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Post Office Ltd has taken decisions on which branches will convert to WH Smith management based on a range of factors, including the proximity to WH Smith stores that are seen as suitable to accommodate a post office franchise, existing overheads such as the lease on properties, and what the company and WH
Smith consider to be the future potential of branches. They are not a reflection on the current branch performance or on the people working in the branches.
In some stores, as in Chelmsford, the first floor provides the most suitable space to accommodate the post office facility. I understand that the existing branch has a total of 10 fortress-style counters, and the new location will also provide 10 positions, with eight of those being open-plan. As regards disability access, Post Office Ltd has given an assurance that all branches will be fully accessible to all customers, with special arrangements in place to assist customers with special access needs, for example in branches like Chelmsford, where the post office counter is not on the ground floor.
As one would expect from an established prominent high street retailer, WH Smith is also fully aware of its responsibilities under the Disability Discrimination Act 1995 and will ensure that the branch remains fully accessible for all customers, including those with mobility problems. Although I understand that the store, as the hon. Gentleman described, does not have an escalator from the first floor down to ground level, a customer lift is available in-store for customers unable to negotiate the stairs. I understand that the lift holds a maximum of 13 people at any one time and is capable of accommodating pushchairs and wheelchairs. The Post Office and WH Smith are therefore confident that this will adequately accommodate the needs of customers.
Many customers will see the products that WH Smith and the Post Office sell as complementing each other. The deal with WH Smith guarantees that that branch will be operated for a minimum period of seven years. In the extremely unlikely event that WH Smith does not want to extend the initial contract or is unable to fulfil it, the Post Office would obviously take steps to ensure that services are retained in that key location. It must be remembered that typically some 10 per cent. of the offices in the network change hands every year, so the Post Office is very experienced in managing that successfully. The deal between Post Office Ltd and WH Smith is a purely operational and commercial issue for the parties, and does not impact on the Government’s recent consultation on the network.
There are a number of challenges facing the post office network, including the need to tackle the losses of the Crown network. Although many of us and our constituents say we like our post office and value it highly, the reality is that, collectively, we do not use it as we once did. It is an undeniable fact that many people now prefer to pay their bills by direct debit or use one of the Post Office’s competitors, do their banking via the internet or use a cash point machine, renew their motor vehicle licences online, and keep in touch using emails or text messages.
Some 4 million fewer customers are using post offices each week compared with just two years ago. Although many Crown offices might still be very busy and well used, they are trading low margin products in high cost locations. In the financial year 2005-06 the post office network lost £2 million a week, as we have discussed in the Chamber on a number of occasions in the past six months at least. When the figures for the performance in the financial year 2006-07 are released, it is expected that the losses will be closer to £4 million per week.
For too long the Post Office was deprived of much needed investment. The Government have reversed that approach and invested substantial sums in supporting the network—some £2 billion since 1999. We have supported Post Office Ltd in its efforts to develop its range of financial service products, with Government’s investment having included £500 million for the Horizon project to bring computer systems into every post office throughout the UK.
The Post Office recognises the need to increase its range of services, adapt to changing shopping habits and give sub-postmasters products to sell that appeal to the needs of today’s and tomorrow’s customers. Post Office Ltd is the largest provider of foreign currency in the UK and the third largest provider of travel insurance. The Post Office is also the UK’s fifth largest fixed-line telephone service provider, and one in every 25 credit cards issued last year was from the Post Office. So new products have been introduced and more are in the pipeline.
Through the statement made by the Secretary of State for Trade and Industry last month and the £1.7 billion committed to Post Office Ltd until 2011, the Government have set out a framework to create stability for the network so that the Post Office can move forward with confidence and rise to the challenges of the 21st century.
I do not underestimate the difficulties that the hon. Gentleman has outlined on behalf of his constituents. I am convinced that Post Office Ltd will take those points on board and respond to him positively. The urban reinvention programme of several years ago did not start out as the best consultative exercise that the country has ever seen. The Post Office recognises that, as does Postwatch, and I have said on behalf of the Government that that was the case. However, the position when it finished was a lot stronger than it had been before, Postwatch is very well placed to ensure that it represents the consumer much more effectively and Post Office Ltd is becoming much more sensitive and can be expected to respond positively by Members of Parliament on behalf of their constituents. I can assure the hon. Gentleman that I will make sure that the comments that he has made tonight will be communicated to Post Office Ltd as part of the consultative exercise.
Adjourned accordingly at nineteen minutes to Eleven o’clock.
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