HC Deb 19 January 2004 vol 416 cc1185-94

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

10.15 pm
Ms Joan Walley (Stoke-on-Trent, North)

I thank you, Mr. Speaker, for the opportunity to raise the subject of post office closures on a motion for the Adjournment of the House. I am grateful, as are a good number of my constituents' businesses and people across Stoke-on-Trent and north Staffordshire. We feel that this is an eleventh-hour debate. It is our last chance to say to the Minister, whom I know to be caring and conscientious, that whatever the substance of what has been agreed under the Post Office reinvention programme, the reality on the ground in local neighbourhoods in Stoke-on-Trent and across north Staffordshire is very different.

As Parliament endorsed our Government's approach—I stand up to be counted as somebody who accepted that things could not continue as they were, and therefore that we had to embrace change—the Minister owes it to us to look closely at the way in which the changes are being forced on us in Stoke-on-Trent. The Department of Trade and Industry is responsible for the Government's policy on postal services and for the nationwide network of postal services. The DTI, together with the Treasury, is the sole shareholder of Royal Mail Holdings plc. The Government have responsibility for overseeing the changes that have been brought about as a result of the Postal Services Act 2000. We expect the Minister to make the Post Office accountable for what it is doing in Stoke-on-Trent, across north Staffordshire and in other parts of the country, as evidenced by the presence of other hon. Members for the debate.

The proposal to close 21 offices across the city—six in my constituency, at Bradeley, Chell Heath, Stanfields, Dartmouth street, High lane and Waterloo road—amounts to nothing more than an ill-thought-out closure plan. It has been met with anger and derision and it is a travesty of the careful preparation that went into the Post Office reinvention programme. It has nothing to do with reinventing the Post Office to make its network services more viable. It has nothing to do with the Government's stated policies on neighbourhood renewal, which I have supported over many years. It will not strengthen the Post Office. The closure plan will weaken communities and betray trust in Government if it goes ahead without any changes. It will deter business from using the remaining post offices and provide incentives for businesses to look elsewhere, which the Post Office does not need or want.

Before I consider in detail what we will end up with, I shall comment on the consultation procedure. Members of Parliament—I am pleased to see my fellow MPs in the Chamber tonight—along with other consultees in Stoke-on-Trent received notice of the closures in a letter dated 9 December. As early as 11 December, just two days later, Postwatch chairman Peter Carr issued a press release condemning the Post Office for not properly managing the consultation process. The Post Office is risking its reputation and its brand.

By allowing only a six-week period which ends tomorrow—hence the timeliness of the debate—and which does not allow any extra time for Christmas and new year, the Post Office has prevented many people who have strong views from making their views known. I know, for example, that the petition from Mr. David Conway in my constituency and that from Mrs. Mellor would have had many more names had there not been such a short period for consultation with Christmas and new year in the middle, when many people could not make the necessary arrangements.

When I look in detail at the procedure used for consultation, it is even more apparent that the consultation is simply a sham. Members of Parliament were granted a meeting with the Post Office, but it was only in a follow-up letter to us, dated 16 January, just three days ago, that the Post Office revealed whom they had invited to consult. Stoke-on-Trent city council informed MPs, at a meeting that we had only last Friday, that its meeting to agree what it should submit to the consultation was not due to take place until 5 o'clock on Friday. By close of play this evening, I still could not obtain the details of Stoke-on-Trent city council's submission to the Post Office about the proposals now being considered. How could the council also consult the residents organisations that it recognises and the ward community facilitation service that was meant to be bringing decision making directly down to the people along with the local councillors?

Likewise, Age Concern has told me that it has submitted its comments to me but has no faith at all that the Post Office will listen to its real concerns that what is proposed will contribute to the dismantling of local communities and increase hardship for older people. It makes the point that for many people on benefits or restricted incomes, 0.8 miles is simply too far to walk, and often there is no public transport. A similar point has been made to me by the Royal National Institute of the Blind. It says that the nature of public transport serving routes around the receiving post offices has not been taken into account. That view is also shared by the citizens advice bureaux, which are also on the consultation list, but which told me earlier today that they were not even aware that they had been contacted, so they have not submitted any views about the problems for the people whom they advise, including those whose limited incomes force them to rely on local services and who cannot afford to travel.

It is worth the Minister noting that the local strategic partnership in Stoke-on-Trent, set up under legislation to bring community partnerships together, has had no opportunity to put the closure proposals to its scheduled meetings. It makes the point that in the past 12 months it has mapped out the poorest neighbourhoods, but this botched consultation that we have been given by the Post Office gives it no time to evaluate the likely impact of closures within neighbourhoods in my constituency. Neither is it clear how the work of the social exclusion unit will be affected by the proposals. What is the point of having the social exclusion units to make sure that communities and people are working together if the Post Office ignores them? I therefore wonder how the Minister can be satisfied that he and his Department are overseeing joined-up government. We need that deadline for consultation extended.

How did the Post Office prepare for this closure package? First, it seems to have simply removed the weakest links. It had no strategy; it simply touted for sub-postmasters who wanted to retire, and I can understand that. However, it comes as no surprise because in Stoke-on-Trent, North we have already seen the Post Office close small branches, and follow that up with a further closure programme that went for the easy targets of Packmore and Ball Green. The Post Office took no account whatever of the views of the community, of the amount of ill health, deprivation and disability, or of the lie of the land. In Stoke-on-Trent we have the frequently used phrase "up bank and down bank", and if one is elderly or disabled walking up bank and down bank is very difficult indeed. No account was taken of the lie of the land and I am still waiting for the Post Office chiefs to walk from Packmoor, with its closely knit community consisting of lots of older people, a new general practitioner's surgery, pharmacy and new houses, down a steep road—down bank—with no pavements and back up again, so that they can understand why the closure was so fiercely opposed. Even if the Post Office goes ahead with its proposals, if it can be encouraged to bring in newer, brighter facilities, so much the better.

When Ball Green was closed after a few weeks' reprieve, we were invited to hear the latest proposals, but neither elected Members nor local stakeholders were asked for our own ideas on the basic skeleton service that would best meet the needs of local people and business and be consistent with a strengthened post office network. The Post Office took no account of local council strategies or of the business and economic agendas that are being drawn up with Advantage West Midlands to renew the local economy after the large number of manufacturing job losses that have tragically occurred in our area.

We have neighbourhood renewal money earmarked for our city, we have health promotion plans, and we are encouraging small businesses to start up and to be successful, but the Post Office's so-called reinvention programme takes no account of any of that. Worst of all, it stands to undermine what other Departments are painstakingly trying to do on the ground with the support of local Members of Parliament. Will the Minister ask the Post Office to justify the assessment that it makes in paragraph 19 of its document on the urban network reinvention programme, which makes no reference to the housing pathfinders that are under way or to the regeneration zone's plans? Will he explain why paragraph 2, which describes the customer profile of the closing branch, makes no reference to the large number of elderly people who live in my constituency or to the industry-related ill health from which many of them suffer? The Post Office has failed even to base its plans on reliable facts.

The Post Office cannot hide behind its bland assertions that there is no alternative but to go full steam ahead with the closure plans. I have been talking to the National Federation of Sub-Postmasters in my constituency throughout the three years in which the reinvention plan has been under discussion. I recognise that there is an element of "use it or lose it" and that some post offices will inevitably have to close in order to strengthen remaining offices and to make the mantra of bigger, brighter and better post offices a reality. However, we have been sold short in the way in which the programme is being delivered. The Post Office is taking no account of deprivation in some neighbourhoods. The definition of urban deprivation that has been adopted is flawed, especially in a former mining community such as north Staffordshire, where Coalfields Trust regeneration is doing an amazing amount to improve the standard of living.

Why has the Post Office not come forward with a set of options based not only on the needs of its core business, but equally on the individual needs of different communities and local business? The reality is that the strategy is simply to close post offices where the sub-postmaster has expressed a wish to retire. Before any sub-postmaster attempts to harangue me for saying that, let me say that I understand that they cannot be expected to subsidise essential neighbourhood services. Nevertheless, it should be possible for the starting point of the consultation to be based on which areas need a post office, not on those where it is easiest to close one down. Only then can a genuine strategy be drawn up.

Many of the protests that I receive point out that the wealthier, well-served areas are not being deprived of services as are those communities that have greater need of them because of their deprivation and reliance on benefits. Can the Minister tell the House what account he has taken of recent complaints that the Department for Work and Pensions has not made it easy for people to opt out and to keep their payments via the post office account? Can he also tell us what progress has been made on the negotiations to agree a new commercial contract for sub-postmasters? It has been put to me in meetings—here I pay tribute to the work of Mr. John Morris, regional secretary of the National Federation of Sub-Postmasters in north Staffordshire—that sub-postmasters cannot afford to pay the minimum wage to their employees on the basis of the current contract. That requires urgent consideration, as does the issue of improvements to assigned payments to benefit smaller post offices.

What account does the Minister take of the views of business in the consultation? Given the comments of Mr. Brian Carnes, director of the North Staffordshire chamber of commerce, about the proposals' costs to business, surely one DTI Minister should be conferring with his counterparts elsewhere? In an e-mail to me, one business man estimates that the annual cost of using a different post office would be £5,000 to his business alone. One hand of government is supporting business through the north Staffordshire regeneration programme while another is making it more difficult for business to operate. Indeed, other businesses have asked how they can survive when they will no longer have easy access to a post office where they can easily deposit bulky items.

I want, finally, to raise some reservations about the fund for deprived urban areas. The way in which it is being applied on the ground seems flawed. There are questions about which areas can apply to the fund and about which ward boundaries are to be used. Post offices that could benefit from the money in deprived wards are denied the opportunity because the strategy revolves around those who wish to retire rather than the communities that need to be served. Smallthorne post office is looking for support there, too.

I hope that the Minister will not simply read me his civil service brief. I have two positive suggestions for him. First, extend the consultation and make it meaningful. Secondly, involve the stakeholder organisations in reconfiguring the network so that it is based on real needs, competitiveness, deprivation, and community and neighbourhood renewal. Everyone accepts that some post offices may have to close, but we want meaningful consultation.

10.31 pm
Mr. Mark Fisher (Stoke-on-Trent, Central) (Lab)


Mr. Deputy Speaker (Sir Michael Lord)

Does the hon. Gentleman wish to speak?

Mr. Fisher

I should like the opportunity to make one or two remarks, which I have discussed with my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley).

Mr. Deputy Speaker

Has the hon. Lady finished her speech?

Ms Walley


Mr. Deputy Speaker

Does the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) have the hon. Lady's permission to take part in the debate?

Ms Walley

He does indeed.

Mr. Deputy Speaker

Does the hon. Gentleman have the Minister's sanction?

The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)


Mr. Fisher

I am most grateful, Mr. Deputy Speaker, to you, to my hon. Friend the Member for Stoke-on-Trent, North for her kindness in giving me a moment or two, and to the Minister. I congratulate my hon. Friend on her resourcefulness in securing a debate that is important and urgent for everyone in north Staffordshire.

Now that the Minister has heard last week's debate and my hon. Friend's excellent speech tonight, I hope that he will think again about the disparity that is apparent between the theory of closures and what is happening in practice. In theory, they are an orderly reduction of the post office network in response to falling demand. In practice, they are an incoherent butchery of a public service that will leave some areas, particularly two large wards of almost 20,000 people in my constituency, without a single post office. Closures work in response to applications from post offices, and if each is vulnerable, there is no provision at all in some areas.

I hope that the Minister will think on that. I know that he cares enormously about post offices, but the way that closures are happening will leave not a smaller, coherent network, but a patchy one, and in those areas where the patches do not meet up, a disastrously inadequate service.

10.33 pm
The Minister for Energy, E-Commerce and Postal Services (Mr. Stephen Timms)

I, too, congratulate my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on securing the debate and on the way in which she has presented her case. She described issues affecting the post office network that are relevant to all Members. I welcome the opportunity to respond to those points.

I assure my hon. Friends the Members for Stoke-on-Trent, North and for Stoke-on-Trent, Central (Mr. Fisher) that I have taken serious note of their concerns, which my hon. Friend the Member for Stoke-on-Trent, Central also raised in last week's Opposition day debate. Both my hon. Friends have also, in discussion and in correspondence with me, told me about their experience of the consultation process for the programme. I shall hold urgent discussions with the chief executive of Post Office Ltd. and the chairman of Postwatch about how we can ensure that there is greater confidence than has been expressed in debates of late that the public consultation is meaningful and local views are properly considered before final decisions are made.

I am pleased to be able to tell the House that in the light of the concerns expressed by my two hon. Friends, Post Office Ltd. has agreed to extend the consultation period for the three Stoke-on-Trent city constituencies by two weeks until 3 February.

Again, I affirm the importance that I attach to the network of local post offices as a focal point for their communities in urban as well as rural areas, especially for elderly and less mobile people. We are committed to maintaining a viable nationwide network of post offices and ensuring that benefit recipients can continue to collect their entitlement in cash each week from their local post office by means of a Post Office card account or a bank account.

The starting point for our policy for the network is the performance and innovation unit's 2000 report, "Modernising the Post Office Network". It rightly pointed out that the network of post offices had not kept pace with the changing needs of its customers. Too often, post offices had become dingy and shabby through lack of investment and the Post Office had not made the most of its highly trusted status as a provider of financial services. The report was widely welcomed, in the House and elsewhere, as squaring up honestly to the challenges to the network. It made 24 recommendations, all of which we accepted.

The post office network has been contracting since the 1960s. Reductions in post office usage have occurred for all sorts of reasons. Past absence of investment is important, but dramatic improvements in technology, greater mobility and changes in shopping and financial habits mean that people simply do not use post offices as much. My hon. Friend the Member for Stoke-on-Trent, North rightly made the point, "Use it or lose it." That applies to many post offices.

The company was slow to develop new sources of income before the beginning of the switch last April by the Department for Work and Pensions to making all benefit payments by direct credit. More than 43 per cent. of benefit recipients already had their cash paid directly into their bank accounts rather than through order books, compared with only 26 per cent. in 1996. There are far fewer recipients of jobseeker's allowance now than a few years ago. Those changes pose big challenges to the network of post offices and they must be tackled, not ducked.

In the past financial year, Post Office Ltd. lost £194 million before exceptional items. This year it has reported a loss of £91 million for its first half year. Declining profitability in the network means that sub-postmasters' ability to sell on their businesses—the way in which people moved on in the past—has taken a severe knock. Decisive action is essential to maintain the sustainable country-wide network that we all want. We are taking such action.

One PIU recommendation was that if the Post Office decided that fewer offices were needed in some urban areas, the Government should consider providing funding to compensate affected sub-postmasters adequately for the loss of their business. That is right, and it is why, after parliamentary approval of the funding, Post Office Ltd began its urban network reinvention programme in November 2002.

To minimise the possibility of damaging and unco-ordinated closures, initial closure proposals in the programme focused on single post offices that were known to be most at risk through poor viability. In response to comments from hon. Members and others and to reduce uncertainty about the future shape of the network, the company moved to producing its proposals on an area-by-area basis, using each parliamentary constituency as the framework.

The area-wide plan gives the Post Office an opportunity to discuss with hon. Members and others the future shape of the network. It gives sub-postmasters confidence, and most people accept that an area-wide picture should help in our discussions about the future. The company aims to complete all public consultations by next December. That will also help to reduce uncertainty.

Ms Walley

Does my hon. Friend agree that when a desert could be left by the closure plan, the Post Office should consider carefully proposals from, for example, other retail outlets, where new post offices could be introduced, even alongside a closure programme?

Mr. Timms

We have made it clear that at the end of the programme, at least 95 per cent. of urban residents should be not more than a mile from their nearest post office. If there is an area larger than that, in which a large number of people would be more than a mile from their nearest post office, the Post Office should consider the possibility of opening a new outlet—indeed, I can think of a number of cases in which that has happened—perhaps within a larger retail outlet. I certainly welcome that.

In the debate last week, we talked about the crucial role of Postwatch in these discussions. Postwatch's assessment of the proposals relating to Stoke-on-Trent is not yet complete, but I understand that the organisation has some concerns about two of the proposed closures in Stoke-on-Trent, Central. It differs from the Post Office in seeing Trent Vale as a reasonably well presented post office. Also, although there is another branch less than a mile away at Hanford, there is a large road in between them. Postwatch has suggested that if Trent Vale were not retained, there would be a strong case for Oak Hill in Stoke-on-Trent, South. Postwatch is also concerned that the Penkhull branch was given as the receiving branch when the Allotments branch was closed under the programme last May. Postwatch is continuing to reflect on those matters, but I find it difficult to see how the closure of an office that everyone was told would be a receiving office only a few months ago can now be justified.

Following those proposals, and the decision that will be reached in due course—and given the additional two weeks' consultation that I mentioned—Post Office Ltd. has no intention of returning to the area with any further proposals for closures under the programme. The company believes that the proposed changes to the network across Stoke-on-Trent will fulfil its objective of providing the right level of service for the level of custom in the area.

An additional element of the programme is the £30 million that the Government have provided for modernising and adapting the offices that remain in the network. The key to improving standards in those offices will be the increased volume of business that they can expect, but the grants of up to £10,000—and in exceptional circumstances, up to £20,000—for each office that expects to take on a significant number of additional customers, to be matched by the same sum from the sub-postmaster, will be an important boost to achieving the bigger, brighter, better post offices that my hon. Friend rightly referred to.

Mrs. Betty Williams (Conwy) (Lab)

Is the Minister aware that when the Post Office writes a letter of decision to Members of Parliament, the last paragraph contains the customer helpline telephone number and a website address, in case Members need to know any more about the decision?

Mr. Timms

I would be grateful if my hon. Friend would let me see the letter that she is referring to.

My hon. Friend the Member for Stoke-on-Trent, North referred to the steps that we have taken in the programme in relation to deprived urban post offices. I understand that to date in the Stoke-on-Trent area there have been four applications to the fund that was launched by my right hon. Friend the Deputy Prime Minister in December 2002. That involves a £15 million scheme, called the deprived urban post office fund, specifically designed to support post office branches that are invaluable to the community in disadvantaged urban areas throughout England. Under the scheme, individual grants of up to £50,000 are available to sub-postmasters.

Of the four applications that have so far been made to the fund from the Stoke-on-Trent area, two have been approved: an application for £45,000 from the Milehouse lane branch, which is in the Newcastle-under-Lyme constituency, just north of Stoke-on-Trent, and one for £49,323 from the Normacot road branch in Stoke-on-Trent, South. A more recent application from the Sneyd Green branch in my hon. Friend's constituency is currently being assessed, as is the application from the Beverley drive branch in Stoke-on-Trent, Central.

We are investing very substantial sums in supporting this transformation of the entire post office network—some £2 billion in total. We have established a strong management team at the Post Office and I believe that the prospects are good. However, it is vital that there should be sufficient public confidence in the arrangements for consultation about the urban reinvention programme. I am grateful to my hon. Friends for raising their concerns with me.

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fifteen minutes to Eleven o'clock.