Local Post Offices

Alistair Carmichael Excerpts

Thursday 30th January 2025 Commons Chamber

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I congratulate my hon. Friend the Member for Taunton and Wellington (Gideon Amos) on taking the initiative to secure time for this debate and on the way in which he opened it.

We are all familiar with the old maxim, “If it ain’t broke, don’t fix it.” I have lost count of the number of post office debates I have taken part in over the years, and it seems to me that as far as post offices are concerned, the maxim that has governed the thinking of Governments of all colours is, “If it ain’t broke, keep reforming it until it is.”

The fundamental problem is that there has been an incoherence of approach within Departments. On the one hand, we have heard—I suspect we may hear similar things from the Minister today—Ministers stand at the Dispatch Box saying that the post office is a brilliant institution and it can be the front office or front desk for Government services in communities across the country. The next day, we will have another Minister standing at the Dispatch Box telling us that access to Government services will become digital by default. Unless we decide exactly what role we expect our post offices to perform in our communities, we cannot be surprised when they fail to thrive and then wither in the way that they are doing.

It is more than 20 years now since the Department for Work and Pensions thought it could save money by driving people away from getting pensions and other benefits from their local post office. Doubtless that was a saving for the Department for Work and Pensions, but it has just meant that the Department for Business and Trade or whatever we call it these days has had to put more money in through Government subsidies. I hesitate to predict the future in politics at all these days, but one day, when we have finally turned the key to lock the last post office in the country, some bright spark in Downing Street somewhere will come up with a policy paper saying that we should have a hub in every community where people can access Government services and meet their postal needs, their banking needs and all the rest of it, and in that way we will end up reinventing what we have reformed to the point of destruction.

The Post Office and how it interacts with the sub-postmasters has not always helped in that respect, including the innovations that it has brought, such as the pick-up and drop-off initiatives. In my constituency, it is not the sub-post offices that are given the contract to do the pick-up and drop-off points. If the Post Office at the heart is not able to support sub-postmasters at the frontline, we frankly cannot be surprised if they start to fail.

In particular, I want to talk about the Post Office’s approach to the closure of Crown branches. We see that in my constituency, where the last Crown post office in Kirkwall is listed for closure. The way that has been done by the Post Office has been nothing short of a disgrace. It has been totally lacking in respect for its employees and the communities that the post office is there to serve. At a time when we might have hoped that the Post Office would want to demonstrate a change of culture—for reasons we have debated often enough—we see it still behaving in this way in my community. It makes me think that all the fine words about changed culture at the top of the Post Office are simply meaningless weasel words.

I have seen similar situations before. We lost the Crown post office in Lerwick in Shetland a few years ago. It was taken out and folded into a local newsagent service. For all the promises given about maintaining services, in fact the community was left with a much inferior service at the end of the day, despite the best efforts of the newsagent who got the contract. If we are to see these changes in Kirkwall, we need to know first of all that the same range of services will still be available as there are from a Crown post office. That includes vehicle licensing, currency exchange and passport checking—all those things should still be available.

Just as important as the range of services is the question of the physical infrastructure. People want a stand-alone post office to offer a level of service of the sort they get with a Crown post office, especially when we are encouraging banking into them. That is a highly personal service for many people. They do not want to be doing that next to somebody buying a tin of beans and their weekly paper. The size and availability of any post office that is to replace the one that the Post Office wants to close in Kirkwall is critical. We do not want people queueing around the block at Christmas when the post office is at its busiest, standing in the rain, sleet and snow to get their postage done. The size, the range of services and the quality of service have to be at the heart of anything that comes from the Post Office by way of revision. That is the basis on which we in my community will be judging any proposals that it comes forward with.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

I echo the thanks to the hon. Member for Taunton and Wellington (Gideon Amos) for securing this important debate. There have been some very clear and consistent messages from across the House to the Government in this debate, and I pay tribute to the passion with which hon. Members on all sides of the House have raised key constituency concerns, as the hon. Member for West Worcestershire (Dame Harriett Baldwin) said.

We have heard from my hon. Friends the Members for Dulwich and West Norwood (Helen Hayes), for North Durham (Luke Akehurst), for Great Grimsby and Cleethorpes (Melanie Onn), for Dunstable and Leighton Buzzard (Alex Mayer), for South East Cornwall (Anna Gelderd), for Bermondsey and Old Southwark (Neil Coyle), for Chelsea and Fulham (Ben Coleman), for Glasgow North East (Maureen Burke), for Bournemouth West (Jessica Toale) and for Leeds South West and Morley (Mark Sewards). I know that my hon. Friend the Member for Manchester Withington (Jeff Smith) has particular concerns about Didsbury post office. We also heard from the hon. Member for South West Devon (Rebecca Smith), the right hon. Member for Orkney and Shetland (Mr Carmichael), the hon. Member for South West Hertfordshire (Mr Mohindra), the hon. Member for Didcot and Wantage (Olly Glover), the hon. Member for Stockton West (Matt Vickers), the hon. Member for Boston and Skegness (Richard Tice) and the hon. Member for Thornbury and Yate (Claire Young), and I know you, Madam Deputy Speaker, have concerns in this space, too.

Post offices provide hugely important everyday services to millions of people across our country. Communities rightly expect to have access to those essential services, just as they would to a GP surgery, a primary school or neighbourhood police. That is because, as many Members made clear, post offices are the very beating heart of our towns and villages.

As our economy has modernised and evolved, so too have our local post offices. Today they are so much more than a place to send letters and parcels. They act as high street banks, as many have said, as access points for some Government services, and as community hubs for an array of different activities, generating crucial social capital. Indeed, after the unearthing of the Horizon scandal, the nation’s unanimous support for sub-postmasters and their campaign for redress and exoneration shows how revered the post office and its workers are by the British public—by all of us.

We are working as fast as we can to give sub-postmasters the compensation they deserve, and we are indeed exploring what further steps we can take. But since the end of June, in just the six months that we have been in office, more than 1,000 more sub- postmasters who are victims of the scandal have received compensation. The amount paid out in redress has increased by over £355 million, more than double the amount that had been paid out at the time of the general election. As of 3 January, almost £600 million had been paid to over 3,800 sub-postmasters across all four main compensation schemes. Also as of 3 January, the GLO—group litigation order—scheme had received 453 claims of which 370 are fully complete and the remaining 83 are being assessed for their completeness or undergoing a request for further information that would unlock a more generous offer of compensation. We expect then to have paid substantial redress, even if the claims are not fully settled, to the majority of GLO claimants by 31 March. But let me be clear: there are still complex cases to resolve and there is still much more to do in terms of compensation.

The hon. Member for West Worcestershire, speaking for the Opposition, asked about Capture. We have identified a number of gaps in the compensation process. We published in particular the Kroll report into what had happened in terms of the Post Office use of the Capture software prior to the installation of the Horizon system. We are beginning to talk to sub-postmasters who used the Capture software about redress going forward so that we can design an effective redress scheme. The hon. Lady and the House may be aware that there are a number of cases where there were convictions that appear to relate to use of the Capture software by the Post Office that are with the Criminal Cases Review Commission at the moment.

The hon. Lady also asked about the timing of when we might hear the Sir Wyn Williams conclusions. As she will understand, we as the Government do not want in any way to be seen to be rushing Sir Wyn Williams. We have heard a similar timescale as her—sometime later this year—and we will all wait with considerable interest for the conclusions.

The hon. Lady also asked about the Ofcom consultation. I stress that it is still a consultation. Ofcom will be consulting for some 10 weeks and, as she would expect, we will be fully engaged in that process.

On the future of the post office, we all know that our high streets have faced huge challenges in recent years. In some cases, the presence of a post office on a high street has been a game changer in driving footfall and attracting custom to other businesses. The public—as many Members have alluded to, it is often the elderly, those who use cash and those who are digitally excluded—rely on the post office for essential services. It is therefore right that the Government hold the Post Office to account to ensure that there is enough postal service provision across the country, and I recognise my particular responsibility in that regard.

We protect the post office network by setting minimum access criteria. With a network of this size, we are likely to see fluctuation in the number of branches open at any one time, but crucially, the access criteria ensure that regardless of how the network changes, services remain within local reach of people at all times. The Government recognise the key role that post offices play in their communities and how branches in rural areas in particular often act as community hubs. We are listening carefully to stakeholders to ensure that the whole network, including those branches, is sustainable.

[Mr Carmichael]

Does the Minister agree that the manner in which the Post Office allowed the information about the closure of directly managed branches to come into the public domain was unacceptable? What is he doing to ensure that the Post Office treats communities with better respect than that in the future?

[Gareth Thomas]

I gently say to the right hon. Gentleman that we are where we are, and it is important that we move forward. I will come to the question of directly managed branches in a second.

To ensure that we are planning properly for the future, we will publish a Green Paper before the summer to seek the public’s views, insights and experiences to help shape the future of the Post Office. In the meantime, we are taking steps to continue to support the network. Along with the annual £50 million subsidy, we have provided a further £37.5 million to support the Post Office network next year.

Our thinking on the future of the post office will also be influenced by Sir Wyn Williams’s conclusions. We continue to support and encourage the chair of the Post Office, Nigel Railton, to shift the focus of the Post Office away from headquarters and towards postmasters. The Post Office, with our support, is reviewing its costs, as its financial position continues to be challenging. We are working with the senior leadership at the Post Office on future opportunities, beginning with banking, so that the company can increase its product offers and commercial revenue going forward. The Post Office has set up a new consultative council that will work with senior management on how these new plans are taken forward. It is a first, but none the less important step to change the culture of the Post Office.

Building a sustainable future for the Post Office is imperative. It has had many false new starts. Nearly half of its branches are not profitable or make only a small profit from post office business. Postmaster pay has not increased materially for a decade. Mr Railton is looking to deliver a reduction in the Post Office’s costs and, as I have alluded to, an increase in its commercial revenues. He has also set out an intention to transform the service and the support that postmasters receive from the Post Office, which we have strongly encouraged. He has announced ambitions for a new deal for postmasters, and I am pleased that the Post Office recently made a £20 million immediate one-off payment to postmasters to increase their remuneration.

On the future of directly managed branches, I appreciate that it is challenging for communities that lose their post office service. I speak from experience, having had Harrow’s directly managed branch close in 2016 and transfer to a franchise service instead. I am always happy to challenge the Post Office on specific concerns that Members have at constituency level. However, the Post Office operates as a commercial business, and the company has the freedom to deliver the branch network within the parameters we set.

I know there is concern about the future of DMBs, and it is important to underline that no definitive decisions have been taken on the future of any individual directly managed branch. I have made clear to the Post Office that there must be discussions with unions and other key stakeholders. I am pleased to hear that the Post Office has seen positive engagement from independent postmasters and strategic partners, who have expressed their interest in taking on DMBs. It is encouraging that there continues to be such interest in the chance to run a post office.