Postal Services Bill

My Lords, I speak to my noble friend Lord Whitty’s ““omnibus”” amendment and to Amendments 22C and 22E. They all seek to introduce new clauses to strengthen access criteria to prevent the further erosion of the post office network, to ensure the provision of a wide range of services at all post office branches, and to ensure a fair distribution of the Post Office's proposed new main post offices. Amendment 22A writes into the Bill the current level of access to post offices in the UK. As part of the 2007 changes to the Post Office network that included an investment of £1.7 billion and incorporated the Network Change Programme, resulting in the closure of 2,500 post offices, the Government introduced a series of distance-based access criteria. These remain applicable but are not included in Royal Mail's licence and are not set out in law. The minimum access criteria introduced by the previous Government state that 99 per cent of the total UK population should be within three miles of their nearest post office; 90 per cent of the population should be within one mile; 99 per cent of the total population in deprived urban areas across the UK should be within one mile; 95 per cent of the total urban population across the UK should be within one mile; 95 per cent of the total rural population across the UK should be within three miles; and 95 per cent of the population of the postcode district should be within six miles. The current post office network of 11,905 offices exceeds the Government's minimum access criteria. Post Office Ltd has stated that a network of 7,500 post offices would be consistent with these criteria. We believe that the criteria are insufficient on two counts. First, they do not guarantee to keep the network at its current size. The Government have stated that they wish to retain their network of 11,500 post offices. In his evidence to the Postal Services Bill Committee late last year, the Minister, Ed Davey, stated that, "““we have made a legal agreement with Post Office Ltd and provided funds so that, over the next four years, there will be 11,500 post offices in the UK””.—[Official Report, Commons, Postal Services Bill Committee, 11/11/10; col. 132.]" This commitment would be better strengthened by introducing minimum access criteria that guarantee the network at its current size, rather than maintaining the current access criteria that could allow for a further 4,000 closures. As a result of the current distribution, 99.7 per cent of the total UK population is within three miles of their nearest post office; 93.2 per cent of the population is within one mile; 99.8 per cent of the total population in deprived urban areas across the UK is within one mile; 99.1 per cent of the total urban population across the UK is within one mile; 99.2 per cent of the total rural population across the UK is within three miles; and 95 per cent of the population of the postcode district is within six miles. Amendment 22A calls for this level of access to be enshrined in the Bill. The amendment goes further in strengthening access requirements that have their origins in the 2007 Network Change Programme measures by putting them into law for the first time. The amendment goes on to strengthen the Bill by ensuring minimum levels of service provision at post offices. These will require not just the provision of postal services but access to social benefit and tax credit processing, national identity and licensing schemes processing, payment for essential utility bills, cash and banking services and access to government savings products. This does not constitute a requirement for all post offices to provide all post office services, but it does mean that a core range of services must be available at all post offices. This is important for the viability of those offices and to ensure universal access to the core government and postal services that are so important to communities across the country, particularly those in urban deprived and rural communities. The amendment requires the Government to establish the number of post offices that is consistent with the minimum access requirements and to decide on the frequency with which this shall be reviewed. They must undertake this work in consultation with the Post Office and with representatives of relevant consumer groups. These access criteria can be reviewed by the Secretary of State and changes can be recommended, but ultimately it is for Parliament to decide through a super-affirmative procedure. Amendment 22C calls for further strengthening of the access criteria to reflect the Government's proposed new model for the post office network. In November, the Government announced a funding package of £1.34 billion: a combination of investment and subsidy for the network until 2015. This includes just under £500 million that has been designated for ““network modernisation””. The November BIS paper on the post office network states that the funding will allow Post Office Ltd to do more than simply ensure the status quo: indeed, it is envisaged that there will be a fundamental change to this. The paper proposes two key strands of the network. The Government have asked Post Office Ltd to have, by the end of the current Parliament, about 4,000 main post offices in town and city centres, and to have converted about 2,000 sub-post offices to the ““local”” model. This last commitment gives cause for concern. The local model is also referred to as ““Post Office Essentials”” because it offers a slimmed-down provision of services. These are likely to be offered over the counter of other shops, not necessarily through dedicated post offices. While the Government have provided little detail on the model, David Smith, the managing director of the Post Office, wrote to the MP for St Austell and Newquay on 13 July 2010. The letter is available in the House of Commons Library. He stated that products not offered as part of the essentials package are, "““cheque deposits, Moneygram, non-automated bill payments, manual cash deposits and withdrawals, travel insurance, European Health Insurance, philatelic items, Post Office financial services, some NS&I products and phonecards””." Alongside this, it is already the case that a range of products and services is available only in specified post offices. These include motor vehicle licence renewals, passport check-and-send services and the online lottery. The new identity and passport machines are also limited to certain branches, and it is likely that any expansion of government or financial services will be restricted to certain branches. The Government have claimed that the remaining branches will provide 86 per cent of post office services, though there is no way to verify how this has been determined. Crucially, no figure has been given for the percentage of revenue or business that sub-post offices currently have. This model sees a loss of core payment and sub-postmasters estimate that a conversion to the essentials model will reduce their revenue by around 60 per cent. Surely that figure is worrying for the future of sub-post offices. The local model has the clear potential to impact on the terms on which sub-postmasters operate sub-post offices and on the terms and working arrangements of their staff. The changed physical working arrangements in the open-plan office envisaged by the pilot also carry implications for the safety and well-being of staff members. These must be taken fully into consideration. The range of services on offer under the pilot is restricted to core services, which means that customers needing to access more time-consuming or complex transactions will need to go to a main post office. The report does not envisage restrictions being imposed on which services may be regarded as core by a local post office, and which may be dispensed with. Therefore, the local model has the potential to threaten the existence of the universal postal service by concentrating an increasing number of services in main post offices. Over time, this would mean that a higher percentage of the population would have to travel further to access the full range of post office services. The problem is likely to be particularly acute in rural areas where the distance to a main post office is likely to be greater. It is also clear that a network of 4,000 main post offices and 2,000 new locals would leave more than 5,500 branches untouched. However, the BIS paper states that under POL's commercial strategy the local model, "““will become the mainstay of the smaller post offices over time””." This would mean a fundamental change to the current network; I hope that the Minister will address this key point. Amendment 22C calls for the development of access criteria to ensure an even distribution of main post offices across the country in order to maintain fair access and to ensure that communities are not disadvantaged by the network changes planned by the Government. Amendment 22E inserts another new clause that calls on the Secretary of State to review the range of services that will be offered by post offices, including services for the collection of vehicle excise duty and facilities for purchasing television licences. It also calls on the Secretary of State to lay before Parliament, at least once a year, a report on what services should be provided by post offices. In conclusion, I urge support for Amendments 22A, 22C and 22E in order to prevent any further erosion in the post office network, in terms of both size and levels of service provision.