During an Opposition Day debate, Liberal Democrat MPs support a motion to suspend the post office closure programme

Opposition MPs last night failed in a bid to halt the Government’s post office closure programme, as Labour MPs rallied around the Government’s closure plans to reject the motion and ensure the programme can continue unhindered.

The Government has ordered that one in five post office branches be closed. Opposition MPs tried to stop the closure programme by proposing a motion in the House of Commons demanding the Government halt their plans to make 2500 branches shut up shop.

The Opposition Day motion (proposed by the Conservatives) “calls upon the Secretary of State for Business, Enterprise and Regulatory Reform to instruct Post Office Limited to suspend the compulsory closure of sub-post offices while these issues are re-assessed.” The Liberal Democrats joined the Conservatives in voting in favour of the motion.

Liberal Democrat Shadow Secretary of State for Business, Enterprise and Regulatory Reform, Sarah Teather, spoke in support of the motion. Ms Teather highlighted the important of post offices to local communities and how the Post Office needs to be decoupled with the Royal Mail to ensure future sustainability.

On the Government’s failure to understand the benefits of post offices, Ms Teather said:

“The truth is that the Government are presiding over the managed decline of our post office network. They are choosing to do that because they totally fail to understand the social value of our post offices to the 2 million vulnerable individuals who do not have bank accounts, for example. Those people rely on the post offices to access their benefits. The Government also fail to understand the role of the post office as a social hub for the community, or the economic value of the post office to the surrounding economy.

Ms Teather highlighted the economic importance of post offices to local communities, saying:

“The New Economics Foundation carried out some research into what happens when a post office is closed in an urban area. It estimated that the closure of such a post office would lead to a loss of about £270,000 to the local economy. Similarly, in rural economies, it is estimated that every £1 of subsidy makes between £2 and £4 for the local economy.”

On decoupling Royal Mail from the Post Office, Ms Teather said:

“We want to finance a lump sum in order to modernise the network and to allow investment in infrastructure, for example. We also propose de-coupling Royal Mail from the Post Office, as I said in an intervention on the Secretary of State, to allow it to work with Royal Mail’s competitors and bring in a new revenue stream. We are also arguing for extra revenue streams, just as the hon. Gentleman is doing. What he lacks, however, is any kind of policy for investment in upgrading the network. I cannot see how he can save 2,500 post offices - or even a little fewer, as I am not quite sure what exactly he claims to be saving - without that further investment. We think we can do that, but we do not think we can do any more than that, so I cannot understand how the hon. Gentleman can seriously think he can save all these post offices without any kind of investment in them. They need that to ensure that they can compete on the high street.”

Sarah Teather explained that the savings from post office closures would actually be pretty limited:

“All this grief and all this political damage are being caused for what is actually a pretty measly amount of money that the Government are saving - just £45 million. We have to ask whether it really will be a saving when everything else has been taken into account. I provided some figures a few moments ago on how much the closure of post offices costs the local economy in urban areas - about £277,000 - but that probably equates to the best part of £50,000 in VAT lost to the Treasury. If we add in other costs to individuals, such as being more isolated or the difficulty of picking up benefits, and if we also add in the cost to the community of losing its high street, and then the environmental impacts of travelling further, probably by car, to access the local post office, we have to ask what we are left with. After all, £45 million is not a lot of money in the grand scheme of Government Budgets. We also have to remember that Royal Mail awarded its own board and chief executive more than £7 million in pay and bonuses last year, and well over £5 million in bonuses and benefits alone.”

Click here to read Sarah Teather’s speech in full

The motion was defeated, with 268 for and 288 against. The Liberal Democrats voted in favour of the motion.

Click here for the full text of the motion

Click here to visit the Save Our Post Offices campaign page