Postal Services Bill

My Lords, these amendments seek to strengthen the current access criteria so that they match current post office network coverage, and to enshrine them in legislation, as well as to provide mechanisms to review these criteria. They also seek to specify the services which should be provided across the network and in which locations a full range of services is to be provided. On Amendment 22A in the name of the noble Lord, Lord Whitty, the Government are committed to maintaining a nationwide post office network. The Post Office is required to provide a network of at least 11,500 branches. This is a legally binding commitment to a minimum number of post offices. The Government have made a commitment that there will be no programme of post office closures. Post Office Ltd is also legally obliged to ensure that precisely the same access criteria introduced by the previous Government are maintained. The previous Government, of course, had the opportunity to put these criteria into legislation in their 2009 Postal Services Bill, but they did not see the need to do so. Indeed, during debate on the 2009 Bill, the noble Lord, Lord Tunnicliffe, observed that the access criteria were ““very stringent””. By legally obliging the Post Office to maintain these criteria in return for the £1.34 billon of funding over the duration of the spending review period, this Government have introduced another safeguard to ensure that these stringent access criteria will still be met. In fact, Post Office Ltd continues to exceed these criteria. Last year’s report by Postcomm on the post office network, from which I believe the criteria in this amendment are derived, demonstrates this fact. The amendment seeks to press the metaphorical pause button, to prevent any changes in the post office network from today’s position. However, this is unrealistic; 97 per cent of post offices are privately owned and operated, and there will always be changes in the network where, for example, sub-postmasters retire or move on to pastures new. It is not through regulation that we will save the post office network. To ensure that the Post Office has a vibrant future, it must be allowed to develop, to modernise and to evolve. It must focus on its customers, reaching out to new customers and winning back those who have drifted away. Major modernisation is needed in order to address the underlying economics of the network. That is what our £1.34 billion funding package will achieve. The noble Lord, Lord Young, raised the issue of the new Post Office local model. I will come back to that in detail later this evening during the debate on Amendment 24EA in the name of the noble and gallant Lord, Lord Bramall, which will be moved by the noble Viscount, Lord Tenby. The Post Office’s access criteria are the strongest that we know of in Europe, when you consider our safeguards for rural, urban and urban deprived areas. In Germany, for example, the requirement is for a post office every 80 square kilometres, whereas we mandate that 95 per cent of the rural population must be within three miles of the nearest post office. The £1.34 billion that we are providing will ensure that our network continues to thrive in the future. Subsection (2) of the proposed new clause in the amendment of the noble Lord, Lord Whitty, seeks to ensure that certain services are provided across the network. Let me reassure the noble Lord that the Government are absolutely committed to maintaining the network, and supporting Post Office Ltd as it seeks to win new business from government and other sources. The Post Office is determined to become a front office for government, by developing and applying services in a number of ways. There is continued progress on this agenda. For example, the Department for Work and Pensions has recently announced plans for three new pilots, opportunities to support the universal credit reforms, and funding set aside for credit unions that will increase opportunities for the Post Office to deliver credit union services to many more people. An important part of restructuring the network will be for the Post Office to ensure that services are tailored to meet the needs of its customers up and down the country. We cannot, and should not, expect the Post Office to provide all its 170 services at all branches across the entire network, as this amendment seeks to achieve. In smaller branches, for example, it makes far better commercial sense for sub-postmasters and sub-postmisstresses to focus on the key services that most people need to use, most of the time. Of course, the services offered by the Post Office on behalf of local authorities may differ from area to area. Amendment 22C, in the names of the noble Lords, Lord Young, Lord Stevenson and Lord Tunnicliffe, does indeed take this fact into account. That amendment seeks a register of access criteria to be issued by the Secretary of State setting out the minimum location and geographical distribution of post offices which provide the full range of services provided by post offices. As I have just pointed out, Post Office Ltd must ensure that services are tailored to meet the demands of its customers. It must also negotiate its contracts on a commercial basis with a range of different clients. We want the Post Office to be able to provide the best possible service to the widest possible range of customers. We do not think that fettering its ability to agree the appropriate level of network coverage to the service would best serve that goal. The best people to develop new services, or improvements to existing ones, are the staff and management of Post Office Ltd. That applies whether we are talking about mail services, telephony, financial services or services on behalf of a range of central and local government institutions. They are the people with the appropriate commercial expertise and experience, and who know the Post Office’s customers best. That is why the Post Office is set up to be at arm’s length from government rather than run from an office in Whitehall. The Post Office is run by a management team with extensive commercial experience under the effective leadership of Paula Vennells, the Post Office’s managing director. Paula became managing director in April 2010, before which she spent three years as the Post Office’s network director and chief operating officer, having previously been commercial director of Whitbread plc. Her blend of skills and experience give her a powerful focus on the Post Office’s unique social purpose and the commercial challenges it faces. On separation from Royal Mail, Paula Vennells will be the chief executive of a Post Office board bolstered by the appointment of a new chairman, a process which is under way. These reasons are why it is also appropriate for the Post Office itself to report annually on the range of services provided at its post offices, as required by Clause 11, rather than a report being produced by the Secretary of State, as would be required by Amendment 22E. One particular example of where Post Office Ltd has been flexible in negotiating contracts is through its relationship with the DVLA for car licensing services. Post Office Ltd works with the DVLA to decide the broad national distribution of branches which should offer this service in order to ensure that there is good national accessibility for a customer group which, by definition, is mobile. The DVLA limits the number of post office branches which provide its services to ensure that delivery of the service is cost-effective. Were the service to be extended to all branches, there would be a significant loss of income to those branches currently offering the service and this could adversely affect their viability. I reassure your Lordships again that the Government are committed to being a responsible owner of Post Office Ltd. We are fully aware of the value of the post office network, of the social and economic role it plays, and of its key importance to communities up and down the country. That is why we have made a commitment that there will be no programme of closures on our watch. There will continue to be at least 11,500 post offices across the network and our funding will enable the Post Office to do much more than simply maintain the status quo. However, the Post Office must be allowed to be flexible and to respond to the needs of both its clients and its customers, or we will see the network wither rather than thrive. With these reassurances, I ask the noble Lord to consider withdrawing his amendment.