Previous Section Index Home Page

5 Feb 2008 : Column 208WH—continued

I listened carefully to the opening of the debate by the hon. Member for Twickenham and found myself agreeing with him on two issues, so much so that I realised that I had said similar things to the Business, Enterprise and Regulatory Reform Committee when I appeared before it last week. First, it is important not
5 Feb 2008 : Column 209WH
simply to say that we have competition, but to look critically at that. In particular, we need to ensure that the conditions in our market do not prevent new entrants or new approaches that may emerge as we progress to a lower-carbon future. I am thinking particularly about the growing interest in local energy systems, combined heat and power, and the often small-scale development of renewables. We must ensure that smaller companies do not find unnecessary barriers to market entry. I do not know whether that happens, but it has been suggested, and I shall discuss it further with Ofgem. If we believe in markets and competition, we must ensure that they look like markets, rather than like oligopolies, as my hon. Friend the Member for Selby said. I am sensitive to that.

The second matter on which I agree with the hon. Member for Twickenham is switching. We must ensure that switching works for all customers, but particularly for the vulnerable. If switching becomes the preserve of an IT generation and is not relevant to many of our vulnerable constituents, it will be worthless. I have raised that matter with Ofgem and the companies and I shall pursue it further.

The Government have made progress through the years and decades on fuel poverty. The figures for excess winter mortality rates are shocking, and they continue to be so, but, when we look at the long-term trend, thankfully, as a result of rising affluence, more jobs, improved housing, energy efficiency schemes, pension credits and winter fuel payments, we see that the Government have been moving in the right direction on the fuel poverty indicator—spending 10 per cent. of income on energy is our definition of fuel poverty. We have made progress for all those reasons. I am proud of that progress. The Government have spent some £20 billion on energy-related measures, including the winter fuel payment, but I recognise that we are being knocked off course by rising energy costs.

Mr. Baron: Will the Minister explain why the Government have apparently cut funding for the Warm Front scheme?

Malcolm Wicks: The hon. Gentleman needs to look at the funding of Warm Front, which is the public spending programme administered by the Department for Environment, Food and Rural Affairs, alongside the successor to the energy efficiency commitment—CERT. When he does so, he will see that more money will be spent in the next three years on vulnerable people and energy efficiency than has been spent in the past. Social tariffs can play a role, and I have met the energy companies to urge them to do more on those. They have increased the amount that they spend on social tariffs, but I met the bosses of the energy supply companies only last week to urge them to do more.

I am not complacent. I am proud of what we have done as a society. I am worried about the current situation, and we need to redouble our efforts. The debate obtained by the hon. Member for Twickenham has helped us to focus on some of the critical questions.

5 Feb 2008 : Column 210WH

Post Office Closures (York)

12.30 pm

Hugh Bayley (City of York) (Lab): I shall be making some pretty blunt criticisms of how the Post Office has consulted the public and stakeholders over its proposals to close four more branches in York. The Minister for Employment Relations and Postal Affairs cannot be here because he has been called to give evidence to a Select Committee, but I believe that he should rein in the Post Office, requiring it to rerun the consultation in York in a meaningful way and adopt a better approach when consulting in other areas. If he does so, it will show that the Government are in charge of the Post Office, but at the moment the Post Office appears to be a law unto itself.

The Post Office has won approval from the European Commission for a further £1.7 billion of public subsidy to keep branches open. I welcome that. I am glad that the Government supported that. That is a lot of money, and Post Office managers should be accountable to Parliament for how it is spent. The Post Office should be accountable through the Minister, and the Minister needs to set reasonable reporting requirements for the Post Office.

At the heart of the Government’s case that further post offices closures are sadly inevitable, despite the public subsidy, is the claim that they currently serve 4 million fewer customers each week than they did two years ago. I presume that the Post Office has figures for customer usage now and then on which that statement was based. I therefore tabled a parliamentary question in November, shortly before the York closure consultation started, asking the Minister how many customers the Post Office had in York in each of the past five years. My hon. Friend said that he had asked Alan Cook, the managing director of Post Office Ltd, to reply. Despite many reminders to Post Office officials, he still has not done so.

I do not object to a Minister delegating the answering of parliamentary questions about operational matters to the Post Office provided that he ensures that it does what it is told to do and answers a question asked by a Member of Parliament. When the Post Office fails to reply, it appears to me and to the public to be out of control and contemptuous of Parliament.

The Minister with responsibility for the Post Office may think that he is on a hiding to nothing with post office closures and that closures will always be opposed whatever he does. My advice to him is to require the Post Office, as a matter of routine, to ensure that every consultation document on closure indicates how many fewer transactions in each town, city and rural area covered by the consultation there are compared with the number at the time of the last round of closures.

The public are not stupid. For example, if Post Office in York had lost 10 per cent. of its customers over the last three years, it would not be unreasonable for it to reduce its counter space in York by 10 per cent. However, despite being asked parliamentary questions, and being asked subsequently on many occasions to provide information about the decline of usage—if, indeed, there has been a decline—the Post Office has failed to do so. It simply has no basis for closing post office branches in York.

5 Feb 2008 : Column 211WH

I am sure that the Under-Secretary will have seen my submission to the Business, Enterprise and Regulatory Reform Select Committee about the Post Office’s closure process, but I would like to go through the recommendations that I made in my submission. I believe that the approach to consultation currently being used by the Post Office, is deeply flawed, and that it is designed simply to enable it to jump the hurdles and to achieve closures without the appropriate public scrutiny.

I made nine recommendations to the Select Committee. First, local area consultation documents should state what change of usage in post office branches there has been in a particular area, and what change in post office capacity is being proposed. I also recommended that the Minister with responsibility for the Post Office should closely monitor the answers to parliamentary questions that are passed to the Post Office for reply, and that if the Post Office does not provide a reasonable and full answer to the Member, it should be told to provide more detail. It is not good enough simply to say that it is an operational matter and not something that should come before Parliament.

There were many factual inaccuracies and a lack of local knowledge in the consultation document that covered the York closures and closures elsewhere in north and east Yorkshire. For instance, it stated that there were 71 post office branches in York. I went through that with the Post Office, and it eventually agreed that there are currently 34.

One of the branches scheduled for closure in York, Micklegate, was designated as a receiving branch for two other post office branches—the Bishopthorpe road and Albemarle road branches—that had been closed three years ago. That was not mentioned in the document. Post Office officials—I pay tribute to them for this—came to a public meeting in York to tell people about the proposals, but they were entirely unaware that a branch that was proposed for closure was designated as a branch that should receive customers from other branches that were closed three years earlier.

It was felt that the customers of one branch that was to be closed, which was almost next door to a small branch of HSBC, could use the bank for services, but officials were unaware that HSBC was about to close that branch. They were unaware of a series of major housing developments in York near other branches that were proposed for closure. No account had been taken of winter flooding. Only last week, we had massive flooding in York, and some of the pedestrian routes that the Post Offices suggested could be used by members of the public to reach other post offices if certain branches were to be closed went through areas that flood in winter. Even when they are not knee-deep in water, they are too boggy and muddy, and too dark and dangerous for people, especially older people, to use.

I propose that Post Office Ltd submit its draft local area consultation documents and closure proposals to local authorities in each of the areas affected before they are published to avoid omissions and factual inaccuracies.

I was concerned to find that the branches scheduled for closure in York ran out of the letters provided by the Post Office to inform customers of how to complain. To ensure a reasonable supply of those letters, I had to
5 Feb 2008 : Column 212WH
phone the Post Office. If the Post Office wants a genuine consultation, it needs to tell its customers how to express their views. The fact that it produced a wholly inadequate number of letters informing the public of how do to that is an indication that it was not serious about consulting the public.

One of my constituents went through the list of local community bodies in York, including residents associations, tenants associations, disability groups and transport groups, that the council routinely consults when it proposes a change in facilities or policies. He checked with as many of those bodies as he could and found that only two of them had been consulted by the Post Office as key stakeholders. Again, if the Post Office wants to know what is going on and what the impact of any change will be in a community, it has to consult in a proper and serious way.

After reading the consultation document that the Post Office issued, it is not at all clear to me whether the closure plans that the Post Office is proposing will comply with the Government’s minimum access requirements for post offices. That should be set out very clearly. The Government require a certain percentage of the population, 95 per cent., to be within, I think, one mile of a post office branch in an urban area or within three miles in a rural area. The Post Office needs to work out what proportion of the public are that close to a post office branch, currently and in the future. If it cannot produce those figures, it cannot be sure that it is complying with the Government’s minimum access requirements.

I am sceptical about the excuse that is used by the Post Office, namely that it is unable to release information about post office branch usage because that information is commercial and confidential. The Post Office is not a private, commercial business; it is a public sector body that receives massive taxpayer subsidy and it needs to be accountable to Parliament. Even if there are commercial reasons why the Post Office does not wish to release information about the usage of a single branch, there is absolutely no reason why it cannot issue information about the usage across branches grouped together—10, 20 or 30 branches—in a particular town or city.

The only argument that has been made to me about why the Post Office would not release information about the number of customers at a particular branch is that that information might affect the proprietor, the sub-postmaster or sub-postmistress, if they wanted to sell their business. Well, if a man or woman wants to sell his or her business, they would have to release to each and every potential buyer precisely that information, so it would cause no difficulty to the business if that information were in the public domain.

I recommend that these Post Office consultation documents reveal, at the very least, the average number of transactions per branch in each urban area and in each rural area, and indicate any branch proposed for closure that carries out more than the average number of transactions. The Post Office should also have to meet a higher burden of proof to make the case for closing a branch that is busier than most of the branches in a particular town or city.

One of the branches that is proposed for closure in York has almost 2,000 customers a week and is the fourth busiest post office in York, while another branch proposed for closure is the 13th busiest. However, of
5 Feb 2008 : Column 213WH
two other branches that are being maintained in York—with, I imagine, a huge public subsidy—one has just 13 transactions a week, or two customers a day, and the other just 26 transactions a week, or four customers a day. Would it not make more sense to use taxpayers’ money to protect a branch with 400 customers a day than one with just two?

Of course, the reason that some branches with very low numbers of customers are protected is the Government’s rural access criteria. The branches in York that I have just mentioned—the two that will not be closed—are not, of course, rural branches in the Yorkshire wolds or dales, far away from any market town, but branches within about three miles of York city centre. Nevertheless, they are protected under the access criteria. The Government need to consider a de minimis rule that would allow the minimum access criteria for rural areas to be set aside for branches that serve a very low number of customers, say fewer than five customers a day. The point of the access criteria is to protect a service for members of the public in rural areas, but if it is a service that nobody uses, or one that only two people a day use, maintaining it cannot be a good use of public money and the access criteria need to be amended.

I put a final question to the Minister. When the last round of post office closures happened in York, Postwatch made an extremely strong argument against closing one of the six branches that had been proposed for closure, the Bishopthorpe Road branch in a secondary shopping centre in York. Postwatch asked the Post Office to think again about that closure. Nevertheless, the Post Office went ahead with it. Had the Post Office kept that busy branch open, there might have been a case for closing the busy branch near to it, Micklegate branch, which was a receiving branch and which is scheduled for closure now. However, the Post Office did not listen to Postwatch at that time and consequently it has got itself into a real mess.

Of course, Postwatch is disappearing. Nevertheless, I believe that the closure criteria for post offices need to provide for a higher burden of proof for the closure of busy post offices. If the Post Office says that the fourth busiest post office in York is not commercially viable while another post office in York with only a two hundredth of the number of customers a day is considered commercially viable, there is something seriously wrong with the way that the Post Office determines commercial viability and it needs to change the criteria that it uses.

I say to my hon. Friend the Minister, who is replying on behalf of the Minister for Employment Relations and Postal Affairs, that our hon. Friend’s conduct as a Minister will be judged by whether he makes the Post Office deal with the public in an effective and respectful way regarding these closures. I do not believe that the Post Office has done that in York; it is entirely wrong and it should change.

I entirely understand that the Minister for Employment Relations and Postal Affairs was unable to attend this debate because he had to go to the Select Committee, but I hope that I may be able to take up with him some of my concerns in a face-to-face meeting at a later date.

12.48 pm

The Parliamentary Under-Secretary of State for Business, Enterprise and Regulatory Reform (Mr. Gareth Thomas): I congratulate my hon. Friend the Member for City of York (Hugh Bayley), in the usual way, on securing this
5 Feb 2008 : Column 214WH
debate on post office closures in his constituency. I also recognise the commitment that he has shown in pursuing his constituents’ concerns, both in his presentation to the Select Committee that is examining post office closures and in the way that he has presented those concerns today.

My hon. Friend is right that the Minister for Employment Relations and Postal Affairs is appearing before the Select Committee that is discussing post office closures. He made a series of points and directly asked for a face-to-face meeting with our hon. Friend. Of course, I will bring those detailed comments and that request to his attention.

In the time available, let me try to establish some of the context for the decisions that have been taken thus far on the closure proposals in the city of York. My hon. Friend will be aware, as other hon. Members will be, that the decline in customer numbers, the increasing losses in the Post Office network and the changes in people’s lifestyle, including changes in the way that they access services and information, have led the Government and indeed Post Office Ltd, after consultation, to take some difficult decisions.

In brief, it was decided that there would be 2,500 post office closures, that sub-postmasters leaving the network as part of the programme would receive compensation, that there would be 500 new outreach services to mitigate the effect of closures and that there would be new access criteria to ensure reasonable access to post office services.

As my hon. Friend made clear, the Government will invest £1.7 billion in the network on behalf of the taxpayer up until 2011. That includes an annual subsidy of £150 million to keep open post office branches that could not otherwise be sustained.

We estimate that about 4,000 post offices are currently commercially viable with no subsidy, with perhaps a number more on the margins. The Government do not take the view that the Post Office is purely a commercial service, which is why we have committed such a large public subsidy and why we are working with Post Office Ltd to maintain a national network that offers genuinely national coverage and is underpinned by access criteria.

As hon. Members will be aware, Post Office Ltd has been losing money for some years and lost approximately £3.5 million a week last year. Four million fewer people now visit post offices every week than they did just two years ago. In urban areas, 1,000 sub-post offices are competing for business with at least six other post offices within a mile of them, and that at a time when the number of customers is falling.

Hugh Bayley: If the core of the Government’s argument is that fewer people are using the Post Office and that fewer post office counter spaces are therefore necessary, would it not make sense for the Government to publish that information on a town-by-town basis when they go out to consult? That would make the case for why reductions were necessary, and the debate would then be about which post offices it would be most appropriate to remove if there was a reduction in demand for post office counters.

Next Section Index Home Page