HC Deb 13 May 1985 vol 79 cc1246-52

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

9.53 pm
Mr. Tony Lloyd (Stretford)

The Minister has an advantage on this occasion because he is well-travelled on the route of post office closures whereas, for me, it is still a novel experience. The closure of the Old Trafford post office is worthy of the attention of the House because of the issues that it raises. It is not simply a matter of a local decision with which I disagree. It is more fundamental. This is a matter of principle on which the Government have responsibility. It is ironic that I, who on many occasions have advocated public ownership and monopoly control of certain operations, such as post office facilities, am faced with a Minister who, ideologically, would put forward a case in favour of privatisation and competition. I shall challenge the abuse of that monopoly power, and I suspect that the Minister, who probably would not wish to defend that monopoly power, will find himself saying that he does not intend to do anything about it. I hope that I may be wrong about that.

I have had a letter from the Parliamentary Under-Secretary of State at the Department of Trade and Industry. He said: The role of government is confined to broad issues of general policy and to matters of overall financial control". In other words, while thanking me for my correspondence about the Old Trafford post office, he was not prepared to take any interest in a local matter. Yet the process of post office closures stems from decisions made by central Government about the financing of the Post Office, and it is, in consequence, extremely frustrating to try to stave off a closure. Other hon. Members know that as well as I do. They have raised the issue both in Adjournment debates and in a half-day debate earlier in the year.

People are unhappy about the consultation process. It is difficult to make anyone admit responsibility for the decision. The chairman of the Post Office has written to me as follows: Although the guide lines have, as you say, been set nationally, the decisions are being taken by the local managers who have detailed knowledge of the circumstances in the individual area. Yet, in speaking to local managers, I have been made aware that they feel constrained by national guidelines that instructed them in effect to choose post offices to be closed.

I have also had a letter from the chairman of the north-west postal board, who used to be the postmaster in Manchester. It is ironic that the man who put forward Old Trafford post office for closure as postmaster then found himself, as chairman of the board, ratifying the decision to close. He said: The main aim"— of the closure programme— is to reduce costs and improve productivity whilst at the same time improving the range of services available to the customer. Improving services is an important matter. In this case however, there will be no improvement for the customers in the area.

No affected group is even remotely persuaded that the closure decision is in its own interest. The local council opposes the decision because the area around the post office already presents a number of reasons for the maintenance of that office and is also an area of potential major development. The council points out that the Cornbrook sidings site provides 153,000 sq ft of industrial development, 25,000 sq ft for offices and a further 15 acres that are ripe for development. Fluor house, just across the road, provides 110,000 sq ft of vacant office space. Half a minute's walk away from the post office there is planning permission for 45,000 sq ft of offices and 25,000 sq ft of supermarket space. Three minutes' walk down the road, the North-Western Electricity Board plans to site its headquarters in the near future. That will be 100,000 sq ft of office space. There is also to be a major hotel development.

There are, therefore, plans for massive development in the area, which is designated as a development area within the county structure plan and the district plans. The local authority does not understand the decision.

The chairman of the Post Office has said: I can promise you that the Head Postmaster will keep an eye on the post office services in the area and should any future redevelopment justify additional facilities, these will be provided. That is an empty promise. The decision to open a post office is massively more difficult than the decision simply to continue to operate an existing service. Clearly, to close the post office would be a very negative step. Quite apart from future developments, there are cogent reasons, even now, why the post office should not be closed.

I have already said that there are interest groups, one of which is opposed to closure.

It will be no surprise to the Minister to find that the Union of Communication Workers, on behalf of the work force, is opposed to the decision to close.

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

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

Mr. Lloyd

It is a great privilege for me to be able to extend the Adjournment debate. I have not previously experienced this, and I thank my colleagues from London for their early departure, which has allowed this matter of national importance to be more fully debated.

The Post Office has given a promise that there will be no compulsory redundancies, but jobs will simply disappear. If the case that those jobs will disappear because the post office is unproductive or socially unnecessary could be made, we might accept the closure as being reasonable. However, I shall demonstrate that the loss of those jobs is not only socially undesirable but is not even economically soundly based. Those jobs will be lost with no rationale, and there will be even less employment for the people in my constituency.

The major users of the post office are business people and claimants. I have had many letters from local people involved, for example the Manchester chamber of commerce. Its Trafford branch is extremely concerned about this decision and has promised to do everything that it can, even at this late stage, to help reverse the decision. I had a letter from a company, P. F. Jones, Diesel Services Ltd. The managing director says: We are a small limited Company who make use of the Post Office at Talbot Road … almost every day, when we visit the bank of Williams & Glyn's next door … I also collect a pension for my mother-in-law … I always have to queue along with many other pensioners". That is not a sign of a post office that is of no value or that has no demand. The signs are to the opposite, that the post office is providing a valuable service to this business and to the local community. The managing director says that the closure of the post office would be a great inconvenience for that company.

The chairman of the Post Office has said to me that, given that the post office is used far more by businesses than by residential customers and that the residential areas which currently use it are close to the alternatives, I do that think there will be undue hardship to customers. There is no consideration of the needs of the local business community. That is remarkable, because the area is ripe for commercial development and has a significant proportion of local traders already.

There is a local shopping parade in the area and the traders there are concerned about their future. There is a phenomenon that every hon. Member present on these packed Benches will recognise, which is that once a deterioration sets into a shopping area and facilities begin to go, a vicious circle develops. If the post office is not there, pensioners do not go there on pension day, so they do not shop there. The local shops find business more difficult and become marginal businesses. Some close and the process goes on. There is no longer an attraction for local customers. Therefore, the local businesses are extremely concerned about the closure of this post office.

Naturally, there is also concern about the loss of services when the post office closes. Business people are anxious that the case for the continuation of the post office is made. The alternative of sending them to Salford, Chorlton or Stretford post offices is misguided because not only are those offices a long way away, but they are along peculiar traffic routes. One would not send the office junior on such a route with the ordinary day's mail unless that is forced on one because of the closure.

About a third of the Post Office's business comes through the payment of DHSS pensions, unemployment, supplementary and child benefits. It has admitted that some 700 pensioners still collect their pensions at this post office and that nearly 300 people claim their allowances there. I concede that those numbers are not as great as may go to other post offices. Nevertheless that is quite a large number of pensioners.

The chairman of the Post Office said that local managers have detailed knowledge about the circumstances of individual areas. According to that detailed knowledge, Old Trafford post office is within half a mile of an alternative post office, the terrain is flat and public transport services are good. What may seem to be the case when one looks at a map and takes the distance that the proverbial crow would fly, may not be the same when one considers what happens on the ground. I know the area extremely well. It is ridiculous to say that there are easy communications to the two post offices that have been forwarded as alternatives.

Hullard Mall post office, which is the closest to Old Trafford, is almost unknown because it is in a party of my constituency which is not on anyone's travel pattern. It is not a recognised place for people to go to. Although there is a bus service, no one would dream of going there to shop or for any other purpose. Therefore, to force people to go to that post office would mean that they would make the journey for only one purpose—to collect their benefits.

The Post Office claims that the route to Ayres road post office is easier, but that is not true. The crow might be able to fly there in a straight line but one could not walk through the streets in a straight line because of the pattern of housing development. Therefore, to use that post office as an alternative is not straightforward.

There will be immeasurable social loss if Old Trafford post office is closed. It would cause difficulties to pensioners if they had to walk another 1,000 yards or more, as the crow flies. One of my constituents, Mrs. Lathwood, wrote to me as follows: The post office at Old Trafford is a vital service and it is convenient after drawing one's pension to catch a bus to the Stretford Arndale Centre or one into Manchester. She is right. The post office is convenient for the people because of its location. It will be massively inconvenient if the people have to use the alternative post office because they are not on routes or in shopping areas that are well defined. Therefore, the closure of Old Trafford post office would cause great social disruption.

On several occasions the Minister has heard cogent social reasons against the closure of post offices. I know that there is a need to reconcile the social arguments with technical and economic efficiency. I was staggered at the reply from the Post Office to my specific question about whether Old Trafford post office was making a loss. I must thank the chairman of the Post Office for his unequivocal answer. He said: You asked me whether the Old Trafford Office makes a loss. It does not. This post office is not to be closed because it is an economic failure; it is to be closed despite being an economic success. Although on commercial grounds it should be kept open, the Post Office says that it will close it. Because the Post Office is a monopoly 99 per cent. of the customers of Old Trafford post office will go to other offices to draw their pensions, to buy stamps and to make various transactions. The Post Office will not lose income, but the proposed closure has all the hallmarks of the most gross abuse of the Post Office's monopoly power that would be written about in economic textbooks as read by Government Ministers or rejected by Opposition Members.

It is an abuse of the Post Office's power. If competition existed, someone would take over and run that post office. Indeed, a sub-post master of a post office in the area approached the Post Office with a view to taking over this Crown office, but he was told that he could not. The Post Office is not prepared to allow a successful post office to continue to exist under any circumstances. That is a diabolical abuse, which is why the matter is sufficiently serious to draw it to the attention of the House.

On previous occasions the Minister said that he did not have the power to intervene. However, section 60 of the British Telecommunications Act 1981 and section 11(2) of the Post Office Act 1969 give the Secretary of State power to act in these circumstances. I urge the Minister to act, because there is a general Government responsibility in that the closure programme stems from their action and, more importantly, because the decision to close the local office which, although regrettable locally is part of a great national plan, runs counter to the Government's logic and to the Post Office's obligations. It is an abuse of its power to trade. The Minister should assure the House that the matter will be examined, the abuse will be checked, and the Post Office will be asked to reconsider this and other closures.

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

I well understand the anxiety of the hon. Member for Stretford (Mr. Lloyd) that the Old Trafford post office should not close, and I acknowledge his efforts to persuade the Post Office otherwise. However, he will appreciate that as a commercial organisation it is essential for the Post Office to find ways of improving its efficiency and thereby safeguarding the future of the entire network, although at times the process may result in a disappointing decision for those who use a particular post office that is to be closed.

The hon. Gentleman explained why he believed that the decision to close Old Trafford post office was wrong and why it should be reversed. He will not be surprised to hear that I am not in a position to comment on the circumstances of the case or to assess the Post Office's decision. Indeed, it would be wholly wrong for me to do so. I realise that that is not the reaction for which the hon. Gentleman wished, but it will not surprise him.

The hon. Gentleman wrote to my right hon. Friend the Secretary of State for Trade and Industry in October 1984, following correspondence with the chairman of the Post Office about this and another closure in his constituency, requesting that the Post Office be encouraged to review its decision. My noble Friend the Parliamentary Under-Secretary said in his reply that he could not comment, because the matter was for the Post Office. He was not being obstructive or unhelpful—the hon. Gentleman is not suggesting that — but following the clear and persistent policy of the Government and their predecessors on such operational questions, which are matters for the Post Office, not for the Government.

Mr. Lloyd

I was not wishing to suggest that the Parliamentary Under-Secretary was being obstructive. I understand why that is the normal response. I do not want the Minister or the Parliamentary Under-Secretary to think that I was trying to be personally insulting. However, I query the way in which the Government approached this decision, considering the overtones of monopoly abuse.

Mr. Pattie

My noble Friend will be grateful for that, although neither he nor I thought that there was any question of the hon. Gentleman taking that position.

It should be clearly understood that the Post Office is responsible for running the counters network and that decisions about individual post offices are operational ones for the Post Office, not for the Government. That is in accordance with the clear distinction, of which the hon. Gentleman is aware, between the respective roles of the Government and the Post Office Board.

Since the Post Office was established in 1969 as a public corporation with its own board, the policy of successive Governments embodied in the relevant legislation has been that decisions concerning the day-to-day management of business are the responsibility of the board. The role of the Government is confined to broad issues of general policy and matters of overall financial control. Of course, no post office closure is popular, because it will inevitably mean some inconvenience to people who must travel further to the nearest alternative post office, as those right hon. and hon. Members whose constituencies are affected by post office closures will appreciate. There is no constituency in the country that has not suffered a closure, and my constituency is no exception.

It is understandable that the average post office customer's primary interest is in the post office which he or she is used to visiting, and he or she will be concerned if it is decided to close that office. However, the Government and the Post Office Board are required to take a wider view. As to the network of post offices, the Government's interests and responsibilities relate to the overall network, and the Government consider the Post Office's proposals for the urban network in that context. We have frequently stated our recognition of the valuable role that post offices play in the economic and social life of the country. However, if the network of post offices is to continue to provide such a role in the future, it is vital that the Post Office, in running the network, should seek ways of improving its efficiency and effectiveness and maintaining it at a satisfactory level.

Since 1945, the Post Office has had a criterion of providing post offices in town areas at intervals of not less than one mile. That is not and was never intended to be a precise and inflexible standard. It represents what the Post Office regards as a reasonable balance between the service that its customers want and the costs involved. The Post Office has not applied the criterion rigidly, but has, over the years, made decisions about post offices in the light of local circumstances.

Until the late 1960s, the network grew due to new housing development, population growth and growth in business. However, with some exceptions, closures were considered only when sub-postmasters resigned or retired and the distribution of population was not fully reflected in the provision of post offices.

A review undertaken by the Post Office in 1983 revealed an excess of about 2,000 offices against the criterion. The review also showed that about 2,000 urban offices failed to make a financial contribution to the financial overheads of the business. The excess of offices was especially evident in the inner cities, where the population movements were strongest.

The Post Office was aware that any proposals to tackle the excess of offices were bound to be unpopular, and we should commend the fact that it did not take the easy option of doing nothing but had the courage to draw up its proposals to reduce the number of post offices in urban areas.

The Post Office informed the Government about the outcome of the review and the proposals to reduce the urban network. We were concerned to ensure that the proposals did not prejudice our commitment to the maintenance of a network adequate to enable the Post Office to fulfil its statutory duty with regard to efficiency, economy 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 PONC 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 offices.

The Government were satisfied with the overall balance that the Post Office wished to strike between the needs of those whom it served and the need for reasonable economy and efficiency. The proposals were consistent with its statutory duty. But that, I repeat, is the extent of our involvement. We are not involved in decisions to close offices, nor are we involved in the process of prior consultation. There have been some complaints about the operation of the consultation process. The hon. Member did not go as far as couching his comments in a way that I would describe as a complaint, but he mentioned the consultation process. I must tell him that, in more than 10 per cent. of cases, the Post Office has withdrawn proposals to close offices following local consultation.

To my mind, that is hardly evidence, as has been suggested by some hon. Members—although not by the hon. Gentleman — that the Post Office's approach is blinkered or that it merely goes through the motions, with the result already a foregone conclusion.

On the contrary, it suggests to me that the Post Office takes the process very seriously. This impression is borne out in the number of representations that have been made to me to intervene on particular closures, where those complaining have complimented the Post Office on the way that the consultations have been handled, even if they disagreed with the final decision. It seems to me that too many of those who complain about the procedure fail to distinguish between the decisions which the Post Office makes and the way that it has to make them.

As for the hon. Gentleman's main point about monopoly power, the requirements that the Government place on the Post Office to operate an efficient network should ensure, particularly with the consultation procedures and the various consultations with the different national bodies which I have just described, that nothing that the Post Office does could possibly be described as an abuse of its monopoly position. It has gone to great lengths, both in this case and in other cases of which I am aware, to satisfy itself and local people that alternative post offices exist. I do not think that the degree of care and attention that the post office devotes to this question could possibly justify the hon. Gentleman's description of the Post Office abusing its monopoly position.

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

I appreciate and admire the hon. Gentleman's persistence. I do not claim that I have been able to convince him at this stage in the process, I hope that I have explained to him with sufficient clarity the Government's position vis-à-vis the Post Office Board and what the board is seeking to achieve by the various reductions it is making throughout its network while still fulfilling the requirement that we have placed upon it. The Post Office has the Government's full support in its endeavours to carry out the review and its programme.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes past Ten o'clock.