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14 May 2008 : Column 452WH—continued

3.11 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): I will be brief because I know that others wish to participate in the debate. I will not rehearse what has been said, but I congratulate the hon. Member for Argyll and Bute (Mr. Reid) on securing the debate. At least 5,000 sub-post offices have disappeared since 1997. In the Welsh context, we have lost 30 in Cardiff and the south Wales valleys, 19 in Gwent and 13 in mid-Wales, and others will go under the current programme.

The Post Office card account concerns everyone in the Chamber. One hopes that its successor will be given to the Post Office. It is estimated that 10 per cent. of the income of sub-postmasters comes from the card account,
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and the figure rises to 12 per cent. in urban deprived areas. The card account not only gives sub-postmasters and mistresses a transaction fee, but draws people into post offices, thereby encouraging the sales of other products. Although the future of the card account is not clear from 2010, we urge the Government to give some positive signals. The National Federation of SubPostmasters tells us that if the successor to the card account is not given to the Post Office, a further 3,000 post offices will close, and nobody wants that.

As we all know, the post office provides an essential service in both urban and rural areas, and I will not repeat what has been said in the two excellent speeches so far. The post office is a focal point for communities. In many areas, 75 per cent. of post offices have a shop or other business attached to them, and they are often the only local place to take out cash. In my home village of Llanuwchllyn, we have one shop, which is also a post office. Without the post office, the shop will disappear. I have a car, as does my wife, and we might well be able to drive 5 miles to the next town, but that might be difficult for others. I am concerned about the future of that post office, which is well used.

If we look at the criteria being applied, the first thing that we see is that 99 per cent. of the UK population is to be within 3 miles of a post office. However, there is a sneaky reference at the end to 95 per cent. of the population being within 6 miles of the nearest post office branch. I am not sure which of those criteria will kick in in my home village. We are 5 miles from the nearest town, so if the sneaky criterion at the end applies, we are in trouble; if the one at the top, which everyone thought was the main criterion, applies, we will be fairly comfortable. I would like to know which it will be. I have written to the Post Office to ask, but it has refused so far to reply. What its representatives do not know, however, is that when they come to interview people and do their appraisal, I will be there telling them plainly what I think of them. I hope that the Minister will tell me when the sneaky criterion will apply and when we will apply the 3-mile zone.

Briefly, on the Royal Mail, yes, the word “liberalisation” was used, but it has been an absolute disaster. That is not because Royal Mail was not efficient; we have had a very good service under the universal service obligation, and we must maintain it at all costs. There have been several changes to working practices, such as the ending of Sunday services, the reduction to one daily delivery and changes to later deliveries. We can live with those things, however, provided that we do not go much further along that route.

Postwatch is concerned about the current situation with regard to the universal service obligation. I will not dwell on the issue, because it has been well highlighted by others, but it is the nub of the matter. The universal service obligation must stand; if it does not, there is no question but that it will be disastrous for rural areas.

Mr. Alistair Carmichael (Orkney and Shetland) (LD): I am sorry that I was not here at the beginning of the debate. Does the hon. Gentleman not agree that there is a degree of culpability on the part of Postwatch as far the unravelling of the universal service obligation is concerned? It was well warned six years ago that its attitude—that liberalisation could not come fast enough—would eventually be injurious. Now it is seeing the chickens come home to roost.

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Mr. Llwyd: I will come in a minute to a court action that was launched yesterday, which the hon. Gentleman may know about. What he says may be true, but I do not know. Many of us felt that the word “liberalisation” did not mean what it said and that it would mean destruction or at least dismantling. It is vital that we have the universal service obligation. Even if other competitors come into the market, as has been said, they must contribute to the overall picture under the universal service obligation.

I hear what the hon. Gentleman says, and he might be interested to know that Postcomm has put its foot down at long last and said that we must protect the universal service obligation. Royal Mail has applied to the High Court to have the decision judicially reviewed and reversed. In that respect, I draw everyone’s attention to early-day motion 116, which was tabled by the hon. Member for Angus (Mr. Weir)—whoever he might be! I urge all hon. Members to consider signing it, because it encapsulates the whole matter.

I also congratulate Miss Judy Brown of Hastings, East Sussex, who yesterday secured permission to seek a judicial review of the decisions made by the Government and the Post Office to axe thousands of post offices. She secured permission based on the fact that she is disabled and that such decisions would be discriminatory. I therefore congratulate her and wish her well in her endeavours in the High Court.

Finally, the following quotation recently appeared on a website:

That was said by the Secretary of State for Wales.

3.18 pm

Mr. Russell Brown (Dumfries and Galloway) (Lab): I did not intend to make a contribution, so I shall keep what I am about to say as brief as possible.

I thank the hon. Member for Argyll and Bute (Mr. Reid) for securing the debate. As the Minister knows, this issue is just not going to go away, whether we are talking about the mail delivery service or our network of post offices. The current situation gives no one any pleasure. In that respect, I am looking to my hon. Friend the Member for Stroud (Mr. Drew), who sat in a room with me on more than one occasion as we tried to tell the first regulator that the liberalisation of the market would be a disaster. Everyone hates to say, “Well, we told you so.” What has happened in the past couple of years is what the regulator anticipated might happen over five or seven years, but sometimes people will not take a telling.

I must have a slight go at our Liberal Democrat colleagues—

Mr. Carmichael: Bring it on!

Mr. Brown: No; perhaps I used the wrong terminology.

The Liberal Democrat policy of privatising certain sections to keep other parts alive would never work. At the weekend, we saw some of the figures on service delivery in terms of mail delivery, and the losses are beginning to pile up. The cost of postage still comes cheap in this country compared with elsewhere, but we have taken our eye off the ball.

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Mr. Carmichael: It is perfectly fair for the hon. Gentleman to criticise our policy, and I would have agreed with him completely six or seven years ago, but the point at which the pass was sold was when we went down the liberalisation of the market route, which we did so ineptly, handing all responsibility to Postcomm. What would he do to preserve the universal service?

Mr. Brown: I was just about to come to the value of the universal service obligation, as someone who represents a rural area. Last Monday evening, I spoke to a local community group that wanted to talk about post office closures. By the end of the meeting, the group agreed with me that, in a rural area, the universal service obligation is every bit as important as their local post office, because no one else is coming forward to go 2 miles up a farm track, six days a week, to deliver a letter. That will not happen unless it is done by Royal Mail, which is why I fully agree that if there is anything we can do to get other carriers to make a significant contribution to that last mile, we should make every attempt to do it.

On the Post Office network change programme, I have still to go through what I suspect will be the pain of the closure programme in my constituency. I currently have 57 post offices, three of which are on outreach, and I am not taking any bets on how many might be lost. One of them is classed as being temporarily closed, and one is working in a partnership. We have to look more widely than what we have witnessed in communities over many years. The network change programme comes to my constituency in mid-August. Mrs. Brown, who is expecting to go on holiday in mid-August, will be disappointed, but she will know nothing about it because she does not read Hansard on a daily basis. There is no way that I will leave my constituency in mid-August when that news breaks.

The Post Office is unable to compete. PayPoint, which has been mentioned, has 17,000 outlets and 300 staff, so it is a mammoth task to compete for business. We always throw to the floor the change regarding TV licences, but that has saved the BBC £100 million.

Mr. Alan Reid: PayPoint was able to undercut Royal Mail because it does not support the rural network that the Post Office has to support. If the contract specified that the rural network was involved, PayPoint would not be able to compete with the Post Office.

Mr. Brown: I agree, and I hope that that will be the saving grace in relation to the POCA.

We have not only lost TV licences; I was horrified to discover from the Post Office that 1 million people licensed their vehicles on the internet in November. I thought that figure horrendous. Not only did 1 million people do that in November, but 1 million people did it in December, in January and in February. Are we to say, “No, you cannot do that. You must go to your post office.”? I do not think that the general public will like us if we do that, as we all regularly conduct our business in that way.

The POCA is vital, because of the footfall it brings— 4 million customers. I do not know what other colleagues who are present have done, but I tell hon. Members on both sides of the House that I took a small delegation
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of my hon. Friends to meet my hon. Friend the Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington (Mr. Plaskitt), who will consider and ultimately sign off the decision. So, he has already received a delegation making the case that this is about more than just providing a service—it is about the ability to provide a good-quality service on a daily basis.

We are all saying that the POCA might be a saving grace, but that will be in the short term, because the Post Office is not looking to sustain it much beyond the middle of the next decade. However, it would undoubtedly help if we secured that business. The Minister was asked whether he can guarantee that there will be no more closures, but I suspect that if we do not secure the POCA for the next round, there will be something much worse than the 2,500 post office closures that we are currently going through.

On the bright side, there are a few positive aspects. The Government continue to put significant sums of money into supporting the network. The Post Office is at the top of the premier league, as my hon. Friend the Member for Stroud put it, for bureaux de change and new drivers who are seeking car insurance for the first time. It is expanding financial services, but, regrettably, as it is rolling them out, the pressure on financial services and the credit crunch are impinging on its business in a different way.

Last week, I, too, attended the report-back by Richard Hooper and his team. There is much for us all to do, and it is not just up to that team to come forward with ideas. There is a duty on us all to come forward with our own thoughts. The delivery of a Post Office network in our communities needs to be done through innovative methods such as outreach and partnership working. We cannot continue to deliver a post office network in 2008 and beyond in the same way that we delivered it 30 or 40 years ago. It has to change if it is to survive.

3.27 pm

Mr. Andrew Turner (Isle of Wight) (Con): At the height of the furore surrounding post office closures on the Isle of Wight, many of my constituents wrote to me voicing their concerns. For them, their local post office served not only as a place to collect pensions and to send letters, but as a vital source of social interaction. In many areas, the local post office is the nucleus of the community. Since the closures, I have received many complaints about people’s difficulties in getting to their nearest post office and about the increased cost of doing so.

Initially, when the closures were proposed, I wrote to the Post Office to ask why some, seemingly profitable, branches were destined for closure, but I failed to get any sort of sensible reply. When branches were eventually closed, I wrote again, asking it to provide me with documentary evidence to show that my concerns and my constituents’ concerns had been taken into account when decisions to close branches were made, but no such evidence was available. I had made joint representations with the island’s chamber of commerce and rural community council, but our concerns appear to have been completely ignored.

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When Lowtherville post office closed, my constituents were forced to go to the branch in Ventnor town centre. The road into the town has one of the steepest inclines in the country, so it is virtually impossible for elderly and disabled people to walk down the hill, let alone up it again, and they are unable to use the kneeling bus because the kerbs prevent it from working properly. The Post Office, however, knew nothing about the buses, and said that it was not responsible for public transport.

In Meadow road, East Cowes, the Post Office could not prove that it had taken into account the fact that 500 houses were being built next to a closing branch. In Newport, Hunnyhill was a handy alternative to the central, very busy branch, so the central branch grew even busier when Hunnyhill closed. Surely it would have been better to resolve the difficulties faced by the Newport branch before closing Hunnyhill, but, again, there was no attempt to explain that.

The proposed alternative to Calbourne post office was Brighstone. That is complete nonsense. To use a bus, as proposed by the Post Office, means a round journey of 20 miles. If it had investigated the matter, it would have found that a nearer post office is at Carisbrooke or Newport. Hence, with no direct bus route, my constituents find it difficult, time-consuming and costly to travel.

In conclusion, the Post Office’s scheme was ill-planned and insensitive to the needs of my constituents. The post office service is in an unusual position because it faces no competition and receives a great deal of public money as subsidy. My constituents deserve better.

3.30 pm

Sarah Teather (Brent, East) (LD): I congratulate my hon. Friend the Member for Argyll and Bute (Mr. Reid) on securing the debate, which is timely. He spoke clearly about the impact of the universal service obligation on his constituency and the importance of post offices as a social hub. I represent a very different constituency—an inner-London constituency. It was interesting for me to hear just how important is it for a rural area to have a universal service obligation and the impact losing it would have on people’s lives.

Although I represent an inner-London constituency, where picking up mail might appear to be easier, my constituents also feel strongly about this matter. They certainly share the same anger that has been spoken about today by many hon. Members, including the hon. Members for Isle of Wight (Mr. Turner) and for Meirionnydd Nant Conwy (Mr. Llwyd), whose constituency I hope I have pronounced properly—I have been practising it under my breath for five minutes. Both spoke about the impact of closures on their constituencies. There is a similar level of anger in Brent, where we have had a further six post office closures in the latest round, which is a 40 per cent. reduction since 1997. As my hon. Friend mentioned, the death of a post office often represents the death of a shop too. In an urban area, it can also represent the death of the local parade of shops because the post office ensures footfall and keeps local businesses alive.

A number of people have studied the impact that post office closures have on the local economy. In a study looking at Manchester, which is obviously an
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urban area, the New Economics Foundation suggested that closing a post office would result in the local economy losing about £270,000. In a rural area, it suggested that for every £1 of subsidy, between £2 and £4 is generated for the rural economy. It seems to be a false saving to make the closures. As I mentioned in an intervention on the hon. Member for Stroud (Mr. Drew), the closure programme generates just £45 million of savings.

My anxiety and that of a number of other hon. Members who have spoken, particularly in interventions, is that there does not appear to be a sustainable plan to keep the remaining post offices alive. I worry when I hear that just 7,500 post offices are required to meet the access criteria. If the post office network is losing money, what good reason do the Government have for keeping those post offices alive? I hope that the Government will commit to a sustainable plan and recognise the social value of the post office network. We cannot afford to lose another 3,000 post offices because we will undermine the whole of the network. There is no evidence to suggest that the 2,500 closures that are currently being forced through will generate the increase in footfall that the Government say is needed to maintain the financial viability of the network in the remaining post offices.

A number of hon. Members mentioned the consultation process, including the hon. Member for Isle of Wight. The hon. Member for Stroud talked about whether communities could be involved in bringing forward finances to safeguard post offices that are threatened with closure. However, it is difficult to do that when we are given only six weeks’ notification. We need a sustainable plan and a rapid injection of funds—both into the post office network and Royal Mail—not just to allow it to survive, which frankly it has just about been doing for the past few years, but to modernise, innovate and compete. That point was made well by my hon. Friend.

Royal Mail has been starved of investment by successive Governments and unfortunately it was inevitable that it would struggle with the liberalisation process if there was no immediate injection of funds. It will be difficult for Royal Mail to modernise to allow it to compete. It continues to have a large pension deficit, as the hon. Member for Stroud pointed out, which goes up or down according to the state of the market. The deficit appears to be £3 billion or £4 billion and was caused by a decision made by the previous Government to take a holiday from payments when the equities market appeared to be performing well. There is a desperate need to invest in the infrastructure of the Royal Mail. At a time when the public purse is tight, particularly after a pre-by-election bailout, what are the chances that the Government will invest the dramatic amount of money required to ensure that Royal Mail can cope?

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