Royal Mail Privatisation

Sheila Gilmore Excerpts

Tuesday 18th January 2011 Westminster Hall

[Anne Marie Morris]

My hon. Friend makes an excellent point. When we are looking at our small micro-businesses to lead the drive to put the economy back on its feet, post offices have a key role. In my constituency, in the village of Broadhempston, there is a delightful situation. Local volunteers run a small community shop—absolutely an example of the big society—in which they have effectively ensured that the post office can be retained. The challenge—the point made by my hon. Friend—is to ensure that we can grow that service. The shop currently opens in the morning between 9 and 12, but if it opened in the afternoon, it would really be able to offer services to local businesses. I have been looking at that and championing it. Looking at such post offices being able to support small businesses must be the way forward; my hon. Friend’s point is extremely well made.

Post offices are at the heart of the community. With regard to concerns expressed in all parts of the Chamber, post offices need to be able to provide more, not less, to individuals and to small businesses. Indeed, the Federation of Small Businesses has said that it would be an excellent idea to have a dedicated business counter or business advertising. Could not such post offices provide meeting rooms or wi-fi hot spots? As discussed, we could be moving towards providing banking facilities.

The opportunity for post offices is enormous, and I am delighted that they have that opportunity. The big society and the overall push to help small businesses should make that opportunity a reality. Nineteen per cent. of small businesses visit post offices on a daily basis, and 47% visit twice a week. That is excellent news. As I said earlier, mutualisation could be the way to make things possible. I have found a real will to work together in the community, whether that is the business community or the community within a geographical area. Mutualisation is a real opportunity and it may be the solution to the position in Broadhempston.

[Sheila Gilmore (Edinburgh East) (Lab)]

I am a supporter of mutualisation. Many people, however, are concerned that from mutualisation comes demutualisation. Would the hon. Lady be in favour of building a way of preventing demutualisation into any plans for mutualisation, as far as that is possible? People are wary of mutualisation given some of the experiences of the past 20 years concerning building societies and other mutual organisations.

[Anne Marie Morris]

I understand the hon. Lady’s point, but the devil is not in the legislation but in the detail and particular circumstances. I am not a great believer in regulating and legislating; I believe in the free market. It is right to empower communities and businesses, but not to tell them how to do what they do.

In conclusion, I would be delighted to see the Government look carefully at what post offices can do, and then empower them so that it happens, perhaps by looking at how we can improve the number of Government services in post offices. At the moment, people cannot always sort out vehicle taxation at post offices or pay their utility bills—they might not know that they can pay in a post office because it does not say so on the back of the bill. There are things that the Government could do to ensure that where it is financially sensible, more services are provided through the local post office network. There is much that could be done by the business community, and I commend to the Minister the suggestions made by the Federation of Small Businesses.

--- Later in debate ---

[Lorely Burt (Solihull) (LD)]

The hon. Member for North Ayrshire and Arran (Katy Clark) has rightly initiated this debate today. It is important that we ensure that the Post Office is protected and that legislation such as the Postal Services Bill does not have an undue effect. She asked many pertinent questions of the Minister and, like her, I look forward to hearing the answers.

Having worked for some years on issues within the remit of the Department for Business, Innovation and Skills, under its various names, I have attended numerous statutory instrument Committees whereby the Government of whom the hon. Lady was a supporter put in subsidies year after year to support the Post Office. That was absolutely right. However, what happened under the previous Government was that they managed a decline. The very important social value of the Post Office has been recognised. Nevertheless, it has not necessarily been given the legs to be able to compete in a changing business situation in this country.

The new coalition Government are taking a different approach to the Post Office. We have no less desire than the Labour party to ensure the Post Office’s future, but we are trying to adopt a different approach to enable the Post Office to stand on its own two feet. Several hon. Members have mentioned the £1.34 billion that the Government have committed to protect the network of 11,500 post offices, which we have said will remain. That is considerably better than managing the Post Office’s decline. We do not want any more post office closures. We want the Post Office to remain in public ownership, unless it goes for mutualisation itself.

The hon. Lady mentioned the inter-business agreement at a little length. The chairman of Royal Mail has said that such an agreement will be drawn up for the maximum legal period before any sale. My hon. Friend the Member for Colchester (Bob Russell) raised the issue in a new clause for the Postal Services Bill. It was argued at some length that a long period would benefit the Post Office, and I totally agree. Where I perhaps disagree, however, is on the practicalities. We are talking about an agreement between two commercial companies, which need the flexibility to negotiate an inter-business agreement that benefits both; if it does not, it will not necessarily hold together. There was also some discussion of how such an arrangement could be implemented, and the conclusion was that it would not necessarily work well under existing EU law.

The hon. Lady mentioned the post bank, and I, too, was disappointed that we did not go down that path. However, we have secured the ability for people belonging to virtually every bank in the United Kingdom to conduct transactions. That is a very good second best, which will at least make sure that the banks start to play ball and respond to the need to be more flexible in conducting their financial transactions.

What about the Post Office’s future? My hon. Friend the Member for Argyll and Bute (Mr Reid) mentioned some of the losses that we have seen, as well as some of the potential losses. A little while back, the Post Office card account went out to competitive tender. Lord Mandelson, who had just been appointed Business Secretary, stopped that straight away. I thought, “Brilliant.” We really cannot afford to lose the Post Office card account in that way. Like my hon. Friend, I hope that it will continue.

[Sheila Gilmore]

The hon. Lady mentions the Post Office card account, and those who are active in promoting financial inclusion have suggested that introducing more functions into the Post Office card account might be one way of assisting people who do not have access to mainstream banking. Another issue, which is much discussed, and about which I have heard a lot of discussion since I arrived in the House in May, is the possibility of linking credit unions with post offices. I have to say that there has been more discussion than actual tying things down, and I understand that there are cost issues, but does the hon. Lady agree that those two additional functions would be useful for post offices and contribute to the financial inclusion agenda?

[Lorely Burt]

I certainly agree that it is important that we extend the range of services available to people who do not have a traditional bank account, and the Government are actively considering how that can best be done. I certainly applaud the work of credit unions, although I am not entirely sure whether they have sufficient coverage and continuity to form a national service at this stage. However, the Government are actively considering these matters, and we are doing all we can to reach a practical solution on increasing financial inclusion for those who are unbanked.

The hon. Member for Newton Abbot (Anne Marie Morris) described all sorts of different ways of introducing flexibility, and the Government are fizzing with ideas about how we can be more flexible. We can adapt to the changing commercial landscape and to the internet. My hon. Friend the Member for Argyll and Bute mentioned vehicle excise duty licences, and I am sorry to say that I am guilty of using the internet to renew mine, because it takes five minutes. The point, however, is that there are many other functions that post offices can carry out; they do not have to exist in their traditional format to deliver a postal service to their customers.

I am very hopeful that some of the pilots that are being undertaken will prove successful. It is good that schemes are being piloted, because we can iron out some of the problems that might otherwise ensue. We will take the best ways of responding to the changing landscape. We do not want to continue giving subsidies to the Post Office; we want it to be vibrant, commercial and profitable and to stand on its own two feet.