Part of the debate – in the House of Commons at 3:25 pm on 8 February 2024.
Kevin Hollinrake
Parliamentary Under-Secretary of State (Department for Business and Trade)
3:25,
8 February 2024
I congratulate Andrew Western on securing this important debate on a subject close to my heart, as the representative of the rural seat of Thirsk and Malton.
We all know how highly our communities value post offices, and our constituents have deep concern whenever they are closed, even temporarily. They value them because of the services they provide but also, as the hon. Gentleman puts it, because they are the provider of trusted relationships—I could not agree more. The Post Office network is still significant, with over 11,500 branches across the country. Recent research by the London School of Economics highlighted that the network makes a valuable contribution to the economic health of our high streets, generating £3.1 billion of additional spending every year. It is understandable that the hon. Gentleman wants to debate the issue, given that his Constituency has seen changes in its provision of post offices in recent months and years.
The Post Office has the commercial freedom to deliver the branch network within the parameters set for it by Government. Those parameters include minimum access criteria and minimum services to be provided at branches across the country. For example, 99% of the population must live within three miles of their nearest branch and 95% of the total urban population must live within one mile of their nearest outlet, which relates to the hon. Gentleman’s constituency because it is in an urban area. Despite all the challenges faced by retailers in recent years, it is pleasing that the Post Office meets and exceeds those criteria at a national level. In fact, more post offices have opened this year than have closed and the network is as large today as it has been for five years, with around 11,700 branches open.
As the hon. Gentleman will know, 12 branches are operating in in Stretford and Urmston, serving around 13,000 customers each week. The post office network in the area supports around 60 full-time equivalent jobs and has an economic contribution to his constituency of over £6 million each year, as well as driving an additional wider high street spend of £5 million a year.
I am aware of the hon. Gentleman’s concerns about the situation in Partington, where I understand the post office branch closed last year when the postmistress retired after an incredible 35 years serving her community. From my own constituency experience, I fully appreciate the impact a branch closure can have on a community. It can be disruptive, particularly for communities without nearby alternatives, but that fluctuation is part of the modern, dynamic, franchise-led business that the Post Office primarily is. The network is made up of small businesses and, just like any other franchise-based business, the Post Office cannot control a franchise’s decisions about their future. As postmasters move on, branches close and new ones open, as the hon. Gentleman has experienced at first hand, with the opening of Stretford post office in its new permanent location late last year.
The reasons for a temporary branch closure are generally outside the control of the Post Office. However, in such instances, the Post Office ensures services are maintained as quickly as it can. I understand from the Post Office that there is interest from a community group in taking on the Partington branch, with a further meeting scheduled next week, so I am hopeful that the branch can be reopened as soon as possible. I note the hon. Gentleman’s point about the provision of a mobile service, and I am happy to take that away and update him. It is not easy to secure, as I have experienced myself, but we will do whatever we can.
We are not blind to the realities of taking on and running a post office. Like any other retailer, post offices face pressures from continually evolving consumer behaviours, particularly as consumers shop online more, driving footfall away from our high street. When it comes to consumer habits and accessing Government services, it is not our place to dictate to people where they should access those services—I think that we often like to access those services online. None the less, we are keen to retain what services we can. The hon. Gentleman did point to the DVLA contract, which has been extended for another year. I think that everyone would like to see that contract extended on a longer-term basis, but negotiations will have to continue.
Changes in consumer behaviour are significantly driving down the number of letters being sent, which is also having an impact on post offices. Nevertheless, there are reasons to be optimistic. We were pleased to see the Post Office launch its Parcels Online business last year, whereby customers can select and pay for Evri and DPD products online before dropping parcels off at their nearest post office. The Post Office is now also rolling out a similar proposition across the physical network, which means that customers can compare different carriers to choose the option that best suits their needs. We see this as a significant opportunity to improve competitiveness and competition in the market, and I am keen that the Post Office expand that proposal further to include more carriers.
There is also a major opportunity, as the hon. Gentleman puts it, in banking services. All customers should have appropriate access to banking and cash services wherever they live. That is why we have legislated to protect access to cash to ensure that customers can continue to access everyday banking services at the post office. This development is important for the hon. Gentleman’s constituency as, for example, around 50% of bank branches in Stretford and Urmston have closed since 2015, so post offices are key in providing access to cash in the constituency, as they are across the country.
In December, £3.3 billion in cash was either deposited or withdrawn across the country. The post office network is therefore a crucial component of this country’s long-term provision of cash and banking services. And that is why I have been clear that the Post Office should be ambitious in its negotiations with the banks for the next iteration of the banking framework agreement, which already provides significant revenue into the post office network. We welcome that, but there are further opportunities. The hon. Gentleman may want to speak to the Economic Secretary to the Treasury about other services, such as banking hubs. As I said earlier, there are 30 hubs around the country already and 70 more in the pipeline, but our aspiration is to get 500, and it may be suitable to provide a hub in his constituency.
In a general election, each Constituency chooses an MP to represent them. MPs have a responsibility to represnt the views of the Constituency in the House of Commons. There are 650 Constituencies, and thus 650 MPs. A citizen of a Constituency is known as a Constituent