) (Pensions)

The Minister boasts of the 60% reduction in taxpayer subsidy. Would it not be better for the taxpayer to invest in Post Office services, perhaps prevent some closures and downgrading and therefore maintain services for our communities?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I agree that we need to invest in the postal service, and we are doing that. I hope that we shall continue to do so. However, I am afraid that one aspect of investment is making the existing structure of Crown post offices more efficient and affordable. Through the process of modernisation and franchising of Crown post offices, we have been able to reduce losses. That is a way for us to uphold our promise to keep post offices open in poorer and more rural areas that are not economically sustainable. I hope that the hon. Gentleman will at least understand that we are not just closing branches; we are franchising them and making them more efficient. We are then able to fulfil our promise to areas that need a post service but would not have one if we continued to invest in loss-making Crown post offices.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I will not give way. I accept that not all Crown post offices lose money; but the majority of those that have been franchised did.

My hon. Friend Huw Merriman put the case very well for the investment made by taxpayers and the Post Office in the service in his constituency; I join him in congratulating Mr Sanjiv Patel on taking the risk, as many others around the country have done. They have then found that it was good not only for their business but for the consumer. The Post Office is doing more for customers and doing it more efficiently for the taxpayer, and is ensuring that post office services remain on our high streets throughout the country.

Franchising or hosting some Crown branches is part of the Post Office’s long-term plan to ensure that the network is sustainable. It is not about closing services; it is about moving a branch to a lower-cost model, often in a better location for customers, and securing and improving delivery of services. The change from a Crown to a franchise or host branch has been undertaken previously in many locations and is a proven success in terms of sustaining services, as post offices share staff and property costs with a successful retailer. We have heard examples of that this morning. As I was saying, Crown branches have moved from a £46 million annual loss in 2012 to a break-even position today. That is no mean feat. There are still loss-making Crown branches, which is why I do not think we can stand in the way of the Post Office as it makes its service more efficient and sustainable and more accessible to a wider number of people.

Photo of Gill Furniss Gill Furniss Shadow Minister (Business, Energy and Industrial Strategy) (Steel, Postal Affairs and Consumer Protection)

The Chamber is packed; what the Minister believes to be the facts, as she has given them to us, do not ring true with the concerns and experiences that even Conservative Members have described. It seems bizarre that when so many of us tell her there are problems she says the Government should not stand in the Post Office’s way; it does not seem the correct response. It seems to me that we have the responsibility; the Government must provide a proper service for all communities. Clearly, the figures that many eloquent Members have given today are at odds with the Minister’s view.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I have talked so far mostly about financial issues. It is undisputed that the Crowns were losing £46 million and are now breaking even. There are still some loss-making ones to deal with. I appreciate that changes of the kind we are considering are not easy, especially when they involve staff who have worked in a place for many years. I know that the hon. Lady has had a briefing from the Communication Workers Union, and I have had meetings with it on several occasions; I sympathise with its position. However, it is essential that the business should continue to manage its costs to ensure that it can meet the challenges faced by high streets, let alone the Post Office, now and in the future, as the way we shop and get access to services continues to change.

Several hon. Members made points about Government services, and I agree that in 2010 the Government had hopes that the Post Office could take over many more such services; but the rapidity with which some of them migrated to the internet meant that that hope did not bear enough fruit. The staff in Crown branches that are being franchised have the opportunity to transfer to the franchisee in line with the TUPE process; or they can choose to leave the business. The Post Office offers a generous settlement agreement, which reflects the hard work, commitment and dedication that many employees have shown over the years. However, I reiterate the point that a more efficient Post Office is able to support and supplement thousands of small businesses, as my hon. Friend Mrs Murray noted; she spoke with great authority about the needs of people in her largely rural constituency. The Government take those needs seriously and have honoured a commitment to maintain a service, even where it is not viable on a financial basis, to people living in the rural parts of her constituency.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I will not give way; I have no time left, really.

I agree with Mrs Hodgson that poorer urban areas also have a great problem with access to local services—it is not just rural areas. I am pleased to tell her that the Post Office is now focusing on that issue. The Post Office is revisiting some poorer urban areas where it closed branches 10 years ago, to talk to retailers about setting up a local post office counter. I hope that that will succeed in the hon. Lady’s area.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

No; I have very little time.

I want to reassure Marion Fellows; I listened to her heartfelt concerns about an accessible post office in the town centre in Motherwell, and I will ask the Post Office to meet her again to discuss the most sustainable option for a service there.

Many hon. Members talked about banking, and I agree that that is an opportunity for the Post Office. However, the Post Office bank idea was looked at closely in 2010-11, and it was decided at that time that the money that the Government had would be better invested in the transformation of networks to secure sustainable access to services.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

Will the Minister give way, on that very point?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I cannot give way now; I have no more time.

The Post Office banking services are increasing now. They have grown 6% in the past 12 months. Credit unions are also being looked at.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

They are. I will write to the hon. Lady, if I am returned, and tell her what the Post Office plans on credit unions are.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

On a point of order, Sir Edward. As we are at the end of term, and as many of us have raised issues, which the Minister is refusing to give way to answer, can you give me some guidance as to whether the Department will be able to give us the information, as quickly as possible?

Photo of Edward Leigh Edward Leigh Conservative, Gainsborough

That, I am afraid, is not a matter for me. I am sure that in the remaining 30 seconds of her speech the Minister will do her best to answer any points.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I am not refusing to take interventions; I am trying to conclude my response to Members’ legitimate concerns. I think that I have responded to quite a number; but I must allow time for my hon. Friend the Member for East Worthing and Shoreham to conclude the debate.

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Okay, but I am not going to fill it with interventions; I am going to carry on.

Hon. Members have said that post offices do not have click and collect services, but I want to reassure them that there are 10,500 local post offices that do provide those services. That is another area of potential growth. I invite Members to write to me if their constituency branches do not have them; we will look into it. As to the allegation about hours being reduced in convenience stores, I am pleased to confirm that that is not the case. Opening hours are not decreasing in the fullness of time.

Photo of Stella Creasy Stella Creasy Labour/Co-operative, Walthamstow

The Minister has just told the House that the Post Office is working with credit unions, but that is not what they tell us; they say that they are open to doing so, but that nothing has happened in the past five years. The Opposition are all talking about financial inclusion; will the Minister commit to revisiting the issue and actively working with alternative providers who will deliver?

Photo of Margot James Margot James Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

The Post Office does work with credit unions where it can, but there is a common link through the Co-op in some transactions. The difficulty has been—and as the hon. Lady is an expert on credit unions perhaps she can help us to solve the problem—not having a common banking platform. When a common banking platform has been developed, further inter-working with credit unions should be possible. We take financial inclusion seriously.

I want to talk a little more about banking; I think that my hon. Friend the Member for East Worthing and Shoreham is happy for me to continue.

Motion lapsed (Standing Order No. 10(6)).