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Post Office Network — [James Gray in the Chair]

– in Westminster Hall at 9:30 am on 10th March 2020.

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Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities) 9:30 am, 10th March 2020

I beg to move,

That this House
has considered the post office network.

It is a pleasure to serve under your chairmanship, Mr Gray. I was tempted to add to the motion this morning so that it read, “That this House has considered the post office network while we still have it.” In 2017, Citizens Advice found that people value having a post office in the local community more than a local pub, bank branch or library. Sixty-two per cent. of small businesses—more than 2 million—use them at least once a month, and in rural areas post ofices are vital, with 36% of rural businesses using them at least weekly.

Photo of Chris Elmore Chris Elmore Opposition Whip (Commons)

I am grateful to the hon. Lady for giving way so early in her speech. I congratulate her on securing the debate. She mentioned bank branches in rural areas, but in lots of constituencies—in hers as much as in mine, I am sure—only one or two banks are left, so the post offices are the true infrastructure that residents now rely on for getting access to cash and general banking services. Does she agree that if more post offices close, whole communities will be cut off, with some people having to travel many miles to find additional banking services? We really cannot afford that.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

The hon. Gentleman makes a vital point, which I will cover later.

Post offices matter to everyone. We are not all digitally inclined. We are not all able to access digital services online, and poorest and most vulnerable people in our society are the ones who are most affected by post office closures.

Photo of Nick Thomas-Symonds Nick Thomas-Symonds Shadow Solicitor General, Shadow Minister (Home Office) (Security)

I congratulate the hon. Lady on securing this debate. I agree entirely with what she is saying. In my constituency of Torfaen, post office branches have survived by going into other businesses—into chains or independent businesses. Does she agree that where contracts are in place for that to happen and circumstances lead to change, those post offices need to be supported and the contracts kept under review?

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

Absolutely. In constituency business, I too have heard of people taking on a post office in their existing business and being told that it is the new nirvana and things will only get better, but it is the existing customers who use the post office service in the shop, and there is no huge increase in turnover. It is important that post offices branch out. Longer opening hours are welcomed by many, but the whole point is to keep post office services available right across the regions and across all areas.

Rural businesses are more likely to use post offices to send deliveries and pay bills, and twice as likely to use them to withdraw or deposit cash. As hon. Members have said, banks are closing, so post offices become even more vital.

Photo of Kirsten Oswald Kirsten Oswald Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Work, Pensions and Inclusion)

I thank my hon. Friend for giving way. The decrease in the number of banks and post offices in our constituencies is of significant concern to local people. There is a real problem in terms of access to cash, which is particularly pressing for elderly and more vulnerable constituents.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

Absolutely. I was outside Wishaw post office, which was temporarily shut, when a disabled constituent came to get her benefits. She did not have enough money to get on the bus to go to the next post office, which is a fair distance away. She could not have walked. She had to phone her daughter to come and collect her to take her to access cash. This is 2020 and that is still happening. People need cash. In a previous debate in this room, the then Chair of the Treasury Committee gave a forensic and detailed account of how post offices let down local people if they close, because access to cash is still vital to the most vulnerable people and to all of us. Most of the taxi drivers in my constituency do not accept cards, and that is the case across the UK. We cannot force people. The Government should not try, through Post Office Ltd, to force people to go down the digital and no-cash route.

Scotland is being hardest hit by the postmaster crisis across the UK. Although since 2009 post office numbers have remained reasonably constant, last year they fell by 1%, and since the early 1980s the number of post offices has almost halved.

Photo of Liz Saville-Roberts Liz Saville-Roberts Shadow PC Spokesperson (Home Affairs), Shadow PC Spokesperson (Women and Equalities) , Plaid Cymru Westminster Leader, Shadow PC Spokesperson (Justice), Shadow PC Spokesperson (Business, Energy and Industrial Strategy)

I am grateful to the hon. Lady for securing this debate. When I speak to my local postmasters, one concern I hear is about the nature of the contract that they are supposed to take on. The length of hours requires them to keep extra staff at the tills. Will she join me in questioning the Minister about the terms of the contract and what is expected of sub-postmasters to make the services as feasible and as affordable as possible?

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

That will be one of my asks of the Minister. I have numerous asks, which might not surprise those present.

The Scottish post office network has the highest number of temporarily closed branches or temporary operators in the UK. Figures from Post Office Ltd show that of 1,016 temporarily closed branches, 134 are in Scotland, representing 13% of all temporarily closed branches; 52 of the 315 branches run by a temporary operator are in Scotland. Temporary postmasters step in when a postmaster leaves and a permanent postmaster cannot be found. This is becoming more and more common. People do not want to take on post offices in the present climate because of the difficulties involved.

The Tories’ continued refusal to support postmasters and the post office network particularly affects Scottish communities. I am sure other Members will testify to the importance of post offices in their own nations and constituencies. Some have already done so by intervention. What does the Minister propose to do about it? If she sees it as a matter for Post Office Ltd, will she ask it what it intends to do about it?

Photo of Liz Twist Liz Twist Opposition Whip (Commons)

I thank the hon. Lady for securing this debate, which resonates throughout all our nations. The post office in Blaydon’s shopping centre closed some years ago, and the Post Office has been unable to find anyone to take it on. Does she agree with me that post offices are absolutely central to the health of our high streets and that the Government must adopt a more flexible approach to supporting the opening or reopening of post offices?

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

I thank the hon. Lady for her intervention. I totally agree with her. I learnt about the circular flow of income and cash many years ago. If we cannot withdraw money from the post office, we cannot nip next door to the baker’s and buy a bun or a loaf of bread, and the baker cannot use it to pay staff. Things come to a halt. It is basic economics, or economics 101 as it is now referred to.

Communication Workers Union officials have also queried the wisdom of closing Crown post offices—those directly managed by Post Office Ltd—given that the company is profit making. The union notes that franchising causes people to leave the service because jobs advertised by firms such as WH Smith, which holds a very large number of franchises, are lower paid than those at the post office. Last year's decision to turn 74 Crown post offices into franchises in WH Smith stores is also alarming, particularly given reports that franchising is being done without consultation with the existing local post offices, meaning the competition risks destabilising the network further. I believe we heard from Rachael Maskell in a previous debate that that happened in York. The Crown post office was closed, put out to franchise, and opened next to an already franchised smaller post office branch.

There must be more consultation and strategic consideration on franchising. That is a particular concern of the all-party parliamentary group on post offices, whose chair, Gill Furniss, is in the Chamber. Last year, the Post Office’s director of sales and trade marketing stated that it has no contingency plan in the event that WHSmith, which has experienced 14 consecutive years of sales decline, collapses. If WHSmith collapses, what will happen to the Crown post offices? We must ensure that further franchising happens only in consultation with other businesses.

The UK Government must provide more incentives for new postmasters to open post offices that are independent of major chain shops. Will the Minister look at that and instruct Post Office Ltd accordingly? It is appalling that this year the majority of sub-postmasters earned less than the minimum wage for running a post office. The pay increase announced in November will not take place until next month. It is vital that the Minister acts to ensure that profits are not increased at the cost of a cut to postmasters’ pay, forcing permanent post offices to close. Will the Minister take urgent action to review the sub-postmaster contract introduced in 2012? I think I can safely say that it is no longer fit for purpose.

The National Federation of SubPostmasters has raised sub-post office closures with the UK Government and the Government-owned Post Office Ltd. A spokesman said:

“Our records show around two-thirds of closures are due to the resignation of the sub-postmaster”.

The spokesman pointed to low pay as the prime reason, saying that

“This is a particular problem for rural areas in Scotland, as well as across the UK, where people rely on their local post office for vital postal and banking services.”

Last year, an NFSP survey warned that one in five towns could lose its post office in the next year. Surveying a thousand workers found that 22% are planning to close, pass on the business or downsize staff. Sub-postmasters have been forced to go without holidays and take on extra jobs to make ends meet.

Photo of Owen Thompson Owen Thompson SNP Whip

We often find in situations such as the one in Loanhead in my constituency, where the Bank of Scotland is completely abandoning the community by shutting the bank branch, that the Post Office is expected to step in. We are very fortunate to have an excellent post office in the community that is willing to do so, but those increased pressures surely contribute to stress for postmasters, which adds to the points that my hon. Friend made about the potential for closure. If post offices close, what then for our communities, where the post office has been the final vestige, picking up the pieces after the bank has abandoned them?

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

I totally agree. The crux of the matter is that if we allow things to continue as they are, there will be a continual and continuous decline in the post office network until it reaches a tipping point and is no longer viable. We will all lose out, but the most vulnerable in our society will be affected the most.

In 2019, it was announced that from April sub-postmasters will receive better financial remuneration from Post Office Ltd for key banking services that they provide to the public. At the NFSP annual conference, the Post Office Ltd announced that it will raise the rates. That is great—it will be a threefold increase—but we must ask ourselves why the Post Office felt the need to do that and why it was not done earlier. A local sub-postmaster came to me and said that he was getting the grand rate of £1.88 an hour for dealing with cash intake to his branch. He will feel much better that he will get more money, but post offices are taking the place of banks, and that is not always right.

I was part of a group of Scottish National party MPs who tried to ensure that banking service provision is properly remunerated. To be fair, the issue was also raised by Members from other parties. I raised the issue at Prime Minister’s questions, and my hon. Friend Gavin Newlands raised it during an Adjournment debate that he led last year. If people think that I sound repetitive, it is because I am being repetitive. Since I came to this place, five Ministers have been in place; today’s Minister is the sixth to have responded to a debate on post offices in which I have spoken. That cannot go on.

We welcome the changes that are happening, but it is vital that the details prove sufficient to protect postmasters’ livelihood and the network. Further improvements are needed to help to future-proof sub-postmasters’ business. The announced measures must not be the end of Post Office Ltd’s actions.

Photo of Kirsten Oswald Kirsten Oswald Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Work, Pensions and Inclusion)

My hon. Friend is making a persuasive speech about the importance of post offices to our communities. She is hitting the nail on the head: it is about the service being sustainable. These services are at the heart of our communities. In East Renfrewshire, people in both rural and suburban communities are extremely concerned that post office services are no longer available to them. It is having a significant impact on their daily lives.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

I totally agree. Across the House, in all the debates that we have had, there has been consensus and unanimity about what needs to be done. Time and again, folk have urged the Government to take action; many Members present have attended many such debates, and I welcome some new Members too. The Government have sat on their hands and done very little to improve post office network viability.

The National Federation of SubPostmasters said in November:

“It is imperative that we anticipate and adapt to future changes in the marketplace to ensure that subpostmasters are equipped and incentivised to grow their footfall and income. That is the only way we will be able to guarantee the long-term success of the overall business. This year we have looked to stabilise, next year and beyond we can look to sustain and grow.”

Sub-postmasters cannot do that on their own. They need support from Post Office Ltd and the Government, who are the single shareholder in that business.

There are major questions about the handling and oversight of the Post Office by the Department for Business, Energy and Industrial Strategy, under its various guises, over decades. The Department has failed post offices, and change is needed. For example, in 2016-17 the former chief executive officer, Paula Vennells, received a major pay increase, while postmasters took a pay cut. At a time when the network is damaged, that seems unwise. I might even put it slightly more strongly than that. I asked the previous Minister for postal affairs for an independent review into postmaster pay. I know I have said this already, but I will keep saying it: we want a review. Will the Minister commit to one?

I will talk briefly about the Horizon cases. We had a debate in Westminster Hall on Thursday, during which we heard some appalling stories. The Horizon scandal is not just the fault of this Government; it has been going on for years, under Labour and under the Lib Dems in coalition. I do not want to make it a party-political issue. Mistakes have been made and they need to be rectified. We cannot just say that a big boy or a big girl did it and ran away. It does not matter who caused it. This is the point that we are at, and we have to move forward and secure a future for our post offices. I do not care who does it; I just want it done, and so do my constituents.

The Minister was in the Chamber last Thursday, when Lucy Allan led the debate on the Horizon scandal and its impact on postmasters and post office workers. We heard of appalling cases of injustice in which victims were imprisoned, were given community service, or lost homes, businesses and reputations. Victims were pressurised into paying money to Post Office Ltd to avoid criminal charges, even when they knew they had done nothing wrong. Post Office Ltd covered up what it knew about the Horizon system and recklessly spent public money trying to avoid blame. The Minister’s response to all of this was lacklustre.

As I have said, since I was elected almost five years ago, I have faced five Ministers—as of today, six—in an effort to get Tory Governments to understand the importance of post offices and those who run them and work in them. I feel as though I have been battering my head off a brick wall, but rest assured that I will continue to fight for our post offices, alongside colleagues from across the House, because our communities need them. Victims of the Horizon scandal must be recompensed. Will the Minister meet Post Office Ltd to ensure that those who run and work in our post offices will not be the ones who pay the price for this scandal?

The Government once said that the Post Office should be the “front office” for Government services. Is the Minister still committed to that, and is she aware that the BEIS post office subsidy, which is paid to Post Office Ltd to ensure there is funding to maintain post office networks in rural locations, has tapered off? The Business, Energy and Industrial Strategy Committee’s inquiry into the post office, which was published in October last year, said:

“A re-think of how the Post Office is being funded for its role in supporting wider social and community goals is urgently required. This includes valuing the sub-postmasters and Post Office staff who deliver the services. It means making the Post Office a key channel for Government to reach customers. It requires ensuring that the Post Office brand continues to maximise opportunities with commercial partners, such as the banks and Royal Mail, so fees can be reinvested into the network and sub-postmasters fairly paid. Finally, it requires creative thinking on how the Post Office can continue its social purpose and maintain the high regard in which it is held by the communities it serves.”

A national post office network provides an essential public service. I do not think this Government and previous Governments get that; they do not understand that although many of us Members will go months before we cross the threshold of a post office, that is not how it works for the majority of our constituents. I have talked a lot about rural areas, but my constituency, in which I live, is an urban constituency, and a number of post offices have closed in Motherwell and Wishaw. Two Crown post offices have closed, numerous post offices closed in 2010 or thereabouts, and thereafter there has been a continual drip, drip, drip of closures and postmasters handing back keys. To provide that essential public service, a national post office network needs Government subsidy. The Business, Energy and Industrial Strategy Committee has expressed concern about what will happen if the network subsidy payment that supports the operating costs of the post office network is withdrawn after 2021. The Committee said it was concerned that

“the PO and many sub-postmasters and retailers who run POs will not be able to fill the gap in funding with other revenues. Many sub-postmasters are already struggling and thinking of leaving their POs and the removal of £50 million in subsidies could tip many over the edge. It could also convince some retailers and retail chains who host POs that it is no longer viable. This would have a damaging effect on the PO network. It should be avoided at all costs.”

I agree with all of that.

That Select Committee report was published in October 2019, but I do not think it has gone anywhere. We have had an election, which has represented another step back. There has not been a continuous push from Government to do what is needed, and although I understand that the general election had an effect, we need the Government to take up the reins again. What is the Business, Energy and Industrial Strategy Committee doing an inquiry on this morning? Post offices—isn’t that strange? That only underlines the importance of the post office network. If I do just one thing today, I want to convince the Minister that this is so important that we require something other than platitudes and warm words from Government. If I can do that, I will feel that I have at least done something.

Photo of Liz Saville-Roberts Liz Saville-Roberts Shadow PC Spokesperson (Home Affairs), Shadow PC Spokesperson (Women and Equalities) , Plaid Cymru Westminster Leader, Shadow PC Spokesperson (Justice), Shadow PC Spokesperson (Business, Energy and Industrial Strategy)

The hon. Lady is making a powerful point. Does she agree that it is concerning that the Government seem to be prioritising digital by default? In effect, that means prioritising the banks that are able to make more money—increasing those banks’ profits—over the needs of many of our vulnerable constituents who will never be able to access digital or who may prefer, for very good reasons, to manage their own finances through cash.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

I said earlier that there was unanimity across this Chamber, and there is. I thank the right hon. Lady for her intervention, and of course I agree with her.

It is really important that the Government and the Minister give us some surety that they are still pushing, in the spending review, for this subsidy to continue; I have already described the costly effects that might occur if it does not. A number of Government services are disappearing from our post offices; for instance, the Government have put post offices at a severe disadvantage when it comes to applications for passports. Why is it much cheaper to apply online? I remember that when I applied for my first ever passport, I filled in the form wrong three times. The nice lady in the Crown post office in Wishaw sent me back and told me to fill it in again. I was a teacher then, and I was busy—I could make all sorts of excuses—but I would not have got that passport if she had not said, “No, do this and this.” Of course, being me, I had left it until the last minute. I had three young children, a full-time job and a husband who thought that going on holiday just meant not working for two weeks. That is the kind of vital social service that post offices provide.

I have spoken about this issue to other Members on many occasions. One Welsh Member, who is not here today, told me about the valuable service that his mother’s local post office used to give her when she went in. Because the postmaster knew her PIN, he helped her to get her money out and to put it into different pockets for different things, and really just helped her along. Postmasters in my own constituency have told me that they feel hamstrung now. They cannot provide the kind of service that they used to, simply because they have so little time. They are trying so hard to make money to live on that they cannot spend the time that they used to with their more vulnerable customers.

Is the Minister aware that since October 2019, the Post Office card account has no longer been available to new claimants and pensioners? There has been an invidious, insidious attack on the Post Office card account for a number of years. In 2015, a local sub-postmaster came to me with a very official-looking letter from the Department for Work and Pensions addressed to a constituent. It said, more or less in these words, “You must have a bank account in order to get your benefits and your pension.” For years, the Post Office card account has been used successfully by pensioners and claimants. They could go into their trusted local post office and draw money out on it without having to worry about having a bank card and going overdrawn, or about the difficulty of setting up a bank account. Many people do not have a passport or a driving licence, and they have never had a bank account and find it difficult to open one. The Post Office card account was ideal for those people, but now it is gone. Are there any plans to bring it back?

Photo of Kirsten Oswald Kirsten Oswald Shadow SNP Spokesperson (Northern Ireland), Shadow SNP Spokesperson (Wales), Shadow SNP Spokesperson (Work, Pensions and Inclusion)

I appreciate my hon. Friend’s generosity in giving way. My constituents have raised the same issues with me. If the Post Office card account has to end, it would be useful to hear what measures the Minister plans to put in place so that people who need to use that kind of account are not disadvantaged by the creeping closure of post offices in our communities.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

I agree with my hon. Friend that that all matters. I am an old person—[Hon. Members: “No!”] I know everyone is shaking their head in amazement. I understand this issue. People who have been using those accounts should be able to continue to do so, and that seems to be happening. Those who are retiring later, thanks to other Government plans, should still be able to go into their post office and use it as others have been able to. Post offices are the focus and the heart of any town or small community, or anywhere rural.

Photo of Ruth Cadbury Ruth Cadbury Labour, Brentford and Isleworth

The hon. Member makes an important point about people who are not digitally enabled, particularly older or disabled people. Does she agree that the closure of post offices also disadvantages small business owners, who frequently use post offices to collect and post parcels, and that that affects local economies?

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities)

I absolutely agree. When the Crown post office in Motherwell closed, one of the biggest lobbying efforts I had was from small business owners who could nip into Motherwell town centre to deposit their cash. With the closure of different banks, they now struggle and have to find somewhere else. The Motherwell Crown post office became a small retail business with two counters instead of six. That post office used to have queues out of the door at certain times of the week, and the town centre benefited from people withdrawing and spending cash. That does not happen now, because although the post office does an excellent job—I have used it—it does not have the required capacity.

The CWU has raised the loss of service and expertise that can occur when post offices are taken over by chains such as WHSmith. The employees are TUPE-ed over, but within a year their pay is cut and they leave, so the business no longer has the expertise to help and serve communities when they need it.

The Minister has been taking note of all my asks, and I hope that she will respond positively. Rest assured that if she does not, I will be back, along with many of the hon. Members who are present. I look forward to yet another debate about post offices in the main Chamber on 19 March, thanks to the work of the all-party parliamentary group on post offices, of which I am a proud member.

Photo of Ruth Cadbury Ruth Cadbury Labour, Brentford and Isleworth 10:03 am, 10th March 2020

It is a pleasure to serve under your chairmanship, Mr Gray. I agree with the powerful opening remarks of Marion Fellows and thank her for securing the debate. Other hon. Members have made important points about the significance of post offices for local communities and town centres, which I will focus on.

A tsunami of post offices and post office counters were lost in my constituency after 2011. We then had 10 post office counters—no Crown post office—of which we have lost three in the three years since 2017. The most important served Brentford high street, where the community has doubled in the past 10 years, to roughly 10,000 to 15,000 households.

The post office counter was in a shop in the middle of the town centre, where many buses passed. It served a large population and a large number of small businesses. There was a one-year notice period during which everyone knew that the parade building in which the post office was situated had to be emptied because it was due for redevelopment, so the post office could not remain in the premises. The building has subsequently been demolished. It also happened that the postmaster decided that he did not want to carry on the business, which is an issue in itself.

The good news is that a couple of months from now—18 months after the post office counter closed, during which time we have had no service in the whole of Brentford—we will get a new counter at Costcutter on the high street. We will have had 18 months without a service that many people feel is vital. We could have avoided the gap, because the Post Office, the local authority, I as the MP and the local councillors knew that there was a need to find new premises and probably a new postmaster. The Post Office sought applications, but in the first round there were only two applicants from the many businesses and organisations in Brentford that could have opened a counter. Neither fitted the criteria, so there was another application round. I am not sure whether Costcutter tipped over the bar in that round and was accepted or whether there was a third round.

Why are people not applying for or retaining counters? As the hon. Member for Motherwell and Wishaw and other hon. Members have mentioned, it is because the margins are so slim, the pay is too low, the requirements for only a qualified person to cover the post office counter make it restrictive in terms of leave and sickness, the increase in robberies and violence makes retail businesses physically risky, and the Horizon project has damaged the Post Office’s reputation. What is the Post Office doing about that? I understand that it has an element of a public sector duty as a fully Government-owned company that, as we all see, provides essential public services.

In my correspondence and meetings with the Post Office, frankly, I have found it very passive. I have received no coherent response from it or the former Minister—I have not had a chance to speak to the current Minister about it. From the response, it feels as though the Post Office is passive. A Post Office representative told me yesterday that, “If no one applies, what can we do about it?” That is not a proactive response from an important Government-overseen operation.

The Post Office access criteria require

“99% of the UK population to be within three miles of their nearest post office outlet” and

“95% of the total urban population across the UK to be within one mile of their nearest post office outlet”,

but that does not make a lot of sense if the community, or the place that people can get to by bus, does not have a post office. There is a post office just over a mile from Brentford, but people cannot get there by bus and there is nowhere to park anywhere near it, because it is a tiny little shop. We should have one in Brentford town centre. The Post Office should recognise that. I have now been told that the Post Office has realised that Brentford is a priority and should have a main post office, but why did it not think Brentford was a priority two years ago, when we knew that there was going to be an issue?

I ask the Minister and the Post Office to work together to address the public sector duty and deliver a core service in all town centres, which we could define. We could use the PTAL—public transport accessibility level—grading used in planning to define the criteria for the quality of public transport access, parking and so on. We could also look at grants and the transaction costs.

The hon. Member for Motherwell and Wishaw talked about business declining in the Post Office’s core services, which is true, because many people use services online that they used to go to the post office for, but where is the Post Office looking at new business nationally, such as basic banking and new opportunities? Where is the entrepreneurial spirit to combine the best of private sector entrepreneurialism and new technology with the public sector duty—in a sense, the Government-perceived monopoly for services?

Photo of Gregory Campbell Gregory Campbell Shadow DUP Spokesperson (International Development), Shadow DUP Spokesperson (Cabinet Office)

Does the hon. Member agree that part of the problem is that successive Governments have not looked at those issues? They seem to perceive the Post Office as a business of the ’90s and 2000s, rather than one for the current and future generations.

Photo of Ruth Cadbury Ruth Cadbury Labour, Brentford and Isleworth

The hon. Member expresses exactly my feelings about dealing with the Post Office—it is passive; it is backward-looking; it is old-fashioned. There is an inherent benefit to post offices, both in terms of their brand reputation and the legal governance position.

The Post Office has a new chief executive, who has been in post for just six months. My understanding is that it will soon release a strategic review about its role. I am looking forward to hearing positive, forward-looking answers to my concerns, so that my constituency and my town centre, like so many other villages, town centres, suburbs and towns, is served properly by this important, Government-owned, public service.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health) 10:10 am, 10th March 2020

It is a pleasure to serve under your chairmanship, Mr Gray. I thank Marion Fellows for setting the scene so well. She is absolutely right; we have been here so many times on this issue. I hope that we do not have to return to it, but we all know we probably will. We hope that the Minister will give us the reassurance that we so desperately desire—I am glad to see her back in the House and congratulate her on her new ministerial role.

I am always concerned when I see a debate on post offices surfacing, as it gives me concern that there has been another round of culls as we are seeing with the banks, but I am thankful that that is not what I am facing in Strangford today. I have had a very good working relationship with the Post Office. On almost every occasion we have been able to find a solution, and I will refer to some of them later.

At the end of March yet another bank will close in Newtownards—this time it is the Barclays bank. Barclays has agreed to meet me about that. I am concerned about bank closures, as I know other colleagues are. Indeed, one of today’s early-day motions is about the closure of a Clydesdale Bank branch in Scotland. I think 10 banks have closed in my constituency, and I am concerned about the effect of those losses on communities. Hailing as I do from a mixed rural-urban constituency, I am very aware that local post offices are a necessity.

The hon. Member for Motherwell and Wishaw referred to the debate in Westminster Hall last Thursday on post offices and the Horizon system. Some of the stories about the impact on people’s quality of life, health, finances and some of the implications we heard were horrendous. Something that came out of that debate was the cross-party, cross-political opinion that something has to be done—it is needed desperately. I believe that the opinion is the same today.

Post offices play a crucial economic and social role in our local and rural communities. One in five people face isolation if rural post offices close. Eight in 10 small businesses in remote rural areas would lose money if local post offices were closed and, nationally, there are more post offices than there are bank branches of all the banks combined.

The banks that have closed in my constituency are mostly Ulster Bank, alongside Danske Bank, Bank of Ireland and Allied Irish, and now we have the Barclays bank closing. Credit unions have filled some of the gaps and have done an excellent job, but they cannot be expected to fill it all. New credit unions have opened in Kircubbin and there is also an active credit union in Newtownards, which is doing exceptionally well. The Under-Secretary of State for Work and Pensions, Guy Opperman, had the opportunity to come over to Northern Ireland to visit that credit union, so he is well aware of its good work. The Irish credit unions and the Ulster Federation of Credit Unions have tried to bridge some of those gaps.

The Countryside Alliance has said:

“The post office network offers an important means of accessing cash, either using its own financial products or because it provides access to the current accounts of 20 other banks and the business accounts of 8 other banks.”

The expansion of financial services through post offices could replace lost banking and financial services to rural communities and small businesses, ensuring the long-term viability of the network and that the post office remains at the centre of rural community life.

There are currently 491 open post offices in Northern Ireland; 314 of them, or 63%, are classed as rural. In my constituency of Strangford there are 22 currently open post offices and 72% are classed as rural. That says it all. I have worked alongside the Post Office and we have been able to integrate post offices into shops in the constituency quite well. That has been successful in Carrowdore, Greyabbey, Kircubbin, Ballyhalbert, Portaferry, Ballynahinch and in two or three places in Newtownards, in Comber and elsewhere. That has worked because it is about knowing the community. The people who have been interested in retaining the post office have accommodated that within their shops, and have thereby ensured that the post office continues to be an important part of community life.

Photo of Gregory Campbell Gregory Campbell Shadow DUP Spokesperson (International Development), Shadow DUP Spokesperson (Cabinet Office)

I am sorry to interrupt my hon. Friend on his grand tour of his Strangford constituency, but does he agree that in many rural areas in the regions and nations of the United Kingdom, what he has outlined is what has happened in the past few years—small post offices have been incorporated into shops and have developed services? That needs to be promoted more to retain and develop the network.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

I thank my hon. Friend for his wise words. I agree that that has been a success story. Perhaps the Minister will be able to confirm in her response whether that is happening in other parts of the United Kingdom of Great Britain and Northern Ireland as well.

There is now no longer a bank the entire way down the Ards peninsula. It is the post office that enables not only pensioners but local workers and stay-at-home parents to access banking and their funds. The importance of that to a community cannot be overstated.

The Post Office has highlighted to me that it has consistently met all five national access criteria; at the end of March 2019, 99.7% of the population lived within three miles of a post office—that is probably true in my constituency—and 92.7% lived within one mile. Post offices are very much an integral core part of village life, rural life and community life.

In addition, there are legal access targets to ensure that at least 95% of the population of every postcode district are within six miles of their nearest post office. It was found on 31 March 2018 that that criterion was not met in seven postcode districts. I am informed that as of 31 March 2019 there were three postcode districts that did not meet that criteria, and they are being worked on. Good work has been done, but other Members have referred to the importance of post offices and there are anomalies that need to be addressed. The post office network is attempting to fill the gap left by the rural bank branches—an extra burden that it is doing its best to address. That should be welcomed and further secured with clear signals from the Government.

I echo the calls of the Countryside Alliance to deliver on three key issues, which I hope the Minister can respond on. The Post Office and banks need to standardise banking services offered over the post office counter. Post offices must remain relevant in modern times through supporting growth in activities such as online shopping through parcel collection and delivery, and to continue to pick up the slack as banks and shops close in rural areas. There should also be access to the banking protocol, to ensure that when a branch is moved or closed, customers are made aware of the banking services offered by the nearest post office. It is crucial that post offices are an option that people can fall back on whenever banks close. That has happened in my constituency and I would like to see it happen in other constituencies as well.

We are slowly but surely moving into a situation where someone who does not have broadband of a decent speed will be isolated from their finances as well as other services, and not every person has access to online services. Our post offices are the last line of defence and we need to stand with them to defend this last bastion against rural social isolation.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport) 10:19 am, 10th March 2020

It is a pleasure to hear your Glasgow accent in the Chair, Mr Gray.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport)

I thank my hon. Friend Marion Fellows for securing the debate, and I commend her for all the work she is doing on this important issue. As she mentioned, the SNP pushed hard for the banking industry to provide a fair price for banking transactions over post office counters, because the rate was simply unsustainable. I am glad that a substantial increase was agreed; it is only right, given that in many places the banks are completely reliant on the Post Office to deliver their services. I am delighted that that has been resolved.

One thing that unites Members of different parties—I say that despite the lack of Tory Back Benchers present—is the future of our post offices in our constituencies and local communities. My constituency has 14 post offices and each is vital to its communities, from Ferguslie Park to Bishopton, Gallowhill to Houston, and Linwood to Bridge of Weir—I thought that I, too, would go on a tour of my constituency.

The post office in Bridge of Weir is an example of a community seeing the real value that a post office provides to the village and working hard to secure it. It was closed in 2011 but, through the hard work of the local community, The Bridge charity was set up to take over the former library and repurpose it as the village’s post office and community centre, with a peppercorn rent from the council. From day one, however, the charity faced an uphill struggle. Its income runs at barely half of that projected by the post office, knocking the projections that the trustees made completely out of kilter. It is a matter of some anger that the post office did not qualify for community status due to the proximity of other post offices in other villages, even though Bridge of Weir public transport links can be charitably described as patchy.

Any closure of the post office would result in substantial inconvenience for service users and the wider community, which has a significantly older than average demographic. The Bridge is able to keep the post office only through cross-subsidisation of counter trade by the associated retail unit, which provides a fairly narrow retail offer in order not to conflict with any other retail operations in the village. That cannot be sustainable without a real change to the criteria by which local community post offices qualify for additional support. It is simply preposterous that every other shop in the village would have to close and lie empty before this community asset becomes eligible for consideration for the Post Office funding streams.

In the last few months Post Office Ltd has provided a one-off grant to support The Bridge. If it recognises that need, ongoing support should certainly be offered to The Bridge. I have discussed this issue with the previous Minister; if she will allow, I hope to discuss it with the new Minister. I hope that she will take away what I and many other Members are saying, and that she speaks to the Post Office about amending the criteria to introduce more flexibility—we need a bit of common sense in designating the units of the network that need support.

Post offices such as that in Bridge of Weir, and in thousands of communities across the country, need real support and recognition from the UK Government that they are not just places to collect pensions and post birthday presents; they are the lifeblood of places that have had facilities taken away from them over the years. Sadly, we know that our postmasters have been poorly served by the Post Office and its management.

The Horizon IT fiasco is not just a damning indictment of the Post Office management and its inability to resolve problems competently; it is a devastating judgment on the “Upstairs, Downstairs” culture that seems to pervade the organisation. Dozens of victims have had their livelihood and liberty stripped from them at the behest of management, who denied for nearly two decades that there was any problem at all. We now know that there was a problem entirely of the Post Office’s making, which has cost a high price, and not just financially; the human victims will never get back the weeks and months they have wrongly spent behind bars, and families will never get their loved ones back.

My constituent was convicted of fraud and sentenced to 13 months. Her life was turned upside down. She lost her marriage and house as a result. No level of compensation is adequate for the damage that Horizon has done to her life. That episode demonstrates the fundamental cultural issues within the Post Office management that need to be addressed, and it highlights the lack of governmental oversight that led to that management culture.

For too long the Post Office has been treated like an old armchair: too useful to throw out, but unloved, battered and kept out of obligation rather than enthusiasm. I wish the Minister well in her new role, but that attitude has to change if we want a post office network that is fit for the remaining years of the 21st century. That attitude left some sub-postmasters living below minimum wage earnings due to the paltry sums paid to them to maintain a link in the post office network, and it has left the Bridge of Weir post office continually fighting for its future rather than receiving the support it deserves.

We need recognition from the Government that a post office is more than the sum of its parts. It is a vital cog in our society and communities that helps to bind us together, and it cannot be yet another piece of social cohesion that is left to be stripped away by the mantra of market forces.

Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Business and Industry) 10:25 am, 10th March 2020

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend Marion Fellows on securing the debate and on her earnest plea that post offices matter. They absolutely do. In each and every contribution to the debate, we have heard about many of the different ways in which post offices matter to our various communities and sections of them. My hon. Friend made a clear call for the sub-postmasters’ contract to be reviewed, and she pointed out that we need creative thinking about how the business model develops. It is a call with which I heartily concur.

I very much enjoyed the contribution from Ruth Cadbury, who spoke eloquently about the difficulty of maintaining the visibility of the service, about some of the problems with security and about the locations of people who are willing to take on the service, which are not always the locations where, in an ideal world, we would wish the service to be transacted. She made those points very well.

Jim Shannon spoke eloquently about the issues in his constituency, but he got right to the nub of it when he spoke of the post office as a core part of village and rural life. He hit the nail firmly on the head. My hon. Friend Gavin Newlands spoke of the importance of a good and effective public transport network in ensuring continued access to the network, and he said that the service is beyond the diktats of market forces. Again, I heartily concur.

Let us look at some of the positive aspects of our post offices. A survey conducted in 2017 showed that 81% of respondents described the post office as important to them; 49% described it as very or extremely important and 97% described it as trustworthy—an unprecedented high figure. That shows the tremendous standing of the institution of the post office, which is not something that has been created in a marketer’s sketchbook. It is a reputation that has been built up over generations of much-valued service to individuals and communities, with a high-quality service at its very heart. The post office is at the heart of both urban and rural communities, and it has provided a universal service and common experience that we have come to value, wherever we are from.

We all understand that changes in the ways that people wish to access the services offered at post offices are inevitable. There is always a temptation to try to take everyone down the route of digital by default, regardless of whether we have the technological capability and sufficiency of broadband access, or the willingness or personal ability, to do that. We have to recognise that digital is not the default for many people, nor will it ever be. It should not be the default for accessing post office services, and we must not overlook the vital role that post offices provide not just to individuals, but to local businesses.

My hon. Friend the Member for Motherwell and Wishaw referred to economics 101 and the importance of the circular flow of cash. That is of particular importance as many banks retreat from our communities and, in many cases, the availability of ATMs in our communities is dramatically reduced. That retreat affects not only rural communities, but urban communities. Lack of access to cash is particularly felt in some of the less affluent urban communities, where the post office’s presence as a provider of cash is vital.

In addition to ensuring the flow of cash, enabling it to be spent locally is important. Many post offices are located within retail businesses in the area, and they also provide direct support to other businesses on the high street. More than 2 million small businesses, or 62%, use the post office at least once a month. In rural areas, 36% of rural businesses use the post office at least once a week to receive deliveries, send products, pay bills and, with the banks retreating from the high street, to deposit cash, as the post office increasingly—willingly or otherwise—takes on the role of cash handler of last resort in many locations.

The network could certainly fulfil that task, but we have to proceed with caution. We must recognise that many post offices simply do not have the physical security to handle large amounts of cash, and that many sub-postmasters are perhaps unwilling to take on a task that carries an increased risk of crime. Although my SNP colleagues and I would very much like to stem the banks’ retreat from the high street, it is important that if and when they do retreat, they are held financially to their responsibility to support the transition and ensure that the post office network is suitably equipped to take on that role, should that be what we want to happen.

Photo of Owen Thompson Owen Thompson SNP Whip

On the point about the need for banks to have long-term contact with the post offices that step in where a bank has abandoned the community, does my hon. Friend agree that the postmasters in those post offices will have to pick up the pieces if that long-term connection does not happen? Months or even years down the line, when customers find themselves in a situation and the banks are long gone, the postmasters will have to pick up the pieces.

Photo of Richard Thomson Richard Thomson Shadow SNP Spokesperson (Business and Industry)

My hon. Friend makes an excellent point. When a service of that kind is withdrawn, the transition is rarely seamless, as I have seen in my constituency where banks have withdrawn and even post offices have reluctantly had to close. There is always a hiatus and an interruption in service, and it is difficult to quantify the degradation in that function that people experience as behaviour changes.

It is not difficult to map out a socially useful and sustainable future for the Post Office. Each of us has spoken at length about the socially useful role that it serves. The challenge is to make that role sustainable for those who provide and operate those services. It should not come as any surprise that as the level of direct financial support to post offices has declined in recent years, there has been a similar decline in the number of post office businesses.

The foundation of a sustainable post office business has to lie in making the everyday transactions sustainable and worthwhile for postmasters to carry out. That aspect of the business is potentially profitable; in 2016, it made a £35 million trading profit. Post offices must continue to be the access point—or the front counter, as has been said—to Government and other public services for people for whom digital is not and will never be the default option.

Postmasters should be properly compensated for the role that we expect them to perform. My hon. Friend the Member for Motherwell and Wishaw made the excellent point that a review of the current contract is absolutely essential. I very much look forward to hearing what the Minister has to say about that.

Although we need at least to maintain the network subsidy payment at its current level, we should also allow a new business model to develop. As I said, the Post Office has a trusted reputation, which it has used to leverage, grow and expand the business into areas such as telecoms and financial services. It should be allowed to expand its retail offering.

We have spoken about the Post Office’s importance as a distributor, collector and mover of cash; it should be able to develop the Post Office Money side of the business. We have heard about the constraints put on the Post Office card account and about the access that the Post Office allows to business banking for eight banks and to personal banking for twenty banks. The Post Office must be allowed to develop and build revenue from its own offerings in current accounts, business accounts, credit cards, saving products and domestic and international cash transfers. That will make the business sustainable.

The Post Office is a much-valued institution and service, but it runs increasingly on goodwill, which is not enough. I look forward to hearing the Minister set out her vision of the future of the service and how it can be made sustainable, not just in goodwill, but in the finances behind it.

Photo of Gill Furniss Gill Furniss Shadow Minister (Business, Energy and Industrial Strategy) (Steel, Postal Affairs and Consumer Protection) 10:35 am, 10th March 2020

It is a pleasure to serve under your chairpersonship, Mr Gray. I congratulate Marion Fellows on securing this important debate. She has played a key role in keeping the viability of the post office network in the minds of Ministers and the public. I have been pleased to work with her, the Communication Workers Union and many others on the important issues facing post offices across the country.

My hon. Friend Ruth Cadbury and Jim Shannon both spoke eloquently about their local issues, many of which are reflected throughout the country, particularly access to cash, the loss of community post offices and the plight of sub-postmasters, who are not adequately recompensed for the very important services they provide.

The Horizon trial and its fallout have clearly put the debate in a different context from last April’s debate on the network. We have had opportunities to discuss Horizon, and there are more opportunities to come, but I appreciate that the subject of the debate is somewhat distinct from that. Some essential context from the trial must be mentioned, though, with warnings from Post Office Ltd about the “existential threat” that the trial posed to the future of the company. The implication is that the financial consequences of the scandal may have an impact on the funding available to the network.

In the fight for justice for wronged sub-postmasters, we must not lose sight of the rest of the network. Ensuring that it is properly funded for the future is key. It is clear, even before we understand the full impact of the trial on the finances of Post Office Ltd later this year, that the network is hugely reliant on the network subsidy payment. The legal and compensation costs that the business will bear will make the Post Office hugely reliant on Government support.

The Government are hiding behind the idea that the Post Office is an independent commercial business, but the need for public support at critical moments means that the Government can and must play a far greater role in shaping the future of the Post Office, rather than simply providing credit and monitoring basic targets. In truth, since the separation of Post Office Ltd and Royal Mail, the Government have not taken their strategic role seriously. We have not had a comprehensive statement of strategic direction for that vital service since 2010, and we have reached the point where the long-term future of the network is at stake.

The Minister will undoubtedly argue that the numerous consultations, funding announcements and statements illustrate the Government’s commitment to the Post Office’s future direction, but none of those pronouncements sets out any real vision for the future. Many communities have already lost vital services because of closures by Post Office Ltd or, increasingly, because can no longer afford to run the services. The Government must set out a true long-term plan that details how post offices can thrive in a changing world. Without such a plan, the network will drift further towards a model of postal counters in larger multiples, as opposed to a network genuinely rooted in communities.

The growth of Crown post offices being delivered by WHSmith and others points towards a possible future in which the public elements of our post office network are continually reduced, so that it becomes a network led by larger private businesses. That is not the future of the network that the public want to see. In previous debates, I have highlighted many concerns about disabled access and adequate numbers of well trained staff, which many of my constituents report to me and many other MPs.

By contrast, we have a clear vision of the future of the post office network. First, the network would receive far greater protection if it were reunified with Royal Mail in public control. The disastrous decision to split the two and to sell off Royal Mail threatened both businesses. As high streets and the postal market develops, we have missed great opportunities to unify the management and services of those businesses. Working together, post offices and Royal Mail delivery offices could provide a much more comprehensive network of local points from which to send and pick up parcels, driving growth and delivering sustainability for the Post Office and Royal Mail. Britain’s post should be public.

Labour would also set up a proper post office bank to bring 21st-century banking services into every community. High street bank closures are happening across the country, and while many post offices work hard to provide basic banking services on behalf of banks, they cannot offer many essential services that local bank branches can. Furthermore, the thankfully reversed decision by Barclays to withdraw its services from post offices shows that the existing relationship is neither sufficient nor stable. A post office bank, by contrast, would bring full banking services to every post office, meaning that people who value a local branch service would have reliable access to branches. Such a bank would offer a vital new line or remuneration for sub-postmasters, helping to protect them for the future.

Not only that, but smaller loans could be available through a post bank, enabling thousands of bottom-up transformational changes for start-ups, small businesses, local co-operatives and community projects in towns and villages up and down the country. A post bank would also be the location for much needed local business development support, further ensuring a sustainable customer base for post offices for generations to come. The proposal would also support the Post Office’s key functions of making cash accessible. Many people, especially those who are vulnerable or elderly, rely on cash in their day-to-day lives, and bank branch closures mean post offices are one of the few places that it can be accessed free of charge. A strong local network of free-to-use cash machines also helps to support small local businesses, which may not have the facilities to accept other forms of payment, and provides a lifeline to our struggling high streets.

Will the Minister commit to bring forward a comprehensive strategy for the Post Office? I know that she will not agree with every element of the plan I have laid out, but the House and the public must be able to see and scrutinise the Government’s plans for the future. Will she also set out what steps she will take to address the governance of the Post Office to ensure that sub-postmasters and the public are assured that the management of the company is able to take the network forward into the future with openness and transparency? Any strategy must identify the desperate need for fair remuneration of sub-postmasters, which will help to maintain a viable post office network, as highlighted by Gavin Newlands, who fondly referred to the Post Office as an “unloved” armchair, which I found very touching.

The post office network is a national gem, valued by many up and down the country. It can provide a bulwark against a retail downturn and essential protection for the digitally excluded, but it must have the correct vision and investment to achieve that. In recent weeks, the Post Office has faced great challenges. The Government must react and lead the Post Office forward for the future.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 10:44 am, 10th March 2020

It is a great pleasure to serve under your chairmanship, Mr Gray.

I congratulate Marion Fellows on securing this important debate on the Post Office. I was taking notes all the way through and sincerely hope that I manage to address many of the questions that have been asked. The Minister with responsibility for small business, my hon. Friend Paul Scully—he is the fifth of the Ministers the hon. Lady referred to—would have been present but could not be here today. I assure the House that I will pass the messages on to him.

It is encouraging to see the shared passion we have for this vital asset—the post office network is, absolutely, a national treasure. I was delighted to hear Ruth Cadbury talk about new premises, and to hear the wise words of all Members—including Gill Furniss, who described the post office network as a “national gem”. I thank Jim Shannon for his kind words. He is always incredibly kind to me, and what he said was lovely. It was great to hear his wise words. It was interesting to hear from Richard Thomson, who had positive things to say about the Post Office, and Gavin Newlands, who talked about the flexibility we have.

I assure the House that the Government fully understand that the Post Office is an organisation like no other. Post offices up and down the country contribute enormously to the life and soul of the community, providing a convenient access to vital services and infrastructure that our constituents and businesses need to prosper. Since 2010, therefore, successive Governments have invested more than £2 billion to safeguard and modernise the post office network, to ensure that it is sustainable for the future.

I will address some of the specific questions asked by the hon. Member for Motherwell and Wishaw. Since 2010, the Post Office has turned a corner, but colleagues should not take my word for that. In 2016, it became profitable for the first time in recent history, culminating in a pre-subsidy profit of £60 million in 2018-19. Winning new business has contributed to the improvement of the Post Office’s official financial performance and, consequently, the Government funding required to sustain the uncommercial parts of the network has drastically decreased. The network transformation programme that took place from 2012 to 2018 enabled the modernisation of more than 7,000 branches, adding more than 200,000 opening hours per week and establishing the Post Office as the largest network trading on a Sunday.

A new chief executive officer was appointed in September 2019. He is committed to resetting the Post Office’s national relationship with postmasters. One of the questions that the hon. Lady asked was about that relationship, and we will continue to ensure that it thrives.

In addition, rather than branches closing, the overall number of post offices grew by 91 in 2018-19, and 653 branches have opened as part of the new network locations programme, supporting our high streets and providing customers with a better and more accessible service while making the network more resilient. Furthermore, the Post Office’s agreement with high street banks enables personal and business banking in all branches, providing vital access to cash and banking services for consumers, businesses and local economies while bank branch closures continue apace.

Post Office Ltd has taken further steps to incentivise prospective postmasters to take on a post office. That includes an increase to postmaster remuneration of 10%, year on year, in 2020-21. That is one of the questions you were asking—

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Apologies—that is one of the questions she was asking.

The hon. Lady asked about BEIS and Government oversight of the Post Office. BEIS has challenged the Post Office and, in fact, the new CEO and the chair personally to strengthen their relationship with postmasters and to take on board the lessons learned from the recent litigation. They have provided assurances that they will do so. BEIS has established, and chairs, a quarterly group with the National Federation of SubPostmasters and the Post Office.

The hon. Lady asked about Post Office card accounts. The POCA contract is a commercial matter for the Department for Work and Pensions and Post Office Ltd. It is no secret that the contract for the Post Office card account will come to an end on 30 November 2021, but the DWP is in the process of developing a replacement. The predecessor Minister with responsibility for small business, my hon. Friend Kelly Tolhurst, wrote to her ministerial colleagues in the DWP in full support of a full and open tender process to ensure the delivery of the best possible service to citizens and value for money.

I turn to franchising. There is a widespread misunderstanding that franchising is a closure programme, leading to redundancies and the deterioration of services for consumers, but that is not the case. I appreciate that the proposed changes to the delivery of post office services can cause concern in the communities affected, and that some constituents have a strong emotional attachment to directly managed branches and their staff. However, the franchising model has endured to this day, and the vast majority—more than 11,300 post offices—are successfully run on a franchise or agency basis with large and small retailers as part of a thriving business.

Since January 2020, the Post Office and Payzone network have become exclusive bill payment providers for British Gas, bringing more footfall for businesses and revenue for postmasters. Although it is important not to be complacent and to recognise the challenges ahead, I encourage Members to look closely and objectively at the facts, which show unequivocally that the network is more sustainable today than it was in 2010. All that has been achieved notwithstanding the challenging trading conditions in the Post Office’s core markets and the wider sector.

Delivering post office services as part of a wider retail offer is a proven model that brings benefits to the community, the local economy, postmasters, consumers and, ultimately, taxpayers. Let me reassure hon. Members that as part of its ongoing monitoring role, Citizens Advice will continue to track the impact of post office changes on consumers and customer satisfaction with franchised post offices. Citizens Advice also has a formal advisory role in reviewing changes to the Crown post offices across Great Britain that are relocated and franchised.

I note hon Members’ concerns about temporarily closed branches. Let me reassure the hon. Member for Motherwell and Wishaw that Post Office Ltd is committed to maintaining the branch network, and there is no programme of closures.

Photo of Ruth Cadbury Ruth Cadbury Labour, Brentford and Isleworth

Could the Minister could explain, now or subsequently, how the Government wish to retain the network? Our experience is that it is not being maintained.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

If I do not answer the hon. Lady’s question subsequently, I will provide her with a written answer.

There are more than 6,100 post offices in rural areas, and almost 99% of the rural population live within three miles of one of those branches. Illustrating the importance of post offices in those areas is the fact that almost half of rural post offices have community status, which means that they are the last shop in their village. When the hon. Member for Motherwell and Wishaw referred to how she had been helped with a passport application, I was reminded that, many years ago, I was in exactly the same situation when I went to do my passport. The Post Office recognises the unique challenge of running a community branch, and it provides fixed as well as variable remuneration to reflect their special situation.

A question was asked about opening hours. The network transformation programme involved the announcement of more than 200,000 weekly opening hours and established the Post Office as the largest network trading on a Sunday. The Government fully understand the importance of access to cash, especially in the context of accelerated bank branch closures. That is why the industry-wide banking framework agreement between the Post Office and the high street banks is pivotal in ensuring convenient access to everyday banking services. The House will be glad to know that, as part of its review of postmaster remuneration, Post Office Ltd increased the fixed remuneration received by community status branches to ensure the long-term stability of the rural network.

On Horizon, which the hon. Member for Motherwell and Wishaw asked about, I echo what my colleague Paul Scully MP said to the House: although the Government are pleased that a resolution to the Horizon group litigation has been reached, we do not take for granted the strength of feeling about the negative impact that the Horizon court case has had on postmasters. The Government recognise that this has been a difficult period for postmasters, who are at the heart of communities across the UK. Although the financial settlement in December 2019 and the Post Office’s apology are significant steps in the right direction, there is still a lot that the Post Office needs to do to strengthen its relationship with postmasters and to regain public trust.

Let me reassure hon. Members that improvements at all levels of the organisation are well under way, reflecting the lessons learned from the past. Minister Scully has already spoken to the Post Office—

Photo of James Gray James Gray Conservative, North Wiltshire

I think the Minister means to refers to the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Sutton and Cheam. The Minister should not mention the name of the Member of Parliament.

Photo of Amanda Solloway Amanda Solloway Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

I apologise. The Minister has already spoken to the Post Office’s newly appointed chief executive, and has been assured that a major overhaul of the Post Office’s engagement and relationships with postmasters is progressing.

The Government will continue to monitor and proactively challenge the Post Office leadership and will hold it to account on its progress. The Department for Business, Energy and Industrial Strategy is looking at what more needs to be done, and it will outline the next steps in due course.

Mention has been made of postmaster relationships and remuneration; in 2019, after a six-month review of postmaster pay, Post Office Ltd announced an additional pay increase of £37 million per annum. A question was asked about subsidy payments; beyond 2020, Government remain committed to ensuring the long-term sustainability of the network with Post Office Ltd.

To conclude, let me reassure Members that Government recognise the value and importance of postmasters and post offices to communities, people and businesses in rural and urban parts of the UK. We will continue to safeguard the post office network to ensure that post offices can thrive at the heart of communities across the country. I thank hon. Members again for their contributions to this excellent debate and for their hard work supporting access to post office services for our constituents.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities) 10:56 am, 10th March 2020

I thank everyone who has taken part in this debate, whether through interventions or speeches. I do not want the Minister to take this personally, because I could have said it innumerable times to many other Ministers, but we do not just want to hear kind words from the Government. We do not want the Government to say, “We will press Post Office Ltd”; we want the Government to tell us what they are going to do. That was missing quite a bit from the Minister’s response.

I want to pick up on one thing. It seems as though where the Government find that Post Office Ltd is making a profit, that is fine—everything in the garden is lovely; we are moving forward and the Post Office is doing really well, because it is making money—but how much money will the Post Office be making when the full cost of the Horizon scandal hits? It is not just about the people who have been taken to court and whose cases are going through the criminal court review procedures; it is about the people who paid the Post Office money because they did not want to be prosecuted, and who were harassed and harangued into doing that. It is about the cover-up. The Government cannot sit back and let the post office network flounder because of the great cost coming down the line for the Post Office as a result of Horizon.

That does not even cover things such as franchising. Franchising is not good. It has been proven, especially where Crown post offices are franchised, that franchising leads to expertise being lost: people leave, there is a reduction in the services provided and everyone loses out. I honestly hope that the inquiry that the Business, Energy and Industrial Strategy Committee is carrying out prods Ministers into effort and deeds, instead of kind words. Post offices need to be kept, and they need to prosper. We need them to support our communities.

Question put and agreed to.

Resolved,

That this House
has considered the post office network.