HC Deb 15 April 1985 vol 77 cc94-109

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

8.44 pm
Mr. Simon Hughes (Southwark and Bermondsey)

Happily, we have more time than expected, so this may be the first of two Adjournment debates. I wish to bring to a wider forum the arguments for keeping open two of London's most important post offices. The first day of a new parliamentary term is an appropriate time for such a battle to protect local services. At this very moment at the other end of the building, in the other place, a much more comprehensive debate is taking place about local government and services in the capital and in the metropolitan counties, encompassing most of the great urban areas of England.

It is proposed to close south-east London's main post office, situated on Borough high street opposite the tube station and just down the road from St. George's church in the centuries-old borough of Southwark. It is also proposed to close the Bermondsey Crown post office just down Great Dover street, better known as the Pilgrim's Way—the old London-Dover road which the Canterbury pilgrims trod—and visible to the left of the Bricklayers Arms roundabout and flyover.

Both are urban post office of substantial importance, and the debate about their future began last May when a document entitled "The Post Office Counters Network: A strategy for the future" was produced by the Post Office and provoked a very worried and hostile reaction. The document set out proposals for counter services—not the giro service, but that part of the service which, with the mail service, is what people traditionally think of as the post office service.

Paragraph 4.8 on page 9 of that document states that the Post Office has therefore decided

—to assure customers that 95 per cent. of the total counter network (taking town and country together) will remain until April 1987, and to consider, after local consultation and in the context of cost reduction and marketing programmes, the number of closures that are necessary within the remaining 5 per cent.

—where the Post Office is forced to close an office due to its inability to recruit a suitable subpostmaster … such an office could re-open in the future if and when a suitable candidate did appear.

—within the 5 per cent. the Post Office will close or regrade to sub-office status about 70 Crown Offices which are failing to generate sufficient revenue to cover their direct costs. Two types of post office are thus involved. Sub-post offices are not staffed by Post Office workers. They are run under an agency agreement by an independent person or persons. The Crown offices, however, are staffed by Post Office employees and constitute what people regard as main post offices. I shall concentrate on the closure of Crown offices, but it is sensible first to put this specific debate into the general perspective of earlier debates on the Post Office service as a whole. The Minister will recall the general debate about three months ago, but I firmly believe that whatever his arguments in that context the case is clearly made out for keeping the specific offices to which this debate relates.

The Post Office annual report for 1983–84 stated that there were 1,559 Crown offices in Britain and 20,499 sub-post offices. In London, there were 367 Crown offices and 1,405 sub-post offices. The postal region of London stretches beyond Greater London into Hertfordshire, Essex and Surrey. For administrative purposes it is divided into districts. Tonight we are considering the south-east district. The hon. Member for Dulwich (Mr. Bowden) is here to represent his end of the borough of which I represent the north. The south-east district runs from Westminster bridge to Thamesmead and South Norwood. It is probably the largest London postal district. At the beginning of the exercise, it contained 33 Crown post offices and 159 sub-post offices.

Southwark—to reduce the scale again—contains 18 Crown offices and 40 sub-post offices, and my constituency contains six Crown offices and 18 sub-post offices. Whatever the scale may be, there is a balance; and a balance of services is provided.

I want to consider the proposals for closing Crown offices. The argument is about the balance between commerce and services — between the need to bear commercial considerations in mind and the duty to serve, both of which are imposed by legislation upon the Post Office. If the Minister is honest enough to listen to the figures and the arguments, he will have to accept that on both those grounds, in relation to the two offices under consideration, the argument is made out.

Last August the district postmasters, who had been given power to do so, announced the proposed closures of sub-post offices. On 19 October, together with other interested parties in Southwark and south-east London, I received information about proposed Crown office closures.

In Britain as a whole — only urban areas will be affected —78 Crown offices out of 1,559 were to be closed. Nine hundred sub-post offices were to be closed, out of 20,499. In other words, about 5 per cent. in each category were to be closed. As has been said, when one's local post office is closed, one loses not 5 per cent. of the service but all of it. That, certainly, is the general belief in the area that I am talking about.

In London, it was proposed that 30 Crown offices out of 367 and 80 sub-post offices out of 1,405, should be closed. South-east London was to lose two Crown offices out of 33 and 18 sub-post offices out of 159. I do not know whether the fates considered these factors, but the two Crown offices chosen were both in Southwark, both in my constituency, and close together. I am here to address the Minister on behalf of a massive community. He has some powers and cannot wash his hands of responsibility, Pilate-like, despite the distance from Government at which the Post Office now operates.

The two offices must be considered together. If both are closed, the business must go to adjacent offices. If one is closed, the business is likely to go the other. There is a substantial risk that the Government, through the Post Office, will lose postal business altogether if these proposals are adopted.

The proposals were made last autumn. Consultations were then embarked on and continued until early this year. The criteria for consultation raise an important point to which I shall shortly turn. Consultation is now over at district level. In spite of unanimous and enormous opposition from every agency consulted, the recommendation of the district postmaster, Mr. Line, to the regional director, then Mr. Brown, was that the offices should be closed, as in the original proposal. That recommendation is at present on the desk of the director of the London region. Although in name it is the regional director who makes the decision, the recommendation must have the approval of the chairman of the Post Office, Sir Ronald Dearing, or of the board member responsible for counter services, if the undertakings given are to be carried out. Consultation at that level has still to take place.

Mr. Brown assured me before he left that he would meet my hon. Friend the Member for Woolwich (Mr. Cartwright) and myself to discuss the matter. He had already had consultations with Conservative and Labour Members in London, and we would have been the third group to be seen. I make no complaint about that. That meeting has still to take place. The change of director does not obviate the need for that consultation, and I hope that the present debate will have helped to clarify the arguments.

The recommendation is on the table. Tonight's debate is opportune because the decision has not yet been made. The House has built up a head of steam on the issue. At the beginning of the Session many hon. Members signed early-day motion 156 which dealt mainly with sub-post offices. On 19 December, during the debate on the Christmas Adjournment, many hon. Members on both sides of the House requested the Leader of the House to provide Government time for a debate.

The Government eventually decided that they could not provide time. There was great regret in the House and the feeling that we had been deprived by the Government and that, because of the Government's decision to impose commercial restraints upon the Post Office, the closures would take place. There was opposition from Government Back Benchers as well as from Opposition Members such as myself. On 23 January we had a debate in Opposition time. No doubt the Minister will refer to the points that he made during that debate. The Government have imposed financial targets upon the Post Office, and the Post Office must comply. The Minister does not have much control over the matter.

In my view, the arguments are clearly against the closure of the two offices. However, I also believe that the arguments adduced by the Minister on 23 January did not answer the question how one defines the necessary provision of services. The pressure to close the head office counter has continued. With the support of many others, I tabled early-day motion 405 stating that it was wrong to close the two offices in my constituency on service and commercial grounds. The protest has all-party support. I hope that the Government will heed that fact.

The district postmaster told me a few months ago that he would make his decision in spite of the protest and he described the reaction to his proposals as total, vociferous and hostile. He said that he expected that, not least because the people of Southwark are well known for wanting to fight for their rights. I am glad that they are, but a total, vociferous and hostile response is not much good if nobody takes the blindest notice. Rights must be respected as well as fought for. Community organisations, tenants, owner-occupiers, unions, businesses, the chamber of commerce, churches, pensioners, young parents and members of every political party—I even had a letter of support from the Southwark and Bermondsey Conservative association, which might not be the largest in Britain—have said that the head office must not be closed. They also want the Post Office workers to keep their jobs. The service is not perfect and those workers should be retained so that the service might be improved. I bet that the Minister does not get many letters saying that the Post Office is wonderful. Rather I suspect that he receives complaints about late deliveries and lost mail. Those criticisms are criticisms not of the workers but of the lack of employees and investment.

The code of practice which was agreed between the Post Office and the Post Office Users' National Council in May 1981 and amended in January 1984 describes what consultation should mean. It says:

  1. "1. The Head Postmaster (in conjunction with the Regional Director) will initiate plans to close or change the status of Crown Offices as part of his ongoing commitment to review all operations under his control.
  2. 2. He will take account of such factors as:
  • —the financial effect
  • —the nature of the area
  • —the productivity of the office
  • —how the change would affect the operation of the mail service
  • —any redundancy problems
  • —disposal of the buildings
  • —the likely growth of the area
If he is contemplating outright closure, he will also take into account the factors outlined in paragraph 2 of the section on sub offices and additionally the question of proximity of offices able to undertake those items of business which may not be available at the nearest sub office". Those factors are: The distance from other offices … The amount of business done. The type of business done (eg, are a lot of pensions paid) The difficulty customers would face in getting to another office … The ability of nearby offices to absorb additional work. The likely future development of the area. With only one hint of weakness, the case for retaining the post offices can be made on all of those grounds.

If the Minister says that this is nothing to do with him, I shall have to remind him of section 11(2) of the Post Office Act 1969 which provides: If it appears to the Minister that there is a defect in the general plans or arrangements of the Post Office for exercising any of its powers, he may, after consultation with it, give it directions of a general character for remedying the defect. If at the end of this exercise the Post Office insists on refusing to listen to voices such as mine, I shall have to have to come back, knock on his door and ask him to exercise that power.

I should like to deal briefly with the specifics of the criteria. I know that two other hon. Members want to add their voices and to raise similar issues. That only proves that these are not isolated arguments which the House should disregard. These are important issues of principle to the communities which many of us represent.

Does the Minister accept that the proposal to close the south-east district office means that this would be the only head office with no counter service? Is that not ludicrous? Let us imagine that someone went to the head office of Lloyds bank in the City of London only to be told, "I am sorry, all we do here is paper transactions behind closed doors. There is no counter service." No one would regard that as a logical set-up. As with every head office, the south-east district office is the place where one catches the post last, because that is where the sorting is carried out. I would be grateful if the Minister could confirm that that would be the only place where there was no counter service.

Before he says, "Ah, but", I am aware that when the south-west district office moved to Nine Elms some time ago, it did not take a counter service with it. However, there is a big difference, because as all hon. Members will know, no people live near the Nine Elms district office. It is surrounded by open space and not much business. In no way is that example parallel.

Secondly, will the Minister confirm that only last year the south-east district office underwent a major refurbishment in both the sorting office and counter service at a cost of thousands, if not tens of thousands, of pounds? If the Minister cares to give the exact figure, the House would be delighted to know.

The south-east district office now has comfortable offices upstairs for the management. I have been in them. Will the result not be that only a year after this major refurbishment, the counter service is to go? How is that for efficiency and cost-effectiveness? At some point the Minister may care to look at some of the letters from local residents and businesses suggesting that that is a ludicrous way in which to proceed.

I have with me a letter from the Midland bank, 82 Newington Causeway, Elephant and Castle branch, to the manager of Post Office customer services. It is dated Christmas eve. It seems that the bank felt so strongly that even that was not an inappropriate date on which to make its views clear. It states: Dear Mr. MacDonald,

I note your comments concerning the need to reduce costs but perhaps an intensified marketing effort will do that, in relative terms, for you? The office in question is, as you will be aware, adjacent to a newly refurbished sorting office and one would think that, if efficiency is being considered, such a situation could not be bettered. I am reluctant to pursue a point unnecessarily but experience of large organisations leads me to suspect that proper consideration from a cost effective view-point is not always given in such circumstances. Convenience from a geographical aspect is certainly no basis on which to assess the validity of a decision in heavily developed areas. I am pleased to note that no final decision has been made and hope that attention will be given to ensure that the service elsewhere is improved to compensate for any closures.

Yours sincerely,

M. J. Mayhew, Manager". Local accountants who with the banks and others attended the chamber of commerce meeting were astonished to discover that only a few months after this major refubishment the office would not be used at all and would be closed. The only rational explanation is conspiratorial, that is, that the post office intended to do that and then to acquire the counter area for the sorting office. Will the Minister either deny that or say that he accepts that it would be folly to have made such a major investment and not to use it for the intended purpose?

Thirdly, the business in the post office is increasing. That is not surprising because the area is being developed. The Government gave the London Docklands Development Corporation the job of developing the docklands, and it is doing so. The decline in inner London continues, but the figures show that in north Southwark we have turned the corner. I hope that we have. Certainly, post office business increased by 10 per cent. last year and will probably increase by 17 per cent. this year. That is a funny sort of unprofitable business to close.

I shall now deal with the criterion of the sorts of users. There are many pensioners in Southwark. It is the borough in south-east London with the most pensioners as a proportion of the population. North Southwark has the most pensioners—20.7 per cent. of the population. It does not need much imagination to realise that pensioners find it increasingly difficult to go further afield for the variety of services that the Post Office provides.

People are writing in the following terms: Dear Sir,

This is shocking news to me to read of the proposed closure of P.O. 239 Borough High Street. I am 94 years old and can only walk short distances—to walk any further would be a terrible burden to bear. As holder of 2 War Medals in World War 1, we did not fight our enemies just so that things like this could happen here. Please save No. 239. Yours truly,

A. J. Vinden. For thousands of pensioners, going to the post office is bound up with their ability to remain fit and active. It is sometimes difficult, and it is made no easier if they must go further than they are physically able to go. To say that because an area of an inner city has post offices closer together than elsewhere and to discount the great disproportion of pensioners in the community relative to many other places is unfair and heartless.

I now turn to the difficulties that must be taken into account. The district postmaster knows of the inadequate and often slow bus services, the pavements and alleyways off Borough high street that are packed with prams, shopping, luggage, people who are blind, handicapped and disabled, and wheelchairs. One does not need much imagination to realise the volume of traffic there. The Post Office suggests that people use the underpasses. It is not advisable for people of 64, let alone 90, to use underpasses, especially in the winter and the wet for reasons which most of us appreciate.

I could argue the case for hours, but I shall not. It is important to use this opportunity both for this case and the many other cases about which hon. Members may not have the opportunity to make the same points.

A petition of the friends and members of the church of St. George the Martyr, Borough high street, states that 6,504 customers a week use the post office, 1,732 pensioners are paid there, 571 child benefit payments are made, and 1,081 unemployment and sick benefits are paid. It continues: The alternative is to go to the Post Office at London Bridge. For three quarters of the year it means a long walk for the old, the sick, and the mothers with little children along the Borough High Street in the teeth of a bitter NE wind. Even to start upon this means crossing main roads at one of the most dangerous crossings in London. If it is suggested that people go by bus they would have a very dangerous crossing either going or coming back, and, in any case, the bus stops at London Bridge would not put them down anywhere near the Post Office. In any case the Post Office at London Bridge is always very busy.

If you suggest that friends should get the pension you must understand that the high proportion of old people means that this is too difficult to achieve. We should be glad to demonstrate to you our peculiar difficulties if you could spend a short time with us. Have you ever watched the old people struggling along through the crowds in the Borough High Street, on the uneven paving stones, having crossed through the thick streams of traffic, with their lorries and buses? Have you ever pushed a pram up and down the curbs of all the entrances which once led to the inn yards of times gone by? Or, because of going the other way, to the Elephant and Castle, have you ever gone in fear of being mugged? We ask you"— this is the crucial point— to consider the reality of our lives, rather than make your decisions according to theory". Another consideration is that other post offices are nearby. The obvious remark is that nearby post offices are often busy already. I went on a little walkabout with the district manager one Friday. He told me that it would not be a busy day, because Friday was traditionally quiet. He told me that the average waiting time was 90 seconds; it happened to be nine minutes. He was embarrassed. So he should have been, because it is not working as the Post Office imagines or pretends.

The last criterion that the Post Office asks us to consider is the development of the area. When we talk about rural post offices, we say that they are important to the communities. But they are no less important in urban areas. The area is being developed and we shall have 17,000 more people in the next 10 years. I suppose that in a few years' time the Post Office will say, "Now we need another office." It so happens that it owns the building in which this office is situated, so it will not save much by closing it. Would it not be better to keep up the present service, although it is inadequate?

The argument will come down, finally, to cost. Therefore, at the chamber of commerce meeting, which was attended by accountants and business people, we. asked, "What do you make at the post office in Borough high street? Do you make a loss or a profit?" The district postmaster and the regional director said, "We do not know. We do not work out whether we make a loss or a profit on all these offices." The Government tell us that the Post Office is supposed to be a business. Not many businesses would deserve to survive for long if they did not know whether they made a loss or a profit. The intelligent business people at that meeting could not believe their ears. No Government can countenance closing offices when the Post Office does not know whether it makes a loss or a profit.

If the Government investigated, what would they discover? First, the post office in Borough high street, like all others, is increasingly productive. There have been many redundancies agreed with the union since 1981 to make a considerably more productive office. Secondly, they would discover that this office makes a profit—probably a substantial one. Then their argument would be, "We cannot keep only the offices that make a profit. If we do, we must close all the offices that make a loss." That is one of those arguments that sounds as though the protagonists are determined to win every way round.

The Post Office is either a service, in which case the places that sometimes make a loss are supported by those which make a profit, or it is a business, in which case the Government should want offices to make a profit to support those which do not, or it is neither. In reality, it should be both, and it makes a profit. Last year, the counters made a profit of £12 million and the Post Office as a whole made a profit of more than £100 million. There can be no financial justification for saying that those offices should close.

Of course, the Post Office may say, as its final gasp, "We give in. There is a need for this office, so we shall close the Crown office and open a sub-post office across the road." If that is the thinking—I suspect that it might be—it concedes the validity of our argument. If there is a need for an office across the road, there is a need for an office at the present site. It will make no difference whether the office is situated across the road or whether it stays where it is, especially as it is making a profit where it is. There is no evidence that it will make a greater profit across the road.

If consultation is not a sham, the consultation that has been carried out should be considered. If ever there was a post office which, on any rational appraisal of the argument, should be saved, the head post office for southeast London passes the test.

It is not sufficient for the Government to say that there are still a good number of offices in south-east London and that Southwark has the best service of all. All those offices are busy and needed. Everyone uses them and wants them. Businesses are expanding and the area is developing—it is a densely populated, bustling part of what we all want to be a prosperous capital city.

We have the tradition of a postal service as a service to our people. I hope that the House is in no doubt that in my constituency, as elsewhere, we are determined that the Post Office will hear our arguments, will heed them and will keep those offices open.

9.20 pm
Mr. Gerald Bowden (Dulwich)

The hon. Member for Southwark and Bermondsey (Mr. Hughes) has drawn attention to the problems associated with the closure of main post offices in his part of Southwark. In so doing, he highlights the repercussions and problems elsewhere in Southwark. He outlined the criteria for the closure of Crown and sub-post offices, and he put his finger on the weak spot—that the criteria may exist in a doctrinaire way, but they are not costed criteria. They do not take into account the profitability or potential profitability of the offices that may be closed. They seem to be concerned more with geographical criteria than with prosperity and profitability.

I want to draw attention to an area where those criteria have singularly failed. In the southerly part of Southwark, in Croxted road, a post office was run by a sub-postmaster who felt obliged to resign. The sub-post office was closed, which brought in its wake a terrible trail of tragedy for a number of people who relied on it for both their livelihood and their social contact. The position is heightened in sadness because there are two potential—and, I believe, already approved — sub-postmasters who are ready, willing and able to be appointed. However, representations at every level in the Post Office have failed to bring about any change of attitude towards that sub-post office, which was closed by an act of fate rather than a properly reasoned decision by the Post Office.

I want to touch upon those aspects of the closure that are not usually considered by the Post Office in looking at its criteria for deciding whether an office should close, or whether, having been closed, should not be re-opened. In this case, the office was situated on the Lambeth side of the borough boundary, but it was equally shared and used by my constituents and people living in Norwood. It fulfilled a very real social need for the many elderly people who drew their pensions and other benefits there, and for the parents of very young children. It fulfilled that personal social objective which has not been taken fully into account by the Post Office in setting its criteria.

That is an immediate and, perhaps, short-term problem. However, there is a long-term problem. The office was in a community of two dozen shops which, to a large extent, depend upon the existence of a post office. People drew their money at the office and spent it in the surrounding shops. It was a convenient shopping point for a number of people. The failure of the Post Office to supply that service means that those who drew their money from that office now have to go further afield, and therefore spend further afield.

During the past few months, two of the two dozen shops have closed and another three are threatened with closure because they cannot keep up the volume of business without the sub-post office. More is involved than the profitability of that sub-post office. It represented a cornerstone, a keystone, a kingpin for that commercial community. If that is taken away, that commercial community will collapse.

The Post Office has suggested alternatives for those who normally used that sub-post office. As with other alternatives which, I suspect, have been proffered in other areas, impossible, or almost impossible, conditions of travel are involved. In this case, there is no direct public transport route. That means either that the elderly must change buses, with the attendant problems, or run the danger of being mugged or suffering in other ways as a result of having to carry money through the streets of south London.

The post office has been used by a neighbouring estate for the payment of rent to the boroughs. It would present an unfair and heavy burden on those who pay their rents by that means to have to take their money a mile or further to the next office, with all the danger involved.

For those reasons, which are well known, which have been highlighted by the hon. Member for Southwark and Bermondsey and which are reflected in many other parts of south-east London, it seems that the criteria on which the Post Office has decided to close post offices, or to leave closed offices which have been closed, are not purely commercial and rational, but are doctrinaire. I urge the Minister to look seriously at the basis on which the Post Office is making decisions of this kind.

For the Croxted road post office we have tried to get the figures of profitability and potential. It is evident either that those responsible for making decisions are not prepared to disclose the figures because it would damage their case to disclose them, or, as is more likely, that they have no idea of the figures.

Being a commercial organisation, the Post Office must act in a commercial way. I submit that, from the ease to which the hon. Member for Southwark and Bermondsey, has drawn attention, and the case of the post office in Croxted road to which I have referred, it is clear that the criteria have been employed in a way that is neither rational nor commercial.

9.27 pm
Mr. Nigel Spearing (Newham, South)

Traditionally, Adjournment debates are occasions when hon. Members raise grievances. Tonight, we do not come to the Government as subject peoples craving the indulgence of a monarchical figure. The people we represent are the owners of the enterprise with which we are concerned and for which, for a temporary period, the Minister is indirectly responsible. He has transferred to that responsibility from other duties and he may yet be transferred to others. The Post Office, meanwhile, goes on and the needs of those who use it go on.

I am grateful to the hon. Member for Southwark and Bermondsey (Mr. Hughes) for raising this subject and for the support that was given by the hon. Member for Dulwich (Mr. Bowden). I am pleased to have this opportunity to join in the debate because there is widespread grievance throughout the country at the way people are being treated by those who run the nation's property.

The way in which they are running it is hurting elderly people and those who cannot walk without difficulty. Public transport is disappearing. It is hurting mothers with young children as they move along crowded pavements with their charges. There is no rhyme or rational reason for a great deal of what is going on.

The hon. Member for Southwark and Bermondsey is from docklands. I am pleased to say that half the area of docklands is in the London borough of Newham, all in my constituency. In the borough of Newham, five sub-post offices are closing. In or close to docklands, two are being closed, one at Boundary road and the other at Roman road, East Ham. In one part of docklands, meanwhile, we want a post office to be opened, but, despite the excellent case for it, the Post Office will not open one, or has not so far opened one. I shall return to that subject.

First, I wish to observe some curious features of this terrible affair which is breaking out throughout the country like a rash of measles. The Government have given the Post Office targets. I suggest that they are arbitrary and are not necessarily realistic. Some of my London colleagues amd I have had extensive correspondence with Sir Ronald Dearing, who I thank for the courtesy of listening to an hour and a half's argument, although it did not leave us much the wiser.

He said that one reason for the closure of post offices, which he hoped would result in the saving of £15 million to £20 million a year, was that more funds would be available for new investment and new business. He hopes to retain the business that he holds.

It is argued that the post offices must close, especially the two in docklands which I have mentioned. Sir Ronald has told me that there will be savings of about £8,000 at each of the five sub-offices that are to be closed. That implies that the savings will be made and that the same transactions will take place elsewhere. The savings will be marginal if the transactions are held, which is the Post Office's objective. The savings relative to turnover will be relatively small and, to some extent, problematic.

In his latest letter to me, Sir Ronald submits that he will not be able to say until the end of the exercise how much of the new investment will arise from savings. I should like to know whether the Government have required a notional degree of savings from the Post Office's own resources to be part of the new investment which the Post Office believes should be made. If that requirement has been made, the entire closure programme is specious and illogical.

In Newham there is an area of dockland known as Beckton, where a mini new town is arising. There will be up to 20,000 new people in the area and, we hope, an associated industrial area. The district centre is like a new town centre but on a rather smaller scale. There will be a number of facilities and there is a large one there already —an Asda superstore with space for parking 700 cars. It has over 30 checkouts. There is also a shopping mall and the Newham post office liaison committee has requested the Post Office to place at least a sub-post office in the mall and perhaps a Crown post office. There is a growing population and most of them are mortgage payers who can enjoy some optional expenditure.

The mall would have been an apt spot for new business but despite the opportunity, the Post Office has not opened a branch office as requested. Instead, it is closing two branch offices that are not far away. The one in Roman road, East Ham, serves an isolated area with a high proportion of pensioners, who will have to get to the nearest sub-post office by walking up and down steps over the northern outfall sewer bank, which will be extremely difficult for many of them. I understand from the district postmaster that the Roman road sub-post office will be closed after the backlog of the Newcastle social security payments has been made up, as will the one in Boundary road in my constituency, which can present an equally good case for being kept open.

This pattern is probably repeated in every constituency in Britain with urban areas. I would have made this speech in any event, but over the weekend I was provided with information at short notice about a Crown post office in London. I have written to the hon. Member for City of London and Westminster, South (Mr. Brooke) about the New Fetter lane Crown post office where many of my constituents, and no doubt the constituents of all London Members, might well do business.

The local branch of the Union of Communication Workers wrote to the freeholders of the site on which the post office is situated. It wrote: The Post Office management locally have informed us from time to time that one of the reasons that New Fetter Lane post office had been selected for closure is that your company refuses to allow them a lease renewal. The union and the company concerned have kindly allowed me to read the reply sent by a responsible person in that company. The letter stated: So far as the particular is concerned, I should not normally wish to disclose to anyone else the detailed agreement between"— the letter names the company concerned— and the Post Office regarding Fetter Lane. However, I can tell you that the present lease does not expire until December 1986 and that there has not, so far, been any discussion about what should happen after that. There may be some misunderstanding, but the point is that, in respect of most of these closures, there has been mysticism and distrust and lack of confidence in the Post Office administration which is widespread and typified by this correspondence.

Mr. Simon Hughes

The hon. Gentleman kindly mentioned that point to me earlier. Although it was not germane to my argument, I must tell the Minister that Merton district post office is in a similar position. That post office was told that London Transport, which owns the freehold, wanted the leasehold to revert to it in September 1983. When LRT was asked about the matter, it said that the post office could have the leasehold as long as it liked. I say that in support of the hon. Gentleman and I hope that the Minister will take heed and ascertain what is happening.

Mr. Spearing

I come to the crunch line—the name of the company, which it has kindly allowed me to reveal. It is no less than Mirror Group Newspapers. Perhaps that was not known to the Post Office, which has written leading articles on this matter. The letter from the company continued: We shall continue to resist closure of Post Offices and we will be glad to hear from you of any developments which you think might help with the campaign.

Yours sincerely,

R. Maxwell. I am grateful to the hon. Member for Southwark and Bermondsey for his intervention. We have two cases where verbal or written information from the Post Office, although it may have been given in good faith by the functionaries, has turned out to be highly questionable, if not incorrect.

I put it to the Minister and through him to Sir Ronald Dearing, with whom I have had extensive correspondence, that this calls into question the basis of the closure of any sub-post office or Crown post office. If the Post Office wants to expand and to increase the confidence of business and individuals, this is not the way in which to go about it. The Minister should use his powers to ensure that the programme is stopped and that a total reassessment of the Post Office closure programme is started by the Government and pursued by the Post Office in pursuit of its duties to the public.

9.37 pm
The Minister for Information Technology (Mr. Geoffrey Pattie)

I am grateful to the hon. Members for Southwark and Bermondsey (Mr. Hughes) and for Newham, South (Mr. Spearing) and to my hon. Friend the Member for Dulwich (Mr. Bowden). We appreciate their concern. The Government have frequently stated their recognition of the important role that post offices play in our social and economic life. I referred to this on 23 January when the House had a full debate on post office closures. I referred to the recognition by this Government, like our predecessors, that the Post Office is a commercial organisation and that it is not only right but essential that it should look to ways to improve efficiency. Unless the Post Office does so, the future of the entire network will be imperilled and its ability to play any role in the life of the country will be in doubt.

The hon. Member for Southwark and Bermondsey attended at least part of the debate on 23 January, and I imagine that little of what I have to say to him will be news. In particular, it should come as no surprise to him that I have no intention of intervening in the Post Office's proposals to close the two post offices to which he has referred. Not only would it be wholly wrong for me to seek to intervene but I have no power to do so. It would be inappropriate for me to comment in detail on the particular circumstances of these decisions.

The hon. Members for Southwark and Bermondsey, for Newham, South and my hon. Friend the Member for Dulwich will appreciate that what they have said will be closely read and studied by the chairman of the Post Office and the board member responsible for counter services. To that extent, nothing that hon. Members have said tonight has been wasted, but they will appreciate that their representations must be properly addressed to that quarter and not to me.

I appreciate that no post office closure is popular. It will not surprise hon. Members to know that I am no exception, as I have a closure in my constituency. I well know from my constituency mail bag what people think about such matters. It is also understandable that the constituents of the hon. Member for Southwark and Bermondsey who currently use those two post offices, like people elsewhere in the country who use post offices which face closure, consider that theirs are special cases. It is for the Post Office and not the Government to consider each case and to make decisions.

It should be clearly understood that the Post Office is responsible for running the counters network and decisions about individual post offices are operational ones for it and not for the Government. That is in accordance with the clear distinction, of which I am sure all hon. Members are aware, between the respective roles of the Government and the Post Office Board. That goes back to the establishment in 1969 of the Post Office as a public corporation with its board. It has been the policy of successive Governments, embodied in the relevant legislation, that decisions about the day-to-day management of the business are the responsibility of the board. The Government's role is confined to broad issues of general policy and matters of overall financial control.

The hon. Member for Southwark and Bermondsey referred to section 11 of the Post Office Act 1969, which relates to directions of a general character for remedying a defect in the general plan or arrangements of the Post Office for exercising its powers. A closure decision, in our view, cannot be regarded as a general plan or arrangement under any definition or construction of those words. That is why—I said this on 23 January—we do not believe that we have the powers, nor do we seek them, to intervene is such detailed matters.

The Government's interest and responsibilities relate to the overall network, and we consider the Post Office's proposals for the urban network in that context.

It might be helpful if I set the Post Office's proposals for reducing the size of the urban counters network and the Government's role and reaction in regard to those proposals in their proper context. The network of post offices is the largest retail chain in the country. In March last year it consisted of 20,499 sub-post offices and 1,559 Crown offices. The current programme to reduce the size of the urban network by up to 5 per cent. will mean a network at the end of the 1986–87 financial year of about 19,500 sub-post offices and 1,490 Crown offices. The reduction is hardly draconian, by anyone's standards.

Although the hon. Member for Southwark and Bermondsey made the acceptable debating point that a local closure is a 100 per cent. closure, that is on the assumption that there is no alternative. I am sure that he accepts that there are eight alternative offices within a mile of the Bermondsey branch office and nine alternative offices within a mile of the 239 Borough high street post office. I am not saying that they are equally convenient for all his constituents. Of course they are not. I hope that he will accept that it is not possible to say that it is a 100 per cent. closure and that there is no alternative post office within a mile when he considers the numbers that I have mentioned.

My hon. Friend the Member for Dulwich was somewhat dismissive about costing and profitability. In my speech on 23 January on the subject of post office closures I said that when the Post Office carried out its major review of counters in 1983 it revealed 2,000 urban offices in excess of the one-mile criterion of which my hon. Friends will be aware and 2,000 urban post offices that are unprofitable, as are about three quarters of the 11,000 rural post offices."—[Official Report, 23 January 1985; Vol. 71, c. 998.] These have been deliberately exempted from any part of the closure programme.

I have emphasised profitability. For the Post Office to know what is unprofitable it has, by definition, to be aware of what is profitable and unprofitable. I hope that no hon. Member is suggesting that the Post Office does not have the ability to make calculations of that kind, because most certainly it does.

By its nature, the counters business is an operation that has high fixed costs and the economics of running it depends heavily upon the volume of business which is undertaken. I have stressed that the Post Office is a commercial organisation, and it is under no illusions that it is owed a living. It recognises that there are effective competitive alternatives for many of the services available in the post offices and is well aware that if the counters network is to retain existing business and win new business it must provide an efficient and cost-effective service at prices which customers are prepared to pay. The majority of the business undertaken at counters is work for Government Departments, public corporations and local authorities. They use the network because it provides a cost-effective way of meeting their requirements. It would be quite wrong to expect these agency customers to use the counters network irrespective of their costs which are, of course, borne by their customers, whether they are taxpayers or ratepayers.

Not only is it sensible, in purely business terms, for the Post Office to look towards improving its efficiency; it is also under a clear statutory duty to do so. Its statutory duty also requires it to have regard to the social needs of the United Kingdom. I should stress that the Post Office takes this part of its duty just as seriously as the requirement to have regard to efficiency and economy.

Earlier today I had the pleasure of flying over the constituency of the hon. Member for Newham, South. Also I impinged slightly on the air space of the constituency of the hon. Member for Southwark and Bermondsey while I was looking at the excellent and impressive London docklands development. Later I drove past the Asda development to which the hon. Gentleman referred. Therefore I can confirm what he said about its existence. It appears to be an extremely significant development and I am sure that the words he has put on the record tonight will be closely scrutinised by Sir Ronald Dearing and his colleagues on the Post Office Board. If there is to be a new development, as certainly appeared to be the case from the air, there will certainly be the potential for new customers, and the Post Office is always interested in new customers.

Since 1945 the Post Office has had the criterion of providing post offices in town areas at intervals of no less than a mile. This is not, and was never intended to be, a precise and inflexible standard. It represents what the Post Office has regarded as a reasonable balance between the service its customers would like and the costs involved. The Post Office has not applied the criterion rigidly but over the years has made decisions about particular post offices in the light of local circumstances. Up to the late 1960s the network grew, due to new housing development, population growth and growth in business. However, changes in the distribution of population were not fully reflected in the provision of post offices and a review which the Post Office undertook in 1983 revealed an excess of about 2,000 offices against the criterion. It is worth while, particularly in a debate that has dwelt upon the constituencies that have been referred to this evening, for the House to bear in mind that the population of inner London has declined by nearly 30 per cent. over the last 20 years.

Mr. Simon Hughes

I accept what the Minister said about his powers, but if there was an argument that the interpretation and use of the various criteria—not just the one mile criterion, but all the others — were not being properly carried out by the Post Office, surely he will accept that he would have a power to review the consultation and other criteria as applied, because otherwise there is no court of appeal. There is only the Minister. He is the only person to whom one can turn if the Post Office does anything wrong. I should be grateful if the Minister could confirm that because, on some of those issues, clearly the general does not apply to the particular cases that he has heard about this evening.

Mr. Pattie

I shall refer in a moment to consultation, because it is an important point. The Government feel that there is a duty to intervene only if there is some evidence of what I would describe as a widespread abuse by the Post Office of its statutory powers, and if it was flouting the consultation procedures, and not making any attempt to provide a proper service or take account of its statutory requirements. Only in such a situation would the Government intervene. The situation would then have developed beyond a mere local difficulty, and become general and widespread.

Mr. Spearing

I am grateful to the Minister for giving way. I am conscious of the time, but he touched on an important point that I raised, and to which he has not yet referred in detail. If the example that I gave—the hon. Member for Southwark and Bermondsey (Mr. Hughes) gave another—is shown to be correct, would it not be within the criteria that he has just outlined, in that, as a prima facie case, incorrect, and knowingly incorrect, information has been given by the Post Office in the course of that consultation?

Mr. Pattie

I do not think that it would be. I have said —not, I hope, in an ex cathedra way—that in my view the Post Office, in order to cause the Government to feel that they should invoke their general powers, would have to give substantial, widespread and nationwide prima facie evidence that it was abusing the criteria under which it operates.

After the review in 1983, the Post Office informed the Government about the outcome of the review and the proposals that it had framed to reduce the number of post offices in urban areas. Our concern was to ensure that the proposals did not prejudice our commitment to the maintenance of a network sufficiently adequate to enable the Post Office to fulfil its statutory duty with regard to efficiency and economic and social needs. The Post Office's proposals included its intention to consult the National Federation of Sub-Postmasters, the Post Office trade unions and the Post Office Users National Council. It also confirmed that individual closure proposals would be subject to the existing code of procedure agreed with POUNC in 1981 and revised in January 1984 to include Crown offices, which provides for consultation with local interests before final decisions are made to close individual offices. We were satisfied with the overall balance that the Post Office was seeking to strike between the needs of those whom it serves and the need for reasonable economy and efficiency, and that the proposals were not inconsistent with its statutory duty. However, that is the extent of our involvement, as I have said.

The hon. Member for Southwark and Bermondsey talked about violent opposition and so on. He is making the assumption that the consultation process is somehow concluded simply because he is apparently aware of some decision that is on the desk of perhaps the director of the London region. It is my understanding that the decisions that he is drawing to the attention of the House have not yet been finally taken. The hon. Gentleman might regard this Adjournment debate as an adjunct to the consultation process. I have evidence that in over 10 per cent. of the cases that the Post Office has had before it on the closure programme, the Post Office has withdrawn the proposals. I do not think that any reasonable person who is minded to take an objective view could say that that shows, as some people have said — I know that the hon. Gentleman has not said this — that the consultation process is some sort of charade. That remark was made —it is a rather unworthy remark—in the debate on 23 January. I know that the Post Office takes the consultation process seriously. It is not blinkered in any way in its approach, nor does it regard any of its proposals as being what I would describe as a foregone conclusion. I repeat, however, that today's proceedings will be closely studied by Sir Ronald Dearing and the Post Office Board.

I have read the correspondence between the hon. Member for Southwark and Bermondsey and various senior officials, including a letter from the London regional director who, I understand, has since retired. In a letter dated 21 February Mr. A. G. Brown stated: I am, of course, delighted to accede to your request for a meeting and I must agree with you that it would make more sense to discuss the matter with both of you at once. I was therefore surprised to learn that that meeting with the hon. Gentleman and his colleague had not taken place.

Mr. Simon Hughes

No criticism of Mr. Brown was implied. He did not leave in any sense under a cloud. He has been replaced fairly quickly and I understand that his undertaking is to be honoured by his successor. Any delay is merely a result of a changeover at that level of management and is no one's fault. My colleague and I look forward to meeting the new regional director.

Mr. Pattie

I merely mention the matter as examination of the correspondence suggested that the ball might he in the hon. Gentleman's court.

As I explained in the debate on 23 January, in undertaking the review of the urban counters network and in framing the subsequent proposals to reduce the size of the network, the Post Office's aim is to improve the efficiency and cost-effectiveness of the network. The Post Office is well aware that closures are not popular but believes that the exercise is essential to secure the future of the network, for the long-term benefit of the community. The Post Office has the Government's full support in those efforts.