SMEs: Access to Finance

Marion Fellows Excerpts

Tuesday 9th November 2021 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the hon. Member for Darlington (Peter Gibson) on securing this very important debate. He gave us a very full and interesting speech, full of issues that I recognise. In terms of regional inequality, he has it spot on. When looking at regulation in different types of banks and those in Germany and France, and where small and medium-sized enterprises can receive their finance, he gave us a thoroughly good and interesting lesson.

The chair of the APPG on fair business banking, the hon. Member for Thirsk and Malton (Kevin Hollinrake), followed—I apologise to him for my not perfect attendance at that important APPG—and gave us a quick run through a number of reports produced by the APPG, all of which were interesting and relevant to the subject we are talking about. During this time of COP26, I especially take on board his words about decarbonisation and small businesses looking forward environmentally. That could well become really important and another block to gaining finance in the future.

After the financial crisis, many SMEs were left to sink or swim when bank lending dried up, despite MPs from all parties calling for access to finance. That mistake must not be repeated. It was only right that firms were given furlough, coronavirus business interruption loans and bounce back business loans to get them through the coronavirus crisis. Since March, those have been replaced by the recovery loan scheme, administered by the British Business Bank. Loans are available through a network of accredited commercial lenders; I will come back to that point later. Term loans, overdrafts, invoice finance and asset finance are now available.

The Scottish National party welcomed the autumn Budget 2021 announcement that the scheme would be extended until June 2022, because it was originally due to close at the end of 2021. However, from 1 January the scheme will be open to small and medium-sized enterprises only and the maximum amount of finance available will be £2 million per business. The guaranteed coverage that the Government will provide to lenders will be reduced from 80% to 70%, which could have a huge impact on small to medium-sized enterprises.

Moving from the previous loan system could be difficult for small to medium-sized enterprises. The flexibility of the bounce back loans for small firms, as well as automatic approval and repaying only when the firm is growing, is no more. This is huge. It is beyond belief, and will mean that schemes will be axed before firms have been lent the amount promised.

As well as access to new finance, the SNP has concerns about firms being able to cope with debt levels accumulated during the coronavirus pandemic, and the economic future is looking even more uncertain. After the last crisis, many SMEs were left bankrupt when they could not repay their debts, despite MPs from all parties calling for access to finance. That is another thing that must not happen again.

However, the risk is rising. Last month, the Financial Times reported that the Bank of England has warned that a

“third of the UK’s small businesses are classed as highly indebted, more than double since before the Covid-19 pandemic”.

It went on to say that the Bank of England said

“two-thirds of the £79bn increase in UK corporate debt between the end of 2019 and the first quarter of 2021”

was held by firms who would not have been able to borrow pre-pandemic. The report continued:

“The research showed 33 per cent of SMEs held debt levels of more than 10 times their cash balances, versus 14 per cent before Covid-19 hit. The percentage of those with high debt relative to both cash balances and monthly inflows trebled to 10 per cent from 3 per cent over the same period.”

The Bank of England’s Financial Policy Committee warns starkly:

“Although debt appears affordable in the near term, insolvencies are likely to rise from 2021 Q4 as government support is withdrawn as planned.”

There is a clear blueprint that the UK Government can adopt from TheCityUK, which the SNP has supported since its publication. TheCityUK’s report, “Supporting UK Economic Recovery: Recapitalising Businesses Post Covid-19”, warned that, by March 2021, £100 billion of unsustainable debt was owed by UK businesses, with £35 billion from Government loan schemes. Much of that came through coronavirus business interruption loans and bounce back loans, which were taken to support firms and the economy through the pandemic. Under current rules, responsibility for chasing up businesses that are struggling to pay back their coronavirus loans falls on banks and other lenders, which will only force a rerun of the post-financial-crisis saga of SMEs being bankrupted by banks collecting debts. That the Government will be forcing them to do so is beyond belief, as the hon. Member for Thirsk and Malton said.

TheCityUK came up with a business repayment plan that would let very small businesses pay back their coronavirus loans via a long-term, student loan-style system, with small repayments made every month via the tax system; and a business recovery capital option allowing larger small businesses to convert their coronavirus loan into a long-term, unsecured loan, again to be gradually paid back. TheCityUK plans would also enable some larger businesses to convert their loans into shares in their company on which they paid regular dividends, but that is unlikely to apply to many SMEs. All that would be overseen by a proposed UK recovery corporation, which in conjunction with the UK Government would administer these repayment schemes. Repayments will be a huge drain on SMEs and the economy for a long while to come. Mike Cherry, national chairman of the Federation of Small Businesses, recently suggested that small businesses should repay their coronavirus loans only once they are turning a profit:

“A guarantee that they won’t have to start making repayments until they’re turning a profit would give them the confidence to invest and hire today, rather than further down the line when such activity may prove too little too late.”

Rising overheads are a key factor behind a slump in Scottish business confidence, according to new research from the FSB in Scotland. Some 77% of Scottish businesses say that the cost of running their business has increased since this time last year, compared with only one in 20 —some 5%—that are seeing a decrease. The FSB’s Scottish small business confidence index fell steeply to +1.2 points in the third quarter of this year, from +20.5 points in the second quarter. The UK’s index also fell, although not quite so steeply, meaning that the typical Scottish business is now less optimistic than the UK average, a reversal of the situation in the summer.

The FSB warns that rising overheads are making it difficult for businesses to invest in measures to grow their operations or tackle their environmental impact, which will hold back efforts to recover from the covid crisis in a sustainable way. Andrew McRae, FSB’s Scotland policy chair, says:

“Scottish business optimism bounced back over the summer but has slumped in the autumn. That’s partly because the easing of Covid restrictions delivered a big confidence boost that’s waned over time. However, punishing rises in business overheads are also taking their toll on the trading outlook. And with a rise in payroll taxes on the way, there’s no end in sight. Spiralling overheads are one of the biggest headaches for our members. Smaller businesses neither have the statutory protections of consumers, nor the bargaining power of the biggest firms. That’s why FSB has been campaigning for the UK Government to take action to help these operators, at the very least easing the VAT burden on their gas and electricity bills.”

One business hit by those rising costs is Equi, which has a number of shops. They are concerned that a high increase in their overheads may cause them to cut corners and cut staff, as happened in the past, which will mean that they are not as successful as they have been in recent years.

A separate FSB report calls on our policy makers to launch a new voucher initiative called “Help to Green” to help small businesses to reduce their environmental impact. The scheme would give businesses grants of up to £5,000 to become more energy-efficient. Andrew McRae said:

“In the short term, we need to help firms manage the overnight spike they’ve seen in their bills. Next, we need to support local and independent firms to reduce the amount of energy they use.”

All that has happened during COP.

Smaller businesses know that they have to take action, but only a third have a plan in place to reduce emissions. Governments in Edinburgh and London need to put together a package of help and support to help firms move in the right direction. SNP Members would prefer indebted firms that are held back from growth by interest payments to have their debt converted to equity or grants.

The UK Government should not force banks to take coronavirus business interruption loan scheme and bounce back loan debtors to the cleaners, as that will prevent them from rebuilding their businesses and, therefore, the economy. The Tory Government’s plan for business-as-usual debt collection is totally inappropriate following what we hope was a once-in-a-century economic shock.

The Chancellor said that total departmental spending will increase by £150 billion over the Parliament, which means a real-terms rise in spending across the board, with Scotland’s Barnett funding up on average £4.6 billion annually. All funding is welcome, but we need to be cautious. The Scottish Government are getting less funding for day-to-day spending in every year of the spending review period than this year. Most of the increases are likely to be in capital.

[Kevin Hollinrake]

The hon. Lady is making some good points, but I am nervous about turning a loan into a grant or making it non-repayable, as I think she outlined that TheCityUK suggested. Lots of businesses did not take loans and used their own funds to keep going, and lots took loans and paid them back. Would there not be a moral hazard in effectively saying that some businesses could have free Government money when others did not take it?

[Marion Fellows]

I take the hon. Member’s point, but I think my point was worth making. We have to be so careful, because businesses took those loans on and are now likely to be hounded by banks that are mainly interested in providing money to their shareholders. The hon. Members for Darlington and for Thirsk and Malton spoke about the mutualisation of banks and local regional banks, which are also on the SNP wish list. I take the point, but my main point is that businesses should not be forced out of business because they borrowed money at a time when they were able, and perhaps would not have been able in the past.

The Chancellor invoked Margaret Thatcher and said:

“The budgets are set; the plans are in place; the task is clear. Now we must deliver because this is not the Government’s money— it is taxpayer’s money.”—[Official Report, 27 October 2021; Vol. 702, c. 279.]

That makes it clear that we must be wary of warm words. The Scottish Government will have to consider the detail of the Budget when it has been confirmed. The £150 million small business fund for Scotland should be disbursed by the Scottish Government and Scottish Enterprise, not the UK Government or the British Business Bank exclusively.

Although the coronavirus business interruption loan scheme and bounce back loans were offered, not all our constituents could access them due to their business banking accounts not being with one of the big banks on the list. They tried to access them through feeder accounts from other banks such as HSBC, but continue to be denied access to any financial support. They were mostly SMEs, many of which were forced to close.

Will there be any guarantee that those who were unable to access those loans but managed to survive with grants from, for example, the Scottish Government will be able to access the recovery loan scheme? Will the scheme allow those forced to close to rebuild their business? I hope the Minister can give assurances on those matters and take on board TheCityUK’s plan and the warnings from the Bank of England, FSB Scotland and nationally.

Income Tax (Charge)

Marion Fellows Excerpts

Thursday 28th October 2021 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It would be churlish of me not to refer to the good work of the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) on nutrition for growth. The House will not be surprised to learn that I did not agree with some of his other comments, however.

I would describe the Chancellor’s Budget statement as failing real people, especially those with disabilities. Likewise, after the past 18 months, my constituents in Motherwell and Wishaw, and indeed people across Scotland, have very little to celebrate. An increase in the living wage is welcome, but it will be denied to workers under the age of 23. An hour’s work is an hour’s work, regardless of the age of the person doing it. In the main, living costs do not differ by age. The Tory party claims to be the party of opportunities, but it is denying those under 23 the opportunity to earn a dignified wage.

Pensioners who have worked hard all their lives have been denied a triple lock on their pension. Pensioner poverty has recently risen to a 15-year high of 18%, meaning that around 2.1 million pensioners across the UK are now living in poverty. They have been utterly let down by the UK Government. The state pension is the primary source of income for most pensioners, and they will find it difficult, if not impossible, to find another source of income.

Reducing the taper on universal credit is welcome, but it does not come close to balancing the cut of the £20 universal credit uplift or the onslaught of rising costs of living. Hard-working families have been an afterthought in this Budget. It looks like a long, hard winter for so many people, who must now choose between heating and eating.

The Chancellor was also silent on introducing viable statutory sick pay for all. The UK has one of the lowest sick pay rates in the OECD. The current rate of £96.35 a week is wholly inadequate, and one in five workers is not even eligible. The TUC estimates that more than 2 million low-paid workers are excluded because they do not earn enough to qualify. This is another hit for those in insecure work and will disproportionately affect people with disabilities and long-term health conditions.

The SNP has repeatedly called on the UK Government to increase SSP in line with the real living wage, to make it available to everyone by removing the requirement to be a qualified worker and the earnings requirement, and to extend it to 52 weeks from 28 weeks. This is another missed opportunity where, yet again, the UK Government have let down sick and disabled people. After a global pandemic in which the health and livelihoods of the entire country were at risk, it is unforgivable for sick pay to remain so low.

Disabled people have been especially let down. According to the Disability Benefits Consortium, the financial situation of 78% of disabled claimants has worsened since the start of the pandemic. More than half said this was partly due to the increased cost of living, from rising utility bills to the cost of food shopping. This Budget does absolutely nothing to address those issues.

Inflation is set to rise—Huw Pill, the Bank of England’s new chief economist, thinks it might hit 5%—which will only increase the misery for millions. The Resolution Foundation has found that four in 10 households on universal credit in the UK face a 13% rise in energy costs in the same month that their income is cut by £20 a week. Experts warn this will push an extra 150,000 Scots into fuel poverty.

It is beyond belief that the Chancellor did not introduce an emergency energy payment to help those struggling to pay their energy bills. He has failed to tackle the cost of living crisis in order to give a tax cut to bankers that is paid for by slashing universal credit, ending furlough and keeping poverty-inducing policies that push people into further hardship.

We have a steelworks in my constituency of Motherwell and Wishaw. We are a proud steel town, and we have been let down by the Chancellor. There is no mention of help for energy-intensive industries in this Budget. In my more than six years in this place, Tory UK Governments have dragged their feet and still have no discernible plan for steel.

The Chancellor had a real chance to vastly improve the lives of the most vulnerable, but instead he has acted true to type by reducing tax on prosecco and cutting the levy paid by banks. Those experiencing in-work poverty and earning poverty wages will not be cheering the Budget as the £20 a week cut to universal credit bites but, with the duty and levy cuts, bankers quaffing champagne and prosecco on planes will certainly be cheering. The Poverty Alliance said:

“We want to see the benefits of the economic recovery from Covid-19 going to everyone, and unfortunately this budget just doesn’t do that.”

It is apparent now more than ever that the only way for Scotland to have a Government and a Chancellor who can meet the needs of Scotland’s people is through independence. At election after election and Budget after Budget, Scotland is being denied the Government that it votes for. Whether it be a dignified wage for young workers making their start in life, reasonable energy bills for working families who do not want to choose between heating and eating, or elderly pensioners who want to enjoy their retirement with the peace of mind that their pension is triple locked, these basic necessities are available in so many other countries but Tory Governments in the UK continue to deny them. I am truly convinced that, sooner or later, the people of Scotland will have their say and will vote to determine their own future.

Post Office Closures

Marion Fellows Excerpts

Tuesday 19th October 2021 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

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.

[Kirsten Oswald (East Renfrewshire) (SNP)]

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.

[Marion Fellows]

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.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

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?

[Marion Fellows]

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.

[Wendy Chamberlain (North East Fife) (LD)]

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?

[Marion Fellows]

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.

[Rachael Maskell (York Central) (Lab/Co-op)]

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?

[Marion Fellows]

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.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

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?

[Marion Fellows]

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.

[Rachael Maskell]

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?

[Marion Fellows]

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 the hon. Member for North Norfolk (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.

[Mr Clive Betts (in the Chair)]

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.

--- Later in debate ---

[David Linden (Glasgow East) (SNP)]

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 the hon. Member for Strangford (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 the Member for Motherwell and Wishaw (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.

[Marion Fellows]

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?

[David Linden]

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.

--- Later in debate ---

[Marion Fellows]

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.

UK Steel Sector: Supply Chains

Marion Fellows Excerpts

Wednesday 9th June 2021 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Graham. My congratulations to the hon. Member for Aberavon (Stephen Kinnock) on securing this important and timely debate.

I was first elected to this place in 2015 and have since lost track of the number of debates I have taken part in and the questions I have asked regarding the UK and Scottish steel industry on behalf of the Scottish National party. In the Motherwell and Wishaw constituency, we produced steel. Motherwell was known as Steelopolis and Motherwell FC is nicknamed The Steelmen, but all that is left is the Dalziel works, which rolls steel. Ravenscraig, our integrated steel mill, was closed in 1992 as part of the deindustrialisation of Scotland under the Tory Government led by Maggie Thatcher. Now this Tory Government are determined to see steel production suffer all over the UK as a consequence of a Brexit deal that Scotland did not vote for.

At the end of 2020, the UK transitioned the EU steel safeguards retaining vital protection against trade diversion and import surges for 19 different steel products produced in the UK. The preliminary decision by the Department for International Trade is to remove a large number of safeguards designed to protect domestic producers from a flood of cheap imports. According to UK Steel, that

“needs to be urgently rethought.”

The Trade Remedies Investigations Directorate recommended extending the measures on 10 categories of imports for three years from next month. It also suggested that measures on nine categories be revoked. These plans are being described by UK Steel as “a hammer blow” that risks damaging the sector long term. That is exactly what they are. UK Steel has also said that the UK would become

“a magnet for huge volumes of steel imports…It is beyond worrying to consider the damage this could do to the UK steel sector and its long-term viability.”

The main union of steelworkers, Community, has said:

“This is the first test of the Government’s commitment to our steel industry post-Brexit and they’re failing it.”

UK Steel said the removal of the protections will have an adverse impact on the manufacture of steel across the UK, as attested to by hon. Members representing steel-producing constituencies across England and—it has to be said—mainly in Wales. The original safeguarding measures were designed to protect the viability of an entire industry, not individual production lines.

The Scottish National party is clear that the UK Government must extend steel safeguards beyond their current June 2021 expiry date. If the UK Conservative Government unilaterally remove the measures, they will open our market to import surges as the sector recovers from covid-19 and, crucially, at a time when our exports to the EU and US will still be subject to tariffs and quotas.

If the UK is serious about global Britain, it must remove the £54 million extra in energy costs that UK companies pay compared with companies in Germany. Over the past five years, that has cost the UK steel sector £254 million or 130% of annual capital investment. Consistently higher UK electricity prices increase production costs, reduce available capital and deter inward investment.

It is time for the UK Government to put forward a bold programme of support for the sector to level the playing field, as the all-party parliamentary group for steel and metal related industries has been continually calling for. Time and again, UK Tory Governments have failed to understand manufacturing. They talk about plans that they do not follow through; they do not even seem to realise that their vision of global Britain will never become a reality if we let down a foundation industry such as steel over and over again.

Scottish Government action in supporting GFG’s steel and smelter operations shows commitment to those sectors in Scotland. The Scottish Government helped Liberty Steel reopen Dalzell in my constituency and direct job numbers have recovered. In Lochaber, direct jobs have been saved. The Scottish Government and Scottish Enterprise supported Liberty’s acquisition; the UK Government must support UK steel industries across the board.

Scottish Enterprise recognises the challenging environment for businesses in Scotland right now and the significant economic benefit Liberty Steel brings in jobs, the supply chain and future safeguarding of Scotland’s steel industry. The Scottish Government work hard to protect jobs and promote Scotland as a place to do business. Indeed, Scotland has bucked the trend and the amount of foreign direct investment in Scotland is growing as international investors increasingly see Scotland as a welcoming place in which to invest. An EY survey of 570 international business decision makers found 15% ranked Scotland as the most attractive part of the UK in which to establish operations, behind London, but with a huge shift in the past two years. London’s vote as most attractive region had almost halved since 2019, while Scotland’s had more than doubled. That is what happens when a Government believe in their people, not just their friends and cronies.

Following the initial decision on safeguards, the Secretary of State for International Trade must decide whether to accept or reject the measures by the end of June. A rejection can only be made on the grounds that the Government believe the recommendation is not in the economic or public interests of the UK. A rejection would mean that the entirety of the safeguards would expire. Removing safeguards may see UK steel consumers receive some modest price reduction in the short term, but that will not last. This Tory Government must understand what is at stake. They must continue safeguards and actively support steelmaking in the UK, or they risk the UK being unable to supply its most basic steel needs in the future.

UK Steel Production: Greensill Capital

Marion Fellows Excerpts

Thursday 25th March 2021 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP) [V]]

With booming metal prices, GFG’s business in Scotland, including Liberty Steel in my Motherwell and Wishaw constituency, remains profitable. Notwithstanding his previous answers, I must press the Secretary of State to echo the promise given by the Scottish Government and do all in his power to protect this profitable industry. Will he do so?

[Kwasi Kwarteng]

That is a fair question, but the hon. Lady will appreciate that the assets in Scotland relate particularly to aluminium smelting, whereas in England and Wales their job is really focused on the steel industry. None the less, we are looking at all options to see what we can do to sustain these crucial jobs.

Budget Resolutions and Economic Situation

Marion Fellows Excerpts

Tuesday 9th March 2021 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP) [V]]

I am in no doubt that the Chancellor’s Budget will result in the continuation of Tory austerity for those on the lowest incomes, especially disabled people and children. During the global pandemic and health crisis, people have been denied vital support to ensure a dignified standard of living. Like successive Tory Governments, this Tory Government are entrenching class inequalities, which weigh heavily on people’s lives.

I welcome the extension of the universal credit £20 uplift. However, those receiving it face a sudden £1,000 cut to their incomes in six months’ time. The Chancellor must provide people with certainty and agree to make the uplift permanent. People claiming legacy benefits will not even see the £20 uplift; 60,000 Scots, including 20,000 children, will be left in poverty and forced to choose between heating and eating in a cynical attempt to force people on to universal credit, which could leave many worse off and facing a gruelling wait of weeks for their first payment. That means that 2.5 million people across the UK, 1.9 million of whom are disabled, are being denied that support.

Being disabled incurs ongoing costs. The disability price tag means that disabled people already pay a premium for normal living, but the UK Government have opted to deny them support to protect their standard of living and health at the time they need it most. Yesterday, I asked the Work and Pensions Secretary whether she had asked the Chancellor to consider extending the £20 uplift. Her answer was no. Refusing even to consider the £20 lifeline for those on legacy benefits is a complete dereliction of duty by this UK Government to the very people they are supposed to protect, particularly after anti-poverty organisations have been asking for the extension for 11 months. Instead, people claiming legacy benefits are being given a pathetic 37p a week extra. When the UK Government have stuffed billions into the pockets of their cronies for bungled contracts, it is clear whose side they are on.

The UK Budget was an all-round kick in the teeth for disabled people. There was no commitment to increasing statutory sick pay, no commitment to the real living wage and making it available for 52 weeks, no commitment to increasing funding for the Access to Work scheme to keep disabled people in work, and no commitment to a fair day’s pay for a fair day’s work with a real living wage. Whether people are working or seeking work, the UK Government have yet again failed to support them.

Coronavirus has exposed the deep inequalities that exist under this Westminster Government. People in Scotland—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Marion, you are going to have to leave it there. I am terribly sorry, but we are out of time.

Oral Answers to Questions

Marion Fellows Excerpts

Tuesday 16th June 2020 Commons Chamber

[Kwasi Kwarteng]

My right hon. Friend the Secretary of State is, of course, president of the COP26. He is committed to publishing very rigorous and ambitious targets for ourselves. As I responded to my hon. Friend the Member for Ynys Môn (Virginia Crosbie), we are second to none in our commitment—our legislation—in terms of dealing with climate change. We have legislation that is very clear and sets the path.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

What steps he is taking to support the sustainability of the post office network.

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

The Government recognise the critical role that post offices play in communities across the UK. This is why the Government have committed to safeguard the post office network by investing over £2 billion between 2010 and 2018, and a further £370 million from April 2018 to March 2021. I regularly meet with the Post Office to find innovative steps to secure network sustainability and the continuity of services across the UK.

[Marion Fellows [V]]

I thank the Minister for his answer, but during the covid-19 pandemic, when sub-postmasters have proved just how essential they are to our communities, many are handing in their keys as they struggle to make a living, leaving communities without vital services. Pre-covid Post Office figures show that Scotland is still being hardest-hit by the postmaster crisis, with the highest number of closed branches in the UK, increasing by 17% since last year. Notwithstanding what the Minister has just said, in the 2020 spending review, will Ministers agree to maintain or increase the Government subsidy to post offices, to ensure that communities can access a post office branch, or will they continue putting the Post Office on a pathway to privatisation?

[Paul Scully]

The Post Office is obviously made up of small businesses, which are subject to the same problems as any, and Scotland, with its rural nature, has been affected. That is why we look to temporary post offices and outreach. But clearly, going forward, the Government will reflect the value of postmasters and the post office network in all their deliberations.

British Steel Industry

Marion Fellows Excerpts

Tuesday 10th March 2020 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Charles. I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing this important debate.

As someone more famous than me said, this is

“déjà vu all over again.”

Since I came to this House in 2015, I have been involved in a number of steel debates. As a proud member of the all-party parliamentary group on steel and metal related industries, I pay tribute to the work that the group has done over the past five years.

I am the Member for Motherwell and Wishaw, where we have one steel plant left, which was saved by the Scottish Government in 2015-16. When many other steel plants in the UK are teetering on the brink, it gives me no great pleasure to say that. The UK Government must stand up for the steel industry and deliver a sector deal. President Trump’s decision to impose tariffs on steel imports from the EU has hurt the sector in Scotland and across the UK. Although the tariffs are aimed at blocking highly subsidised Chinese steel, they have adversely impacted steel manufacturers in Scotland and across the UK. Trump’s tariffs also pose threats to the whisky industry, which is ours and ours alone.

Around 10% of UK steel exports went to the US in 2017, but that fell to 7% in 2018 and 8% in 2019 after the tariffs were introduced. The steel industry is not a nice-to-have aspect of the manufacturing sector; it is crucial to all aspects of infrastructure projects in these isles. It supports a huge number of jobs—well-paid jobs, in the main—and feeds a supply chain that contributes even more to employment and economic prosperity. Further support for the sector could open significantly more opportunities for employment and growth.

It is time for the UK Government to match the ambitions of the SNP Scottish Government and get on with the sector deal, to deliver tangible support on energy procurement and all the industry’s other asks. The hon. Member for Aberavon went over those asks eloquently, and I will not repeat them, but they are things that UK Steel, the all-party group and I have been requesting since at least 2015 from a succession of BEIS Ministers. That is not good enough. It is time that the Tory Government took action, saved the steel industry and showed it a really good future.

[Alexander Stafford (Rother Valley) (Con)]

Does the hon. Lady agree that the steel industry goes wider than just steel manufacturers? For instance, last Friday I visited Lincoln Electric, a high-quality welding company that specialises in welding together all sorts of things, including steel plates. We need those auxiliary industries, which benefit the steel industry, to support more to happen in our country.

[Marion Fellows]

I really did not think I would be in such agreement with the hon. Gentleman, but I am pleased to say that on this topic, I am.

After a study into the industry, the UK Government encouraged the steel industry, as part of a planned industrial strategy, to come forward with a proposal for a sector deal, and it did. The industry made serious commitments on its side and asked for a list of commitments from the UK Government, which they have refused to sign up to—in particular, to decreasing energy costs for the steel industry. The industry sees that as vital if it is to compete with steel producers on the continent. The £50 million per annum electricity price disparity that the sector asked the UK Government to eliminate in autumn 2017 is now about £70 million per annum.

Even leading Tories say that the UK Government are a problem for the UK steel industry. The Tory Tees Valley Mayor, Ben Houchen, was quoted in The Spectator only this month as saying:

“The biggest problem with the steel industry in the UK is Whitehall…The UK steel policy and the BEIS team are absolutely useless.”

No one from the Opposition has actually said that, but this is what he says:

“It has become a sticking plaster. Oh, British Steel’s fallen over, how do we rescue it? Oh, now south Wales is in trouble, how do we rescue it?”

He says there is too much worrying about failure and not enough planning for success:

“It’s never: what do we want the steel industry to look like? What can we do as a developed nation when we’re having to compete with places like China?”

I have agreed with two Tories in one speech. This is something of a record, Sir Charles.

[Alexander Stafford]

Will the hon. Lady give way?

[Marion Fellows]

No, I would like to carry on—

[Sir Charles Walker (in the Chair)]

Order. It is traditional in a one-hour debate that the Front Bench speaks for five minutes. I have been lenient because the hon. Lady took an intervention, but can we move on? Mr Stafford, you have not been here for the whole debate, so I think we will just let her continue.

[Marion Fellows]

Thank you, Sir Charles; I am just about to wind up. The SNP Government have fought for threatened jobs wherever and whenever there has been a chance to save them. Unlike successive Westminster Governments, the SNP will never turn our back on Scottish industry. I am proud that they saved Dalzell works in my constituency; Sanjeev Gupta, the chair of Liberty House, said that he was very impressed with the efforts of the Scottish Government and the Scottish Steel Task Force to save that plant. No such commitment has ever been shown by a UK Tory Government.

I have taken on board the fact that I need to wind up, Sir Charles, but I just want to say one more thing. Brexit is only going to make all this worse, but in the past the UK Government have used our membership of the EU as a shield that prevented them from doing anything about the UK steel industry’s asks, which it has repeated time and time again. Will the Minister confirm that he can do even more now that this Government have dragged us out of the EU against Scotland’s will?

--- Later in debate ---

[The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)]

I am delighted to conduct and take part in this debate under your chairmanship, Sir Charles. I will not see 5.53 pm as a challenge; I will speak to the points that were made, and I would like to make some of the points that we really should air as a Government. I think there has been a bit of misrepresentation—a suggestion that somehow we are not doing anything, and I want to say a few words about that. First, however, I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing this timely and important debate. It is timely because it comes the day after the important announcement by Jingye and British Steel—I know that the British Steel is not situated in Port Talbot, but it is a big part of the story of steel in this country—and the day before the Budget, which we all eagerly anticipate. I am sure there will be more in that Budget about some of the support that we are providing to industry generally.

Hon. Members will have seen the announcement on the sale of British Steel to Jingye yesterday. The sale secured British Steel’s sites in Scunthorpe, in Skinningrove and Teesside, and it is to be welcomed. I know that the Secretary of State has worked tirelessly to ensure that a deal was on the cards. I also pay tribute to his predecessor as Secretary of State, my right hon. Friend the Member for South Northamptonshire (Andrea Leadsom), who also worked tirelessly so that we could reach this point and celebrate the fact that the deal has been done.

Many hon. Members here have suggested that we have not done anything, or we are not doing enough, to support the sector. I notice that the hon. Member for Motherwell and Wishaw (Marion Fellows) suggested that it was—I paraphrase—“the evil Tories” who were doing nothing. That is a grotesque characterisation. I point out that in many areas, this Government have provided finance and support and engaged eagerly with the sector. That sort of partisanship—“The Scottish Government do things so much better”—is beneath the level of this debate.

[Marion Fellows]

I do not generally intervene on Ministers when they are responding, but in 2015, when the steel industry was at crisis point yet again, the Scottish Government saved the Dalzell works, while many, such as Redcar, went to the wall. If a small nation with a devolved Administration such as Scotland can do so much, perhaps the Government should think again about what steps they are taking. Fine words will not do. We have had them many times in the past.

[Kwasi Kwarteng]

I am grateful to the hon. Lady for allowing me to continue. I will not get into a debate as to who is better or what the Scottish or British Governments have done. All I will say is that we have policies and have given funds to support the sector. We are completely aware of the strategic importance of the steel industry and remain committed to it. I will say a few words, to emphasise what has been done.

Post Office Network

Marion Fellows Excerpts

Tuesday 10th March 2020 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

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.

[Chris Elmore (Ogmore) (Lab)]

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.

[Marion Fellows]

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.

[Nick Thomas-Symonds (Torfaen) (Lab)]

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?

[Marion Fellows]

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.

[Kirsten Oswald (East Renfrewshire) (SNP)]

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.

[Marion Fellows]

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.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

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?

[Marion Fellows]

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?

[Liz Twist (Blaydon) (Lab)]

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?

[Marion Fellows]

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 the hon. Member for York Central (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, the hon. Member for Sheffield, Brightside and Hillsborough (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.

[Owen Thompson (Midlothian) (SNP)]

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?

[Marion Fellows]

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 the Member for Paisley and Renfrewshire North (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.

[Kirsten Oswald]

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.

[Marion Fellows]

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 the hon. Member for Telford (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.

[Liz Saville Roberts]

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.

[Marion Fellows]

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?

[Kirsten Oswald]

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.

[Marion Fellows]

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.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

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?

[Marion Fellows]

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.

--- Later in debate ---

[Marion Fellows]

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.