Post Office Closures — [Mr Clive Betts in the Chair]

Backbench Business – in Westminster Hall at 9:30 am on 19th October 2021.

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Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee 9:30 am, 19th October 2021

I remind all Members of the guidance from the House of Commons Commission and the Government to wear masks and to give other Members appropriate space when entering or leaving the room.

I recognise that the House rightly paid tribute to Sir David Amess, given the tragedy of his killing last week, but we should also remind ourselves that Sir David was a highly respected and long-serving member of the Panel of Chairs. In other circumstances, he might have been in my place today. Without getting formal, we will all want to think our own personal thoughts about the contribution that Sir David made as a Chair and in other ways as a Member of this House, about the incredible loss and grief felt for him, and about his family at this time.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities) 9:31 am, 19th October 2021

I beg to move,

That this House
has considered the effect of post office closures on local communities.

It is a real pleasure to serve under your chairmanship, Mr Betts, and I will add my own tribute to Sir David. He was a wonderful man and will be sadly missed by everyone across Parliament.

I extend my thanks to the Backbench Business Committee and to all the Members present. I am sure they will be speaking about how important and valued their local post offices and post office staff are, and about the effect of post office closures on their communities. This debate on the effect of post office closures on local communities is important.

I thank the Minister for attending. I am glad that he is still in post. It is imperative that the UK Government have someone overseeing the Post Office brief who understands it, who can see that the Horizon scandal is concluded satisfactorily, with all its victims and their families compensated, and who will ensure that the post office network continues unabated.

Post offices are at the heart of our communities. They are used most regularly by the most vulnerable members of society—the elderly, people with disabilities and those who are unable to work, for example—and more than nine in 10 people agree that post offices provide an essential service for them or others. Communities suffer when post offices close, whether temporarily or for good. Local residents and businesses suffer serious inconvenience. For some, the withdrawal of perhaps their only regular human contact causes real misery and hardship.

As chair of the all-party parliamentary group on post offices, and on behalf of all its members, I thank postmasters and post office staff—those key workers— across the UK, who have served us well throughout the pandemic. They have been a lifeline to many people through their work at the heart of our community.

The APPG on post offices is close to my heart, as the plight of sub-postmasters in Motherwell and Wishaw was one of the first campaigns I was involved in. We have no secretariat for the APPG and I am very grateful for the additional work that my staff put in to ensure that the APPG runs smoothly. We are a big-tent APPG, with MPs and peers from all political parties and none, and diverse organisations such as the National Federation of SubPostmasters, the Communication Workers Union, Citizens Advice, the Association of Convenience Stores, and the Countryside Alliance. All those organisations are testament to the importance of the post office network across the UK.

Photo of Kirsten Oswald Kirsten Oswald SNP Deputy Leader, Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Equalities)

That broad range of stakeholders my hon. Friend has just told us about reflects the fact that a broad range of communities are still focused on the need for post offices in their local areas. Does she agree that we must heed the asks of community organisations? Broom, Kirkhill and Mearnskirk Community Council is keen to secure post office services in its local area, because it knows how much they matter for the most vulnerable in our society, as she said.

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

I thank my hon. Friend for her intervention. What she says is absolutely true. I am sure that all of us present and further afield would vouch for the real feeling for post offices across the entire UK. In fact, I have been known to say in the APPG that the reason I took on its chairmanship was to ensure that there was a network of post offices in an independent Scotland—that network is right across the UK.

We have also spoken to franchisee representatives, and we hold regular meetings with the CEO of Post Office Ltd and the Minister. Recently, the APPG decided to be less reactive and more proactive in its approach to sustaining the network. The APPG is currently compiling a Post Office action plan, to provide an outline vision for the network going forward. I hope the UK Government and Post Office Ltd will carefully and seriously consider the proposals put forward by members.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

I am extremely grateful to the hon. Lady for giving way, for securing this debate and for the work that she does on behalf of our post offices. I am sure that, like many hon. Members, she has received representations over recent weeks from charities based in her constituency that are very concerned about commercial banks levying charges on their activities. For many of those charities and community groups, those charges are going to be prohibitive. Does she believe that the Post Office could fill the void that is being left by the commercial banks by providing a community banking service, expanding banking services, safeguarding the Post Office and helping to improve the lives of our communities?

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

I thank the hon. Gentleman for what he has said. Yes, I think that it could. Although the Post Office was almost coerced into taking on banking, it is something that we need to seriously look at. There are models in other countries’ post office networks, and there have been studies. That is an excellent suggestion.

As we all know, the UK Government are the owners of the post office network; they cannot sit idly by, allowing closures and the impact that they have on local communities and economies. The public expects the Government to play a proactive and direct role in preserving and growing the network. Post offices may not be the first things that spring to mind when thinking of public services, but whenever a post office closes it is always missed. Post offices are, without a doubt, valued public assets and must remain so. Closures not only create an inconvenience but harm local businesses and the welfare of local people, given that the most vulnerable people rely on post offices for access to cash.

Photo of Wendy Chamberlain Wendy Chamberlain Liberal Democrat Spokesperson (Wales), Liberal Democrat Spokesperson (Scotland), Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Work and Pensions)

I thank the hon. Lady for giving way and for her work with the APPG on post offices. In my constituency, which is facing four closures, the answer in the short term seems to be mobile services. Does she agree that those are simply insufficient for communities and that we should be urging the UK Government and the Post Office to look for longer-term solutions?

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

Absolutely. I thank the hon. Lady for intervening. Her constituency was one of the most affected by the SPAR closures in Scotland, to which I will refer later, as well as outreach services.

It is devastating for everyone when a branch is closed, especially when it happens in a rural community where the post office may be not only the last shop in the village but also the last bank.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

I am really grateful for all the hon. Lady does on behalf of post offices. In York, in my short time in Parliament, we have lost post offices in Acomb and Tang Hall, we have lost two in Clifton and we have lost our Crown post office—it is now placed in a WH Smith, which is far more inaccessible than it was previously. Does she agree that, before any post office closure, there should be a community consultation about how that estate could be repurposed as a community service?

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

Absolutely. I know how hard the hon. Lady has worked for her constituents in York and with regard to the Crown post office closure there.

Post offices support local businesses. Half of those who started selling online during the pandemic have used the post office to post items, while three in four marketplace sellers say that if their local post office were to close, it would become difficult to send items to their customers. In my constituency of Motherwell and Wishaw, communities have experienced both temporary and permanent closures, notably the permanent closure of the Brandon Street Crown branch in Motherwell town centre. Sadly, many Crown branches have been closed—decisions typically opposed by the communities affected. Unlike smaller branches, Crown post offices offered a wide range of services, which made them service hubs at the heart of communities.

Photo of Margaret Ferrier Margaret Ferrier Independent, Rutherglen and Hamilton West

While post office closures present a real issue for local communities, some initiatives have the potential to provide great support to those communities. Cambuslang in my constituency is home to a post office bank hub, which has massively increased access to banking services, and I was delighted that the Economic Secretary to the Treasury visited the constituency last week to hear all about that fantastic initiative. Does the hon. Member agree that the focus should be on rolling out these multi-purpose initiatives?

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

I thank the hon. Member for her intervention. I, too, visited Cambuslang a number of months ago, and it is a great initiative. The local community council fought hard for that pilot, and it was doing great work. I think there is a way forward through that kind of initiative, which again I will come on to.

There are multiple reasons for branch closures, but at the root of many of them is the issue of sub-postmaster remuneration. Post Office Ltd must agree a fair deal with sub-postmasters. The Horizon scandal has undoubtedly damaged the relationship between Post Office Ltd and sub-postmasters and staff, and the ongoing work to repair that relationship must continue. Now more than ever, it is essential that sub-postmasters are properly remunerated. Many of the sub-postmasters I have spoken to have said that they have handed in their keys because they simply cannot afford to live on the income they make from running a post office. Some sub-postmasters have even reported that they have been earning less than the minimum wage.

That is simply not good enough. Citizens Advice has found that the number of temporarily closed branches has doubled since 2013, and that two in three remain closed for over a year and two in five for over two years. Poor remuneration is not just forcing sub-postmasters to retire or postpone retirement; it is preventing a new generation from taking up the role, as they see no value in it. The UK Government must provide the funding, and Post Office Ltd must agree to guarantee a minimum income for every sub-postmaster so that their hard work pays off and running a post office can be an attractive opportunity.

Another reason for concern is the over-reliance on franchise postmasters—not independent sub-postmasters, I hasten to add, but large retail chains. Only this year, SPAR announced the closure of 31 of its 48 Scottish counters. If a larger retail partner were to go into administration or decide that having a post office counter was not worth their while, that could leave hundreds of communities without a local branch. I fear that Post Office Ltd is fighting a losing battle with large franchisees and putting all its eggs in one basket to meet the national access criteria. CJ Lang has said that it made more money from putting a Costa machine into a branch than it did from running a post office. That is an outstanding critique of what is wrong with the post office network at the moment. Can the Minister outline what the Government’s contingency plans are in the event that a large partner decides to close its branches, or close altogether? It is not just up to Post Office Ltd to sort this issue out.

As banks leave high streets and town centres, post offices are filling the gap. Over 4,300 bank branches and building societies have closed since 2015—over a third of the entire network. In fact, post office branches now represent 60% of all the UK’s branch-based cash access points. Banking and access to cash must therefore be part of the long-term vision for the network. In September, Post Office Ltd announced that it had taken in £2.9 billion of deposits, with that figure expected to rise to over £3 billion this month. Many local businesses are using post office branches to make deposits, and others who rely on cash are using those branches for withdrawals. As post offices take on a greater financial role, the security of branches and staff must be reviewed. In my discussions with sub-postmasters, they have raised concerns about security. I hope that the Minister will elaborate on what steps he has taken and what discussions he has had, or will have, with Post Office Ltd on the issue of branch security.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

I am grateful to the hon. Lady for being so generous. When a company in the rail industry cannot operate, an operator of last resort is backed by the Government. To maintain these community assets, surely we need a model whereby the Government step in; and would that not also be a step towards what is really needed, which is to look at nationalising the Post Office, which we know our communities really do want?

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

I thank the hon. Lady for her intervention; again, she hits the nail right on the head. I welcome the pilot of the post office banking hubs. However, I am aware that many sub-postmasters are concerned about the impact they will have on existing branches, and I share their concerns. We cannot have branches in competition with and cannibalising each other. The full impact on existing branches must be watched closely.

However, I give full support to the private Member’s Bill in the name of Duncan Baker, who unfortunately cannot be here today. It aims to establish in law that major banks will be obligated to provide banking services through local post office branches.

Banks have been let off the hook. They are abandoning town centres, villages and customers. Not only should banks be mandated to provide their services through post offices via the banking framework, they must be made to pay for the outreach and banking services that the post office network provides. At present, many sub-postmasters are subsidising the running of these services. That cannot be allowed to continue. Will the Minister confirm today that the Government will back the Bill from the hon. Member for North Norfolk and, if not, what alternatives will be put in place?

Post offices are just one means of accessing cash, and losing a bank branch can make it much more difficult for people to access cash. The UK Government previously committed to an access to cash Bill, which has not yet been forthcoming. We are hurtling towards a cashless society, which will undoubtedly impact the most vulnerable people. Measured action is needed so that cash can be available free of charge to those who prefer it. Can the Minister confirm whether it is still the Government’s intention to introduce a Bill in the coming parliamentary term?

I understand that some of this is under the auspices of the Treasury, but we cannot keep passing the buck and going backwards and forwards, nor can we have the silo mentality whereby one Government Department is responsible for the money to post offices and the Minister has to say, “Well, it’s not my job, it’s the Treasury.” We need joined-up thinking on this.

The Post Office has massive potential to provide not just banking services, but a range of services. The UK Government have previously committed to making post offices the front office of Government. With over 11,500 branches across these islands, they are perfectly placed to be that, but the UK Government have pulled service after service from the network, most notably the Post Office card account. One million people used a POCA in 2019 and this has fallen since the forced migration of recipients to bank accounts.

However, for many, a bank account is still out of reach. It is also an additional and unnecessary hoop for people to jump through to receive their benefit payments or pensions. It makes no sense that when banks are leaving and post offices remain, a greater emphasis would be put on banking.

Other services, such as biometric enrolment and HMRC payments, have also been removed. Whenever the UK Government remove a service, that means less income for the post office network and its sub-postmasters, which makes closures more likely. The income derived from these services can be small, but proves how important it is to encourage people to use their post office services.

The Minister has heard me speak many times on post offices, as has everyone else in this Chamber. That is because they are an important service that people across the UK recognise, use, value and need. It is vital that the post office network continues in spite of the difficulties that Horizon has forced on to Post Office Ltd. I appreciate that the Government have given money, but I and many others are concerned that the situation will lead in the end to a diminution of post office services. I plead with and urge the Minister to make sure that the post office network continues, grows and thrives, and that those who run post offices on our behalf are suitably recompensed.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

Six Members have indicated that they would like to speak. In order to start the Front Benchers at no later than half past 10, I would suggest about six minutes for each Back Bencher. I call Andy Slaughter.

Photo of Andrew Slaughter Andrew Slaughter Labour, Hammersmith 9:50 am, 19th October 2021

It is a pleasure to serve under your chairmanship this morning, Mr Betts. You paid tribute earlier to Sir David in another of his roles here, and it occurred to me as you were doing so that this is exactly the sort of debate he would have loved, because it is about championing essential services in our constituencies.

I congratulate Marion Fellows on securing the debate. This is an important issue—it has been for many years, and it is a shame that we have watched the decline of the post office network over that period. It should not really need saying that post offices are essential services and that they are part of our communities, but sometimes I think Post Office Ltd needs to be convinced of that. Association of Convenience Stores public surveys have shown that post offices are considered the most essential services in the community. There is also the work done by Citizens Advice. Most of all, there is the response from our constituents when offices close permanently or temporarily. That should tell us all, lest there be any doubt in the Minister’s mind, that post offices continue to be absolutely vital to sustaining communities.

It is true that there was a downsizing in the network in the 2000s and that many branches closed. I represent a constituency in a fairly small borough where there were eight proposed closures. After a very vigorous campaign, we managed to keep five of those open. Across the country, many hundreds of branches did close then. If there was any silver lining in that cloud, it was that we were told that it would make the network sustainable and able to stand on its own feet and that that would be the end of it.

There was still a sustainable network left at that point. However, a bit like with court closures, the Government seemed to get the taste from that, and we have continued to run down the network in what has really been death by a thousand cuts. We have seen a complete reduction of the Crown post office network. Whenever there is a retirement or a redevelopment, which happens quite often in my constituency, it is difficult to sustain the service and keep the office open.

I want to come on to the plague of the so-called temporary closure. I have two town centres in my constituency, in Hammersmith and Shepherds Bush. They both used to have thriving Crown offices—substantial public buildings. Hammersmith’s post office had been there for a century, since 1920, and was important not just for the functions it carried out, but as a notable public building. There were three Crown post offices in the constituency at one time and they have all gone now. We have only a third of the Crown network that we had 10 years ago.

In many cases, the product of this situation has been the rather unhappy liaison with WHSmith. It is quite easy to see why Post Office Ltd saw the attraction of WHSmith. It tends to provide space for no rental, because it is not a thriving business and wants to draw custom into its stores. In a way, it has become a marriage of two failing enterprises trying to support each other, and not a very happy one.

In Shepherds Bush, I lost the town centre Crown post office, which went into a WHSmith in the Westfield shopping centre; similarly, Hammersmith’s post office went into a WHSmith there. But at least they were continuing, and Post Office Ltd conceded that we needed town centre offices. Two years ago they told me they would find a new office for Shepherds Bush centre, but that has never materialised. That is partly, I am sure, because of covid but it shows that there is no follow-up when these things happen.

A year ago, the main office in Hammersmith closed. These are extremely busy and thriving town centres. They both had a huge throughput because of office workers during the day and they are busy shopping centres seven days a week. We know that there is a need for a continuing post office service, because the surrounding small branch offices, even when they are half a mile or a mile away, have queues outside because the main offices have closed. That is all the more extraordinary, given that most of the major banks have substantially reduced their branch networks. I used the example of Shepherds Bush, where NatWest, Barclays and Santander have all closed branches. The last remaining bank, HSBC, has reduced its hours. The post office was the only financial institution providing a great variety of services there, and it is certainly sustainable.

I am interested to hear the Minister’s views on this question. Why does he think there are so many closures? If he says, no, that the network numbers have remained stable over the past years, that would ignore the new practice of temporary closures. I have five temporary closures in my constituency and three of those offices have been closed for more than five years. They are all very important branches. The one in St Ann’s Road, on the border with Kensington, serves the Edward Woods estate. I say that as I see that Felicity Buchan is here in her role as Parliamentary Private Secretary. The one in White City is in one of the most deprived parts of my constituency. I declare an interest in that one is just round the corner from my constituency office in the Fulham Palace Road, which we used heavily, as the Minister can imagine. Those three have been closed for more than five years. On top of that we have new closures. There is the one that I mentioned in Hammersmith, which has been closed for a year, with plans for that now abandoned and a return to the beginning with the search for a new sponsor, and there is one at Stamford Brook.

With one promised branch not opened, five branches in temporary closure and the loss of all the Crown offices we had, this is a parlous state of affairs. I ask the Minister specifically to look at the issue of temporary closures. I do not know how a closure of more than five years can be called temporary. Why is it impossible to find locations or postmasters for these places? I think the answer stares us in the face. It is that the terms and conditions that the Post Office is prepared to offer and the efforts it is prepared to put in are not sufficient to regenerate the network. We are being sold a myth that we have a stable network that is continuing at the same level as in previous years. In reality, we see more and more temporary closures that turn into permanent ones.

I hope the Minister agrees with that analysis and that he can respond to it, at least in part. This is a problem that demands his attention and that of the Government if the post office network is to survive into the future.

Photo of Robbie Moore Robbie Moore Conservative, Keighley 9:58 am, 19th October 2021

It is a pleasure to serve under your chairmanship, Mr Betts. I also associate myself with the comments made about Sir David Amess. I congratulate Marion Fellows on securing this important debate. Post offices are the lifeline of communities, especially those in rural areas. The services they provide are vital, including keeping people and loved ones connected. They also provide financial services, which is particularly important in the light of the closure of many high street banks.

I am grateful to have this time to talk about a live issue in my constituency, where Post Office proposes the closure of the Haworth Main Street post office. That is causing a huge issue for many of my constituents in Haworth, the Worth valley and the wider area. In July 2021, Post Office served notice on the sub-postmaster of the Haworth post office that it was to close the service, before launching a consultation. I want to delve deeper into that issue, because I think it is worth noting.

The Post Office informed my sub-postmaster that it would be closing their service and at the same time opening just a desk-based service at the local Co-op at the other end of the village. For those that may not know Haworth, topography and accessibility is a huge issue. The Haworth post office is located at the top of Main Street, right at the top of the village, and the Co-op is located right down at the bottom of the village, down two very steep hills. That makes the service offering very inaccessible for the elderly population living at the top of the village, particularly when a much lesser service offering is proposed at the Co-op.

It creates huge challenges for many businesses along Main Street that use that post office service, including the Brontë Parsonage. Many other locals come to visit Haworth and use the only cash machine, which is located in the Haworth Main Street post office. The consultation process over the summer has been a complete sham. It has not looked at all at the needs of my community. It has not looked at all at the accessibility issues of many of my residents, who will be struggling to use the Co-op service.

I want to pick up on a point eloquently made by the hon. Member for Motherwell and Wishaw on the issue of Post Office Ltd putting all its eggs in one basket. If it is going down a route where it specifically looks at putting all its post office services in WHSmith or the Co-op, what if those big service providers decide to cut those services? What does it say for the independent providers, such as the one at the top of Haworth Main Street, that are able to service their communities, who they know best?

The campaign in my constituency has been rolling at a huge pace. We have a fantastic local campaign team. Our parish council and the three district councillors have been very supportive in putting weight and pressure on Post Office Ltd to listen. As a result, I submitted a petition in the Chamber signed by over 7,000 of my constituents, putting pressure on Post Office Ltd to listen. We must maintain our service offering at the top of Main Street, so that my residents feel engaged with the process and can access a good post office service.

To summarise, the message from my constituents in Haworth and the wider Worth valley is very clear. We want to see our Haworth post office at the top of Main Street open, so that residents are able to access that facility and so that we do not feel disengaged. I hope that Post Office Ltd is listening, and that the Government use their weight to put pressure on the Post Office to maintain that service.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Defence), Liberal Democrat Spokesperson (Digital, Culture, Media and Sport) 10:03 am, 19th October 2021

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate Marion Fellows on bringing forward this important debate, which is very pertinent to my constituency. I want to touch on the tragic death of Sir David. When I arrived four years ago, I remember that he was one of the very first to be a friendly face and greet me. That is all I will say, but that sort of thing stays with you the rest of your days. I mourn his passing, as does my party.

In 1616 it was under the rule of a Scottish king, King James VI of Scotland and I of England, that the Scottish postal service was set up, so we rather led the way. Shortly after the restoration of his grandson King Charles II in 1660, the network of post offices in England was set up. So, once again, a Scottish king showed the way. We have had huge trouble with closures of branches, as others have said, but I will not repeat their remarks. I am going to use one example—the village of Balintore in Easter Ross. When the aforementioned retail business pulled out, we were left with the prospect of having no post office whatsoever. I say to the Minister that I give absolute credit to the people working at the post office for their valid attempts to secure some other arrangement, and they have done it in conjunction with the local Seaboard Memorial Hall. We are going to have a post office—thank God—once again in the village of Balintore. It is not just Balintore but Shandwick and Hilton, and a lot of people live there—believe you me.

It was great that this particular community had a vibrant hall committee that was willing to step in and see whether it could meet halfway with the post office in order to take up the service. They did that, but the trouble is that, looking at my vast constituency—if the Boundary Commission for Scotland has its way, it will get vaster still—not every community has a whole committee or some sort of organisation that is willing to step into the breach to take on that role. Therefore, it is patchy. To use a hackneyed phrase, it is a bit of a postcode lottery in terms of where people live. For the record, I say, “Well done, Balintore,” but it is not so easy to replicate that.

The final point I want to make in my brief contribution is that in a remote part of Scotland, such as my constituency, the post office network is part of the fabric of society, as others have mentioned. People say, “Oh well, the young people can go online,” and so on, but it is not quite as simple as that. Post offices are important to young people as well, and I think we have come to appreciate the value of the face-to-face aspect of the post office through the pandemic.

Photo of Kirsten Oswald Kirsten Oswald SNP Deputy Leader, Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Equalities)

The hon. Gentleman is making a really important point. The post office has a place right at the heart of our community, especially in difficult times, in my constituency, which is not remote. Tariq Chishti of Netherlee post office has received an award for going above and beyond during the pandemic to support people who were having real difficulty. The staff at Barrhead post office, which I visited recently, have done the same. The Minister should really take heed of the hon. Gentleman’s point about the community at large—all of the community—requiring this service and benefiting from it. That is at the heart of the debate.

Photo of Jonathan Edwards Jonathan Edwards Independent, Carmarthen East and Dinefwr

Further to some of those points, I have been quite fortunate in my constituency, where the Post Office has innovated and placed a sub-post office within the community centre. A common theme of the debate is that it all comes down to remuneration and whether we can make that sustainable. That is the vital point that we need to get across to Ministers.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Defence), Liberal Democrat Spokesperson (Digital, Culture, Media and Sport)

My final point is simply this: where there is a post office service being conducted in a retail premises that is not a post office—a newsagent or some other business—there is an issue. I can think of an example in my constituency, where privacy tended to be invaded. Someone would be queuing up and talking to the lady about his or her pension or whatever, but the people behind wanted to buy a copy of the Daily Record or whatever. The person at the counter was uncomfortable with the feeling that the person behind could hear what was being said. That is perhaps an issue for another day, but I say to the Minister that we must remember that for some transactions in post offices, or however we do it in the future, there is a confidentiality aspect. I have no doubt that the Seaboard Memorial Hall in my constituency will do an excellent job and will tackle that privacy aspect of the work as well.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

There are two more Members who wish to speak. As long as we finish by 10.28 am for the wind-ups, we have time for both hon. Members.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health) 10:08 am, 19th October 2021

It is a pleasure to speak in this debate. There has not been a debate on post office closures that I have not attended or spoken in on behalf of my constituents.

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

There are many things that interest me.

I thank Marion Fellows for securing the debate. She has been a real champion of this issue, and we thank her for giving us all the opportunity to participate. It is a real pleasure to see the Minister in his place, because he understands the importance of post offices. I am sure that he will encapsulate our feelings about post offices, so I look forward to his reply.

Historically, post offices have been central hubs of both rural and urban communities, but. like others, I want to draw attention to their importance to rural communities. I am fortunate that, over a period of time, I have had the opportunity to engage with post offices directly and may be able to chart a way forward. The hon. Lady referred to the closure of Spar shops; I am going to speak about the Spar shops that have given opportunities to the post offices across Northern Ireland. My hon. Friend Mr Campbell will also be able to contribute to the discussion. I am absolutely sure that post offices in rural communities and in housing estates have been a vital point for social interaction and accessibility. I will give some examples of just how important this is for people.

There is always a little feeling of dread when I get an email detailing amendments to post office services. I dread the news that services are going to be cut, although, thankfully, such news has not been prevalent recently, probably because of the engagement between post offices and major supermarkets in Northern Ireland to ensure that that we can defer potential closures and cuts. The co-operation with the Spar Henderson group in Northern Ireland has meant that there are many more basic post office functions available in our petrol stations and stores. I am incredibly thankful for that, but they do not provide the full range of services or the same expertise as dedicated post offices. It is clear that demands for the service require the retention of stand-alone post offices, as well as these smaller, satellite offices.

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

On the issue of not providing a full range of services, does my hon. Friend agree with me that we need to look to the future? In the past, the Post Office did innovate to some degree with the support of previous Governments, but just as we see credit unions evolving in terms of financial services, we now need to look ahead to the bigger picture over the next 10 to 15 years, and to allow post offices to innovate and evolve to serve the community better in financial services.

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

I thank my hon. Friend for his intervention, which encapsulates what we all feel about how post offices have an integral part to play in the future. We look to the Minister for indication of his vision for the future of post offices, and the importance of having them as an integral part of local communities.

Photo of Ronnie Cowan Ronnie Cowan Shadow SNP Spokesperson (Infrastructure)

One of the issues in my constituency is that when one post office closes, rumours start about all the other post offices; I am sure we all feel that. Because of the uncertainty and the precarious environment that post offices are operating in right now, it is very hard to get anybody to invest in them and keep them going. Talking about the long-term future, the Government either have to accept and admit that there is no future for post offices, or they have to legislate to protect the long-term future of the post offices in all our constituencies.

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

The hon. Gentleman is absolutely right. When the Minister sets out his vision for post offices, as I hope he will, he has to retore confidence in the post offices so that they can see a future for themselves financially and viably.

Yesterday morning I had a lady in my office thanking my staff for persevering with her attendance allowance form. She had been notified that her appeal had been upheld. I listened as my staff members reminded her that this additional money was hers, and that she should use it to make her life easier—to get a cleaner or to help pay for a taxi rather than walking everywhere. She said something that struck me and was very important: “I will get a taxi to get my post office money.” It was very clear what she was saying. “I can’t use this card stuff, and they help me to get my cash where I can get all my bills sorted. I don’t know what I will do when they don’t do cash anymore.”

This is replicated dozens of times across my constituency, and I know it is replicated across all of the United Kingdom of Great Britain and Northern Ireland. The availability of the help and support that post office staff provide to vulnerable people in our communities cannot be overstated. That lady also said that her life would be turned upside down if she could not get her pension and her money sorted. She said, “The girl in the post office put some money on my gas and electric, and my TV licence bill. She does it all.” This lady is in close contact with the people in the post office. I am so thankful for all those staff who take the time to do what those in a busy petrol filling station simply cannot; I mean no disrespect to them, but it does underline the importance of post offices.

With more and more bank branches closing down, the role of the post office for vulnerable people and for businesses that cannot lodge cash easily without it is more vital than ever, so I urge the Government to ensure that we play our part in the retention of post office services. We should remember that although a large number of people operate online for the majority of things, there is also a large vulnerable section of society who do not operate online and who are frightened to do so because of security concerns. Again, I seek the Minister’s reassurance in relation to this security issue. I will give him another example, which concerns one of my constituents, because I do not believe that the vulnerability of some elderly people to scams can be underlined enough.

Only last month, a man in my constituency lost a substantial amount of his savings because he was scammed through an online system. Many of our older people and other vulnerable people are increasingly refusing to try any online payments, just because they are not sure whether they have the security that they need so much. My parliamentary aide’s mother had a discussion with her private pension provider regarding the transfer of a bulk payment. Coincidentally, that afternoon she received a message on her phone, apparently from HMRC, regarding an outstanding tax bill. Let us be quite clear—HMRC does not make telephone calls to tell people about tax bills. If someone receives such a call or message, it is a scam, and that is a fact. Indeed, I received a phone call here at Parliament just before the recess, telling me to contact a particular number immediately in relation to something similar. I contacted my accountant and asked him about it, and he said, “Jim, HMRC do not contact you about any HMRC business by phone. They will contact you by letter. If you get a phone call supposedly from them, it’s a scam.” He was quite clear about that.

The mother of my parliamentary aide, Naomi, rang her, and Naomi told her mother to do nothing about the message until she had looked at it. It was a scam, but one timed in such a way as to be believable. Not everyone has a child who understands the tax system so well that they can spot a scam, which perhaps underlines the importance of this issue.

Fears about these issues make people’s ability to head to their local post office and have a local, friendly staff member help them to pay their bills safely and to get things sorted out vital. How important it is to have the accessibility to that service from someone an individual knows and who has a face they recall and trust—trust that has been built up over many years. I believe that every speaker today will endorse that.

The post office is vital. It is okay to have all the other shops and petrol stations where people have access to a post office service, but people also need to have someone they know. Post offices give that reassurance, so they are vital, and we must do our part to protect them. In doing so, we must protect our service provision, which is even more important for our elderly community, who rely on it and cannot do without it.

Photo of Kirsten Oswald Kirsten Oswald SNP Deputy Leader, Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Equalities) 10:18 am, 19th October 2021

It is very kind of you to call me to speak, Mr Betts. Thank you. I was not down to speak in this debate—

Photo of Kirsten Oswald Kirsten Oswald SNP Deputy Leader, Shadow SNP Spokesperson (Women), Shadow SNP Spokesperson (Equalities)

—but I am very happy to speak and to wax lyrical about my local post offices. As you have called my name, Mr Betts, I ask for your indulgence to speak briefly.

This is an incredibly important topic, and I am grateful to my hon. Friend Marion Fellows for asking for this debate, and to the Backbench Business Committee for allowing us to have this discussion. We often talk about post office closures in the all-party parliamentary group on post offices, which, as my hon. Friend said, is a wide-ranging APPG. That really speaks to the great significance of post offices in all our communities.

I do not want to labour points that others have made, but as a Member representing a constituency with a number of population centres, all with their own diverse needs and geographies, I know that the importance of post office services to my constituents cannot be overstated. I have constituents who live in rural areas where it may be difficult for them to get to a post office, and the closure of post offices in some of these outlying areas has created significant difficulty, particularly for elderly and vulnerable people.

My hon. Friend Ronnie Cowan raised the issue of the “stop-start” nature of post office services and the impact that has on communities. It has caused significant concern in Clarkston in my constituency, for example. We have a post office operating there now, which is very welcome, but it has been something of a movable feast over a number of years.

I mentioned that I had visited the post office in Barrhead. I will dwell on that briefly, because it was really fantastic to go out and meet the people working in the post office, and to see what they do day to day in terms of helping people and providing access to cash. Jim Shannon talked about constituents receiving real individual support from the people working in the post office, and I saw that for myself when I visited the post office in Barrhead, which is a great shop as well as a post office—if anyone is in the area, I absolutely recommend going along. That human contact and personal knowledge of customers was evident there. We cannot afford to lose that. Even in that big, thriving town, access to cash is an issue. We have many elderly and vulnerable residents, and we need the support that the Barrhead post office provides for our community.

I mentioned the support that Tariq Chishti provided from his post office, Netherlee Post & News, and I think it is telling and well deserved that he received an award for his work during lockdown. Many of our communities relied on the people who became focal points of their local area by going above and beyond what could ever be reasonably expected of them to ensure that people were okay in those difficult times. It is no surprise that post offices were at the centre of that. They are at the centre of our communities, and the functions that they provide are so very important. I am keen to hear from the Minister about the various actions that Members have asked for to try to secure the position of post offices, to ensure that they are sustainable, and to deal with issues overhanging from the Horizon scandal, which make it very difficult for people to see this as a sustainable business opportunity for them.

Photo of Clive Betts Clive Betts Chair, Levelling Up, Housing and Communities Committee, Chair, Levelling Up, Housing and Communities Committee

I thank the hon. Member. I called her because she was on the list of people who had requested to speak.

Photo of David Linden David Linden Shadow SNP Spokesperson (Work and Pensions) 10:21 am, 19th October 2021

It is, as always, a great pleasure to serve under your chairmanship, Mr Betts, although I must say that I miss seeing my friend Sir David Amess sitting in that chair, here in Westminster Hall. If Jim Shannon is a season ticket holder for Westminster Hall, then I am an aspiring season ticket holder. Of course, another Member who was in here very often—if not in the chair, then on the Benches opposite—was Sir David.

As this is the first opportunity I have had, I place on record my sincerest condolences to Sir David’s wife Julia, to his children, and to his staff—particularly Gill, who worked for him and has been such a support to the all-party parliamentary group on fairs and showgrounds, which David led superbly. I know that we will all miss him enormously.

I also want to acknowledge and thank my hon. Friend Marion Fellows for initiating this morning’s debate. She is a tireless campaigner for post offices, whose work has shown their importance to our local communities right across these islands.

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

I crave everyone’s indulgence; I lost the last five pages of my speech, but I really must use this opportunity to raise a couple of issues. A moratorium on the closure of Crown post offices, which was negotiated by the Communication Workers Union, is due to end next year. Will the Minister please confirm that it will continue? Will he also speak to other Departments within Government to find out what other services they can put into post offices, with charges that will help sub-postmasters’ remuneration?

Photo of David Linden David Linden Shadow SNP Spokesperson (Work and Pensions)

I congratulate my hon. Friend on being so versatile as to ask questions to the Minister through me. I feel like the Cilla Black of Westminster Hall here in pulling people together, but she is right to place on record those questions to the Minister. I join her in paying tribute to the Communication Workers Union, which has campaigned tirelessly on Crown post offices. We very much reaffirm to the Minister the need to see more progress.

Over the course of this debate, we have had 11 contributions from Members in all four constituent parts of the UK. That in itself shows that this is not an issue that affects only Scottish MPs, but that there are wider issues around the sustainability of the post office network right across these islands. In my own consistency of Glasgow East, even in my short time as an MP we have seen the closure, both temporary and permanent, of post offices in Cranhill, Garthamlock, Tollcross and Parkhead. That is four post offices in the four years I have been here.

The closures have had far-reaching consequences for my constituents, and many have felt the absence of the postal services in their local area. Post offices provide essential services for local communities across these islands, from mailing and posting to accessing pensions and benefits. On the subject of benefits, the decision by the Department for Work and Pensions to move away from the Post Office card account is particularly damaging for the sustainability of post offices. As I have said many times before in the House, we must ensure that vulnerable people and particularly our older constituents still have access to cash. I will return to that point later.

Despite all the vital services they provide, post offices are routinely being shut down across these islands. In 2001, there were just over 1,900 post offices in Scotland; pre-pandemic, their number had dipped to 1,300, and we know there have been further casualties in the network since then. In August alone, my small urban constituency saw the closure of not one, but two post offices, in Garthamlock and Parkhead. Though there may be light at the end of the tunnel for residents in Parkhead, the broader picture suggests that local services in the east end are being decimated, with communities being abandoned as the post office network collapses like a pack of cards. Put simply, it leaves my constituents and I continually worrying about which post office will be the next to close. I have a lot of time for Mark Gibson at the Post Office, but every time I see his name in my inbox it spells out that yet another closure is coming.

As part of the campaign to save Garthamlock post office, I and a hard-working local councillor, Ruairi Kelly, met with CJ Lang & Son Ltd to better understand how the situation came about and continues to crop up. I also met with Calum Greenhow from the National Federation of SubPostmasters. I have raised this issue in the House before, but through my meetings it has become clear that Post Office Ltd struggles desperately to get sub-postmasters to take on branches and indeed keep them on. For many, it is an inescapable fact and a financial reality that branches are not economically viable, forcing them into the difficult decision of closing down. For operators such as CJ Lang, which at the end of the day is a private enterprise, that is a black and white commercial decision, which I understand from a very crude profit/loss perspective.

I think it was my hon. Friend the Member for Motherwell and Wishaw who mentioned that in many cases, it is more profitable for CJ Lang to have a Subway store or a Costa machine. That highlights some of the major problems. Clearly, there are problems with the fundamental business model for post offices, which needs addressing. That is something that I and many other Members have raised with the British Government, but it appears thus far to have fallen on deaf ears. As we see post offices being closed, we risk inflicting huge and long-lasting damage on local communities, which rely heavily on post offices and the services they provide, particularly after banks have long taken flight.

The importance of post offices in providing access to cash is a particularly prevalent issue in my constituency in the east end of Glasgow. The consumer group Which? has recently undertaken research that identifies 259 communities from across the UK with poor cashpoint provision or no ATMs at all. The Federation of Small Businesses has reminded us that when an area loses cashpoints, it has real impacts on surrounding small businesses: sales fall as customers who want to pay with notes and coins are left in the lurch, and footfall drops as shoppers head to other areas with greater access to cash. The recent decision by Barclays to continue allowing customers to freely access cash at post offices was the right one.

We need to see continued support from banks for the post office network, not least because we know that banks, when—I was going to say when consulting, but actually more often when giving us notification of closures in our constituencies—often say to us, “Oh well, the Post Office can step in and backfill,” only for the post office network to be eroded further after that.

In the 2020 spending review, the Treasury announced £227 million worth of investment in the Post Office, including a subsidy of £50 million to protect customers’ access to essential services in commercially challenging locations. I question whether £227 million of funding is enough, but it is a step in the right direction. I hope the Minister can provide an update today—specifically on which locations have been deemed to be commercially challenging, how the money will be allocated and what the timescale will be. Given that I lost not one but two post offices in the space of the month this summer, I suggest the east end of Glasgow ticks the commercially challenging box without a doubt.

Thus far, the British Government are failing way short of meeting their responsibility to provide and uphold postal services in our communities. As a constituency MP, I am clear that the continued threat to post offices puts vulnerable and older constituents in Glasgow at grave risk of losing yet more vital services in an area that has already been hit extremely hard. To be blunt, Ministers in Whitehall must stop viewing post offices through a narrow commercial prism; instead, they must see them as pieces of vital community infrastructure that need protection and investment. I say to the Government very clearly that they cannot level up communities when shutters are being pulled down.

Photo of Chi Onwurah Chi Onwurah Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (Digital, Culture, Media and Sport) 10:30 am, 19th October 2021

It is a great pleasure to serve under your chairmanship, Mr Betts. I want to echo your tribute to our friend, Sir David Amess, who was tragically and horrifically murdered. As you said, he could well have been in the Chair for today’s debate. As my hon. Friend Andy Slaughter said, this is the kind of debate that Sir David would have truly appreciated. I am sure that there would have been a reason why post office closures showed that Southend needed to be a city, and I am so glad that that is to be realised. This is also the sort of debate that he would have appreciated because Members on all sides have conducted it with affability, civility and respect. I want also to pay tribute to Marion Fellows, not only for securing the debate but for the great cross-party work that her APPG does to support post offices.

As we have heard, for 361 years the Post Office has been at the heart of the community, and post offices have established themselves as the backbones of local economies across the United Kingdom. My hon. Friend Robbie Moore, for Caithness, Sutherland and Easter Ross (Jamie Stone), for Strangford (Jim Shannon), for East Renfrewshire (Kirsten Oswald) and the SNP spokesperson, David Linden, have spoken of the contribution that post offices make to our constituencies. The network provides over 170 essential services to 17 million customers and one third of small businesses each and every week.

More recently, the pandemic has highlighted how vital a reliable postal service is—I am sure that we all appreciated that during the pandemic. A survey by the National Federation of SubPostmasters found that 97% of post offices that remained open during lockdown did so to support their local communities. Sub-postmasters stepped up as key workers, not only keeping us connected but going above and beyond their job descriptions by offering services such as grocery deliveries for vulnerable customers. I thank them for their work during the pandemic, and also pay tribute to the CWU for its support and campaigning on post offices.

As this debate has shown, postal services matter to everyone, but customers and businesses in the most rural and vulnerable communities are paying the biggest price for closures. A 2015 freedom of information request revealed that, out of the 20 north-east branches marked as temporarily closed, 17 were closed for more than a year and seven for more than five years. To put that in context, the north-east has 499 open branches, already the lowest number in any UK region. Hon. Members have spoken of concerns about closures in their constituencies. In my own constituency of Newcastle upon Tyne Central, we have seen a number of closures, often in deprived areas such as Kenton, where I grew up. Other branches have moved into private sector operations, despite opposition from local MPs and residents. For example, the Gosforth high street post office was moved to a convenience store on a secluded residential street, without nearby bus stops or non-permit parking—a decision made with complete disregard for accessibility. We have heard from hon. Members of similar experiences in their constituencies. In 2019, the former Minister, Kelly Tolhurst, stated to the BEIS Committee that it was a Government commitment to maintain the post office network at 11,500 branches. Does the Minister plan to uphold that commitment in our post-pandemic economy?

With only 1% of branches managed directly by the Post Office, many sub-postmasters are relying on the Government’s subsidy to remain financially viable. However, sub-postmasters are resigning at a faster rate than they can be replaced due to the difficulty in making a decent living. That has been a major driving force in the decline of the network. In 2019, the National Federation of SubPostmasters found that 76% of members were struggling to earn the national minimum hourly wage, resulting in an estimated 22% planning to downsize or close their post office in the coming year. What recent discussions has the Minister had with Post Office Ltd on the incomes of sub-postmasters, and what steps he is taking to minimise the risk of further closures?

During the pandemic, reduced footfall and post offices’ inability to access many coronavirus support packages saw many temporary closures become permanent. Between March and April 2020, the number of open branches fell by 651 from 11,638, and 388 of those closures were of outreach services in the most remote parts of the UK. In August, the BBC reported that 260 temporarily closed branches were still closed as of 30 June 2021. What steps is the Minister taking to ensure that the number of open branches returns to pre-pandemic levels?

The post office subsidy provides a fixed amount of remuneration to an estimated 5,000 post offices, including 1,600 outreach services operating from mobile vans and village halls on a part-time basis. But the Government have ignored the importance of the subsidy, which has decreased from £210 million in 2012-13 to £50 million in 2020-21. Two years ago, the hon. Member for Rochester and Strood told a Select Committee that the Government would look to continue to support the post office network, sharing this responsibility with Post Office Ltd. Much has changed since this pre-pandemic statement. What assessment has the Minister made of the ongoing impact of covid on post offices, and how does he plan to fulfil that promise in the future?

Last year I welcomed the announcement of a £227 million investment, including a £50 million subsidy to support the rural post office network. However, the CWU rightly stated that it is unlikely that this investment will be sufficient given the amount the post office will have to raise to cover future legal claims associated with the Horizon scandal, which remains the greatest public scandal that our country has suffered, and the implications of which are still being felt by many current and former sub-postmasters who are struggling to gain the compensation the Minister seemed to promise. The more than 900 false prosecutions resulting from the Horizon scandal destroyed lives, families and reputations, and we have yet to see public confidence restored. Indeed, I do not believe that public confidence will be restored without justice for those whose lives were ruined. The Government must ensure that this justice does not come at the expense of our post office network’s survival. What steps is the Minister taking to maintain the financial viability of the Post Office, and will considerations be made for the continuation of the subsidy beyond 2022?

Finally, many Members have spoken about the importance of access to cash. It is worth noting that the subsidy I have spoken about is for the rural networks, but with 55 banks closing every month and up to 8 million people relying on cash daily, the impact of closures on access to cash in both rural communities and urban ones such as my own must be considered. The post office network provides financial services to individuals who are digitally excluded, are ineligible for a bank account, or use cashless services. In 2019, a report by LINK found that 47% of the UK population believes that losing that access to cash would present real challenges. Despite that, 10% of free-to-use ATMs were disconnected during the pandemic, further exacerbating the lack of access. Post offices have been left to pick up the slack, with recent figures suggesting that they will shortly exceed £3 billion a month in cash deposits and withdrawals for the first time in history, so I ask the Minister what assessment he has made of the impact of bank closures on the importance of the post office network, and what plans he has to ensure that banks offer support to post offices that take up their services.

As we have heard, post offices across the country offer more than commercial services: they are a source of social interaction for the vulnerable and lonely, a key touchpoint between people and Government services, and a vital part of local communities. The Post Office is a great British institution that has fulfilled a social purpose for centuries, but it is also an institution that the Government are failing to support. Managed decline is the story of our times under the Conservative Government. Labour is committed to protecting our post office network, and will fight to ensure that postmasters are given the support that is needed to guarantee that network’s survival. I hope the Minister will join us in that mission.

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London) 10:41 am, 19th October 2021

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate Marion Fellows on having secured today’s debate, and on all the work that she and other Members do in the APPG on post offices. It is a very vibrant and diverse APPG, and I always enjoy speaking with its members and sharing thoughts with them.

I thank you, Mr Betts, and others for the tributes that have been paid to our friend and colleague Sir David Amess. In giving my tribute, I want to respond to Jim Shannon, who talked about the Government’s social vision for the Post Office, because two of the three things in our vision really chime with what Sir David did and what he stood for. The main building blocks are to deliver a convenient and trusted local service offer that meets customers’ needs—working closely with postmasters, who play a hugely important role in their communities—and to ensure that the Post Office’s services continue to be easily accessible to all consumers, particularly the vulnerable groups that need them most. The third, which perhaps does not relate directly to Sir David but is so important for the Post Office, is to support the Government’s access to cash and financial inclusion agenda by ensuring that basic cash and banking services are available throughout the network to meet the needs of individual customers and small and medium enterprises. We have heard about the importance of those services throughout the debate.

The post office network is unique. With more than 11,500 branches, the Post Office is the biggest retail network in the UK: there are more post offices than bank branches and building societies combined. Thanks to Government funding, we have ensured that we have the most stable post office network in a generation, with 99% of the population living within three miles of their nearest branch. As I go through my speech, I will try to cover some of the issues that have been raised about the network, but over the past decade, while the country’s high streets have undergone a significant period of change, the number of post office branches has remained broadly stable. As we have been discussing, that business has continued, and must continue, to evolve to meet customer need. What has not changed, though, is how undeniably important post offices are to communities. Our local post offices have never been more important or more valued than in the past 19 months, as the country has faced the unprecedented challenges of responding to the pandemic.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Defence), Liberal Democrat Spokesperson (Digital, Culture, Media and Sport)

Does the Minister accept that his point about 99% of the population living within three miles of their nearest branch does not apply to my constituency?

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

I think the hon. Gentleman has a fair point. As I will try to develop a little, we need to do more to diversify and change the network to make sure it evolves, not only to use those mileage figures, but to make sure it meets demand and what is required by communities.

We wasted no time in March 2020 in announcing that post offices were an essential business and postmasters were key workers, so that post offices could stay open and provide the lifeline for businesses and customers everywhere that we have already heard about, and to enable loved ones to keep in touch at such a difficult time. Post offices have changed, because there is no Post Office without postmasters. While high streets grew quiet through the pandemic, postmasters across the UK went the extra mile to support their communities.

I was delighted to see Sara Barlow, the postmaster for Rainhill branch, and Luke Francis, postmaster for Bude branch, recognised in the recent Queen’s birthday honours for their services to local communities. Thanks to the tireless efforts of postmasters and their staff, those vital post office services continue to be available to communities across the country—an incredible 90% of the network remained open. I think there are many Saras and Lukes across the country who deserve our recognition.

However, the network was not immune to the challenges of the pandemic and branch numbers were clearly impacted. Some postmasters had to close their branches for health reasons, but other post offices were closed because of their location—for example, if they were in a university, community centre or library. The Post Office worked hard on a case by case basis to resolve any practical issues to keep as many post offices open as possible, but obviously it was not always possible.

I discussed the issues affecting the network on a regular basis with the Post Office’s chief executive, Nick Read, throughout the difficult time. His priority and that of the Post Office was, rightly, to protect vulnerable customers. The Post Office acted quickly to designate 1,000 branches as priority branches based on socio-economic criteria. These were branches that the Post Office considered would have the most detrimental impact on vulnerable customers should they close. That ensured that the Post Office’s efforts through the pandemic could be targeted. When any of those branches were forced to closed, the Post Office could implement a range of mitigations, including deploying mobile vans, the “post office in a box” kit and even redeploying trained staff from Post Office HQ itself. The Post Office also worked closely with Government to set up two cash delivery services, designed for self-isolating or shielding customers.

We have been monitoring the network situation very closely and working with the Post Office to understand further the impacts on postmasters and how we can support them throughout that period. Post offices were eligible to be awarded financial support through many of the Government’s measures to support business and were able to access other business support schemes, such as the VAT deferrals.

We also stepped in to put in place a temporary waiver for the requirement for the Post Office to provide those 11,500 branches. It was clear that despite postmasters and the Post Office doing everything they can to ensure services were available through the pandemic, it still was not possible to provide full network coverage. However, I am pleased to report that the waiver expired in June this year and that the post office network is above 11,500 again and with increased stability.

The pandemic helped to demonstrate what an incredible contribution post offices make to our communities. This confirmed, as we have heard, what we all know to be true. Many of us see first hand the impact that post offices have on our communities and how much constituents value their post office. That is widely backed by research, not just our own eyes and ears. The Association of Convenience Stores consistently finds that post offices are valued by customers and have a positive impact on the local area.

I fully appreciate and recognise the impact a post office closure can have on a community. I know it can be disruptive, particularly for those rural communities that do not have nearby alternatives, as we have heard. I can reassure hon. Members that we are confident that the post office network is stable and that the Government continue to be as fully committed as ever to ensure the long-term sustainability of the network.

However, it is inevitable that, with a network the size of the post office network, there will be variations, as we have heard, in the number of branches open at any one time. The post office network can and does fluctuate and change over that time, as postmasters move on, branches close, and new ones open. The Government’s access criteria ensure that however the network changes, services remain within local reach of all citizens. Churn in the network is part of the modern, dynamic, franchising business that the Post Office is.

A postmaster can resign for a number of reasons. They might be retiring, and the new business owner does not want to take on that post office. The postmaster might want to turn their shop back into a home. With partners who operate multiple post offices, businesses might make a commercial decision to resign from operating a post office. The reasons behind the post office closing might be varied, but I assure hon. Members that the Post Office’s response is tried and tested and it works. It requires operators to provide six months’ notice of a branch closure to allow it time to identify alternative ways to provide services.

We have talked about specific examples. That requirement applies to all franchising partners, whether it is a multiple retailer or an individual postmaster. Where notice is given, Post Office works hard with communities to make sure that the service is maintained. When it is not possible to open a full-time branch due to lack of retail premises in the local area, maintaining the service can include innovative solutions, such as mobile or outreach services. It is important that we make sure that those are temporary and that we look to more permanent, long-term solutions.

Photo of Andrew Slaughter Andrew Slaughter Labour, Hammersmith

I am listening very carefully to what the Minister says, but how does he explain the circumstances that I set out? I have just totted up in my head—I have half the number of branches open that the Post Office thinks should be open. I have six open, five temporarily closed and one that was due to open two years ago that never has. That is a system that is not working. I am sure I cannot be the only MP in this situation. How does he address the problem of temporary closures?

Photo of Paul Scully Paul Scully Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy), Minister of State (London)

Temporary closures do not feature in the network figures. The 11,500 does not include temporary closures—trading has to have taken place within that month to be included in those figures. I understand the hon. Gentleman’s position. This is part of the churn that I am talking about. He and I both represent city seats, where branches tend to be closer together and can be more easily lost compared with rural communities, where there is a massive, immediate hit that everybody notices. Whether it is in Hammersmith or Sutton, there is probably more fluidity and churn, but the services are no less important for the most vulnerable in our society and we need to work through that.

We are not blind to future challenge. The hon. Member for Motherwell and Wishaw and others have talked about the Horizon scandal. It is a scandal. The vast majority of comments today have been about the future of the network. We cannot fully address the future of the network without addressing the past. I am really pleased to be back in my place after the recent reshuffle because it gives me the opportunity to continue the work to make sure that everybody affected by the Horizon scandal gets justice and gets fully compensated, and that we can work towards that. It will take time. It will not happen as quickly as those who are badly affected will want, but I will make sure I redouble my efforts on this issue, through the statutory inquiry and our considerations around it.

Turning back to the future, the retail sector has clearly gone through a significant period of change, which covid has accelerated. Post Office is continuing to explore new business opportunities to ensure a thriving national network for the benefit of communities, businesses and postmasters up and down the country. As the e-commerce market continues to grow, accelerated by covid-19, it is expanding its pick-up and drop-off offering. In the last few months, it has signed click-and-collect deals with DPD and Amazon. A new partnership has been forged with Yoti, a global leader in digital identity services—that is a clear demonstration of the Post Office embracing new technologies. Alongside those new partners, it is strengthening existing relationships. A landmark deal with Royal Mail was agreed at the end of last year to solidify what has been a long and successful relationship.

Finally, Post Office continues to work to secure the third iteration of the banking framework agreement, a vital partnership with all of the main UK banks and building societies to provide free-to-use cash services for those that need them right across the UK. Chi Onwurah talked about the record amount of cash withdrawn from post offices in August. That is an opportunity for the Post Office, as it has more branches than banks and building societies put together. No bank wants to be the last bank in town—they want to be the second-last bank in town—because the pressure and the spotlight are put on them. Only too often, the post office is there to work through. The Post Office is continuing to innovate through its bank hub trials, which are shared retail spaces where high-street banks can hold appointments with their customers on specific days of the week, in addition to the usual post office banking services available either at the counter or in the new self-service machines.

The hon. Member for Motherwell and Wishaw talked about Government contracts and about POca. It is for the Department for Work and Pensions specifically to work out who the contract is with. I speak to my colleagues there on a regular basis and I am due to speak to them and, indeed, to the chief executive about that. Yes, we look at what we can do for the Post Office, but clearly, we need to make sure that contracts are tendered on a commercial basis and deliver value for money, alongside that social purpose, through whoever provides the service.

A number of Members raised CJ Lang’s commercial decision to resign from operating 31 post offices. As with all post office closures, we regret the commercial decision and recognise the disruption that will cause to affected communities. I speak with the Post Office regularly about that because I know how concerning it is for our Scottish colleagues across the House and the communities they represent. The Post Office continues to make significant progress in finding the solutions to mitigate that customer impact and I understand that it is in discussions with both independent postmasters and various retail groups. The Government will continue to monitor the situation closely to ensure the access criteria continue to be met in the affected areas.

Similarly, my hon. Friend Robbie Moore talked about Haworth, and I will certainly take that away. I know that the petition he has raised has been heard. I assure those Members who are wondering whether the Post Office is listening that I will have a message for it about the debate when I get back. It is listening and will respond, but I will take that away and make sure my hon. Friend’s work standing up for his constituents is heard.

I thank hon. Members for their contributions to the debate. I cannot do justice to all the things they have raised, or I will be here way beyond time. To make one last point about postmasters’ remuneration, again, that is an operational matter for the Post Office, but we have to recognise the importance of supporting postmasters to give them the future we talked about. I was pleased to see that it listened carefully to the feedback it received on the proposed changes, and I welcome the recent improvements it announced last month. We will continue to monitor and work with the all-party parliamentary group and the Post Office to make sure postmasters feel they have that vibrant future. I thank hon. Members once again for their contributions. It is encouraging to see everybody come together to ensure that a vital national asset continues to serve our constituencies for many years to come.

Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Disabilities) 10:58 am, 19th October 2021

I thank everyone who has taken part in this debate. As ever, it has been cross-party and hon. Members have put passion and experience into their contributions, and I welcome that. I also welcome the Minister’s comments. He and I are old comrades in arms; he has visited the APPG and will be coming back soon, as will Nick Read and others, because this has to go forward. I am concerned that the Post Office has been put on a path of managed decline and that the Horizon scandal will affect that. We must not lose sight of Horizon. People deserve justice and just compensation but it cannot be at the expense of the network. It is vital that we recognise the work of people in post offices: sub-postmasters, Crown post offices and those independent retailers who do so much to enliven and help their local communities. I see that I am running out of time but this is important. I have written on behalf of the APPG to the Chancellor demanding that he give money to post offices so that they continue to be a vital part of our local communities and also help in town regeneration and levelling up.

Question put and agreed to.

Resolved,

That this House
has considered the effect of post office closures on local communities.