WATCH LIB DEMS...
Save Our Post Offices
Tue, 09 Sep 2008
(Scroll down for an update on the campaign and the Government's plans.)
Sign our petition
We, the undersigned, call on the Government to stop the unnecessary Post Office closure programme, and instead free the business from restrictive regulation, invest in the future of the network and stop removing government business to safeguard our post offices.
The Government's Post Office Closure Programme
The Government has agreed to the closure of at least 2500 post offices throughout the UK. A rolling programme of closures is being carried out and no area of the country will escape without the loss of branches. The announcement of closures in some areas of the country has already been made whilst other areas will have announcements over the coming weeks and months.
The timetable for announcements can be found by clicking here.
These closures will be the death knell for many communities across the country. Villages that have already lost their school and shops, elderly residents in the suburbs who risk losing their independence and the poorest in our inner cities all now face a bleaker future.
Recent developments
On 11th March 2008, a delegation of Liberal Democrat MPs and campaigners handed in to Downing Street a petition signed by over 50,000 people calling on the Government to keep Post Offices open (see photograph above).
On 19th March 2008, opposition MPs failed in a bid to halt the post office closure programme, as Labour MPs rallied around the Government’s closure plans to ensure the programme can continue unhindered. Opposition MPs tried to stop the closure programme by proposing a motion in the House of Commons demanding the Government halt their plans. The motion called upon the Business Secretary (the cabinet minister who is responsible for post offices) to instruct Post Office Limited to suspend the compulsory closure of sub-post offices. The Liberal Democrats, Conservatives and other opposition parties voted for the motion, but it was defeated by 268 votes to 288. You can read more about the debate here.
You can see how your MP voted by clicking on this link. A vote against this motion is a vote to support the continued closure of post offices.
Liberal Democrat Shadow Business Secretary Sarah Teather MP is leading the campaign to save our post offices nationally. Speaking ahead of the parliamentary debate, she explained why this was such an important issue:
"Labour's post office closure programme will have a huge impact on the elderly and most vulnerable members of our community as well as hitting small businesses. Even cabinet ministers are opposing the closures in their own constituencies - while supporting them for everyone else.
"The Conservatives now oppose the closures, even though they shut 3,500 post offices when they were in office. But they have no serious proposals to revive the post office network.
"In contrast to the Tories, the Lib Dems have a properly thought through and costed programme, which would deliver £2 billion of additional resources to keep post offices open and, where necessary, to open others." (scroll down for more on these proposals)
Where does the campaign go from here?
We continue to be opposed to the closure of post offices. The post office has always been an integral part of community life; so many people rely on their post office. These closures represent the worst of Britain, an uncompassionate and faceless society. We must persuade the Prime Minister and the Business Secretary to think again and scrap, or at least scale back, their closure plan.
Please help us keep this issue high up the political agenda by:
- Writing to your local paper about the damaging effect the cuts will have
- Writing to your local MP (or email them via www.writetothem.com) opposing the cuts, and asking them to pass on your letter to the BERR Secretary
- Contacting your family, friends and neighbours, and encouraging them to sign the national Liberal Democrat petition against the closure programme (see above)
The Government are trying to claim there is no alternative to the closure programme. They are wrong. The Liberal Democrats have put forward a fully funded plan for an additional £2 billion investment in the Post Office that would create a thriving network. (See below for details of our plan.)
We will continue to fight the Government’s post office closure programme every inch of the way.
The State of the Post Office Network
The Post Office network is crumbling.
Over the last two decades, post offices have been closing at a rate of over 300 a year.
Under the last Conservative Government, 3,500 local post offices closed, and under Labour another 4,000 have closed, hitting communities across the country.
And, with the news (see above) of another 2,500 closures, things are set to get even worse.
The Government's policy to avoid “unnecessary” rural Post Office branch closures came to an end in March 2006. This policy has previously slowed down the rate of closure in rural areas.
And the Government has announced that it will not extend its contract beyond 2010 for pension and benefit payments using the Post Office Card Account, worth £1 billion of income for post offices between 2003 and 2010. A replacement will be put in place but the competitive tender process means that the Post Office could lose this work altogether.
The likelihood is that, while the Government ducks the long term decisions necessary to secure the future of Post Offices, 12,000 post office branches (urban and rural) will close.
Why this matters
Post Offices are the lifeblood of communities in both rural and urban areas, particularly when they are combined with other services, such as the local shop. When the local post office closes other services often follow suit, which can be devastating for the community.
It is vital that the true social value of this network is included as well as its economic value when looking at the long-term future of this valuable network.
Post Offices in rural areas play a particularly crucial role. They have an ‘existence value’ similar to the local school or village pub. They also provide vital face-to-face access to government, postal and commercial services for communities which may not have, for example, a local bank branch.
Research for Postwatch in 2004 showed that:
-
75% of those surveyed felt their local post office was ‘extremely important’
-
59% thought it was ‘essential to their way of life’
-
91% agreed it played an ‘important role in their local community’
-
86% felt that losing a Post Office means ‘a lot of people lose their independence’
-
27% found it difficult to get to another post office when their local one closed
These figures increased among the elderly or those with disabilities affecting their mobility.
Action is needed by the Government now to prevent the mass closure of post offices occurring.
Post Offices - how the parties compare
The Liberal Democrats are the only party to have fully costed plans to modernise Royal Mail and safeguard the Post Office network for the long-term.
The Conservatives
The Conservatives’ policy consists of a list of potential additional services that can be offered by or through the Post Office. They have no proposals on the future structure of Royal Mail and Post Office Ltd (POL) or where investment funds are going to come from.
During the 1992-97 Conservative government, when there were similar funding pressures as currently, over 1,000 post offices were closed – more than four every week.
The Labour Party
The Labour Party’s policy is one of managed decline, developed in response to their own plan to require the Post Office to be commercially self sufficient, while at the same time withdrawing huge chunks of revenue through the decision to pay benefits where possible through bank accounts, and develop direct and online channels for vehicle and TV licences. By the end of the current closure programme, termed Network Change, Labour will have overseen the closure of almost 7,000 post offices – 11 offices for every single week in power.
Ministers are now asking Post Office Ltd to return to profit by 2011. Yet despite the size of that task, less than £90m per year is going to be available for the investment essential to turn the business round.
The Liberal Democrats
The Liberal Democrats are the only party to have a costed and credible set of proposals to keep post offices open and, where necessary, to open others.
The Liberal Democrat plan would enable us to:
- Open new post office branches where they are needed
- Keep the Post Office in the public sector
- Make the Royal Mail into a successful company, with new investment freedoms
- Give Royal Mail staff a guaranteed stake in their company through employee share holding and participation
- Protect and improve the service to customers that provides a daily delivery at a uniform price across the country
The Liberal Democrat plan
Our plan, passed at our spring conference 2006, keeps the Post Office Ltd in the public sector and enables Royal Mail employees to get a share in their company through a radical employee share ownership Trust, with the sale of some of its shares providing the investment needed by our post offices.
Key points of our alternative proposals include:
(1) Demerge Post Office Ltd from Royal Mail, giving the Post Office freedom to develop services for all mail delivery companies.
(2) Sell off a 49% stake in Royal Mail to the private sector, make a further 50% available to provide an employee trust for the workforce on the John Lewis model. This will give Royal Mail the freedom of a private sector business to borrow and invest, allowing it to compete with lean and effective private sector businesses in the main UK mail and parcels market.
(3) Use the proceeds of the asset sale (49% of Royal Mail, which we estimate could release £2bn) to fund the product/service investment desperately needed to make post offices profitable: to transform the retail environment in the Crown offices (currently losing £70m per year)
(4) Ensure that the Post Office network is the cornerstone of the programme to provide every UK citizen with access to a basic bank account. Post offices can play a key part in financial inclusion – they want and need the additional trade that offering basic bank accounts would provide.
You can find out about the proposals in more details by reading our background paper on the policy.
Why the Lib Dem plan is the right thing for Royal Mail as well as the Post Office
The Royal Mail has been starved of investment by successive governments and needs at least £2 billion to invest in automation to remain competitive. Royal Mail now faces full competition as its centuries old monopoly on the delivery of mail was ended on 1st January 2006. It is facing massive competition from well financed competitors. Doing nothing would see the Royal Mail wither on the vine, putting at risk many services, including the Universal Service Obligation (the guaranteed daily delivery at a uniform price throughout the country) which so many communities rely on.
Our proposals would create a new ownership model for Royal Mail which would allow it to borrow to invest without it having to compete with schools and hospitals as it is no longer wholly owned by the public sector. (This is because publicly owned bodies have to have government permission to borrow.) Our proposals will enable Royal Mail to become a great British company free to improve its own business services, fight off foreign competition and win markets abroad.
The employee shareholding scheme would benefit future Royal Mail employees not just current ones. It would not be a one off hand out to people who happen to be working for Royal Mail at the time of change of ownership. Rather the employees' shares would go into a trust for the benefit of those working for Royal Mail. When an employee leaves the company, that person will no longer be entitled to any dividend. A new employee, however, would become a partner in the company and would be entitled to receive a dividend from the trust. The model is similar to that operated by the John Lewis Partnership. In addition to the trust, we would establish a system of employee participation so that staff are involved in the running of the company. Again, this would be similar to the John Lewis Partnership model.
Lib Dem proposals - your questions answered
"Is this a privatisation of the Post Office?"
No. This is not a privatisation of the Post Office. That is a misrepresentation of our policy spread by some of our opponents which relies on creating confusion between the Royal Mail and the Post Office. Under our plans the Post Office franchising company – Post Office Ltd - will be separated from the Royal Mail and retained in the public sector. Our proposals will lead to extra investment in existing branches, the opening of new ones and will give the network new markets.
"Could a part-privatised Royal Mail decide not to deliver in rural or remote areas?"
No. Royal Mail will continue to deliver to every address – it will be required to do so under its license.
"Will the daily delivery of mail continue?"
Yes. We will protect the Universal Service Obligation (USO) and therefore the network will be required to be able to deliver to each property 6 days a week.
"Will customers have to pay more to post a letter to a rural area?"
No. The USO will require the Royal Mail to deliver to every address at a uniform price.
"Will stamp prices go up?"
Big rises in the price of stamps will be less likely under our proposals. The only source of cash for investment if the Royal Mail is in the public sector and not allowed to borrow is the income from stamps and charges to business customers. To make the investment needed without borrowing, these costs will rise considerably. We do not wish to see the price of stamps rise in this way. Borrowing to pay for investment will be repaid through the company being more competitive and efficient.
Documents
Royal Mail motion background paper (PDF)
See also:
Commerce and Industry