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29 Nov 2007 : Column 146WH—continued

I served on the Committee that drew up the report, and we heard a great deal of evidence about the whole system. We were concerned about the 2,500 figure and why the Government came to it. There does not seem to
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be any rhyme or reason to it, and it will lead to some perverse decisions. As I mentioned, in a campaign in Scotland when people lobbied against the closure of their post office, they were told that, if they were successful, another post office would close. That does not seem to be a logical stance. Presumably, the new target was accepted by the post offices to be necessary under the previous criteria, so why would it suddenly become unnecessary? That question needs to be revisited.

Mr. Arbuthnot: Is that not similar to the threatening tone of the letter that was sent in the summer to sub-postmasters about what they could say? The consultation has the same threatening tone by effectively saying, “If you save this post office, we will go for another of your post offices,” That is worrying.

Mr. Weir: It is worrying, because it sets communities against one another in the plan, which is dangerous.

As was mentioned by the Chairman of the Committee, we were clear that the six-week consultation programme was insufficient and that it should have been at least 12 weeks. What happens if one post office is taken out of the plan during the consultation period and another put in? Whether there would be another six-week consultation process is not clear, so will the Minister make it so? It would be iniquitous, to say the least, if someone who used the second post office ended up with no consultation period whatever.

We also mentioned the question of local authorities. The report makes it clear that the Committee felt that the local authorities must have a significant input. In evidence, we made the point that, at least in Scotland, many local authorities work on a six-week rolling programme, so it is difficult for them to look at the consultation in the middle of such a period. In the Highland region, the consultation will come out in January. My colleagues who serve on Highland regional council have been trying to persuade the Post Office to give them an early indication of which post offices will be targeted, but it refuses to do so. The Post Office will conduct a consultation in the winter months, which will not work.

The Committee also made an important specific recommendation. The report states:

That point was taken up by the National Federation of SubPostmasters, but, sadly, such an aim will not be achieved by the programme, and I suspect that we will be back in the same position within a few years.

The fundamental difficulty with the process is that it merely follows on from the previous closure programmes and does not, despite the rhetoric, look at the overall network and how it should be rebalanced to meet the needs of communities throughout the country. It is aimed merely at reducing the network by 2,500, and the problem is that the current network has evolved piecemeal through unplanned closures in the past. The urban reinvention programme was a classic example: it was not really a programme, but an attempt to get rid of a large number of post offices, and it proceeded at times
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on the basis of having a large sum of money with which to close post offices and then asking which ones wanted to close.

The result is that there are areas with no post office service and other areas where offices are close to one another. One village in my constituency, Friokheim, lost its post office, but it should have kept it under previous criteria. To be fair to the Post Office, it tried to get someone to open a post office, but not surprisingly, given the uncertainty, it could not get anybody to do so. Under the new criteria, however, the village will no longer be entitled to a post office. I have raised with the Post Office the question whether the village would qualify for outreach services, but they are apparently being considered only for areas that do not meet the new criteria—the 38 excepted postcode districts. That is very short-sighted of the Post Office, and I continue to seek to persuade it to reconsider. Outreach services are not perfect, but they do retain some services in an area.

Elsewhere in my constituency, in the town of Forfar, the two remaining sub-post offices are very close to each other on one side of the town, but there is nothing on the other side. Under the proposals, however, one of those offices is likely to close. In the past, a more sensible solution would have been possible, with one office on each side of the town, but that will not be possible, because the programme looks only at closures.

The Committee made it clear in its recommendations that it is essential for a proper network to be maintained and that that will require not only incentives for sub-postmasters to move to offices where the need is greater, but the opening of new post offices, because large volumes of new house building around the country will result in significant changes in settlement patterns. That strengthens the case for a clearly defined policy on the opening of new post offices, but the programme does not offer that and is purely about closures in the existing network.

The other fundamental reason why we will not have a sustainable network relates to the way in which the excepted areas are dealt with. When the then Secretary of State appeared before the Committee, I pressed him on what would happen if there were unplanned closures in the excepted areas. My constituency contains one excepted area and shares another with a neighbouring constituency. Inevitably, there will be further unplanned closures when a postmaster dies or retires or simply decides that he wants to give up. However, I have been unable to get any real answers as to what will happen. I have pressed the Post Office on the issue, and I have been told that it will look at outreach services for such areas. However, if there is a closure in one of the excepted areas, where post offices should be retained, the service to the area will be diminished, even though such areas are already considered to have an inadequate service under the criteria that have been set down. That is unacceptable.

I do not want to take up too much time, although I could go on about many other issues, but financial inclusion has been mentioned. Postcomm has made the pertinent point that about 65 per cent. of rural communities have a post office, while only 10 per cent. have a bank branch. One result of the proposed changes, therefore, will be that the last outpost of financial services in many areas will go.

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I also want to ask the Minister about the purdah. It suddenly appeared last week that some of the closures were being postponed because of the purdah period. When the closure programme was set up, we all knew when the local elections would be. Interestingly, when Alan Cook spoke to the Post Office group last week, he said that the purdah period had been mentioned to the Post Office only recently, and I wonder why it has suddenly leapt up at such a late stage.

To be fair to the Post Office, it is trying to move into other areas, although it is somewhat ironic that it has said that one of its saviours will be the move into telephony, which used to be part of the old General Post Office. However, the Post Office is trying to move into areas where the market is very crowded. We live in the age of uSwitch, when we are told to keep switching providers to get a better deal, but I am not convinced that the Post Office’s proposals will be its salvation.

The real problem is that the Government insist on treating the Post Office as simply another commercial entity, which must be gradually weaned off the network subsidy. That is not realistic, and we should accept the need for continuing help from the Government to meet the social responsibilities that exist throughout the network, and particularly in rural areas.

3.14 pm

Mr. David Kidney (Stafford) (Lab): I was not a member of the Select Committee, but I see that it has recognised and accepted the changes in our society that justify a major rationalisation of the Post Office. In fact, paragraph 3 of the Committee’s response to the Government’s response says that:

I raised an eyebrow when it went on to say that:

It seems, therefore, that the case for doing the work has been made.

Peter Luff: I read that paragraph last night when I was preparing for the debate, and it is open to misinterpretation, so I am not surprised that it has been mentioned. The Committee reluctantly accepted that there was a need to rationalise the network, given the Government’s changes to the business being done by post offices. However, we wished that the Government, having crippled the network—that is a pejorative phrase, which a Committee Chairman should perhaps not use—had moved rather more quickly to address the situation systematically. None the less, we deeply regretted that we were in that situation in the first place.

Mr. Kidney: We all find it regrettable that there are millions fewer customers and millions of pounds of losses and that the network has become dependent on public subsidy. Indeed, it is now essential for the Government to make it clear that there will be a long-term subsidy into the future. As far as Post Office Ltd is concerned, a commercial network would have about 4,000 branches, but the Government and the Post Office together say that there will be a network of
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12,000 branches. Clearly, the difference between the two—two thirds of the whole—can exist only because of the long-term payment of public subsidy.

The changes that have taken place are not entirely of the Government’s making. We need only look at some of the business that has been withdrawn from post offices, in addition to the payment of pensions and benefits. In my area, councils are withdrawing the facility to pay council tax through the post office, while the BBC has withdrawn the facility to pay the TV licence. Many private sector organisations that serve the public are also pressing their customers to pay their bills by direct debit. It is right that we face up to the consequences of those changes and debate how we can have a proper and sustainable network for the future.

Mr. Russell Brown: On that point, the more business that disappears from Post Office Counters, the greater the potential for losses. That in turn means that the Post Office as a business will find it more and more difficult to compete with those who are trying to muscle in on the limited business that it still does.

Mr. Kidney: Yes, that is the unpalatable fact that we face. Let us all support the new management of Post Office Ltd in its ambition to increase the range of services at post offices and to make them relevant to today’s way of living. I will make some suggestions about that in a moment.

I have listened to hon. Members’ interventions and I, too, want to voice my dissatisfaction about the consultation process. That goes back to my experience of the urban reinvention programme in Stafford, where there were a number of closures. I could see the sense behind all but one of them and I did not object to them, but when I did object to one, I had the backing of the local community, the local council and Postwatch. None the less, Post Office Ltd would not listen or accept that it had got things wrong in that one case out of so many.

One of the most unattractive aspects of the closure of that post office, which was in a part of Stafford called Doxey, was that the sub-postmaster was willing to close it and take the compensation for going. That was a particularly unsatisfactory reason for choosing the post office for closure. That is why, when the then Secretary of State, now the Chancellor of the Exchequer, made a statement about the process on the Floor of the House on 14 December 2006, I asked him to confirm that it would not simply be a case of selecting post offices for closure on the basis of who volunteered to take the money. In fairness to my right hon. Friend, he did give me that reassurance, saying that

That was confirmed in the Government’s evidence to the Select Committee and in their response to the Committee’s report.

The next unhappy event in Stafford was that the Crown post office was moved into a WH Smith store. Again, I have no confidence in the outcome of the consultation that took place. I can see the sense in moving a number of post offices to bright, town centre premises under the franchise agreement that Post Office Ltd made with WH Smith—indeed, the WH Smith store in Stafford is in the pedestrian area in the town
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centre—but the commercial pressures on WH Smith were unfortunately such that it wanted to put the post office on the first floor of a building with a tiny lift. Previously, the lift had carried materials, but it was now proposed that it would carry people with buggies, children, pushchairs and motability scooters. No matter how hard I and the disability access group for Stafford, the council and Postwatch argued that the arrangement was not suitable, no account was taken of it. The move has taken place. So of course I look forward with trepidation to the start of the process in Staffordshire at the beginning of 2008.

Jo Swinson (East Dunbartonshire) (LD): I wanted to ask the hon. Gentleman whether his experience of the lack of consultation over the WH Smith move was like my experience; it seemed that things were almost being kept secret from people, apart from the fact that a few key politicians were written to. One of the most obvious places at which to consult seemed to me to be the current post office; there could have been a board up, and leaflets, saying “This is what we are planning.” That did not seem to occur to those responsible. It was swept under the carpet and the move at Kirkintilloch happened just last week.

Mr. Kidney: No, I do not impugn the management’s intentions; I believe that it was sincere in its consultations. Of course in a consultation all points of view will be listened to, but that does not mean that they will all be agreed to, so perhaps I am being a little unfair, although in both instances I thought that there was a strong case for a change of opinion.

We are now, locally, trying to get everyone ready for the preparation of the local area implementation plan. I have contacted all the councils and Postwatch; the community is alert to the fact that the process is about to start. I have asked the councils to get ready the kind of information that will supplement what Post Office Ltd will collect. Examples might include local geographical features that might be physical barriers to access, which appear on a plan to be within three miles of a post office—such as a river or a motorway. I have asked them to examine public transport access to show that there may not be a decent public transport service to the post office that it is proposed to retain, and to consider impending changes in circumstances, such as new housing developments that might change the picture very soon. In that way, the councils, the community council, Postwatch and I are as ready as we can be to deal with the consultation and for my third attempt to get Post Office Ltd to listen to a well made argument.

I observe the experiences of those who have already gone through this process, and I add my voice to those of hon. Members who have angrily asked the Minister how profitable post offices can be closed in this process. My hon. Friend may be able to comment on what people mean by “profitable”, and explain that things are not as they seem. However, there is great concern in my area about the possibility that good-quality, profitable post offices may come into the frame for closure, simply because the access criteria could be met without them. I should not like that to happen. It is not economic common sense.

I have some suggestions for ways of helping post offices, including those with a shop in them. I am thinking both of those that will survive the cull but will
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still need support to succeed in the future, and of places that will lose their post office, but want the shop to stay open. I am grateful to the community council of Staffordshire, the Rural Shops Alliance and, in particular, its new chief executive, Ken Parsons, for their input into the four suggestions that I have to make. By way of an introduction I want to point out that in Staffordshire, most rural post offices, at least, are part of a sole village shop, and that a closure of the local post office could lead to the closure of the shop. For many of those shops the post office income is between a quarter and a half of their income. Although my introduction is about rural areas, my suggestions apply equally to urban areas.

First, I would like more support for shopkeepers and post office managers. They need support to show that the Government, the council and the community are on their side. They need help to rebuild morale and give them hope for a sustainable future. In a moment I shall suggest some practical support that we need to give them, but that is not all they need; they need to know that there is a will that they should survive and prosper.

The second of my suggestions is access to consultancy advice, independent of Post Office Ltd. However good the new management is, I do not think that its members are the people to give advice to post office managers and shopkeepers about the future of their businesses. Of course, for those who lose their post office, so that the shop where it is located is at risk of closure, such consultancy is particularly important. I should like a commitment from the Minister to a right to have access to free consultancy in those cases. In my dealings with the regional development agency and the regional business link, during which I have been trying to obtain an assurance that such consultancy advice will be available, I have been unable to get a straight answer. Will the Minister step in and make it clear that that would be an entitlement, and clarify where the payment for the consultancy would come from? The consultancy help is needed on extending the range of services to cover, for example, parcel post, if the post office is lost, as well as cash withdrawals, bill payment, and changing demands for things such as phone cards. It is needed also in relation to increasing footfall through softer services, such as a social hub, a meeting place, and support for vulnerable people.

The third suggestion concerns grant support. Perhaps for some people that would be match funded, but should not we help people to keep their businesses up to date in areas where there is a social as well as a commercial need for their survival? Aspects of that approach include converting space into new retail space, making shop alterations and adding new fittings that are beyond the owner’s means. There was, previously, a similar scheme called the community services grant scheme, operated by the Countryside Agency. Will the Minister confirm that there will be something similar in future?

My hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt) mentioned the fourth of my suggestions. If a full-blown private enterprise village shop and post office will not be possible, can we give communities support to explore other ways of running their village shop, through a social enterprise, a co-operative or some other community effort? There are about 170 community-run shops nationwide already.

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Local authorities are well placed to be real partners in providing this help. In particular, I want to point out the success of the local authority business growth initiative. It seems to make sense for councils to make use of some of the income that they receive from the promotion of new businesses, to help businesses in areas of stress—particularly in rural areas. Ultimately, the responsibility is the Government’s to co-ordinate support from councils, community councils, regional development agencies, Business Link and different Departments. I ask the Minister to make sure that that co-ordination is given.

I am waiting to hear the result of the Office of Fair Trading investigation into newspaper and magazine distribution, which also has an important impact on small shop businesses of the kind that I am talking about. This is a matter not just of economic development but of social inclusion. It is worth fighting for social inclusion and I hope that the Minister thinks so too.

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