Post Office Network

Russell Brown Excerpts

Tuesday 2nd November 2010 Westminster Hall

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

It is a pleasure to serve under your chairmanship, Mr Caton, and I thank you and Mr Speaker for giving the House the opportunity to debate this important subject. Although it may not be quite as lively as the previous debate, it nevertheless affects constituents throughout the United Kingdom. I therefore hope that many Members will be able to take part. I welcome the Minister to his seat. He is extremely welcome, and I am sure that he will consider my proposals with great sympathy.

This subject was more broadly debated in the main Chamber during the Second Reading of the Postal Services Bill last Wednesday. I start by offering my overwhelming support for the proposals put forward by the Government in their effort to protect the future of Royal Mail and the post office network. Unlike the previous Administration, which for more than 13 years chose to manage its decline, the Government have taken decisive action within their first few months.

The Secretary of State noted on Second Reading:

“The previous Government’s closure programme shut 5,000 post offices.”—[Official Report, 27 October 2010; Vol. 517, c. 352.]

Once and for all, the Bill reverses the decline of Royal Mail by tackling the £8 billion pension deficit; in terms of today’s debate, it provides a new vision for the future of the Post Office and guarantees the universal service obligation to the 28 million addresses in the UK. It is an assurance that the days of wholesale closure are over. I wholly support the Business Secretary.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I welcome the fact that the hon. Gentleman has managed to secure this debate. He is precise in what he said about the previous Government, but would he care to tell the House how many post office closures took place in the five years prior to Labour taking power in 1997?

[Geoffrey Clifton-Brown]

If the hon. Gentleman looks at the figures, he will find that there were more closures during the 13 years of Labour Government than under the previous Conservative Government. He should be careful when considering the figures.

--- Later in debate ---

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I am pleased to be called in this debate, and I thank the hon. Member for The Cotswolds (Geoffrey Clifton-Brown) for raising the issue yet again. As he said, he has a good and honourable history on the matter.

I am pleased to continue the debate that we started last Wednesday, when we had only limited time. As the Minister knows, I have serious concerns about the plan to break up the Post Office and Royal Mail. I have been the secretary of the Communication Workers Union liaison group in this place for more than a decade, and have worked with sub-postmasters and sub-postmistresses on every campaign to oppose the closures that have been deeply damaging to many communities in all our constituencies, particularly in rural areas, as has been pointed out.

My concern about the announcement is what the detail will be. I do not remember Hooper recommending such measures as necessary to save Royal Mail. All the things that Hooper 1 and 2 focused on did not result in a recommendation to break up the two organisations. As has been said, there are substantial synergies. One third of Post Office’s income comes from the synergies and the services it delivers for Royal Mail.

I have three concerns for the Minister to address. What will the announced subsidy of £1.34 billion be spent on? What back-of-a-fag-packet calculations has he done? He has put none in the public domain so far. Will that £1.34 billion come on top of the currently planned subsidy of £180 million a year from 2011, or will it include that sum? On the cost of breaking up Post Office Ltd, how much is it calculated will be required to set up a parallel structure removing it from Royal Mail? It is currently a subsidiary of Royal Mail to whose new chief executive it is answerable through another chief executive.

The second problem relates to the historical business model of Royal Mail versus the promises that there will be continuing synergies. It is easy to make promises that that will happen—I heard the new chief executive say that it will—but, in reality, when it comes down to the wire will that be the case? For example, when Royal Mail at the centre was asking too much for the right to issue TV licences, it transferred that business out and would not take it. My local post office could not get that business because Royal Mail at the centre was asking for a fee that there was no willingness to pay. In fact, we started to get that service from PayPal at a service station at the bottom of my village.

[Mr Russell Brown]

That very point was also raised by the hon. Member for Newton Abbot (Anne Marie Morris); the saving was £100 million for TV Licensing. It was a commercial contract for which the Post Office, frankly, was not even in the ballpark.

[Michael Connarty]

I recall the detail well, but to me it was an example of a centralised organisation not having in mind the interests of the peripheral parts of the organisation, particularly small businesses. That is why although I am a Co-op party member, I have serious concerns about a mutual taking over all of Post Office Ltd, because it will become another central organisation, with its own raison d'être that is not necessarily the same as that of people in sub-post offices. I have some serious concerns about how the detail of the proposal will work.

I see the Minister smiling. The other issue is that this is another Lib Dem promise. We know that their promises are worth absolutely nothing, particularly to those who voted for them. That is similarly the case with regards the question raised by the hon. Member for Angus (Mr Weir). To say that there will be no closure programme is the stupidest thing I have ever heard. It is like saying, “The world will stand still because we have done this in the Postal Services Bill.” The world will not stand still; changes will be required. Again, that was mentioned in a Lib Dem promise. It is easy to make promises, but unfortunately the hon. Member for Kingston and Surbiton (Mr Davey) is actually a Minister now; he is in government and he must back up such promises with facts. Is he saying that regardless of how far the income of every single sub-post office in every village or urban community declines, the Government will continue to pile in subsidy? As I said in the debate last week, my calculation is that it would take £270 million a year to guarantee that.