HC Deb 28 October 2003 vol 412 cc58-65WH 3.45 pm
Mr. Mike Hancock (Portsmouth, South)

I am delighted to have"been given the opportunity to hold today's debate arid to bring to the Government's attention the strongly held views of the people of Portsmouth, and in particular Portsmouth, South, about the proposed closure of six more post offices. Those six offices—Highland road, Fawcett road, 4 Albert road, Old Portsmouth High street, Winter road and 249 Milton road—comprise nearly 50 per cent. of the sub-post offices in Portsmouth.

The irony is that the existence of the Milton road office was used to justify the closure of Langstone road post office some months ago on the grounds that it is quite close to Langstone road and that the people affected could use that. Less than six months later, it is also being closed.

Public reaction has been significant and many thousands of people have made representations. The strength of feeling is such that my office has passed on well over 500 objections to the closure of one or other of those offices. On top of that, we have submitted petitions containing more than 1,000 signatures in support of the Highland road office and some 1,500 signatures in support of the post office in Old Portsmouth High street.

Many Members have been involved in discussions and debates about closures, and my mind goes back to what Ministers, and indeed the Prime Minister, have said. In November last year, the Prime Minister made it clear that he would do everything in his power to enable all post offices to become Government general practitioners. How right he was that most people would support that aspiration; how sad it was that he did not follow it through by introducing the very things that would offer alternatives to closure for many of those post offices.

I would be the first to admit that many offices in cities such as Portsmouth have struggled to hold on to their business, but they have had little or no encouragement to grow their business from the Government. In fact, obstacles have been placed in their way. It is interesting that more than 50 per cent. of the elderly people in Portsmouth—this statistic is much greater than the national average for pensioners—get their pensions through their pension books and post offices. My constituency is unusual because it must be one of the few where the percentage of the elderly who still want to obtain their pensions in that way is greater than 50 per cent.

The Post Office is reluctant to answer the question whether it is prepared to see a viable post office close. Its failure to supply information supporting its case is a significant point in today's debate and has been a notable feature of past debates. Obviously, it has done individual deals on compensation with sub-postmasters. One cannot blame individuals for settling on the bird in the hand rather than trying to work out what the future might hold. If imaginative measures to galvanise support for sub-post offices along the lines promised by Ministers and, in particular, the Prime Minister had materialised, perhaps some threats of closure would not be happening.

I wanted to assess the viability of the High street post office in Old Portsmouth. I asked the Post Office's consultation team leader whether, in principle, any of the decisions could be reversed, and I was assured that they could. I therefore mentioned commercial viability and whether that had been taken Alto consideration. The High street post office in Portsmouth is interesting. The postmaster who holds the franchise lives in Somerset and does not operate the business. He has a manager there. The post office is well supported, and the manager claims that it is a viable proposition. A group of residents is willing to buy that business and take it on, but the Post Office told me that it would not seriously consider that.

I find it strange that the Post Office, as on a previous occasion, would not even entertain the idea of meeting the people and discussing those issues face to face. When there were closures in Portsmouth previously, the Post Office agreed to come to meetings after the closures were announced, not during the consultation period. The Minister on that occasion seemed somewhat gobsmacked by that, and felt that it should not be repeated. Once again, however, the Post Office has agreed, but only this morning, to attend a meeting later this week, after the consultation period has closed.

The point that Post Office representatives made to me very robustly was that they did not want to have to talk to the people in a public meeting. They were prepared to meet only a select few, such as local councillors and perhaps one or two other interested people. That was the only basis on which we could get a meeting. That is highly regrettable and it does not suggest that public consultation will be a vital part of deliberations. It also appears that the decision has already been taken. I would be surprised if any of the post offices were allowed to remain. I should like to see them stay open, but I fear that the decisions have been made because the Post Office has announced that it intends to close some 3,000 post offices in the current round of activity.

We will lose nearly 50 per cent. of the sub-post offices in the urban area of south Portsmouth. To say that that is a good thing could not be further from the truth. In most instances, it will encourage the one thing that the Government have said that they do riot want: more car journeys. It is not easy in a big city such as Portsmouth to walk a mile comfortably. For some, particularly the elderly, a journey of a mile across urban roads is not as easy as one might think. Certainly, some proposed closures will lead to difficult and hazardous journeys for the elderly if the journeys to alternative post offices—I have walked three of those—are made. In at least two cases it would take a fairly fit elderly person the best part of an hour in each direction if they wished to continue to use the services of a post office. Others have made it quite clear that instead of walking to the next post office, they will drive. That will defeat the object of trying to get people to reduce their number of car journeys.

That returns us to the question of what a post office means to a local community and how important it is. In a city such as mine, there are a significant number of places that one could describe as urban villages, and I expect that the scenario is the same in many other constituencies. The post office is located at the centre. It is convenient and useful for many reasons. It is on the way to school, close to other shops and close to where a large number of people live.

If the Government had been a little more courageous in their attempts to encourage businesses in post offices, rather than doing everything they could to persuade people to find alternatives, we might not have seen the closures and some post office business might have been more successful. I shall quote from a constituent's letter. Relating to Old Portsmouth, it says: I am 77 and have a naval disability pension. I am unable to drive, I am entirely dependent on a wheelchair … I view the future with considerable apprehension if we are going to lose our Post Office … Old Portsmouth no longer has a bank and the post office is regarded as the bank and 'village' financial centre. Its loss (especially to pensioners) would be an enormous deprivation. It is not overstating the case to say that this Post Office is the hub of the village and an integral part of people's lives. Its loss would lead to disruption and a serious devaluation in the quality of life. To many pensioners it is a lifeline". Some people might think it bizarre that a post office could mean so much to a pensioner, but two or three post offices lend themselves to such a scenario. They are meeting points—he focal point of the place, where people meet regularly and enjoy the facilities. Many hundreds of houses are going to be built in Old Portsmouth, but the Post Office said that it was not sure that that expected growth would be "deliverable" to the post office. I hope the Post Office is prepared to test that over time to see whether it materialises.

I was disappointed by Ministers' lack of response when I wrote to them on the matter. They sent back the Government line and did not engage in the debate raised in the correspondence. My letter to the Department of Trade and Industry on 14 October asked specific questions, none of which was answered satisfactorily. I wrote on similar lines to the chief executive of Postwatch; its approach to the Post Office on the situation in Portsmouth was received in a very negative way. I hope that this debate gives us an opportunity to ask the Minister, the Department and the Post Office to reconsider in respect of the difficulties that the closures present.

It is not easy to take difficult decisions and I understand that the Post Office has problems, but many are of its own making. It has not gone out of its way to engage the public and encourage them to use the post offices. Indeed, the post office in Fawcett road was subject to a temporary closure. The Post Office wrote to me saying that it would open the post office on a specific date last November, but that day came and went. I followed up with letters and received a reply saying that the intention was to reopen the post office. Sadly, when the list of six was announced, Fawcett road was on it. I wonder whether there was any intention to reopen it. This is a sad reflection of the dismissive way in which the Post Office and, to a lesser extent, the Government have ignored what people said in the past.

Thousands of people tried to save the Langstone road post office, but they lost the argument. I hoped that the Post Office would learn a lesson from that and not repeat its mistakes, and that a consultation exercise would mean a dialogue with the people of the city of Portsmouth. I greatly regret that the Minister did not take serious note of what was said when I raised the issue during the previous debate on the subject in this Chamber. More important from the point of view of the people of Portsmouth, the Post Office disregarded the matter too.

People take time and effort out of a busy life to fight such a campaign. Pensioners do not readily take to the streets and motivate others to support the retention of a building or a business unless they genuinely believe that something bad will happen unless they do something. They have fought their corner and made their case, so it is disappointing that the Post Office has not had the courage to come to the city of Portsmouth to make its case transparently and, if necessary, forcefully. It has chosen not to do so. Indeed, it seems to be willing only to rehearse the enormous problems it faces and the financial burdens it carries nationally.

The Post Office is not prepared to consider the upheaval and disruption as well as, in some instances, the undoubted deprivation that removing a facility such as a post office will cause. That cannot be right and it should be opposed vigorously by Members representing constituencies such as mine. That is why I was keen to join in a debate here a few months ago, when about 16 Members took part—record for this Chamber. All those Members were affected by closures in one way or another.

I hope that the Minister's reply gives hope to people who have campaigned on the matter, asking for their case to be listened to and to be able to take part in a dialogue—not a one-way slog against a brick wall. They want an open dialogue on the issues that they face and ways forward. I would also be interested to know whether closures are Government policy. The Prime Minister said that they were not and that he did not want to see viable post offices closed. I hope that the Minister will say that the Government are prepared to make the debate more transparent and provide the necessary figures to support, or otherwise, the closures. I also hope that when there is a viable alternative to closure it will be explored and developed.

I assure the Minister, her colleagues in the Government and the Post Office that people's support for that organisation will wane considerably. No effort was even made to test whether the post offices that will be expected to absorb the people displaced from the closing post offices will be able to cope. Do they have the physical capacity to take perhaps several hundred more transactions over a busy two days when people are collecting their pensions? It is disappointing that, once again, none of that has been properly explored. Sadly, when questions are asked about such issues, the Post Office does not want to give too much information.

I hope that the plea from the people of Portsmouth, South on the six proposed closures and the closures that have already taken place has taught the Post Office and the Government a lesson about how not to go through a consultation exercise. I would be interested to know whether the Government have given instructions to the Post Office not to enter into a public debate on the closures.

Interestingly, the hon. Member for Eastbourne (Mr. Waterson) said in a debate that a public discussion finally took place only after he forced the issue on to the Floor of the House, put the Minister behind the black ball and said, "Are you afraid to have this debate?" I have tried everything possible to have a reasoned debate with the Post Office, but, sadly, it has neglected to take up the challenge of justifying its decisions and, more important, neglected to explain to the people of Portsmouth how the post offices in our city will operate in future. That can only be described as a disgrace.

4.3 pm

The Minister for Industry and the Regions (Jacqui Smith)

I congratulate the hon. Member for Portsmouth, South (Mr. Hancock) on having secured the debate on what is clearly an important issue. I assure him that the Government are committed to maintaining a viable nationwide network of post offices. Both as Ministers and as constituency MPs, we fully recognise their importance as a focal point for local communities, particularly for elderly and less mobile customers. However, as I think that he accepted, failing to take difficult decisions about how to maintain that viability is not the best way to support the Post Office.

I will come on to some of the hon. Gentleman's specific points about the proposals in his constituency, but it is worth while reminding ourselves of the policy context for the changes, which are based on recommendations in the performance and innovation unit's 2000 report. which was widely welcomed. The Government accepted all the recommendations that it made. One of those recommendations was that, if the Post Office decided that fewer post offices were needed in some urban areas, the Government should consider providing funding to ensure that sub-postmasters affected could be adequately compensated for the loss of their business.

Last November, following parliamentary approval of the funding, Post Office Ltd. initiated its urban network reinvention programme. The network of post offices is made up of nearly 17,000 branches—ore than all of the banks and building societies in the country put together. Over 1,000 urban sub-post offices have at least 10 other post offices within a mile. Sub-postmasters have been finding it increasingly difficult to earn a reasonable income from their business and have been leaving the network. In the last financial year. Post Office Ltd. lost £163 million.

The truth is that if action is not taken now, there will be unmanaged decline in the network and serious gaps will open. That will do nothing to maintain the viability of the Post Office or to serve the hon. Gentleman's constituents and those who depend on Post Office services. There are many arguments for why this decline may have occurred. The hon. Gentleman admits that for many post offices it has been a struggle, not least because of under-investment. The programme is also enabling the Government to put that right. It is also the case that greater mobility and changes in shopping and financial habits mean that people are not using the post office as often as they used to, and customer numbers have sharply reduced.

I take seriously the hon. Gentleman's challenge to ensure that we make the range of services offered by post offices attractive. I want to talk later about the support that the Government are providing and the action that Post Office Ltd. is taking in order to improve those services. It is essential for the viability of the post office network that it adapts to changing lifestyles, changes in people's preferences and new ways of doing business.

The hon. Gentleman raised a point about the proposal to develop post offices as Government general practitioners. That was a recommendation from the performance and innovation unit report and, as the Government were asked to, we embarked on a pilot project to test the concept of post offices as Government general practitioners. As sometimes happens when one piles up proposals, one finds that they do not work in the way that is most effective.

The pilot showed that it would neither significantly improve Departments' ability to meet their delivery or financial objectives nor raise sufficient new revenue for post offices, although it did show a number of areas in which Departments might deliver services through post offices in future. The scope for that is being kept under review, as is the significant commercial interest in placing kiosks in post offices, which would open, as the hon. Gentleman suggested, other business opportunities. That was a rational decision taken on the basis of a pilot.

The hon. Gentleman also raised a. concern about the consultation process with regard to the closure proposals. It is the case that the consultation proposals have been considerably improved. Initially closure proposals were focused on single offices known to be at most risk of closure because of poor viability. The company has accepted that there was much uncertainty about the future shape of the network and has now undertaken to produce its proposals on an area-by-area basis using each parliamentary constituency, or geographical groupings of them. In its recently published report on the post office network, the regulator Postcomm commended Post Office Ltd. for its constructive response, and welcomed its more co-ordinated approach, as did the Trade and Industry Committee.

Producing proposals on that basis brings the benefit of giving a clear view of the level and location of service provision at the end of the programme in a given area, taking into consideration all those important issues of access and the way that local people need to use post offices, while giving the opportunity to understand the views of key opinion formers—especially MPs and local authorities—about the wider plans. Of course, in accordance with the code of practice, every proposal is subject to public consultation.

The consumer watchdog set up by the Government, Postwatch, has a key role in the process. It is consulted on every proposal and monitors th programme as a whole. Following discussion with Postwatch on how to undertake consultation on the new area plans, Post Office Ltd. agreed to extend the period of public consultation from one month to six weeks. As with the early stages of the programme, consultation is still based on the proposal for each individual branch and Postwatch still receives prior notification of proposals.

Mr. Hancock

Does the Minister agree that one of the fundamentals of any consultation would be the willingness of the Post Office to take its case to the people of the area? Why has it systematically refused to take its case to the people of Portsmouth, South and many other constituencies where offices have been deemed ready for closure? What is it about that proposition that the Post Office finds so difficult to handle? Would not a major breakthrough be for the Post Office to be ready and willing to participate in a proper consultation, in which it makes its case to the people most affected?

Jacqui Smith

I certainly agree that it is important to have proper consultation. That is why we have extended the time period; why we have increased the support to Postwatch to enable it to act as a defender of, and a voice for, people throughout the process; and why we have ensured that the proposals are shared with local people. I am not sure that I agree that public meetings, beloved as they are of politicians, are always the most effective way to make local people's voices heard. As the hon. Gentleman himself pointed out, he has been able to ensure that the voice of his constituents is being clearly heard, as have many other hon. Members. It is—dare I say it?—slightly churlish of him to criticise the Post Office for now agreeing to meet him, when that is clearly what he is demanding.

Mr. Hancock


Jacqui Smith

The hon. Gentleman spoke for longer than his allotted time. If he wants to speak again, that is fine, but I will not be able to answer all his questions.

Mr. Hancock

I want the Minister to be left in no doubt that the Post Office has agreed to a meeting after the consultation period is closed, which is complete nonsense. Surely she agrees that for the Post Office to say that it will argue its case after the consultation has closed and then to have a fixed number of people who can attend does not encourage the public to believe that it is doing this openly and transparently.

Jacqui Smith

The hon. Gentleman has certainly taken the time opportunities available to him today to put his case. I agree with him to the extent that I expect the decisions to be taken on the basis of the widest consideration of the views of local people and the other criteria that have been laid down. That is clearly what should happen and, given the extended time and the role of Postwatch that I have outlined, it is more likely to happen now than it was previously.

The hon. Gentleman also raised specific issues about his local branches. It is important to identify the fact that, although he pushes me on this issue and rightly demands that Post Office Ltd. takes responsibility for listening and responding to the points made by his constituents, the Government do not have a role in this decision-making process. It is also important to note that once decisions on the current proposals have been reached, difficult as they are, Post Office Ltd. has no intention of returning to the hon. Gentleman's constituency with any further proposals. That is why it is important that the views of Postwatch, as an effective consumer champion, and of local people are taken into consideration in the process.

The hon. Gentleman rightly raised the issue of how we improve the services offered by post offices. Let us be clear that this process has enabled the Government to invest an additional £30 million to modernise and adapt the offices that remain in the network. Those offices that may receive customers who previously attended one of the post offices being closed are eligible to apply for grants of up to £10,000 each to improve their facilities. I understand that offices in the hon. Gentleman's constituency have applied for such grants. That will enable us to begin to see better, more accessible post offices, with some of the investment necessary to make them places that will do business successfully and contribute to their communities.

More widely, Post Office Ltd. continues to develop and introduce new services and business activities. Most recently, that has included the announcement of the intention to offer a range of financial products through a joint venture with the Bank of Ireland. Other initiatives, including the acceptance of debit card payments and a major advertising campaign for travel insurance and bureau de change services, contribute to make the post office a place that customers want to visit. The Government have provided £480 million to automate every post office branch, enabling the establishment of the technical infrastructure to support electronic banking services.

Change is difficult, and I understand the hon. Gentleman's concern to ensure that, throughout this process, there is open consultation, and that local people have the opportunity to have their say. However, the ultimate objective is to end up with a better, stronger and broader post office network.