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1.17 pm

Lord Low of Dalston: My Lords, I commend the Conservative Front Bench for allocating its time to this important question. I am particularly grateful to

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it for agreeing to broaden the scope of its Motion to encompass the Question for Short Debate that I tabled. The fact that this debate has attracted so many speakers is proof, if proof were needed, of the level of concern, the urgency of the matter and the timeliness of the debate.

Before I come to the matters I had in mind for my debate, I must say a word about post office closures. After all we have heard, noble Lords hardly need me to underline the impact of further closures on elderly, vulnerable and disabled people and on communities. Let me give an example: the criteria for closure have to do with the proportion of the population who are within a mile of the nearest post office, but for many older people a mile is simply too far to walk. Many blind people receive their library books by post. A book may comprise several large volumes. Let us take the Companion to the Standing Orders. It is a slim volume weighing about 12.5 ounces that we all know well. In Braille, it occupies five large volumes weighing 4.5 pounds each. Imagine staggering to the post with that lot. If these closures go ahead, it will be essential to develop alternative outreach services to enable people to access the post.

If not only the access but also the sense of community that the post office provides is not to be further eroded and perhaps lost for ever, we need to think creatively about locating post office counters in what community facilities remain, such as the local library or the village hall. My plea to the Government is to have more regard for the social consequences of policy decisions and not just for the opportunities to cut costs by whatever means possible.

In my maiden speech I referred to Henry Fawcett, the blind Postmaster-General who was MP for Hackney, where I live, and introduced the parcel post in the last quarter of the 19th century, reduced the cost of telegrams and postal orders, improved facilities for small savers and investors in the Post Office Savings Bank and opened a number of positions in the Post Office to women. So he presided over a universal service but was clearly prepared to act entrepreneurially.

The universal service provided by the Royal Mail is part of the fabric of British society which it behoves us to treat with care. Yet it is under tremendous pressure, much of it, as we heard, stemming from the system of regulation we have in place. The volume of mail is declining by 2 per cent to 3 per cent a year, and that is accelerating due to alternative modes of communication. Competition is being allowed to develop more rapidly here than elsewhere. Royal Mail’s competitors now have 40 per cent of the bulk mail market. Postcomm says that Royal Mail needs to become more efficient, but the latter has done a lot to increase efficiency. As we heard, since 2002, it has taken £1.5 billion out in costs and reduced the head count by 50,000, and further cost reductions of £1.5 billion are planned. Yet Royal Mail’s competitors are still given a built-in advantage—some might call it an unfair advantage—by the system of regulation we have in the so-called access headroom rule, which means that Royal Mail can never be competitive, however much it increases its efficiency.



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The regulator Postcomm imposes a particular business model on Royal Mail. Eighty-eight per cent of its revenues come under Postcomm’s price control, far exceeding the requirements of the European Union’s postal services directive and far exceeding the proportion of business regulated in other European countries. Yet Postcomm’s business model is flawed. It estimated that Royal Mail would make a profit of £779 million on its regulated business in 2006-07, whereas, for the reasons I indicated, it actually made a loss of £29 million despite meeting the regulator’s efficiency targets and keeping within the price control. Postcomm sees the future for Royal Mail as either a better deal for the customer through increased efficiency, greater liberalisation and more competition, or a scenario of managed decline. But as we have seen, the present Royal Mail management is doing much to increase efficiency. It welcomes competition, but not on terms which give competitors, some of them coming from Europe where they have a much more protected domestic base, an unfair advantage.

Royal Mail wants to operate commercially in a commercial environment but it cannot do this if the weight of regulation—as to 88 per cent of its revenues—means that it is trying to operate commercially with one hand tied behind its back. Postal services clearly need to be regulated but if we want Royal Mail to behave entrepreneurially, regulation must be light touch, leaving it scope to act entrepreneurially, to innovate, diversify and seize commercial opportunities. If we are not prepared to do this, I fear that the future is managed decline, and that inevitably means progressive erosion and ultimate destruction of the one-price-goes-anywhere universal service.

Whatever we think of Royal Mail—and we all have our grumbles—this is not something we should contemplate. The universal postal service is a priceless asset, truly part of the fabric of British society, still part of the steadily declining heritage of public service in our country, and we destroy it at our peril.

The Government have set up an independent review of the postal market. I fervently hope that the review panel will weigh these considerations carefully and fairly. If it does not, I fear that Henry Fawcett will be turning in his grave.

1.24 pm

Lord Brooke of Alverthorpe: My Lords, I, too, am grateful to the noble Baroness, Lady Byford, for giving us the opportunity to have this debate and to look for better prospects for the post office network. It is also a privilege to follow the noble Lord, Lord Low of Dalston, many of whose views I share. Like my noble friend Lord O’Neill of Clackmannan, I want to mention a few difficult facts rather than offer more tea and sympathy so that we can get a better balanced debate, which I believe is in the best interests of all the British public.

As the noble Baroness, Lady Shephard of Northwold, stated, the Opposition know that the post office network is losing half a million pounds every day, between £3 million and £4 million every week of the year, and that is increasing. As the Opposition also know, there are now 4 million fewer post office customers than there

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used to be. I see little benefit in going back over the history of why we have got to that position; it is a fact of life that confronts us. More and more people now use alternative technological services which have become increasingly available and of which there will be more in the future. Many of us, even elderly people such as myself, no longer queue at the post office with all the relevant pieces of paper to get their road fund licence. Instead I use the new brilliant system available from the DVLA. I say to my noble friend Lord Whitty that, had this system been left with the Post Office, I do not believe that it would have delivered it in the way that the DVLA does. The change is absolutely phenomenal. The system is available seven days a week, 24 hours a day and 52 weeks of the year. It is interesting to note that 50 per cent of the people using it do so at hours when post offices are not open. I understand that a million people a month are using it. That is a remarkable change and it is happening in other areas too, which we should not disregard. Technology will have an even bigger impact in a whole variety of ways.

Changing lifestyles are also having a big impact on the post office network. The people using the post office are increasingly an ageing group. We must do everything we can to protect them but we must also take into account the fact that a change is taking place. There is no point in building for the future if you will not have customers going into post offices. I say to the right reverend Prelate that if customers are determined to act on a personal basis, this matter will not be tackled on a community basis. That is what we are seeing all the time with computers and online systems. People do not want to go to the post office, they want to access services from home and they will do so more and more in the future. That presents great challenges for us in a whole variety of ways but we cannot ignore that it is happening. In addition, post offices face more and more competition for their traditional business from organisations such as the banks. As the noble Lord, Lord Dearing, pointed out, a major threat is facing us as regards where the Post Office account will go in the future.

Post offices are part of the social network. I support them and want them to continue to be part of that network. They are the glue that holds communities together. I speak as someone from an urban area where these changes are having an equal, if not greater, impact on certain parts of the community than in rural areas, as my noble friend Lord Whitty pointed out. I support a subsidy for the post office network but we should acknowledge that the Government have provided much support, which has hardly been mentioned—£2 billion of support was given overall between 1997 and 2006 and another £1.7 billion is guaranteed up to 2011. It is estimated that without this, if the network operated solely on a commercial basis, it would be down to only 4,000 offices around the UK. None of us wants to see that. We need to see the network operate on a sustainable basis. But should there be unlimited subsidies? I do not believe that there should and I do not believe that, ultimately, the public want that either.

Having followed what our friends in the Opposition have been saying in their “Save our post offices” campaign, I have been trying to establish where they

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stand. I should be grateful if when they respond they could give us a few straight answers on some of those points. Speaking in the Opposition Day Debate, Alan Duncan said:

Later, when he was asked how much subsidy he would offer to post offices to stay open, his response was right to the point:

That is, proposed by the present Government. We have to have some openness and frankness about finding a policy that takes us forward. If everyone accepts that we need a subsidy, we ought to try to reach an agreement on what kind of subsidy, and we should endeavour to reach agreement on how many post offices there will be and what size the network will be, rather than pretending that it will continue as it is at the moment without any further changes.

Some very useful suggestions have been made in this debate and, like others, I look forward to listening to what the Minister says in response to the vision that has been proposed by many noble Lords. Equally, I emphasise that I should like to hear from the Opposition on where they stand on subsidies and the size of the network.

1.31 pm

Lord Selsdon: My Lords, my noble friend Lady Byford has the ability to choose the right topic at the right time and to present it in the right way. Somehow, she managed to gather around her a group of cockerels and hens who say the right things. There is always a unity on such subjects between the political parties. I do not know when noble Lords do their thinking; I do mine late at night and sometimes, according to my wife, I mutter in the middle of the night, “my Lords” this or that. I think in the early morning. I have a very expensive coffee machine. As noble Lords know, coffee is the second biggest commodity in the world. I sit with my coffee under a framed sort of charter, which says, “We, trusting in the fidelity and wisdom of our most trusty and well-beloved Sir William Mitchell-Thomson, hereby give tremendous powers”. That is one of the reasons why I am in your Lordships’ House; he was my grandfather, who was Postmaster General.

Noble Lords will recall that the first master of post was in 1510. He was one of the Tuke family, I think it was Sir Brian Tuke. He was probably from Norfolk or the rich parts of the world. The first Postmaster General came in about 1630, I think it was Sir Henry Bishop. In 1880 to 1884, I think we had Mr Henry Fawcett. My grandfather was from 1924 to 1929. He had to be in charge, as chief civil commissioner, of the general strike in 1926 to force people to go back to work. Somehow, sitting in front of that charter makes me think every morning of post.

I have certain hatreds. At the moment, I measure my waste, because I am trying to be good with that pink bag. Some 85 per cent of that waste is complete

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and utter coloured junk delivered by direct mail. That is wrong, because of the cost of putting it away, and because I value my privacy. Then there are people who advise burglars that you are not there, because they chuck post or other things on your doorstep and you cannot get rid of it. My first suggestion is to say that the Post Office is pre-eminent; so let us increase the costs and the legislation that affects those people who send unwanted junk to so many people. The savings to the environment—if you are Conservative or Labour—will be enormous.

What is the reason for communication? After my grandfather, there were certain other successful Postmasters General, the latest being Tony Benn, who writes about it. I do not agree with him on many things, but I agree with his comments about the Post Office. There was also Clement Attlee. There were many great men, and it was a great post. Then in 1969 we got rid of it, and we had the Minister of Posts and Telecommunications. Yesterday, at 2.35 pm, I went on to the government website to find out who the Minister is for Posts and Telecommunications or who is responsible for it. The answer is “nil”. We do not have one on the official government website. Therefore, we should reinstitute the post of Minister or Postmaster General. I do not know what government department is involved.

I am also worried because I do not trust the post any more. I have to have one of those machines that chop up your bits of paper. You wonder who will pilfer your address and your postcode. Postcodes are extraordinary things. No one bothers to research the fact that alphanumeric numbers are very difficult. People can remember the alpha and the number, and everyone in the world can remember their service number; PJ963040 Pompey Rating.

Lord Graham of Edmonton: PLY112105.

Lord Selsdon: My Lords, I knew that the noble Lord would do that.

I sometimes cannot remember postcodes. Who owns the intellectual property of my address? Is it me? I used to have the right to deny other people to know what it was. I know that I can go into British Telecom to find out where I live and find out how rapidly a burglar from Chepstow can get to my house. I have lost my security and I have lost my identity. I tear things up and realise that I have to burn them, because I realise that someone who has sent me unwanted post may have got my postcode on it. I go into a shop, and I do not have an account there, but they can look me up because someone sent me a present once, which had the postcode on it. I do not want my postcode any more; I want to get rid of it.

I am being light hearted, but I have some suggestions to make, and I have been writing things to myself. I think again of my grandfather. I would have been Sir Malcolm McEacharn Mitchell-Thomson, Baronet of Clackmannan, had they not chosen Polmood instead. My grandfather was an MP for Glasgow, for North Down and for England but never for Wales. The reason he ceased to be Postmaster General was that in 1929 he obviously did something wrong. A certain postmaster Crick was appointed to a town in Wales.

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He was an Englishman. He was not very good at the Welsh language, and he did not understand postcodes. There was one problem; he did not know where to deliver the post, so he resigned and joined the Navy.

That postcode was quite a difficult one; it had 58 alphabetic letters. I thought because it was a Welsh name, I would try to learn it, and Eleanor in security downstairs, who speaks fluent Welsh, gave me a training lesson, and I started to do it. I realise that there is another one who has the same sort of name, who spoke earlier today. This postcode, in English, is the Church of Saint Mary in a hollow of white hazel near to the rapid whirlpool by a red cave. I wonder whether I could have some help?

Lord Roberts of Llandudno: My Lords, let me jump in to help our colleague. The town was Llanfairpwllgwyngyllgogerychwryndrobwlllantysiliog ogogoch.

Lord Selsdon: My Lords, these Llans! I have a feeling that the noble Lord may well have wished to choose that as his title. I finish on that happy thing.

1.38 pm

Lord Graham of Edmonton: My Lords, it is a pleasure to take part in this debate. Like other colleagues, I warmly thank the noble Baroness, Lady Byford, for, as always, championing the cause of those who live in rural areas in their present indictment.

The noble Lord, Lord Selsdon, tempted me to give my Royal Marine number. There is another number in the minds of most people, at least on this side, which is their Mam’s Co-op share number. I can give mine; I wonder whether the noble Lord can give his. Mine is 65539 in the Newcastle Co-op. I have heard that number, and many others, quoted in many other places.

This is not a happy debate because, quite frankly, there is no solution with a large “S”. The value of the debate is to bear down on the Minister and her colleagues with noble Lords’ anxieties for the plight of those who live in the circumstances outlined. My take on the situation is this. As noble Lords can see, I wear a tie on which is written the word “Co-op”. My background in this debate, as in many others, is with the Co-op. Its history, as I know it, is that in many a small town and village there was a butcher, a baker, a candlestick maker and all sorts of shops, including a Co-op. Over a period, by the will of the people who once patronised those shops, and with the creation of what we call the car-borne shopper, those customers decided to take their trade elsewhere until eventually there was only one struggling shop left: the Co-op. It remained because it had a responsibility to the wider membership of the community. The Co-op shops kept going in many small places for a long time until eventually the imperative of economic logic drove them out.

I live in Loughton, in the middle of Epping Forest. It is a lovely place. When I moved there 15 years ago, there was a Crown post office, which was then closed. But it reopened inside the Co-op. It had a life.

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Eventually the Co-op left that place and the post office was re-established inside a chemist shop in Loughton. As far as I am concerned, it is successful in providing what the populace need.

During the war I was wounded, and so I receive a small pension for that. For years I went happily along, weekly or monthly, to the post office in Chase Side, Enfield to draw my pension until it was suggested to me that it would be more convenient all round if I had it paid into my bank account, which I now do. That was a service to me, and I was glad to take it. The consequences of the service remain to be seen, of course. I also have my old-age pension paid that way, not by queuing as I saw people do all my life as the constituency MP. The figures have already been given. Some 80 per cent of old-age pensioners have opted by one means or another not to use the post office facility. The Government’s dilemma is to match the changing mood and pattern of the people of this country, which is referred to as their lifestyle. I do not envy the Government in having to come up with a solution.

In an adjournment debate in the Commons in 1975, when I was the MP for Edmonton, I made a successful plea to the then Minister, Gregor Mackenzie, for the post office at 101 Silver Street, Edmonton, not to be closed. It was not. The issue came up again when a local library was threatened nearby. Among those who protested was the postmaster, who still resides at 101 Silver Street. You pays your money and you takes your choice. I believe in the initiative proposed by Essex County Council, which says that we need to look much more at outreach services and we need to be flexible, because other people are taking advantage and applying their commercial expertise. Others are finding gaps in services and taking advantage of them.

I do not envy the Post Office management; they are closer to the issue of how to find a solution than I am or Ministers are. But do not think that the issue has been visited on us out of the blue. I remember the noble Baroness, Lady Byford, talking about the lack of affordable rural housing. As I reminded her, most of the village council housing she described is no longer public because of a Bill that was passed in 1982 which gave every council tenant the right to buy their house. It was a great thing at the time to own your own house, but the consequences down the line have had to be picked up by others. You pays your money and you takes your choice.

1.45 pm

Lord Cotter: My Lords, I thank the noble Baroness, Lady Byford, for this timely debate. I particularly thank the noble Lords, Lord Selsdon and Lord Graham. I did my national service and it worries me that I cannot remember my Army number.


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