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25 Jun 2008 : Column 126WH—continued

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Post Offices (Plymouth)

4.13 pm

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): I recognise that Post Office Ltd faces a big challenge to right-size its network for the 21st century. As we have heard many times, traditional services, including benefit payments, are now available in other ways online or directly through banks. People who were Teddy boys in the 1950s are now pensioners, and as each generation progresses towards retirement, fewer of their number will do things in the traditional way that the Post Office represents. More will want to conduct their business online. There are other pressures on Departments to do things cost- effectively. Indeed, MPs are under pressure from the Treasury and taxpayers, and the wish list for Government support is probably two or three times as long as the public purse will stretch to.

In 2002, we thought that the urban reinvention programme in Plymouth had achieved the right size of post office network for the city. Indeed, for reasons that I shall set out, I believe that we did achieve a sustainable network of post offices for Plymouth. I believe that that remains the case, and that we are being asked to contribute over and above that to the wider network sustainability, which is much more challenging for the rural network, particularly in Devon. I cannot be sure of that because Post Office Ltd does not make the figures available on that basis.

Plymouth is a special city. It is special because of the particular challenges that it has had to meet over the past decade or so, and the way in which it has risen to meet those challenges, but also because of its ambitions for the future. We maintain a truly extraordinary regeneration agenda, and have growth point status which will be equivalent to a new market town. That regeneration is a response to the situation that I inherited in my constituency when I was elected in 1997. Plymouth, Sutton contained the poorest ward in England according to the index of local conditions. Today, Plymouth as a whole is rated the 76th most deprived local authority in the country, with a high population of low income households.

As the largest city on the south coast of England, Plymouth is also the largest centre of population in the counties of Cornwall, Devon and Somerset. It has a population of about 250,000, but that population base does not give us the critical mass to support the range and quality of facilities found in other major urban areas. There are ambitious and well-laid plans to increase the population from its present level to 300,000 or more by around 2026, with about 30,000 new homes in the next 20 years.

The Devon area plan on post offices was launched in May 2008 and is open for consultation until 30 June. Devon currently has a network of 379 post offices. After the review, it will have 333, as 45 are scheduled for closure and a number will be replaced by outreach services. Four of the scheduled closures are in my constituency, leaving 43 in Plymouth, including 14 in my constituency.

After urban reinvention in 2002, I think that the city probably had about the right sized network. Even if that were not true, the ambitious plans for growth, much of which will take place in my constituency,
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should give pause for thought. Some of the developments are going up across the city as we debate; indeed, there are four developments in the catchment area of Pennycomequick post office.

There are also other important considerations when it comes to the Pennycomequick post office. The distance to and from alternative post offices is very different from that laid out in the access report accompanying the plan. Cecil street was described as being 0.7 miles away, when it is in fact 1 mile away, or 1.1 miles on the return because of how the roads work. Mutley plain was down as 0.7 miles away, when it is in fact 1.4 miles away.

Cecil street is difficult to reach on foot. Residents must cross Victoria park and face 49 steps and a steep hill to reach the post office. I went to a meeting that was well attended, considering that it was early on a wet Saturday morning, where many people told me of their fears and difficulties. One elderly lady over 80 had been mugged on the way to that post office and now uses the Pennycomequick branch. Several older people expressed similar fears and experiences. The community served by Cecil street post office is deprived, and it is possible that the post office has been protected for that reason. I have visited it. It deals with a number of drug addicts and other difficult-to-serve customers, which is a worry for some of the people who have contacted me.

My survey had a large response. There were more than 500 responses on all post offices from across the city, and half of them dealt with Pennycomequick post office. I also had lots of letters, including some from community groups and sports teams supported by the sub-postmaster, Abdul Terasder. He is clearly popular and well thought of. There were lots of comments about the helpfulness of the staff, who also work with local businesses, which wrote to express their concerns.

A large new sheltered housing complex is being built at St. Barnabas and new housing in Central park. The report places the post office in the 500-to-749 transactions per week bracket, but I have been there on several occasions recently, and it seems a great deal busier. Beaumont road post office, on which I received about a third of the survey forms, serves and is in the middle of what I would describe as a natural community. There are some 6,100 adults on the electoral register in its catchment area, so it will be like closing the only post office in a town the size of Crediton or Cullompton. As for the other post offices, four out of 10 households in the area do not own a car. It is in the 1,000 to 1,500 weekly transactions bracket, and many customers migrated to Beaumont road when three nearby post offices were closed in the 2002 urban reinvention programme.

There is no bus service from Beaumont road to Embankment road. Buses are available to Royal Parade, but post office users would then need to negotiate two busy roads before reaching a very busy post office. In reality, there is no parking for elderly or disabled people at either of the alternative post offices, because parking is on the arterial road to Embankment road. Although a car park is situated on the opposite side of the large city centre roundabout at St. Andrew’s cross, it is almost always full. St. Andrew’s cross is not a sub-post office, but a Crown post office, and is often very busy—10 to 20 minutes in the queue is not uncommon. It is my local post office, so I know that its size means that the personal touch, care and attention shown by David and
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Diana on Beaumont road, about which so many have written to me, is not likely to be possible, even though its staff are hard-working and knowledgeable.

Walking is not an option for most people. It is 0.9 miles to St. Andrew’s—I have checked it and agree with the branch access report on that one. From the top of Mount Gould to the post office is another 0.9 miles, which means a walk of almost 2 miles to St. Andrew’s cross, and 1.7 miles to Embankment road. A sheltered housing development and an Age Concern residential complex are situated within 2 minutes of the branch, as too is Mount Gould hospital, which caters for elderly people and those with learning difficulties. Beaumont road post office works with the hospital as part of its skills development, which is made possible by the ease of access and smaller, friendlier atmosphere of the sub-post office. Neither St. Andrew’s cross, nor—I fear—Embankment road, could offer that, given the access difficulties. I am very concerned about the errors made in the access reports on both branches; it suggests that Post Office Ltd’s homework was pretty sloppy.

Post Office Ltd’s branch access report on St. Levan valley post office points out the lack of bus services between both its suggested alternatives and the St. Levan branch. It also notes that the terrain is very hilly—that cannot be stressed enough. The branch is at the very bottom of a steep-sided valley, with hills that are almost vertical immediately behind the post office, including Ryder road, on which it is situated. The incline is probably 1:3, but when I walk up it, it seems almost 1:2. Will the Minister issue crampons to the post office customers for when they visit that post office? Neither alternative is accessible to elderly or infirm residents, and I have researched further how they manage with their general shopping. They do not tend to shop locally, but are often taken shopping, and removing their local post office will mean that they will have to rely on others for help in collecting their pensions, sending eBay parcels or just buying a stamp. Although parking at Wolseley is easy, parking in Stoke village is not. A couple of spaces are provided on the arterial road, but they are rarely available, and when they are, neither is easy to park in. It is a busy post office with 1,000 to 1,500 transactions per week, and again the care and attention from sub-postmistress Polly and her team is greatly valued.

West Hoe post office is also the local general store—a true general store that is much needed and used by the community. Little other community general shopping is available in the area, which is home to about 1,500 people—the fact that such a small community post office processes 500 to 750 transactions a week demonstrates how well used by the community it is. The demographic for retired people in the area is 19 per cent., which is high, and half of all households do not own a car. Postmaster Ravi is interested in taking on some of the new work that Post Office Ltd is considering, such as biometrics. He is a progressive and enthusiastic operator and would be willing to work with Post Office Ltd. Closing that post office would be a lost opportunity in that respect.

I have also spoken to Post Office Ltd about “Post Office Light”, which is a new concept being piloted that I think would work well in St. Levan valley and West
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Hoe, and which both post offices have mentioned to me as being something that might enable some level of service to continue in their communities, should all else fail. If that becomes the only option, those post offices should be supported to stay open until the new options can be explored.

Finally, it is important to note again that Post Office Ltd has a difficult job. The Government have agreed to a cash injection of £1.7 billion, which is an awful lot of taxpayers’ money, into sub-post offices. A condition is that POL must limit—slim down—the network, so that that money is used to create viable post offices, and not be spread so thinly that all post offices are once again put under threat. However, my case to the Minister is that it is uniquely unfair to expect Plymouth and its particularly significant challenge of regeneration and growth—there is not another place in the country that has the extent of that challenge—to be brigaded with one of the most sparse rural networks in the country. Of the 43 post offices proposed for closure, some 13 have weekly transactions above the 500 bracket. That includes seven post offices with fewer than 49 weekly transactions, one with fewer than 100 and four with fewer than 200. How many tiny post offices, escaping this time round, simply cannot be viable in future, whereas in Plymouth we seem to be closing viable ones in a growth area, a lot of them in my constituency? I will repeat, business seems unlikely to migrate—certainly not at the 80 per cent. level mentioned in a recent edition of Post Office Ltd’s news of the network.

I do not think that it is right for the taxpayer to pay the Post Office £17 to issue a stamp, as someone suggested. We cannot simply subsidise every post office without thought for cost. That does not mean that well used, highly regarded post offices should close. I understand the arguments about rural post offices and their importance to villages and small communities, but urban communities also depend on post offices, especially in cities such as Plymouth, where people lead very local lives, with many on low incomes and benefits. As I said, the proposal is to remove one post office serving an area the size of a small market town. I believe that all four of those selected in my constituency are or have the potential to be profitable. They are heavily used—1,000 to 1,500 transactions per week in Beaumont road and St Levan’s valley, and 500 to 750 in Pennycomequick, which is growing, and likewise in West Hoe. Meanwhile, how many of the 1,600 post offices that serve fewer than 20 customers a day, costing £8 for every transaction, will be left under the Devon plan?

I think that POL could well be cutting off its nose to spite its face when it comes to closing those post offices. A large proportion of the business will certainly not go from Beaumont road to other post offices—it will simply be lost. I think the same will be true of the other post offices, especially Pennycomequick, in view of the particular problems that I spelled out. In the case of Plymouth, Post Office Ltd ought to give us sufficiently detailed figures to allow us to appraise whether our post office network is sustainable when viewed across the city, and how it can become so as our population grows at the fast rate of 2,000 people per year.

Plymouth is of course included in the Devon area plan, which means that we have a city with many deprivation and regeneration growth challenges brigaded with a rural county that must have the biggest of
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sparsity challenges. I have based my arguments not just on the individual value of specific post offices in my constituency—valued though they are—but the overall future viability of the cluster. I honestly believe that, far from providing a more sustainable network, including those post offices in the closure programme will damage the network. Indeed, two of those post offices are among the third in my constituency that I would never have guessed could have been at risk when thinking about it before the programme was announced.

I hope that the Minister can look at the arguments. Better that POL should face up to some hard decisions now than it should seek to lead the Minister into believing that it has done so only to find that, because it loses much more than it gains from the Plymouth closures, it has to revisit the whole idea of closures in the near future. Instead of making the network sustainable, it is making it less viable. Quite simply, the POL’s Devon area plan has, for all the reasons set out, got the balance wrong.

4.29 pm

The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): It is a pleasure to serve under your chairmanship today, Mrs. Dean. I want to begin by congratulating my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) on securing the debate. She spoke eloquently about the challenges facing the city of Plymouth and the way that it is rising to meet them with ambitious plans for demographic growth. I am also pleased that she acknowledged that life in Britain had changed a lot in recent decades. The image of the Teddy boy pensioner will stay with me, but she is actually right because what we think of as the traditional image of the pensioner is changing over time, due to lengthy and, we hope, more prosperous and healthier retirements for most people.

One of the features of these debates is often the ease with which the Government are blamed for the consequences of the changes in life that my hon. Friend set out. The Government have a duty to respond to those changes, but it would be wrong if they placed themselves in the way of modernisation, choice or change in how people live their lives. She talked in great detail about the individual post office closure plans in her constituency. She will know that, as a Minister, I do not play a role in decisions to close or retain individual post offices. That is quite rightly a matter for Post Office Ltd, after the consultation process that she is currently taking part in, involving Postwatch, local people, MPs and other representatives.

What is happening in Plymouth is part of the wider programme that was announced last year by the Secretary of State at what was then the Department for Trade and Industry: up to 2,500 closures, with 500 new outreach services planned alongside. The reason the Secretary of State had to come to such a difficult judgment is that some of the lifestyle changes that my hon. Friend talked about are having a profound impact on Post Office finances. The post office network loses around £500,000 every day and it has lost 4 million customers a week. At the extreme she is right; this involves small rural branches with few customers, where the subsidy per transaction can be up to £17, but alongside that, in urban areas we have 1,000 post offices, with six or more branches
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within a mile competing for the same customers. The difficulties and the challenges affect both urban and rural areas.

Let us look at some of the changes that are taking place. Eight out of 10 pensioners are now having their pension paid directly into their bank account. New services such as car tax online did not even exist a few years ago. One million people a month now renew their car tax online—that is 1 million people a month on one service alone who are no longer going to the post office to carry out that transaction. In addition, there is competition from other networks such as PayPoint, which won the contract for the BBC TV licence. There is lifestyle change in how we expect to receive money, there is technological change in terms of the use of the internet and the way in which people communicate with one another, and there is competition from other networks. Those three things all mean that our post office network faces big challenges in terms of the size of the network and the distribution of the branches.

Linda Gilroy: I am following carefully the arguments that the Minister is advancing, which are familiar to me. I ask him to consider two points: first, in respect of the BBC licence, am I not right in thinking that PayPoint has perhaps over-extended itself in describing how well it can do that, when the collection of BBC licences is actually going down? There is a value-for-money issue there. Secondly, is the Minister not also concerned about, and will he deal with, the value-for-money issues that I raised? He and the Secretary of State are responsible for the £1.7 billion investment and I do not think that what is happening in Devon represents good value for money.

Mr. McFadden: The point I am making about competition is that Post Office Ltd can no longer be guaranteed the streams of work that it used to rely on when that competition was not there. That is the point that I make about PayPoint. My hon. Friend asked about the £1.7 billion and she also made a point in her speech about the right size of the network. Before this closure programme began there were about 14,000 post offices in the country. If Post Office Ltd had run just as a commercial network without Government support, the number of branches would be around 4,000. Three out of four post offices run at a cost to Post Office Ltd.

My hon. Friend said she thought that the branches in her constituency were profitable. I take part in a lot of these debates and every MP says that the post offices that they are talking about are profitable. However, three out of four post offices in the network are not and rely on subsidy to stay open. Without the high level of Government support on behalf of the public, thousands more post offices would be under threat. The Government subsidy is £150 million a year, which is part of an overall programme of £1.7 billion. Without that support, thousands more branches would be under threat. I accept that that may be cold comfort to somebody affected by post office closures, but given the size of the challenge facing the network, the Government response has been very large indeed.

Linda Gilroy: I hope the Minister understands that I have taken those points in. I set them out very clearly in my speech. However, the tension between sparse rural
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Devon and growing, ambitious, regenerating Plymouth is such that the balance is simply wrong. We are talking about busy post offices. Every time I go into them there are queues.

Mr. McFadden: It may help my hon. Friend if I outline the loss per branch in rural and urban areas. Average losses range from about £12,000 per year for some rural post office branches to about £20,000 for some urban branches. She said that Post Office Ltd would not give her figures on this matter. My understanding is that it will give figures on the cost per branch to MPs. It is sometimes wary of giving full details of sub-postmasters’ pay or other commercially confidential information, particularly given that it is up against competition from other networks for part of its business.

I will move on to some of my hon. Friend’s other points. She rightly and understandably talked about distances, transport routes, gradients and so on. Such concerns are precisely the reason for the consultation. It enables the public and hon. Members to make those points to Post Office Ltd. If it has got it wrong, there is a process of review involving Postwatch, which can ask Post Office Ltd to look again at particular branches. I do not pretend that the consultation is just a referendum on whether people want to see post office closures. The decision was announced by the Secretary of State last year. I am sure that Post Office Ltd will have heard the points that my hon. Friend has made today. It is right that hon. Members can make representations about such things.

On the issue of whether it is wrong for Plymouth and Devon to be together in one plan, it is not unique for a city and rural areas to be in the same area plan. I am sure that my hon. Friend will argue that her area is unique. Many hon. Members argue that their constituencies are unique in one way or another. Although it is never popular to close post offices, I hope that the area plan process is not unfair to any part of the country.

In the area covered by the closure plan for my hon. Friend’s constituency and others, some 92 per cent. of customers will see no change to their nearest post office. More than 99 per cent. of customers will see no change or will remain within a mile in road distance of the alternative post office. Although this is a difficult process, most customers will see no change to their local post office.

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