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22 July 2008 : Column 181WH—continued

The hon. Member for Chesham and Amersham spoke about access and hills. In my constituency, the problem is exactly the opposite in the case of the Olton Hollow
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post office. It is situated in a hollow, and accessing either of the two alternative post offices would involve a huge climb.

The hon. Lady spoke about serving commercial communities, including large communities such as Amersham hospital. The Catherine de Barnes post office, which is a little post office in my constituency, is convenient for people to stop at on their way to or from the national exhibition centre and the airport, both of which are also situated in my constituency. No thought seems to have been given to where those people will go to access a post office, should that one not be available to them.

All the speakers this morning spoke about the queues that are already prevalent in the next existing post office. When I took a petition around to 35 local shops in Shirley, the shopkeepers said, “Please don’t make us go to the Stratford Road post office,” which is the alternative to the Haslucks Green Road post office. They said that waiting there could take 35 or 40 minutes, and that as local businesses they just did not have the time to do that. So although there was another post office closer, they were not using it.

Mr. Bill Olner (in the Chair): Order. I remind the hon. Lady that the debate is about post office closures in Buckinghamshire. I do not think that Shirley is anywhere near Buckinghamshire.

Lorely Burt: Thank you, Mr. Olner. I beg your pardon. I was carried away by my enthusiasm for my own area, in which I am so ensconced at present. I will try not to do that.

The hon. and learned Member for Beaconsfield spoke about deprivation in areas that are considered to be wealthy. For many elderly people, having money does not make any difference. Often, they do not have access to transport, but they still need to get out; they still need to have a social life. I do not believe that there is a direct correlation between needing a post office and the amount of money that one has. Coming from a similar supposedly wealthy constituency, I have a huge amount of sympathy with him.

The hon. and learned Gentleman mentioned the sub-postmistress who informed him that she had been told not to speak to the press. A similar situation exists if a post office is in premises owned by another organisation such as, for example, the Co-op. We were not allowed to run a petition in one of my post offices but had to stay outside and collect our signatures in the rain.

The hon. Member for North-East Milton Keynes asked whether the closures were a foregone conclusion and questioned the process. He was right to do so, because we are not allowed under any circumstances to obtain trading figures. We are allowed to know the footfall but a shroud of secrecy has been drawn over the economic situation of every post office, in the interests—so say the Government—of commercial confidentiality. But how are we to know which post offices are viable and which are not if we do not have access to such information?

People say, “Just because you’re paranoid, it doesn’t mean they’re not out to get you,” but I wonder whether there is some kind of conspiracy. Are the Government closing post offices that may, indeed, be more profitable
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than others, eventually to obtain an even slimmer post office network? Instead of 11,000 post offices, are they actually aiming for closer to the 7,500 that are needed to meet their access criteria? If they were to close the more profitable post offices, those that would be left would struggle even more.

In conclusion, the Government say that they want a sustainable network, but I do not understand how they propose to achieve one if services are withdrawn, if things such as the Post Office card account are under threat and if the Post Office has to re-tender for its own services. By making queues longer, the Government are ensuring that footfall away from post offices will increase: physically attending a post office will become less and less feasible, thereby making it even more difficult to get to a post office. All those things are conspiring to decimate our post office network and to make it less, not more, sustainable. I am sorry to say that this Government, even though they do not let us know the price of everything, do not seem to understand the value of the post office network.

10.28 am

Charles Hendry (Wealden) (Con): I congratulate my hon. Friend the Member for Chesham and Amersham (Mrs. Gillan) on securing this debate, and on her determination to hold it before the House rises for the summer. I also congratulate my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve) and my hon. Friend the Member for North-East Milton Keynes (Mr. Lancaster) on speaking so eloquently about the issues in their constituencies.

The only note of concern is that the hon. Member for Solihull (Lorely Burt) seems to believe that Buckinghamshire is somewhere in the west midlands, given the names and locations that she mentioned. It is fortunate that you are here, Mr. Olner. With your personal experience of the west midlands, you were able to put that right.

We have had an important debate, and I entirely understand why my hon. and learned and hon. Friends are so concerned about what is happening in their constituencies. We heard from my hon. Friend the Member for Chesham and Amersham that one third of her post office network is closing, and from my hon. and learned Friend the Member for Beaconsfield that almost the same proportion—30 per cent.—of the post offices in his constituency are closing. That is about twice the national average, so I entirely understand why they felt that the matter needed to be raised in the House before we break for the summer. It is a devastating blow. Indeed, as my hon. Friend the Member for Chesham and Amersham said, the closures result in the decimation of communities which, all too often, lose not just the post office but the shop that is also such a vital part of the local community.

The Minister intervened, saying that this process had been going on for some time. Post office closures have been going on for some time, but the rate of closure since 1997 is three times higher than before 1997, in the 18 years of Conservative government. As my hon. Friends have said, back then post offices were making a profit: they only went into loss in 1999 and, until that
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point, the network was making a profit. At that time, people were closing their post offices if they could not find anybody to take them on; they were closing because people were choosing to retire. This is the first time that a Government are saying, “You must close” and ordering people to close post offices. In spite of the huge amount of public support and sympathy for particular post offices in the network, post offices may not stay open once that decision has been made and confirmed. So there is a fundamental difference now and, because of the way in which the closures are being driven forward, this is a devastating blow to our post office network.

My hon. and learned Friend the Member for Beaconsfield and my hon. Friend the Member for North-East Milton Keynes raised concerns about what they described as the gag on postmasters talking publicly about the closure programmes. There has been some misunderstanding about this. Certainly, postmasters are asked to keep closures confidential before they are announced, but there is no gag on their speaking out publicly afterwards. Indeed, when this matter was raised with me recently, I wrote to Alan Cook, the chief executive of the Post Office, and he said:

So there is no doubt—the Minister responsible for post offices has said it in the main Chamber and the chief executive of the Post Office has said so—that once the closures are public, postmasters are free to campaign to keep their post offices open, because anything else would be an intolerable infringement of their liberties and their freedom to campaign as they would wish.

The problem, as has eloquently been set out in this debate, is that there is deep dissatisfaction about the consultation process. The Cabinet Office guidelines say that consultations of this nature should take 12 weeks, but we have been given only six weeks—that happens sometimes over holiday periods, in the run-up to Christmas or over the Christmas period—and people have not had the chance to campaign against proposed closures as effectively as they would wish. Having seen what has happened elsewhere in the country, people feel that the odds are stacked against them. I understand why sub-postmasters and sub-postmistresses in Buckinghamshire will feel that, however hard they campaign and however strong a case they put forward, a decision has been made somewhere and there is nothing that they can do to get it overturned.

The process has been deeply flawed. The access criteria have been rightly criticised. My hon. Friends have highlighted some of the failings in the process. Essentially, somebody has put a pair of compasses on a map and drawn a circle around individual post offices. Proposals for closure have been made in respect of those post offices that can most readily be taken out of the network while keeping the best geographical spread. However, that takes no account of profitability or viability and it is leading to some perverse decisions. For example, no account is taken of whether the roads are straight. I know Buckinghamshire relatively well. The roads from village to village do not go as the crow flies, but meander through valleys and woods, and there is a range of longer roads. Nevertheless, the map will show that the distance is three miles from the nearest post office. However, if one takes that route—there almost certainly
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is no bus—one finds that the road journey could be twice as far, making it much more difficult. My hon. and learned Friend the Member for Beaconsfield spoke about the lack of public transport and the impact on people who are less well off in wealthy areas. That is a very valid point.

The access criteria take no account of future growth. So the houses that are being imposed right across south-east England by this Government—I always find it slightly bizarre that Buckinghamshire is in the south-east of England, but there it is; it is certainly not in the west midlands—are not being taken into account in the closure programme. It would be much more sensible if future housing growth were taken into account.

As my hon. Friend the Member for Chesham and Amersham said, the process that has been adopted sets community against community. If any one of the post offices that have been mentioned this morning is saved, another one will be added to the list for closure. So this is not a way of saving important, much-loved post offices: we know that if one is saved, another one elsewhere will be put into that process.

Mrs. Gillan: Will my hon. Friend give me the benefit of his experience of speaking on this matter from our party’s Front Bench? I asked the Post Office how much it would save from the closure of each of the branches in my constituency and I received vastly different figures for each post office. I understand that 10,000 of the 14,000 existing branches around the country lose money. Therefore if this were a cost-saving exercise, hon. Members might think that at least some logic would be applied to the closures, taking into account the savings that the Post Office would achieve from the closure of each branch. However, not even that has been brought to bear on the situation. Does my hon. Friend have any experience of such illogicality in other parts of the country in respect of the premise that the Post Office is using for the closures?

Charles Hendry: My hon. Friend makes an extremely valid and important point. When the proposals for closures were being set out, the Minister responsible talked about some post offices only having a few customers a week, the assumption being that those were the ones that would be closed. In fact, those post offices are in some of the most remote areas and they are being kept open, rightly, to serve remote areas. However, as a consequence, often the busier, profitable post offices are being closed. Alan Cook, when giving evidence to the Business, Enterprise and Regulatory Reform Committee, admitted that some profitable post offices are included in the list of proposed closures. It is incomprehensible how one can make a network more profitable, or less unprofitable, by closing the elements that make money. That shows the flaw in the process.

We should be looking at not only how the Post Office can have its decline managed, but how we can make it relevant and provide a service that is right for these years and this century. We should be looking to develop the network, freeing it up to work with other carriers, rather than just the Royal Mail—carriers such as UPS, FedEx and others, which pass the doors of post offices day after day, unsuccessfully trying to deliver packages, trundling back for miles to their depots and coming out
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again the next day. It would be much more sensible if the post office network could be a hub for all those sorts of services.

The post offices should be a centre for more financial services, as the National Federation of SubPostmasters is calling for, and they should be more of a hub for Government services than is currently the case. We would undoubtedly continue to provide subsidies to the Post Office network—we have said that clearly—but, by bringing more business into the network, we would be able to sustain many more post offices than under the proposals made in the Government’s current programme.

We are also finding that unfair restrictions are being put on those businesses that are being closed down. This will be the next stage about which there will be concern, as my hon. Friends will find in Buckinghamshire. Once a post office has been taken out of the shop, the Post Office will determine what other services can be offered in that business. For example, the shop will be told that it cannot have a national lottery outlet. There is an agreement between the national lottery and the Post Office about how many post offices may have national lottery outlets, so many have been told up until now that they may not have a national lottery outlet; but bizarrely, when they lose the post office from their premises the Post Office will tell them that they still may not have a national lottery outlet because now the shop does not have a post office in it.

Lorely Burt: Is the hon. Gentleman also aware that where a post office is being closed down, if it elects to retain an existing national lottery facility, the compensation received by that post office will be diminished?

Charles Hendry: The hon. Lady is right: it can be diminished significantly—by thousands of pounds. When people find that retirement is being forced on them by the loss of a post office, and that the rest of their business is essentially being ripped away from them, they feel very angry indeed. The same applies in respect of phone top-ups, a service offered through post offices, when, as part of the compensation package, people are told that their business may no longer offer telephone top-ups. Some people also wish to work with PayPoint, but they are told that their compensation will be put at risk if they do so.

I can understand that the Post Office may wish to determine where we can buy our stamps, post letters and get foreign currency through the post office network, but it is unacceptable that it is seeking, in this process, to determine where we can buy a loaf of bread or a pint of milk as well, because with such determinations it is driving the closure not just of the post office, but of the business in which it is based.

Finally, the elephant in the room in this debate is the future of the Post Office card account. It is disappointing that we have not had a statement from the Department for Work and Pensions before the House rises for the summer about the contract for the Post Office card account. This is causing massive concern. If it were to go to anybody other than the Post Office, it would lead to thousands more closures. The National Federation of SubPostmasters reckons that it would lead to 3,000 more closures—an even bigger round of closures than we are seeing in the current round. The Government owed it to the House, and to the postmasters and
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postmistresses in worried communities throughout the country, to bring forward the decision to as soon as possible, instead of delaying it until some time during the summer recess, hoping that on a hot August day no one will notice what happens. This is a matter of the greatest concern, and could lead to a further decimation of our network.

Ultimately, the blame for the programme does not lie with the Post Office. The Post Office is doing the Government’s bidding. The Government have set the funding package; the Government have determined the number of post offices that must close; and the Government have determined the access criteria and allowed intolerable burdens to be put on the future business activities of those shops. The Government’s own Members have been unwilling to try to stop the programme, although they were given the chance and campaigned in their own constituencies to keep post offices open. It is a devastating chapter in this Government’s history and it will haunt them for many years to come.

10.41 am

The Minister for Energy (Malcolm Wicks): I congratulate, as others have done, the hon. Member for Chesham and Amersham (Mrs. Gillan) on securing this debate on post office closures in Buckinghamshire. I shall stick to the terms of the debate, which is Buckinghamshire, otherwise I would have been happy to follow the precedent set by other hon. Members and give a scenic description of my constituency of Croydon, North, but I know that you would rule me out of order, Mr. Olner. The hon. Lady spoke eloquently and passionately about the effects of post office closures on residents in her county. She also spoke on behalf of the hon. Member for Wycombe (Mr. Goodman), and I take heed of that.

The hon. and learned Member for Beaconsfield (Mr. Grieve) spoke with equal passion about the sheer riches and wealth of his constituency and the extraordinary car ownership per household. I wondered where his comments were going, and thought at one stage that he might present a three-point action plan to make it the richest constituency, but he turned the coin and properly noted that even the wealthiest constituencies have pockets of relative deprivation. I listened to his statement about that. The hon. Member for North-East Milton Keynes (Mr. Lancaster) represented his constituents’ interests well, and we had two speeches from the Opposition Front Benches.

I should say at the outset that my hon. Friend the Minister for Employment Relations and Postal Affairs is unable to be here today, and I thank the hon. Lady for her welcome, if that is what it was, to my engaging in this debate on his behalf. My hon. Friend has no role in the detailed decisions to close or retain individual post offices, which is rightly a matter for Post Office Ltd, after local consultation involving Postwatch, local people and, of course, MPs and other representatives.

The post office closures in Buckinghamshire are part of a wider programme announced by the then Secretary of State for the Department of Trade and Industry in May 2007. Under the network change programme, up to 2,500 post offices will close, taking the network to around 11,500 branches, which will be a considerable
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network and equal to the country’s bank branches. In addition, some 500 new outreach services will be established, and some are relevant to the issues that have been discussed in Buckinghamshire. There will be a roughly similar number of closures in urban and rural areas.

Let us recognise the reasons for the programme: the falling volumes and mounting losses. The background is important, and the programme of a substantial number of post office closures has given rise to much concern and protest, including in my constituency. The network faces significant challenges. We, as serious parliamentarians, must recognise that and consider the consequences. It is losing around £500,000 a day, it has 4 million fewer customers a week than just three years ago, and three out of four post offices run at a loss to Post Office Ltd. If the Post Office were run as a commercial network, there would probably be only about 4,000 branches. Some very rural branches have so few customers that the cost per transaction is £17. Those are serious trends that serious people must address.

Many services that have traditionally been conducted over post office counters are now transacted by other means.

Charles Hendry: The Minister is being helpful, and I hesitate to intervene as this is not his brief, but will he explain how it is sensible to close profitable post offices? How does that make the post office network less unprofitable?

Malcolm Wicks: I shall come to the issue of profitability.

Many services that have traditionally been conducted over post office counters are now transacted by other means. On pensioners and elderly people, I recall my time as the Minister for Pensions when Post Office card accounts were introduced, and I shall come to that later. Eight out of 10 pensioners have their pensions paid directly into a bank or building society. Among new retirees, the figure is nine out of 10. I suspect that when hon. Members in the Chamber draw their pensions, they will do so not through the Post Office, but in the way that they are used to for their salaries. As I said, nine out of 10 newer pensioners do not use the post office. Most people have their salaries paid directly into a bank, so it is hardly surprising that that is the trend. One million people a month now renew their car tax online, but last year that figure was only 500,000. Most people use the internet in one way or another, and that cannot be uninvented. The Post Office faces competition from companies such as PayPoint, which won the contract for the TV licence, a decision that was taken by the BBC, not by the Government.

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