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Northern Ireland Assembly

Tuesday 20 June 2000


Postal Services (Rural Areas)


The sitting begun and suspended on Monday 19 June 2000 was resumed at 10.31am (Mr Deputy Speaker [Mr McClelland] in the Chair).

Postal Services (Rural Areas)


Mr Dallat:

I beg to move the following motion:

This Assembly is seriously concerned by proposals drawn up under the Postal Services Bill, which will undermine economic prosperity and regeneration in rural areas.

I am sure that all Members are grateful for the opportunity to debate the legislation on post offices that is currently going through the Westminster Parliament. We need to explore how the proposed changes will affect rural communities in Northern Ireland. I welcome the Bill, but I am concerned about its impact on rural areas.

Post offices are vital to the industrial, economic and social fabric of our communities. This debate is very important because the proposed changes will have a fundamental impact on how we live. The argument, therefore, is not so much about change but about how the change will impact on society, and how the Government and this Assembly can use their influence to ensure that the most vulnerable members of society are not deprived of services that they depend on. The argument goes much further, of course, and I hope to develop some of the issues later.

Change is being forced on us by many factors, including pressure from the European Commission, which wants to liberalise postal services throughout the European Union. There are other challenges from the development of electronic communications. The number of faxes sent now exceeds the volume of conventional mail. In the United States, the number of e-mails now exceeds the number of letters. We must recognise the increasing changes and challenges posed by these new technologies. There is also a trend towards globalisation, which invariably creates a smaller number of global players and alliances. Customers’ needs are changing. People are writing less personal mail; indeed, the use of handwriting is less in every sense.

The arguments made for change are very convincing, given the announcement yesterday that the Post Office lost £270 million in the past financial year. The Post Office needs to be able to borrow and invest. It needs to be free from the unfair financial payments that it has to make to the Government, which are both problematic and excessive. There are many other arguments for change, but I shall not use up my time making them, as they are well documented by advocates of change who clearly do not have their first home in the countryside. Indeed, one could be forgiven for believing that their views of rural life have been formed by listening to ‘The Archers’.

In addition, there are valid arguments for criticising the Government’s decision to stop making social security payments through the Post Office and using banks instead. I believe that the Government are very much aware of their mistake and have, at the last minute, introduced the notion of a discretionary subsidy for post offices as a solution to the problems that will arise in the future. My concern is that the proposed changes do not take into account the impact they will have on rural areas, as profit making becomes the motivating factor.

There will be many communities in Northern Ireland in serious trouble if steps are not taken to give the Post Office opportunities to develop a changing role that will generate additional income. Many people do not have bank accounts, do not want them, and need cash for their transactions.

Neither can they afford the bank charges which will be picked up by them and not by the Government. Furthermore, they know that the track record of the big banks in Britain has been appalling for rural communities. Why expect better from our local banks when we cannot be sure what will happen in the future as they too become the victims of globalisation policies. During the last 10 years more than 4,000 branches have closed in rural areas in Britain, and it is predicted that another 4,000 will close in the next five years. Is that the type of structure which the Government can trust to meet the needs of their people — in particular, the needs of the most vulnerable in economic and social terms, such as the sick, the disabled and the elderly?

How does this square with the Government’s commitment to tackling social exclusion and targeting social need? I look forward to a report later this week from the Cabinet Office’s performance and innovation unit, which will set out details of proposals to save rural post offices, and I understand that making use of new technology is one of them. This would allow small post offices to transact a wide range of business, including the payment of most household bills and even the ordering of rail and bus tickets. In many parts of Northern Ireland that could be difficult, as the whole infrastructure of public transport has already been a casualty of rural neglect. Nevertheless, it has to be welcomed that the British Government have expressed some interest in saving rural communities. They have recognised that the closure of rural post offices will have a devastating impact on the communities they serve, being, as they are, an integral part of the social fabric of those communities.

Unfortunately, a lack of research combined with belated ideas for saving these facilities has already had an effect. In the first place, the uncertainty hanging over many rural post offices has, in itself, caused them to close. If you want to get rid of something, create the notion that it is closing, and it will. This technique was successfully applied to rural schools in the past, with deadly effect. My point about the lack of consultation and the lack of knowledge of the local scene is illustrated by the suggestion that councils could become involved in subsidising small rural post offices. Can you imagine the impracticality of that in a rural council area where there are many small sub-post offices and a very small revenue budget to draw that subvention from? In any event, I do not believe that postmasters want discretionary subsidies. They know that by the time consent for such subsidies went through the various bands of civil servants they would, most likely, be bankrupt.

The most poignant question here is this: if there is to be a saving of £400 million, who is going to be the loser? Will one Department or agency save money while another Department pays it out in unemployment benefit to the thousands of people who will lose their jobs and businesses? In developing my arguments in favour of the protection of rural post offices, I am mindful that in many suburban and urban areas too many small sub-post offices provide vital services to the community. Often these are located in areas of high social deprivation, where the post office is much more than a post office. It is an advice centre, an outpost of many social security services and much more. These people are of equal concern, and the Government must be very mindful of that when they are examining ways of preserving small sub-post offices. Up to 90% of business in some post offices will be lost if the Government do not take positive action to save them. Apart from the loss of the services to the community, often including a high percentage of elderly people without cars and with no public transport, there are other considerations. Rural post offices create employment, and the present Government are committed, I believe, to creating jobs in rural areas — not to destroying them.

Small post offices often give a wider service to the community too. They may be part of a small mini-market providing daily supplies of essential items, such as bread and milk, or a pharmacy or some other vital service, still managing to survive in the rural environment, and it is reasonable to assume that if the post office element of the business is taken away, the remainder will close because it will no longer be viable.

In other words, there is a real possibility that all the sterling work done to regenerate rural communities could be lost when the proposals currently going through Westminster are implemented. That would be particularly bad news for Northern Ireland, where the political instability of the last three decades has had its own impact on rural life. That should concern the Government, and I hope that it does.

We are told that the Post Office will have a new legal status: it will be a public limited company owned by the Crown. We are assured that the changes will enable this new company to generate wealth by franchising its business. I am not complaining about that, but it is reasonable to ask the Government to legislate so that part of the profits be ring-fenced for genuine development of post office services in rural areas. In doing that, the Government might have the opportunity to target social need. That seems an obvious suggestion, but I have not read it anywhere in the various Hansards and other Government documents I have researched.

I have no doubt that many other ideas will emerge from this debate. It is urgent that there be serious discussions with An Post in the Republic, where there is a similar debate. The fears of sub-postmasters in Northern Ireland and the Republic are exactly the same. The apprehension felt by people in similar rural areas, North and South, is entirely the same, and there could be a common solution to this common problem.

Change is needed to address the current unsatisfactory arrangements between the two parts of Ireland. At the weekend, a businessman in Coleraine told me that it cost £12 to post a parcel locally for delivery in the Republic. That parcel would go to Scotland and back. At a post office just over the border in Donegal the cost was £IR5. That type of anomaly must be rectified, and the only way to do it is to develop a better working relationship which reflects the needs of the consumer, rather than some operational system which ignores reality. That could also help to save our post offices in a way that is tailored to life in rural communities in both parts of Ireland.

The proposal to give representation to users, as outlined in the Postal Services Bill, does not recognise Northern Ireland as a separate entity. It only offers representation on a panel in London. I hope that the Government will take note of this debate and that the Assembly is concerned about these proposals. I sincerely hope that the record of this debate, and the contributions made by all Members, will be read urgently by those with the ability, and the duty, to take on board the widely held concerns of the House. I ask particularly that a copy be sent post-haste to the Cabinet Office’s performance and innovation unit.

The Post Office must consider its commercial viability, but a balance must be struck between hard-nosed economics and the social needs of our communities. It must be realised that, while small rural post offices can never be as cost-effective as large ones, it is the responsibility of the Government to ensure that the services of the Post Office continue to be provided in those areas. That will, without doubt, involve additional costs. That is where the Government play a vital role. Pensioners, the sick, the disabled and people on low incomes must be given a voice in this debate, as well as the people who may lose their jobs and businesses.

This debate is not about preventing change, but about the special problems that arise when an agency switches from being a social service to being a profit-making public limited company. The decision to make social security payments through banks from 2003, while not part of the Bill, is nevertheless a major part of the problem and worthy of consideration. I look forward to hearing Members’ contributions.

Mr Deputy Speaker:

I want to say a word about the timing of this debate. The Business Committee decided to allow two hours. The proposer was given 15 minutes, with a further 15 to wind up. Because of the number of Members who wish to speak, each Member will be given seven minutes. It may be necessary to review that at a later stage.

10.45 am

Mr J Wilson:

I wish to associate myself with today’s motion. Although there is much to commend in the Postal Services Bill currently before another place, the threat to the rural infrastructure in Northern Ireland is a real one. The principal threat is the Government’s stated intention to pay benefits directly into recipients’ bank accounts from 2003. Obviously, this will gravely affect many post offices, not those in city centres, but those in local communities, rural and semi-rural.

The Government must face the reality that many people still live a cash-based life. They do not have or wish to have bank accounts, and they are fearful of large institutions. Obtaining a bank account is not easy unless you are earning a wage, and benefits are meagre enough without recipients having to pay bank charges. The benefit payments business is crucial in sustaining many rural post offices which are often, alongside the church and the school, the hub of community life for many people, particularly the elderly.

Around 40% of a post office’s business is derived from that source alone. The network has already contracted by nearly 15% over the last decade. If post offices are not appreciated by ordinary citizens, why do 20 million people in the United Kingdom choose to pick up benefits from them, when 80% could have them paid into their bank accounts? For many women in particular, a giro book is their only source of financial independence from their husbands or partners.

I am not some old Labour diehard who resists creeping privatisation as a matter of ideology. The controlled commercialisation of the Post Office is to be welcomed if it succeeds in making it more competitive, although I suspect that we are dealing with a natural monopoly situation where there is little competition for most classes of mail. The amount of international competition is also small — the Post Office is not British Airways, if I may be allowed to make that comparison.

I appreciate that the Post Office is already looking at ways of diversifying, but I am concerned that many more rural post offices will be allowed to wither and die before Government gateway, the strategy for connecting the Government with citizens, and universal banking, the scheme to bring more people into the cashless economy come on stream. Sufficient thought has not been given to the implications of phasing out the payment of benefits through post offices. The Post Office network is in the process of being computerised. However, the machines being installed do not have the facility to provide a simple banking service. This is clearly a failure to provide joined-up Government.

Cost is a further problem. Independent research has calculated that the real cost of paying benefits through the banking network is actually slightly more than through the order-book system. It is not the cheap alternative that some people imagine. Remember the experience of cash machines. We were told that they would bring about huge savings, but now banks are trying to charge us for the cost of a system they originally said was cheaper than cheques and giros. How many banks are there and how many post offices, and what are the implications for public transport in rural areas with no bank? Is the bank network really going to fill the void when it is already contracting? I doubt it. Is my elderly mother really expected to bank via the Internet?

If someone is entitled to £79.50 a week, what use is a cash machine which only pays out in multiples of £20.00? People must have access to all their benefits when they need them — waiting until next week is not an option. These questions have not received satisfactory answers. I trust that the Assembly will keep a watching brief on the situation and make its views known until the practical issues have been fully addressed and the cost, in terms of the fabric of local communities, properly taken into account.

I support the motion.

Mr Shannon:

I support the proposal. Post offices, as we all know — especially those coming from a very rural constituency like mine — are an integral part of everyday village life. The long and the short of the plans to review the distribution of Government benefits is that their implementation will lead to the closure of many rural post offices right across the United Kingdom.

I was reading in the paper at the weekend that over 330 post offices closed in the United Kingdom last year — 100 more than the previous year’s figure of 230. We are now faced with the possible closure of 650 post offices. In fact, the headlines in the paper talked about 8,000 closures. The impact on post offices across the United Kingdom, and especially in Northern Ireland, is becoming very apparent.

It represents the loss of a very valuable civic amenity, and it is the duty of Members in this Chamber to voice concern about such moves. In theory the procedural and logistical basis of these changes should be of advantage to a claimant, as all benefits would be transferred directly into his bank account. However, I fear that the real reason for this move is of somewhat more shallow origins — one more swath of blind financial cuts. The impact of these plans could be catastrophic for the future of our post offices and will cause many unnecessary problems for claimants. I believe that the loss of rural post offices will have a devastating effect on the rural economy and communities in the Province.

The implementation of plans to divert benefit claims directly to bank accounts will have negative repercussions for both the claimant and the post office. In many villages there are no banks; there never were any banks, so the villages depend on the local post offices. The impact will be very severe on people living in villages.

The primary reason for opposing such a move is that the future of many post offices and post office jobs, especially in rural areas, will be put in jeopardy. The bulk of Post Office business involves the distribution of various benefits, from the working families’ tax credit to jobseeker’s allowance. Without such a duty to fulfil, the financial viability of many post offices will be brought into question. This will inevitably lead to job losses on a grand scale, and will impact heavily on local communities. The farming communities have already had a hard time, and the closure of post offices will greatly increase their problems and concerns. It will strike at the very heart of the rural community.

In rural areas, post offices form the backbone of local society and the economy. They are a major part of the local community network and an integral part of everyday life. Many people, especially the elderly, look forward to their journeys to the post office, which gives them contact with the outside world. Such visits provide an early warning system for staff in the offices who can tell whether people are keeping well or have fallen ill. A post office is not just there to get people’s money; it acts as a carer for elderly people in the community.

Many people in rural areas do not have bank accounts. Many do not have their own transport and have to depend on public transport to get about, so it is not always possible to go to where there is a bank. Many do not live anywhere near a bank and have little or no access to transport. Anyone who has an account has to travel a considerable distance to get his hands on his money. That is happening more than ever. Of the 650 post offices in Northern Ireland, it is rumoured that up to 60 or 70 could be forced to close if it is not financially viable to continue in business. That means some five or six in each constituency. Members who represent a rural constituency, as I do in Strangford, know that the closure of village post offices will have a dramatic effect on the communities and on the very core of society. The closure of businesses and the loss of jobs will be unavoidable. I hope that support for this proposal in the Chamber today will help to put an end to that.

It is impossible to say at this stage whether the closures will be distributed evenly across the Province, but it is fair to say that in many areas, especially the villages, there will be a dramatic effect. Perhaps, there could be five or six closures in the rural communities, with not so many in the towns. That would affect tens of communities and thousands of citizens and will leave them worse off. The proposed changes will result in a crucial aspect of local community life being ripped out, and they will restrict the freedom of citizens throughout the Province. On that principle alone they must be strongly opposed.

Mr McHugh:

Go raibh maith agat. I too oppose this Bill. To reform the postal services and increase profits for the Government, it is proposed to pay all benefits directly into bank accounts by 2003 and to end the system of paying money directly over the counter by 2005. The repercussions will be serious, especially in rural areas. Urban areas will be affected as well because they are made up of many small communities, similar to those in the rural areas of Fermanagh, south Tyrone and other counties. Older people use the services of their local post offices to collect their money. They need these services.

We oppose the Bill on another count. A local post office is one of the many services that are being drained from rural areas, making them places where people no longer want to live, and that is a critical issue. People begin to wonder whether it is worth rearing a family in an area that is losing its schools, post offices and shops and where all the services are being centralised in the larger towns and cities. Such losses have a great destabilising effect on people.

The loss of services and jobs and the closure of sub-post offices in small villages will be on a large scale. The figure of 600 has been mentioned. The number of post offices will decrease significantly unless they can diversify into shops or supermarkets where they can survive to serve the local community. That has not happened yet; they have to stand alone for various reasons. There are planning issues when they try to extend their premises. They face increased rates bills. All these factors mitigate against people trying to do something about their predicament. We must try to find ways to support them.

The degeneration of rural areas and small villages is the result of these closures. The cost of travel in rural areas is another issue, especially for old-age pensioners, many of whom will have to pay taxi fares. That money comes out of their benefits, which may be between £65 and £70, but they may have to pay £5 a week in taxi fares to collect that money. That should not be allowed to happen. The Government gave pensioners a measly 75p rise in their pension last year, and those pensioners may well now face a future where they will lose a lot of their money because of the changes and bank charges. Banks charge for their services, and as anyone using them now knows, they are very costly. People will make mistakes and could end up with a net loss.

Many small towns have no banks. Corporate planning at present means that many banks are moving out of villages. In the next few years they will all disappear into the larger towns, leaving even less of a service for the people who need to get to a bank on a daily or weekly basis.

The Government are cutting costs, and others will have to take up the loss of that. It is the ordinary people, especially those in rural and border areas, who will end up having to pay. We need to protect these areas because of the amount of work that has gone into them in recent years. A great deal of money has been spent by community groups on developing their areas as places to live. They have made a tremendous effort to survive, build up and improve these areas, and we must help them to protect them.

11.00 am

Most of the councils in these areas, including my own local, are against this move, but often their views are not taken into account. Perhaps there is consultation on a small scale, but it is very seldom acted upon. They are usually dismissed with a wave of the hand, and it is a fait accompli.

In particular, there will be an adverse impact on local communities, small urban villages and rural and border areas. In such areas, virtually the same arguments for retaining postal services apply regardless of whether they are urban or rural. We need to support people in trying to keep services in their areas, rather than go along with Government planning. One could argue that this is planning at the highest level — perhaps they want these areas to degenerate so much that people will move to the cities as they originally planned. Go raibh maith agat.

Mr McCarthy:

I wish to add my concerns to those already expressed about the proposals contained in the Postal Services Bill. The proposals in that Bill will have serious repercussions for everyone, but particularly, as has been mentioned, for our senior citizens. The proposals will have a massive impact on the support given to our rural and village life by the activities carried out so diligently over many years by those working in the post offices.

No one would argue with any organisation is moving with modern technology and becoming more efficient, and this must also apply to the Post Office, which is now computerising all its branches. If a customer is to get a more efficient service, this must surely be welcomed. However, particularly in rural areas, the post office is the lifeblood of the community where, in many cases, it is also the local shop. Those coming to use the post office buy their provisions, the daily paper and other goods. Even those in rural areas who now make the journey to a supermarket once a week to do a large shop for the family, still use the local shop and post office on a regular basis.

A post office makes at least one third of its income from the administration of pensions, child benefit, income support, and so on. This percentage is higher in a rural area. The Government say that they will persist with plans to have all types of benefits paid directly into bank accounts from 2003. Banks are busy places that are out to make money. They have little time to answer social questions, particularly from senior citizens. As other Members have pointed out, many villages do not have banks, and that means extra travel for the people there.

If the Government move ahead with these plans, post offices stand to lose much of the vital income they depend on to survive. These plans will cut off their lifeblood and lead to many small closures. If these proposals go ahead, there will not be a single post office left in my area, the Ards Peninsula, or other rural areas in five years’ time.

This will have a disastrous effect on rural life. When the village post office closes, the shop attached to it struggles to survive and probably has to close eventually. Other facilities in the village begin to struggle, and it becomes a less attractive place to live. The numbers in the local school fall and it starts to become unviable. And so the spiral of rural decline continues. We have seen it happen before — even without post offices closing.

I have a letter from George Howarth, dated 13 March, written during his spell as Social Development Minister, which is not that long ago, in which he gives the following commitment:

"There is a continued commitment by Ministers that benefit recipients will continue to be able to collect their benefits in cash at post offices if they wish".

I hope that the present Minister for Social Development will give a similar commitment, for such is needed, to reassure those postmasters and postmistresses whose post offices depend on income derived from administering benefits. I have suspicions about the Minister’s statement for he went on to say, with regard to the continuing use of the Post Office network, that his Department has given the commitment that the Social Security Agency will use the Post Office to much the same extent as it does now until March 2003. Thereafter, customers will have the choice of having their benefit paid into any account which the Post Office makes available or into a commercial bank. He said that he was glad to acknowledge the essential role which post offices, and particularly those serving rural communities, have played in social security matters.

I am also mindful of the needs of elderly and disabled customers and have a strong desire to see that the arrangements made for payments take account of the needs of those groups in the community that are most at risk. A post office can be much more than a place to cash giros or collect a pension. People go to post offices for advice on benefits, to talk over problems and to exchange information. Indeed, people see the post office as a one-stop-shop for advice and information. It is almost a fifth emergency service. If the person behind the counter cannot help, or does not know the answer to a problem, he can point the customer to the man or woman who can.

We must look at ways of helping the Post Office develop this side of its work. Staff training in giving this "one-stop-shop" type of advice is vital and can provide a much needed service to help the lifeblood of our rural community. The post office is vital to rural life. Our economy depends on it, and we have a social responsibility to maintain it. I do hope that our present Minister for Social Development will give a commitment similar to the one that the last Minister gave.

I support the motion.

Mr C Wilson:

I rise to add the support of the Northern Ireland Unionist Party to the motion standing in Mr Dallat’s name.

Rural areas and small villages and hamlets form a large part of the constituencies of all Assembly Members, and the Assembly is quite correct to express its serious concern about these proposals. This will help those who are running small, rural and village post offices.

All those who have spoken seem to be concerned about the impact that this will have on the rural and semi-rural communities. Indeed, it has been well put that the people who will suffer most from the proposed changes will be the most vulnerable in our society — the elderly. Elderly people do depend upon the local post offices to transact their financial affairs. Indeed, in my area of Strangford — and I am sure that it is not unique — one has to travel from Portaferry to Donaghadee on the east coast of the Ards peninsula to use a bank. We can only imagine the difficulties that will be created in the small villages and hamlets if the Post Office reorganises in a way that removes local post offices from the hearts of the communities.

Several Members have also touched on another very important aspect of this. A post office is more than a place to go to cash giros or other benefit cheques. It is somewhere where elderly people go to seek advice. Small village shops, which double up as sub-post offices, attract large numbers of people into the shop once or twice a week whom they might not attract otherwise.

The Bill will have a major impact on rural areas at a time when so many of the community groups, councils, and other Government agencies are actively involved in trying to regenerate some of the areas that are in difficulty. I support the motion and hope that the Assembly’s unanimous endorsing of it will send out a message of hope and confidence to those who are facing difficulty in small rural post offices.

Mr B Hutchinson:

I support the motion and would like to thank Mr Dallat for bringing it to the Floor of the House for discussion. I have listened with interest to what has been said, particularly by those who represent rural areas. However, there are a number of points I would like to make.

Elderly people are elderly people regardless of where they live. They tend to have a similar culture, and they have all depended on post offices. Post offices have existed for as long as anyone cares to remember. We talk about rural areas, and I understand that post offices occupy a significant position there. However, if you live in Belfast, post offices are similarly significant because, in terms of distance, everything is relative. Urban dwellers are used to facilities being close to them. They are familiar with the people who work in the post office, and not with those who work in the banks. If it were so easy for people to use banks, a lot of elderly people living in rural areas would use banks and not post offices.

Anyone coming to my constituency on a Monday or a Thursday morning will see queues of people outside the post offices. They might be quite surprised by the length of those queues, whether for pensions or for child benefit. The post office has a significant part to play in all our lives, so this is not just a rural problem.

When a post office is robbed in Belfast, it closes down. Anyone representing a Belfast constituency in which a post office is robbed will be "inundated", as Jim Rodgers would say in Belfast City Council, by people ringing and writing to complain about having to travel. It may not be so great a distance in comparison to that in rural constituencies but, in relative terms, it is quite a disruption for people to have to move from one post office to another. I want to put that marker down.

Mr J Wilson made the point earlier — unfortunately he is not here — that he is not opposed to privatisation or stuck in old Labour dogma. Perhaps I am, but the matter concerns me, and I am sure that some of the rural people would want to focus on the implications of privatisation.

In 1999, postal service regulations attempted to give greater commercial freedom to enable the Post Office to run its business on a five-year strategic plan. Does anyone know the real cost of posting a letter in a rural area? It is approximately 87p. In Belfast, it is 1p. The people who live in Belfast are subsidising those in the rural areas, and that is how it should be because we need to have equality, and we need to ensure that everybody living in the country can get a letter.

So it is not just a simple matter. There is a cost involved, and we are all paying equally. My point is that if AT&T, which is operated by a Dutch company, had the freedom to operate the postal service here, would it deliver letters to rural areas? No, because that would not make money. That is why post offices are important. It is important to ensure that we do not allow full privatisation, but that we enable them to compete against their German and Dutch rivals.

While we are very critical of this legislation we should also be critical of the people bringing it forward, and that is the Labour Government, not Post Office Counters Ltd (POCL). I do not know of anywhere in the Province, or in the United Kingdom, where POCL wants to close offices. I have already pointed out that when there are robberies and offices are closed, people work very hard to get things up and running again quickly.

11.15 am

As elected representatives, we should recognise that the Post Office has never wanted to leave any area without those services. The Post Office recognises the need for those services, but it is the Labour Government who are trying to push this through. I recognise the problems in rural areas, but I want some of the rural people to recognise that this problem goes beyond Post Office Counters to other things. We should be keeping our eye on the ball and not just focusing specifically on Post Office Counters.

I want to make a further point regarding banks. Not long ago, in March or April, we had an announcement from a major English bank that it was closing down all its banks in rural towns and villages. There were protests from staff about this. We were told that the reason was rationalisation. Can you imagine what would happen, particularly in rural areas, if we decided to close down post offices — everybody would then use banks. If the banks then said that they could make a bit more money by closing some of the banks down, customers might have to travel five or six or 10 miles to the nearest bank — this is what will happen. The banks operate completely and utterly on profit, nothing else. They do not take society into consideration or their effect on jobs. We need to be careful about what we say and do.

Finally, we need to recognise that this Bill is about more than Post Office Counters. We need to ensure we do not sell off the crown jewels. Sorry about that, Sinn Féin, but the Post Office is one of the crown jewels. We got rid of British Telecom, and it is making profits. Let us not get rid of the Post Office; let us make sure we keep it and enable it to compete with the Germans and the Dutch, as England did the other night.

Mr J Kelly:

Before or after?

Mr B Hutchinson:

It depends on how you look at it, but the match was won. We want to equip the Post Office with that commercial opportunity and we want to ensure that we do not allow people, in any way, to destroy the post offices in our rural or urban communities.

Mr Beggs:

I also support the rural sub-post offices and urban sub-post offices referred to by Billy Hutchinson. Sub-post offices are vital to local communities. They provide a local focal point and often ensure the viability of the village shop or the corner shop in urban areas. We have to appreciate the context in which this discussion is taking place. Many changes are occurring in the post office network. Currently 30% to 40% of post office income is related to benefit payment. Many claimants are now choosing alternative methods of payment such as automatic transfer. The income of sub-post offices is declining.

We must also appreciate that the Postal Services Bill is a reserved matter that our debating it here will not change it. It is important that the Assembly appreciates the views of the Prime Minister, who commands a Labour majority in the House of Commons. In April the Prime Minister said

"Half a million more people each year choose to get their pension or child benefit through their bank accounts. That will carry on so inevitably the post offices are faced with a process of change."

Mr Weir:

Does the hon Member agree that there is widespread concern across the United Kingdom about the closure of post offices? A petition organised by the Women’s Institute earlier this year raised over three million signatures from people across the United Kingdom complaining of the prospect of post offices and sub-post offices being closed.

Mr Beggs:

I fully accept that this is an issue which affects every rural and urban community in the United Kingdom, and this process of change will carry on. The question is how will we deal with it. The Prime Minister said

"The best way is to make sure that people can still get their benefits in cash, if they want to do so, but that we work with the post offices to provide a new range of services for the future."

If we are to instigate any action from the Assembly as opposed to a lot of conciliatory words and friendly statements, we have to address our thoughts to what is happening at United Kingdom level. There are basically two problems. First, people are choosing to put their money through ACT so post office incomes are declining. Secondly, there is on the horizon the tendering for the payment of services. The payment of benefits from the Post Office itself could be at risk within a couple of years. Certainly if the post offices were to lose that, it would bring an immediate closure of many local services.

It is clear that the Post Office provides the widest possible method of access to money in Northern Ireland and any other part of the United Kingdom. This is particularly important to the rural community. The level of access that the Post Office presents should be a major consideration when the Government next award the benefits contract. People should not have to pay for travel to the centre of towns to collect their benefits, if that is the only means that is available to them, or for that matter to collect their money from some form of banking service.

Tony Blair, during Prime Minister’s Questions, said that the Government would work with post offices to provide a new range of services for the future. Those are highly significant words. The post office network contains a high quality ISDN communication link, and, in development terms, Northern Ireland is ahead of the rest of the United Kingdom. This asset could enable additional Government information and services to be accessible to the public from the convenience of their sub-post offices. Of course the Government should be paying for that service, and that money could keep sub-post offices viable.

I call on the Assembly to ensure that savings which central Government are making are reinvested in sub-post offices. They could be used to provide easier access to information technology and learning in the rural setting or simply to provide more open and accountable government through convenient methods of accessing that information. The Government have pledged to increase the use of information technology and to make it accessible to all.

It has been estimated that by using electronic transfer for the payment of benefits we could save over £600 million and that some fraud could be avoided. If that is the case, there are substantial savings to be made and, if so, the Government should be passing those on to the sub-post offices. If these savings were used to provide additional services to local post offices, their long-term viability would be much more secure.

As was mentioned earlier, another major problem facing post offices is robberies by criminal gangs, by paramilitaries and by those who are freelancing from paramilitaries. In a letter written at the end of last year Raymond McCrea, the area manager in Northern Ireland, advised me that in July last year there were seven such robberies, seven in August, five in September and six in October. As one Member said, those robberies frequently result in the closure of those sub-post offices because it becomes increasingly difficult to recruit people to work in them.

I urge the Assembly to support the motion, to support the essential services that sub-post offices provide and will provide to seek alternative means of funding to ensure their viability.

Mr McMenamin:

The present plans to repeal the Post Office Act 1969 and replace it with the Postal Services Bill will effectively kill off many rural post offices unless there is substantial financial support for them. The offer of a rate rebate of 50%, and in some cases up to 100%, is chicken feed compared to what is needed. It does not recognise the worth of sustaining post offices to serve rural areas and, in particular, the elderly and the less mobile. This is an issue which should concern us all.

As recently as this week I received a letter from Strabane and District Community Network, which represents over 32 community and voluntary organisations informing and supporting up to 80 groups in that area, expressing grave concern that benefit payments will be being made directly into bank accounts by 2003. The payment of benefits over the counter will have ceased by 2005. This will, without doubt, have a devastating effect on our rural post offices. The letter went on to say that many communities do not have banks, something that has been said many times today, and that many recipients do not have bank accounts.

The post office is a focal point in many areas, and if cash is not available locally people will have to travel to urban areas. There they will shop outside their rural areas, and that will have a serious knock-on effect on rural businesses — for example, the butcher, the grocer and the newsagent. The letter ended by urging elected representatives to do their utmost to save rural post offices.

Given the hardship that farmers have suffered over the past years, this Bill, if it goes through, will be nothing but a slap in the face for rural communities. The suggestion that district councils could add the cost of small post offices to the rates bills would merely rob Peter to pay Paul and is not practical. My constituency, West Tyrone, has a rural population of over 80% and it does not take a mathematician to work out that these measures will affect four out of five of my constituents.

Over the past 30 years of sustained political instability, rural post offices have kept their doors open and provided an essential service. It would be most unfortunate if now, in more favourable times, they were sacrificed on the altar of profit making. The Post Office should not become another tool driven by profit with little or no concern for the people it was set up to serve. I support the motion.

Mr Paisley Jnr:

I support this motion which shows the Assembly’s support for retaining Post Office Counters’ presence across Northern Ireland. The Post Office reform Bill deals with many issues, but its main implication will be for the survival of our post offices. It is only right and proper that we voice our concerns. It is amazing that it has taken Postman Pat and his black and white cat to unite the House, and we appear to be united on this.

11.30 am

The Member for East Antrim, Mr Beggs, rightly said that the House has absolutely no competence in this matter. Nonetheless, it is essential that we make our concerns known. As public representatives, we have a duty to watch the public purse and ensure that accounts are properly sanctioned and scrutinised. However, it is also our duty to respond to the public’s demands, and it is clear that the public across Northern Ireland wishes to retain a postal service.

In the United Kingdom, about 75 million items go through post offices every day. Every year, about half the United Kingdom’s population visit post offices. That massive statistic alone shows the support that there is for post offices and the devastating impact that their removal would have on vulnerable, remote communities that have been attacked and robbed.

Let us make no mistake about this Bill. It intends to do one thing — set the course for privatisation. The Government say that they have other intentions: they want to convert a statutory corporation to a plc, and they want to make it more cost-effective. These are admirable aims to a degree, but it is not the Government’s responsibility to run companies. Do they want to privatise the postal service and run it as a private company? That is not the Government’s job, yet that is what the Bill is seeking to do. This Bill represents a great struggle between the private sector and the public service. It is important that the Government recognise that the two sectors are very different and do not try to pay lip-service to one while failing the other. This will happen if the Government proceed with this Bill, which is unclear and carries a mishmash of ideas.

Members may ask why I say this is about privatisation. In December 1998 the Secretary of State for Trade and Industry, one Peter Mandelson, when introducing the White Paper preceding this Bill, said

"I should make it clear that we certainly do not rule out the possibility of introducing private shareholding into the Post Office. At present wholesale privatisation would not be a realistic option."

The ambition at that time was to achieve privatisation, and I believe that it remains so under Stephen Byers.

In the early 1990s John Major’s Government failed to privatise the postal services, and it would be a shame if the Labour Government now proceeded with a Bill they opposed themselves when in Opposition.

With regard to the cost of privatisation, the Member for North Belfast outlined some of the problems and increasing costs resulting from subsidisation. He quoted the statistic that in real terms it costs about 87p to post a letter in a rural area while in Belfast or London, it costs less than 1p. In some parts of my constituency, such as Rathlin Island, the real cost of sending a letter is £10, but I can do that for 19p. If the postal services were to be privatised, serving the rural community and the outlying areas of Great Britain and Northern Ireland would not be a priority for the private company but would be much further down the pecking order. One of the best reasons for retaining our postal services is the standardised cost of sending post across the whole of the country.

This Bill proposes a regulator, but one cannot serve two masters. If this Bill goes through, the Post Office must bow not only to Government demands but also to those of an independent regulator. As I said earlier, one cannot satisfy one master and pay lip-service to the other without their coming into conflict eventually. It is the Government’s duty to ensure that the needs and demands of the public are met. It is not the Government’s duty to privatise this essential service — a service which ensures that post gets to the public across the United Kingdom at the same price.

For Northern Ireland this Bill means that there will be 615 fewer post offices in about two years’ time and that 1,500 jobs will be lost. The facts speak for themselves. Yesterday the Post Office published, for the first time in 25 years, a fall into the red of over £250 million — an indication that the Bill is bad news for the Post Office and for the public.

Mr J Kelly:

A LeasCheann Comhairle. I support the motion. It was timely of Assembly Member Dallat to bring it to our attention.

I want to talk about rural regeneration. We have heard a lot about rural regeneration, both from the farming community and from other communities who live in rural areas. The farming community in particular has pointed out the fact that rural communities are being bled and that no attempt is being made to regenerate them. The post office in a rural community is the main artery to its heart.. If you remove that artery, you will cause the heart to stop.

Members have talked today about the neighbourly connection between the post office and the rural community. Coming as I do from a rural community, I can say that for many old-age pensioners the post office has become a focal point, a place where they can exchange news, where they can talk to their neighbour — and it may be the only chance that they have to talk to their neighbour during the course of the week. Some people are able to walk to the post office, and others use a bicycle to get there, but there is no doubt that a local post office is an inseparable part of the rural community. It would be wrong to divest old-age pensioners of a post office and expect them to use a cash dispenser, which some of us who are in full possession of our faculties sometimes cannot use, let alone an elderly person. We should not expect the older generation to adapt to that kind of technology, not to mention all the costs that would be involved.

It has been pointed out that the minimum sum that may be withdrawn would, for many old-age pensioners, be too much to take out at one time. There is also the question of shopping locally. These people use their post office not only as a focal point for meeting others, but also as a place to do their shopping — where they can get their few bits and pieces to carry them through the rest of the week.

Mr Billy Hutchinson made a good point, and we can be very parochial in terms of rurality. There is a point to be made for city people also and for those who live in vulnerable areas. They too should have a local post office.

I support this motion and its timing. The retention of local post offices will not only maintain the idea of rurality but it may also be a springboard for rural regeneration. A LeasCheann Comhairle.

Mr ONeill:

I too want to thank Assemblyman Dallat for bringing this motion before the House. I congratulate him on his authoritative research and on the way that he presented it — he did so well that he has left many of us with very little to add. However, there are a couple of points that I would like to emphasise.

Members have already clearly made the distinction between service and profit as they examined the problem of local post offices, and it is on that very point of principle that we should be judging what we should offer as advice from the House. The concept of service is very clear: post offices provide a service to everybody, rural and urban — and I think that even Billy Hutchinson will forgive me if I emphasise the importance of the service in rural areas. It is in the rural area rather than the urban area that the problem strikes home.

Rural areas, such as my constituency of South Down, have reeled from centralised thinking. We have reeled from centralised thinking on planning, where people have difficulty even building a house for members of their family on their farmstead. We have reeled from centralised thinking on roads: no new stretch of road has been built in South Down in living memory. We have reeled from centralised thinking on hospital services, as illustrated by the argument over the Downe Hospital in Downpatrick.

Centralised thinkers are not necessarily urban dwellers, but they tend to have an urban mindset. They tend to arrive in a rural area, look at it, and say "That’s a nice place; we’ll go for a walk with our green wellies on" or "That’s a nice place for a weekend home". They pay scant regard to the difficulties faced by the population who actually have to live, bring up families and survive in rural areas.

This continual erosion of services to people in rural areas and to the quality of their lives combined with the insecurity that people feel about this will inevitably force people to move out. Recently a medical person in my area retired and said that he was going to move closer to Belfast for his health and safety. That sort of thing will increase as services continue to be reduced.

Why am I so concerned about the post office? Well, next to the primary school in a hamlet or a village, the post office is at the heart of a rural community. In terms of commercial and community activity, there is a network, an interdependence, between a local post office and the surrounding businesses in the hamlet or village. People who collect their benefits and pensions purchase goods there. If they have to go to another location, business will be taken away from that particular hamlet or village. That is the reason for the erosion of services in the rural community.

People should be heartened by the support, from all sides, for John Dallat’s motion. It shows the concern that there is about the erosion of services in rural areas. I hope that there will be unanimous support for the motion.

Mr Morrow:

I was struck by Mr ONeill’s comment that centralists and centralism are the curse of those dwelling in the rural areas of Northern Ireland. I could not agree with him more. In recent years we have watched, with utter dismay, as they have tried to turn rural dwellers into urban dwellers. Those of us who live in rural Northern Ireland will never be urbanised, and we defend our right to have services retained in our rural communities.

I am speaking in favour of the motion, and I thank the Member for bringing it before the Assembly. It is very timely. This morning’s discussions clearly illustrate the widespread concerns that exist about the implementation of the Postal Services Bill. I believe that the Bill is designed more for inner city and town dwellers and that it has very little to offer those of us who live in rural parts of the United Kingdom.

11.45 am

It goes without saying that many rural post offices will be forced to close. Significantly, when we talk about rural post offices, the impression may be given that these are remote offices tucked away under a mountain somewhere, used by a dozen people, but it extends much wider than that. Our towns and villages are going to feel the impact of the Postal Services Bill. In some cases, the principal towns of a district council area are feeling the impact of what is happening to their post offices.

It has been said that the local primary school is the heartbeat of a rural community. I agree entirely. In the same vein, the rural post office is a vital link within that community. We have watched in dismay as rural primary schools have closed one after another. In the Dungannon District Council area, 10 or 12 rural primary schools have closed in the past 15 to 18 years. Now it is the turn of the rural post office. We can see a pattern developing. Very soon, rural communities will be denuded of all life.

The Postal Services Bill will have a devastating effect on rural communities. It will impact not only on rural Northern Ireland, but on our villages and towns. The Assembly should resist this with all its might. Rural Northern Ireland is already under pressure. Stringent planning regulations are turning our countryside into a wilderness. It is vital that those who live in rural Northern Ireland are permitted to do so. The post office is vital to the whole rural community infrastructure.

In recent years there has been an influx of large retail stores into Northern Ireland. In many cases they have picked off the prime sites on the periphery of our towns. What do we find then? Our sub-post offices are cleverly moved into these large stores. Tony Blair’s New Labour has shown little regard for rural communities. It has been said that the only apparent interest this Labour Government has in the countryside is in abolishing fox-hunting and introducing homosexual studies to the few remaining rural schools.

The Government plan to pay pensions, welfare benefits and child allowances directly into recipients’ bank accounts from 2003. Of course, when this decision was taken, little consideration was given to the fact that rural Northern Ireland does not have adequate banking services. Many of our villages have, at best, poor part-time banking facilities. I am convinced that the postal service has been designed for an urban Britain, with very little consideration given to rural communities and to Northern Ireland in particular. We are fast moving towards a cashless society, if we have not already arrived. The important role that the rural post office plays in society today cannot be overestimated. I represent a rural community whose inhabitants are going to be further penalised for being rural dwellers.

I support the motion.


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