Ministers should be able to fix Post Office without closures

Published on Sunday 23 March 2008 21:27

The government seems determined to wield the axe – but it should beware a public backlash

STANDING in a queue in a busy post office that is earmarked for closure through lack of custom is like trying to believe in global warming on the coldest Easter Monday in living memory. The underlying theory might be right – it's just hard to believe on the evidence.

Regular users take a book and overcoat to visit the average closure-threatened urban post office branch. Apparently, they come in handy for the queues from hell that snake out of the door at lunchtimes most days.

According to the Post Office, that proves nothing, except that customers at the 2,500 branches earmarked for closure appear in unwieldy peak-time clumps, temporarily overwhelming staff. But those customers then tax their cars online, get their pensions by direct debit, pay for their TV licences elsewhere and will soon remove their banking business if the government winds up the Post Office Savings Account (POCA).

Alistair Darling might argue if he were a tad more colourful that, just as video killed the radio star, the internet is killing the Post Office. The only snag is that radio isn't dead. Nor are cinemas, bicycles, books, buses or other "old fashioned" products and services.

Other businesses have adapted to market trends, the digital revolution and the challenge of managing utterly predictable customer peaks. Surprisingly, for example, supermarkets are still busy in the wake of the home delivery revolution. Astonishingly, high street banks manage lunchtime surges by putting on extra staff, and, miraculously, local takeaway shops survive, despite being really busy for only two hours a day.

So why are busy post offices set to close? And why are successful services being withdrawn? The POCA, for example, is an amazingly well-designed and popular product. It can only receive benefits and cannot pay standing orders or direct debits, so for five million account holders – most living on the breadline – there's no danger of incurring the 39 per failed direct debit that banks charge. Great news for people on low incomes who juggle life's priorities daily using cash.

But the government is planning to axe the POCA by 2010, even though it will cost the network 100 million a year in lost income and lower "footfall". The Post Office will not know what's happening until later this year. Nor – more importantly – will the five million account holders.

It's almost as if the People's Party wants to sabotage the poor, the elderly, the young, the baffled and the large-envelope user. Labour MPs have campaigned to keep branches open but have failed to deliver. On last week's showing – when 32 of the 39 Scottish Labour MPs opposed a Tory motion blocking closures – the Catholic Church may be disappointed if it hopes for back-bench Labour support in a free vote on the embryology bill. The Commons defeat was followed by a ministerial comment suggesting further cuts might be in the pipeline. It seems the end is nigh for a bit of Britishness even Alex Salmond applauds.

Apparently, it costs the taxpayer 3 million a week to keep rural branches open. Half a mile of motorway costs more, and if Labour had the courage to undo a Tory mistake and allow the profitable Royal Mail to cross- subsidise the Post Office, the taxpayer would have been in the black to the tune of 1 million last year.

But the government and Post Office management are not just resigned but committed to the latest wave of closures; so much so that groups trying to devise community, council or commercial buyouts of "redundant" branches are being stymied at every turn.

Fifty local authorities led by Essex and Falkirk councils are trying to save closure-threatened POs by adding council functions and extra footfall (as they do in France). Others have asked if post office functions could be incorporated into libraries or other council outlets. A community buyout is being considered in Argyll. Across Britain, neighbouring shops are bidding to take over "stand-alone" branches facing the chop.

But all complain about the Post Office's obfuscating response. It has refused to give financial details of individual branches "on grounds of commercial confidentiality", and suggest buyouts aren't worth a candle as the average rural post office demands a subsidy of 17 per visit. Which is strange. How come such wobbly enterprises weren't included in the list of 4,500 branches closed since 1999? Perhaps business has unaccountably collapsed just as rural populations are finally rising again. Or perhaps there is little logic or fairness behind the current closure plans.

Post office counters within village shops are being closed and compensation will be paid only if shop owners affected by closures agree not to offer competing services for a year. This means shops struggling to make up for the loss of the post office side of the business will not be able to sell lottery tickets, payment services for utilities or council tax through PayPoint, or private mail, courier or foreign currency services. Rural shop closures would be disastrous when rural pubs, churches and schools are all facing closure, too.

The government is the Post Office's sole shareholder. If that shareholder can't adapt a popular national network for the internet age, customers might usefully question what it can do. And voters willing to suspend judgment over complex matters like Northern Rock may come to conclusions far quicker about the failure of political imagination over Britain's Rock – the Post Office.