Sub-post Offices (Hansard, 9 March 1984)

§ Mr. Chris Smith (Islington, South and Finsbury)

I wish to raise the issue of Post Office policy on the provision of sub-post offices in inner city areas.

The issue first came to my attention last November, when I was contacted by the district postmaster for the area that covers my constituency who was proposing to close the Westbourne road sub-post office which lies almost in the heart of my constituency. That decision has happily now been reversed and the Post Office has decided to keep the office open. I pay tribute to the decision of the regional postmaster and to the chairman of the Post Office in ensuring that the earlier decision to close that office was reversed.

The earlier decision, in my view, had been unjustified and would have caused unnecessary suffering to many of my constituents. The post office was well used and patronised. Whenever I used its counter services there was always a queue. In the immediate vicinity are three blocks of sheltered accommodation for the elderly and a block of sheltered flats for the disabled. In addition, there are about 350 elderly people living in local authority accommodation in the immediate vicintiy. There are no public transport facilities in the area. The nearest major post office, if the sub-post office had been closed, would have been a half-mile walk away.

In addition to the problem which would have been imposed on the elderly, there would have been difficulty for home helps who work for the elderly, who often collect their shopping and pensions at the same time. They have a limited amount of time in which to do so, and the imposition of a major walk to the nearest post office would have reduced the amount of time available to them to do other things to assist their elderly clients.

The decision to close the office was an outrage. It should never have been suggested, let alone made. I am delighted that the decision has now been reversed. That early decision illustrates in graphic form one of the major problems that applies to the Westbourne road sub-post office and to other sub-post offices in inner city and urban areas. Throughout our inner cities the social cost involved in the closure of such facilities is enormous. The use of a post office, especially by the elderly, goes beyond an option that they wish to exercise. It is a necessity for them.

The imposition on the elderly of having in many instances to walk a considerable distance to the nearest post office makes for a long and difficult journey and is an unwise and unfair obligation on them. Where there are good public transport facilities and where post offices are close to one another and easily accessible, there is little justification for keeping sub-post offices open, but often that is not the position.

I am extremely worried by what appears to be the Post Office's national policy. The background briefing note that the Post Office distributed to all hon. Members about a month ago states: There has also been a major review of the urban post office network, which showed that against the Post Office's aim of providing counters at mile intervals in town areas, there is substantial over-provision. It adds that rural post offices are not included in the review. 1154 The chairman of the Post Office, in a letter to me dated 29 February, reiterated what is set out in the background briefing note but rather more specifically. He wrote: We have guaranteed that 95% of the network will remain intact for at least the next three years, but the future of the remaining 5% will have to be reviewed. This review will be confined to offices in urban areas". It is that 5 per cent., and probably a greater percentage if the review is confined to urban areas, with which I am especially concerned.

The regional postmaster has acknowledged to me that there is a direct threat to many sub-post offices in my constituency. I may have been successful in persuading the Post Office to keep open one particular office, but the general policy promulgated by the Post Office appears to act as a direct threat to other facilities. I have no quarrel with the Post Office's decision not to call for closures in rural areas. That is right and proper. My quarrel is with its decision to go for what appears to be an arbitrary and technical figure of mile-apart post offices in urban areas and the effect on the existing network of sub-post offices in parts of my constituency.

Why should the Post Office not apply the same criteria and consideration of individual need and circumstance for sub-post offices in urban areas as for those in rural areas? Rather than simply making it a technical policy — I should like to know how the Post Office arrived at the figure of one mile — why does it not more carefully count the social cost of individual cases in inner city areas?

I shall put four major questions to the Government. First, what account is taken by the Post Office of social cost and need in individual circumstances when considering the closure or maintenance of sub-post offices in inner city areas? The reasons given to me for the initial closure and for the retention of the Westbourne road sub-post office at no time mentioned the individual circumstances of that post office and the community it served. The reasons rested entirely on national considerations of rationalisation and cost.

Secondly, what is the rationale for the rule that the Post Office wishes to have post offices in urban areas placed a mile apart? Why was that decision taken?

Thirdly, why does the Post Office wish to rationalise its service by reducing the numbers of counters across which the public are served? I suspect it is to save money. The Post Office's financial statement for the year ended 30 March 1983 shows that in 1982 counter services made a national profit of £12.7 million and in 1983 £11.5 million. In the face of those profitable figures for the Post Office, why is there a current need to save money and carry out so-called rationalisation of the network of post offices in urban areas such as that covered by my constituency?

Fourthly, and most importantly, what role have the Government played in forcing this policy of rationalisation and closures on the Post Office? A letter from the district postmaster first gave me news of the decision to close the Westbourne road sub-post office. The letter states: The Post Office has to meet demanding targets set by Government, notably a reduction in our real unit costs and we also need to keep down costs in order to remain competitive. It is clear from that letter from the London northern district postmaster that the Government have played a part, and that the Post Office was conscious of the role that they have played and the guidelines that they have given, when the Post Office embarked upon that arbitrary and, in many cases, cruel policy. 1155 I hope that the Minister can give us answers to those four questions: social cost related to individual circumstances; rationale for the one mile apart rule, which appears to have been promulgated by the Post Office; the overall need to carry out such an exercise; and the role played by the Government.

Several sub-post offices in my constituency are under threat. My constituents are worried about the possible impact of decisions to close sub-post offices upon their lives and services. We need some convincing answers from the Government if we are to be persuaded that the Post Office's policy is not lunatic and unwise.

Many people in Islington and other inner city areas will suffer unduly if the Post Office decides to close local neighbourhood offices to meet some arbitrary Government targets and guidelines in a desire to placate Government directives.

I hope that the Government can offer some consolation and tell us that in future there will be a more careful and considered policy on these matters. If there are no convincing answers, and no apparent reason for such a policy, in respect of post offices throughout my constituency and others in inner-city areas, I—and I am sure many of my colleagues—will continue to fight the arbitrary nature of such decisions. We will do so in the interests of all people—not just those who live in my constituency and who are worried about the prospect of closures similar to the one at Westbourne road, which now happily has been averted.

§ The Under-Secretary of State for Trade and Industry (Mr. David Trippier)

I am pleased to be able to reply to the debate. I begin by assuring the hon. Member for Islington, South and Finsbury (Mr. Smith) that I understand his interest. The Government have frequently referred to the important role that sub-post offices play, not just as the providers of important services but often as community meeting places that fulfil a social need. That is why the Government have consistently committed themselves to the maintenance of an adequate network. I welcome the opportunity to repeat that commitment. Having said that, I must stress the fact that the Post Office is a commercial organisation, and that it is right that it should study ways of improving efficiency.

The Post Office has a statutory duty to provide counter services through its network of main and sub-post offices as efficiently as possible. However, in providing those services, it must have regard to the commercial and social needs of the community. The balance between sensible and desirable cost benefits and social needs leads to difficulties.

No post office closure is popular because, by definition, some people will have to travel further to the nearest alternative. However as the hon. Gentleman will be aware from his interest in the future of the Westbourne road sub-office in his constituency, although it is not a statutory requirement, before a final decision is made by the Post Office to close a particular sub-office full consultation takes place, in accordance with the Post Office's long-standing procedures, with local authorities, hon. Members and the Post Office advisory committees of the chambers of commerce. I understand that under this procedure the hon. Gentleman was consulted in November last year 1156 about the Post Office's proposal to close the Westbourne road sub-post office following the sub-postmaster's resignation.

Following consideration of local opinion and views it was decided that the office would stay open. The hon. Member's representations over the Westbourne road sub-post office bears witness to this flexible approach and a willingness on the part of the Post Office to take account of local views.

However, the case of Westbourne road is an example of the problems faced by the Post Office in the provision of sub-post offices. The Post Office has informed me that within a half mile radius of Westbourne road there are three other offices, one of which is the Highbury branch office. Within a one mile radius there are 12 other offices including the northern district office. When confirming last week in a letter to the hon. Member that the Westbourne road office would remain open, the chairman of the Post Office pointed out that the decision did not necessarily mean that others in the area were less likely for closure following the Post Office's review of the urban network.

This review of the urban counter network, the first for many years, was carried out in the early part of 1983. It showed that whilst a major network of post offices was well justified, there was over-provision in urban areas against the distance criterion. It was this review that led to the announcement by the Post Office last month of the decision to phase out a number of main and sub-post offices.

I am anxious to answer the specific questions. Since 1945, the Post Office has aimed to locate sub-post offices at one mile intervals in built-up areas. This, it believes, is representative of the fair balance between the service that its customers would like and the costs involved. This distance standard is not applied rigidly. Account is also taken of various other factors, such as the age of the population, the terrain, likely development in the area, the availability of public transport, and the ability of neighbouring offices to absorb the additional work.

Up to the late 1960s the network grew due to new housing development, population growth and growth in business. This resulted in some over-provision against the Post Office's distance standards. Over the past 15 years, there has been a decline of population in inner city areas and consequently the network has gradually been reduced in these areas, but there is still considerable over-provision in town areas against the original one mile criterion.

The question of the future of the main and sub-post office network is of concern to the Government, and they were fully advised by the Post Office of its plans to reduce the network in inner city areas. It must, however, be recognised that decisions about opening and closing specific offices are operational matters for the Post Office and not decisions for Government to make.

The Post Office was a Government Department until 1969, when the Post Office Act established it as a public corporation. In common with other nationalised industries, the Post Office was given considerable powers of autonomy in that Act for the managment of its day-to-day business. Successive Governments have accepted that it is for the Post Office to run the business, with Government involvement limited to discussion of broad policy matters and, of course, the setting of financial and performance targets. 1157 The Government's interest, therefore, is in the network as a whole and, on the whole, I believe that the recent announcement shows that the Post Office has taken ample account of its social duties in reducing the network to a more efficient size. Under those proposals, it will remain the case that no one in an urban area will be more than half a mile away from his nearest post office.

The Post Office has confirmed that in the making of decisions about specific closures within the overall programe, the existing procedure for consultation with interested parties will be maintained, as the Post Office has no desire to cause hardship and would wish to be fully aware of any special circumstances, which it would consider before coming to any final decision whether to close or keep open a sub-post office.

There are already in existence schemes for compensating sub-postmasters whose offices are closed by the Post 1158 Office, and an improved scheme for closure in connection with the network review has been agreed with the National Federation of Sub-Postmasters.

It is also necessary to remember that the counter review is not being undertaken in isolation. It is part of the overall strategy to secure the long-term future of what will still be by far the largest retail network in the country. Also involved are the Post Office's recently announced plans for counter automation. These plans are not just to reduce costs; an extensive network of post offices linked by computer both internally and externally to their main customers presents exciting possibilities for new services and facilites for customers.

In summary, I believe that the measures that the Post Office intends to take will help it to maintain the difficult balance between meeting the reasonable needs of the community and operating in an efficient and commercial way.