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“will be continuing with the judicial review challenge”,
“London has already experienced disproportionately high levels of post office closures in recent years compared with other areas of the country. The Post Office has not provided convincing evidence that further closures in London are necessary on economic grounds. Community-based enterprises like local Post Offices provide vital services for Londoners, especially older Londoners and families, and they should be protected. Post Offices are crucial in supporting local retail and where a Post Office closes, small businesses and the local community suffer.”
The criteria used in the closure programme were far from clear or coherent. They seemed to relate only to distance and money. I shall say more about that shortly. The decisions on which post offices should be closed have been arbitrary, and, as far as I can see, have been made with very little regard for the representations made or the consequences of closures. The decision document paid no more than abbreviated lip service to all the protests. I submitted a petition from 2,150 users of the post office, but I do not think that it was given sufficient weight. The consultation process was unfair.
The post office serves a very deprived area. Clyde Loakes, leader of Waltham Forest council, in a letter to the Minister wrote:
“I am concerned about the negative impact on some of our most deprived communities.
Waltham Forest is one of the 10 most deprived local authorities in England. However as you know the lives of vulnerable people are always more complicated than the statistical picture painted by the Index of Multiple Deprivation (one of the key criteria for informing post office closures). We have high numbers of people claiming incapacity benefits, a high incidence of health issues such as circulatory disease, which can restrict mobility, and a concentration of older residents in some areas. Moreover we have significant problems with financial exclusion—the most recent research available indicates that 24 per cent. of our local social housing tenants do not have a bank account. Equally, for many of the most vulnerable in our community, interaction at local service points such as sub post offices helps reduce feelings of isolation which are so often a precursor to serious social exclusion.
This Government has prioritised support for the vulnerable in a whole range of public policy areas. My concern is that the closure of these local post offices will leave some of my borough's most vulnerable residents more isolated.”
I echo those views. I too made representations. Indeed, my assistant was amazed at the length of the letter that I sent to the Post Office, but that was due to the importance of the Leyton post office to local people. As well as drawing attention to the petition that I had submitted, I pointed out that during the previous closure round, when the Post Office had earmarked the branch for closure, it had sited it wrongly on its maps. Moreover, the Post Office had not taken into account the refurbishment of the branch only two years ago. When it was up and running again a number of its clients were not told, but now it has a good clientele.
Major regeneration has taken place in the area served by the post office. People who had been decanted from estates there are now being returned, and plenty more are due to return to the Beaumont estate. The Leyton post office will be their local branch. There is other building activity in the area as well: there is to be a new police station, as well as more housing. The alternative post office branches being suggested are simply not suitable. There is no bus route and a walk uphill is necessary, or if there is a bus route people must cross major roads when they have got off the bus. They then face very long queues.
The area is multi-ethnic, and much of its population is poor, deprived and vulnerable. Near the post office is a mosque attended by many people, and the number will increase in the future. The postmaster and postmistress speak Urdu, and provide an excellent service. When I visited the post office I saw a great many customers of eastern European origin. That is important, given the post office’s international links. It also has an ATM, which has attracted many customers. All in all, the case against closure was overwhelmingly powerful. I was dismayed that those points did not form part of the criteria.
I could read out a lot of residents’ letters, mainly from elderly people who are very vulnerable, but I do not have enough time. There was also a letter from a local business whose name I do not want to mention. It said that it uses this post office to deposit its business takings, and that the safety of its staff would be at risk if it had to do those cash transfers in some other way.
Help the Aged has also made very strong points about vulnerability. It states:
“The Urban Reinvention Programme resulted in the closure of around 2,500 Post Offices in cities in the UK. The Network Change Programme will result in the closure of 2,000 more branches, both rural and urban.”
“we are concerned that the lessons of the Urban Reinvention Programme have not been learnt and the impact on communities and older people receive inadequate consideration...the closures will serve to further fracture community structure and make life increasingly difficult for older people and the most vulnerable...61 per cent. of customers in deprived urban areas say they use their local Post Office to access free community services and 36 per cent. meet friends there. Between 2001 and 2005 the proportion of the elderly who use the Post Office at least once a week has risen in both rural and deprived urban areas.”
The same point applies in this case. Help the Aged continues:
“88 per cent. would have to make special travel arrangements to reach alternative services.”
The same point applies in this case. Help the Aged continues:
“77 per cent. of over-65s view the network in deprived urban areas as a focal point and place to meet others...Older people in the UK are amongst the Post Office’s most loyal and frequent users. Many who rely on their state pension wish to have a Post Office account, often use co-located shops”—
the same point applies in this case—
“and appreciate both traditional and new services offered.”
The Post Office reports the concerns and representations in a cursory manner, and it is hard to believe on reading them that it gives them any realistic weight. I received a letter on 15 May from Valerie Stanley, the agency correspondence team leader of Post Office Ltd that almost—not quite—constituted belated criteria. She states:
“The decisions...are complex and difficult. These involve balancing a wide range of factors, as prescribed by the Government, which include the commercial viability of branches and other operational issues, as well as factors which are offered due regard by Post Office Ltd, such as the local demographics and the effect of closures on the local economy. At the same time Post Office Ltd must ensure compliance with the detailed minimum access criteria...set out in the Government Response Document.”
“balanced against the severe financial constraints that the network faces”.
Even though those are belated criteria—that letter was not available, by the way, ahead of the consultation—they still boil down to the factors of distance and financial cuts. That is not good enough and not appropriate.
There was an Opposition day debate and vote in Parliament on 19 March, and I voted against that Opposition motion because they would not have put a penny piece into the post office network; in fact, they would not have matched the Government’s money for the network. I was not going to vote for more closures than are already proposed. However, I did think that the process would be a fair one, and I was prepared to give it a chance at that time.
There was a very good article in Tribune on 11 April by Billy Hayes, the general secretary of the Communication Workers Union. It points out that the Tories cannot be relied on to defend the network because they would not provide enough money, and that
“they closed 3,542 post offices when they were last in power.”
He also criticises the Liberal Democrats for their proposal of
“separating out the branch network from the rest of the Royal Mail, disregarding the fact that this would jeopardise the fulfilment of the Royal Mail’s universal service obligation. But then when have the Lib Dems ever been obliged to have a coherent policy?”
The Government are not off the hook, because, as the Minister may gather, my distinct impression is that the consultation went through the motions and it was a waste of my time and that of the petitioners and other constituents who wrote in arguing for this post office to be saved. This decision was not based on proper criteria, being overwhelmingly based on distance and financial cuts to the network.
The distance involved may be less than a mile, although I believe that two post offices are within a mile and others are beyond a mile or very close to that, however the terrain involved is very difficult, consisting, as it does, of major roads. So, the journey is not an easy one for the people who have to make it, particularly older
and vulnerable people. Those social factors, and the fact that the closure is bad for trade and business, were not given proper weight by the Post Office.
May I make one more point politically to the Minister? He may not agree with it, but I shall say this anyway. I think that this policy is a Blairite one. It is an example of why things are going wrong for Labour with the voters, because it hits the poor and vulnerable, and muddles the message of what Labour is really for—it is for helping the poor and the vulnerable to improve their lives. This is a deeply Conservative policy, claiming only to do it better than the Conservatives would. That is not good enough in this context. The country and people, who want to support Labour, are crying out for the Prime Minister to move away from this out-of-date, unproductive and uncaring Blairite approach. I am sure that, like me, the Minister is keen for the Labour Government to succeed and to carry on past the next election. That is why these policies have to be examined and changed.
I heard the debate in which rural post offices were discussed, and it was mentioned that some of them were used by six customers. Of course, nobody would say that such post offices have to be saved. However, these cuts are far too deep and damaging, and change should start by our pulling back from them. The case for the Leyton high road post office is overwhelmingly powerful. It should stay open, and I urge the Minister to intervene on its behalf.
2.47 pm
The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): I pay tribute to my hon. Friend the Member for Leyton and Wanstead (Harry Cohen), as I believe that he has represented that constituency for 25 years. I congratulate him on that, and on speaking so strongly and eloquently about the Leyton Green post office and the hard work of Mr. and Mrs. Bashir. I also pay tribute to them and to the thousands of sub-postmasters up and down the country, in both urban and rural areas, who give such sterling service to our community. The Post Office is a highly valued institution; it is valued highly by the public and by the Government, and I shall discuss that when I explain to my hon. Friend why the closures are taking place.
As the Minister, I can set out Government policy on this matter, but I do not have a role to play in selecting or not selecting individual post offices for closure or in intervening in any such closures, and I think that my hon. Friend will understand that. We set the overall financial framework for the amount of public subsidy that can be put in—I shall say more about that—but it is for the Post Office to decide on the details of this programme. Obviously, Postwatch, the consumer voice in all this, has an important input, as do others, such as MPs, local authorities and members of the general public, who care passionately about their post offices.
Many would prefer no change to take place, but change is taking place well outside anything that the Government are doing. Change is happening in society and that is affecting the use of the post office. I shall mention some of those changes. My hon. Friend said that the post office is used by many pensioners in his constituency to collect their pension. That is one of the traditional roles of the post office, but across the country
it is no longer the case for eight out of 10 pensioners, as they have their pension paid directly into their bank account. For new retirees, that figure is nine out of 10, and it will probably increase. When 80 per cent. are no longer collecting their pension from the post office, that inevitably has an impact on the network.
Another change is the new services that are available online, which have grown phenomenally in recent years. When my hon. Friend came into Parliament 25 years ago, the internet had not really been invented—perhaps it existed in the minds of a few defence researchers in the US. Even when this Government came to power, the internet was still in the early stages of common use. Now we can apply for car tax online, and 1 million people a month do so, including my hon. Friend’s constituents. That is 1 million people a month applying for one product alone, and they are no longer using the local post office.
Another change is competition. Whether we like it or not, there are other networks out there offering to do jobs that were traditionally done by the Post Office. Perhaps the greatest example of that is the BBC choosing to give the television licence contract to another network. We may have an opinion about that one way or another, but it is a choice that the BBC is free to make. Competition is another factor that the Post Office has to face.
What do all these changes mean for the network? They mean that it loses £500,000 every single day. I have to take issue with some of my hon. Friend’s figures for Post Office customer numbers. The Post Office has lost 4 million customers a week over the past few years, partly because of the changes that I have mentioned in how people are paid money, the technology they use to pay bills and the competition from other networks. Those figures are not static. The losses have been increasing and customer numbers declining.
The hon. Gentleman said that Leyton Green post office was profitable, but I must take issue with him on that. Before the start of this closure programme, there were some 14,000 post office branches. Only 4,000 of those ran at a profit to Post Office Ltd. The rest cost the Post Office money to run. Three out of four post offices cost money to run. It is very difficult for even a sub-postmaster to gauge that, because their books show only one half of the equation—what comes in and what goes out, in terms of what the post office pays for services. What they do not see, but are very real in the Post Office’s accounts, are the costs of moving cash around a network that size; of the IT systems that the sub-postmaster does not pay for, so they do not appear in his books; and of a range of other services that make it possible to run a post office. Those costs may not appear in the individual post office’s books, but they are real costs for the Post Office. The branches closing at the moment cost the Post Office, on average, £18,000 a year to keep open. Therefore, I urge my hon. Friend to be cautious about saying that a particular branch is profitable.
What is the Government’s reaction to all this? Have we just walked away? Absolutely not. We have stepped in with huge public support for the post office network. When the previous Government were in power, the Post Office received no subsidy at all. Between 1997 and 2006, the Post Office received some £2 billion in public
support because of decisions made by the Labour Government to support the network. Another £1.7 billion will be provided in public support for the network between 2006 and 2011.
Although this is difficult for my hon. Friend, for his constituents and for those of other hon. Members, without that level of Government support thousands more post office branches would be closing because of the changes that I have talked about. The whole of society is taking part in those changes in how money is paid, how we carry out transactions, how we find out information and how we communicate with one another. For example, we used to be able to track mail volumes and economic growth almost together. When one went up, the other went up. That link appears, for the first time ever, to have been broken. The volume of mail posted in the country has been declining over the past few years. That is happening in a number of other European countries, too.
Big changes are going on, and the Government have stepped in with significant levels of public support. We value the post office network and understand that it is not purely a commercial enterprise. The extra subsidy that we have put in, rather than leaving the post office with just those 4,000 commercial branches, will allow it to maintain a network of about 11,500 branches. That is the difference that the subsidy makes. At the same time, it is true that we must have some regard to the public purse. and to the degree of exposure that would affect the subsidy, which, if no action were taken, would have to go up year after year as the numbers declined because of the changes that I have talked about.
We have played our part by putting in that subsidy. My hon. Friend referred a little to the debate that took place on 19 March and to the position of the other parties. The hon. Member for Rutland and Melton (Alan Duncan), who is the Opposition spokesman on these issues, said during that debate that
“we have to face the facts about the future of postal services in this country...we fully expect the network to shrink in size. We have never given a guarantee that no post offices will close”.—[ Official Report, 19 March 2008; Vol. 473, c. 947.]
He accepted that the network would have to shrink in size, although that might or might not be what his party is saying in my hon. Friend’s constituency—the Opposition spokesman accepted in this House that the network would have to shrink in size. That has also been accepted by the National Federation of SubPostmasters. Its general secretary, George Thomson, said at the start of the programme:
“Although regrettable, we believe that closures are necessary to ensure the remaining post offices are able to thrive in the future”.
So, the federation itself understands the need for the network to shrink in size.
What does the future hold for the Post Office? Society is unlikely to turn back from new ways of doing business, and people are unlikely to stop using the internet and direct debit, so the Post Office has to innovate. We can be optimistic about that, because the Post Office has been innovating: it is now the leading seller of foreign exchange and it is expanding in car insurance, home insurance and broadband provision. There is great potential in biometric ID management in relation to passports, driving licences and perhaps ID cards in the future. There are new areas of work for the Post Office, although
the business will have to be won fair and square, because of the competition I have outlined.
The Government will play their part by continuing to subsidise the network to the tune of £150 million a year as part of an overall package of public support of £1.7 billion, but the Post Office itself needs to innovate. I accept that it is difficult for my hon. Friend and his constituents, but even after the closures are complete, we will still have a network that is three times bigger than the top five supermarket chains combined and bigger than all the banks combined.
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