Post Office Governance and Horizon Compensation Schemes

Alistair Carmichael Excerpts

Monday 19th February 2024 Commons Chamber

[Kemi Badenoch]

I agree with my right hon. Friend. The comments by the members of the board who are former postmasters are very interesting. They are saying exactly what I am saying: that Henry Staunton was not doing a good job as Post Office chair. That leads me back to the point made by the right hon. Member for North Durham (Mr Jones), who is more interested in attacking the Government than in looking at what even the members of the board are saying. It is important that we continue to give confidence to people that those organisations are run properly. That was the reason for the dismissal.

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

Having supported constituents in negotiations in relation to the historical shortfall scheme, I can tell the Secretary of State that, whatever the reason for it, the conduct of the Post Office and its agents was characterised by delay and obstruction. That, in turn, led to the view taking hold among sub-postmasters that there was no point in making claims. Since the ITV drama aired, I have heard of several constituents making belated claims. What more are the Government doing to ensure that everybody out there who may have a claim is able to receive compensation?

[Kemi Badenoch]

The right hon. Gentleman’s question is a good one. The fixed-sum awards show that we are taking the matter very seriously. I became Business Secretary in February last year, and my one priority was to ensure that people got their compensation as quickly as possible. I did everything that I possibly could, with the Minister with responsibility for the Post Office, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), whom I thank for his tireless efforts. He had been looking at the portfolio before I got the job as Business Secretary, and I knew that the work was in safe hands. We have worked together as a team, fought cross-departmentally to ensure that people got the compensation that they deserved, and brought in legislation just before December—well before the ITV drama. The cases that the right hon. Gentleman raises are important, as they show that there is still a lot of work to do, and we will continue doing it.

Post Office Management Culture

Alistair Carmichael Excerpts

Thursday 8th February 2024 Commons Chamber

[Marion Fellows]

I absolutely agree. The ITV drama exposed what happened, despite numerous efforts by many distinguished people in this place and the other place, by journalists such as Nick Wallis and by Computer Weekly. Many thousands of people knew about this scandal, but not the general public.

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

I congratulate the hon. Lady on securing this debate. She has heard me speak often enough about the culture in the Post Office. Does she agree that following the money is often a good approach? Last year, the cost of administering the Post Office centrally went up by 10%, but the money going to sub-postmasters went down by 2%. When those figures are reversed, we will know that there has been a genuine change of culture within the Post Office.

[Marion Fellows]

I could not agree more with the right hon. Gentleman. I frequently agree with him on Post Office matters. This is important, because the all-party parliamentary group on post offices, of which he is a member and I am the chair, is a true cross-party group. There is no party that does not have a member of the APPG.

Sean Hudson of the Communication Workers Union described the management culture perfectly:

“Every serious management failure results in a culture of offering that failure up for external investigation at significant expense to POL and the taxpayer, without learning from those mistakes.”

It has since transpired that the legal fees for resolving disclosure issues in the past year alone cost £24 million. That money could have gone into the network to help struggling sub-postmasters, many of whom are working for below the minimum wage. For context, POL announced remuneration improvements this year of just £26 million, which in no way take into account the rise of costs and overheads. Some of the issues were only brought to light through the perseverance of campaigners through freedom of information requests that revealed that not all relevant evidence had been disclosed to the inquiry. Some of the issues outlined came to light before the transmission of ITV’s “Mr Bates vs The Post Office”, which has had a monumental impact on the public consciousness in Britain. It is important that that was beamed into front rooms across the nation. It has caused deep distrust of Post Office management among the general public.

With the words “openness and transparency” in mind, I want to bring to the attention of the House the case of my constituent Salman Aslam. Salman, or Sal, is a young man who ran a post office in my constituency for five years, before he walked away last year. Sal took over the post office from his father, when he was in remission from Hodgkin’s lymphoma. Sal began noticing shortfalls, which he continually plugged himself and which ranged from £4,000 to £16,000 at a time. He estimates that he has paid in about £100,000 of his own money. When audited last year, a shortfall doubled in front of his eyes to £80,000, He decided he could no longer go on, for the sake of his finances, and of his mental and physical health, which doctors were saying was under threat due to his levels of stress.

Throughout the five-year ordeal, Sal contacted the Post Office for help continually, but none was forthcoming, and after handing in his keys, the Post Office was not in touch for more than a year, leaving him in a perennial state of stress and fear. Sal went public with his story a few weeks ago—I had a hand in that—and once the story went out, Post Office Ltd immediately sprang into action and the communications department got in touch with him. That is not indicative of a change of culture. It echoes tales of the past that are all too familiar: desperate postmasters reaching out to POL for help, but receiving little in return; and communication from POL arriving only after some negative press.

Throughout the Horizon scandal, POL prioritised institutional reputation over the welfare of sub-postmasters, whom Mr Read himself recently told the Business and Trade Committee were the trusted asset that made the network what it is. Sal is one of many postmasters who have been in touch in the past weeks to tell me that they are experiencing shortfalls—not historical shortfalls, but ones that have occurred in the past year. Issues with Horizon appear to be continuing to this day, which is seriously concerning. Is the Minister aware of ongoing issues with Horizon? What has he done, or is he going to do, to address these? Sal, like all the victims who preceded him, is in this position through no fault of his own. Today, I call for an undertaking from the Government, the Post Office’s sole shareholder, that he will not be pursued for the ghost debt of £80,000, and I ask the Government to examine what kind of redress he can expect, having sunk so much of his own money into his post office to cover repeated shortfalls generated by Horizon. I have other constituents who are also in that position.

The culture of change that Nick Read has called for has not been apparent. In 2023, POL was rocked by scandals once again, with one appropriately named “bonusgate”. The former Chair of the Business and Trade Committee, the hon. Member for Bristol North West (Darren Jones), outlined the statutory definition of “false accounting” at a meeting and said:

“it seems to me that in the annual accounts that Post Office reported to Parliament there was false or misleading information presented that did lead to…financial gain”.

I said in July:

“That is the management culture of POL: bonuses for doing ‘a reasonable job’.”—[Official Report, 13 July 2023; Vol. 736, c. 161WH.]

We should compare that with the compensation schemes, which have been fraught with difficulty every step of the way. The fundamental principles of public life, including openness, honesty, and integrity, have not been upheld by the management of POL for decades.

Regrettably, even the compensation schemes established to address the injustices of the lamentable Horizon chapter are not immune from POL’s unjust approach. Dan Neidle, a renowned tax expert, soon realised that the schemes are designed to ensure that the lowest amount of compensation is paid out. The application forms are so legally intricate that even a legal expert such as Mr Neidle expressed the need for legal advice in order to complete them, but POL provides only token amounts for legal advice. The original absence of an option to claim punitive damages, something a lawyer would notice, puts applicants, many of whom are elderly and financially vulnerable, at risk of missing out on a significant portion of their compensation. I have seen a heavily redacted offer, and that is what happened to a sub-postmistress who was spat at by members of her local community after rumours of her stealing abounded in the neighbourhood. This is appalling, shameful and a stain on us all.

Oral Answers to Questions

Alistair Carmichael Excerpts

Thursday 25th January 2024 Commons Chamber

[Kemi Badenoch]

A spending review, where we can look at these things, will be coming up shortly, but I really have to challenge much of what the hon. Gentleman said. It is a misrepresentation to say that the issues going on with sewage are to do with the actions of my right hon. Friend the Member for South West Norfolk (Elizabeth Truss). This Government have been taking reforms through the Environment Act 2021 to improve the situation throughout multiple Governments, including the one in which his party, the Liberal Democrats, participated during the coalition. So it is very wrong to make that case.

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

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Business and Trade (Kemi Badenoch)]

As Secretary of State for Business and Trade, I am committed to ensuring the resilience of the UK’s critical supply chains. Last week, the Government published the “Critical Imports and Supply Chains Strategy” to help UK businesses build secure and reliable supply chains. Our 18-point action plan will help businesses to deal better with global supply chain issues from overcoming bureaucratic barriers to dealing with severe shocks caused by events such as the pandemic, Russia’s war in Ukraine and the attacks on the Red sea that have threatened a key route for global trade. DBT led the development of the strategy, which was shaped by the experiences of UK businesses. I was delighted that representatives of industry as well as key international partners joined us at the strategy’s launch at Heathrow airport, which is, of course, the UK’s largest import hub by value.

[Mr Carmichael]

Mr Speaker, I wish you and the rest of the House a happy Burns night for this evening. Is it not a scandal that the only way to get the great chieftain o’ the puddin-race exported to the United States is by sending the vegetarian version? [Hon. Members: “Oh!”] Could not the Secretary of State put that into her 18-point action plan and get on and do something, or does she want to risk forever being known as a cowran, tim’rous beastie? [Laughter.]

[Kemi Badenoch]

I thank the right hon. Gentleman for his esoteric question. We are continually removing barriers to US-UK trade, and we are trading with the US more than ever before. If he has a specific example that I can help with so that he can enjoy his Burns night, I would appreciate it if he wrote to me, and we will look at the matter in detail.

Horizon: Compensation and Convictions

Alistair Carmichael Excerpts

Monday 8th January 2024 Commons Chamber

[Kevin Hollinrake]

I thank my hon. Friend. He talked about building on my work. Can I say that I am building on his work? He did a tremendous job in his role when this issue first came to light. We share the ambition to do something that expedites the process of overturning convictions. The time for quibbling is over; it is now a case of action this day and delivering that overturning of convictions. Clearly, we want to do that in a way that does not cause us any constitutional or legal problems across the system. We believe we have a solution and we should be able to give more details in due course—very shortly. Sir Wyn Williams’s work is also playing a key part and I thank him for establishing the statutory inquiry, which is going to lead to so many answers that people rightly demand.

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

The Minister has heard from me previously about the difficulties faced by the executors of my constituent, who was a victim of this scandal and has subsequently died. Ultimately, the difficulty with my constituent’s case was that she had been putting in her own money to make up shortfalls and the executors did not know how much they should settle for, because the Post Office itself had no idea what the proper sum ought to be. In such circumstances, what can the Government do to ensure every victim of this scandal gets the full compensation to which they are entitled?

[Kevin Hollinrake]

Again, I thank the right hon. Gentleman for the work he has done on behalf of his constituent and I am so sorry to hear she has passed away. I have a similar situation in my constituency, as Sam Harrison of Nawton, near Helmsley, sadly passed away last May before she received compensation. It is a tragedy. As the right hon. Gentleman knows, compensation will be paid to the executors, who will probably be family members, so it is not about any saving of money but nevertheless we still want to accelerate the process. I totally agree with what he says about the lack of evidence in some cases, which may be 20 years old. In those situations, the benefit of the doubt should be with the victim, ensuring that the settlement is assessed as generously as possible and paid out as quickly as possible.

Post Office Services: Edinburgh West

Alistair Carmichael Excerpts

Monday 27th November 2023 Commons Chamber

[Christine Jardine]

I most certainly do agree with my hon. Friend’s constituent. Citizens Advice tells us that almost 20% of people still visit their post office weekly for one of the services that he mentioned. That increases to 23% of those in rural areas, 27% of carers, 22% of over-65s and 21% of disabled people, so there is a need in our communities. On the DVLA services that my hon. Friend mentioned, the contract with the Post Office ends in March next year. Currently, the Post Office handles more than 6 million DVLA transactions annually, which contributes £3.2 million per year to postmaster remuneration.

People rely on their post offices for all these services, yet we are seeing them fail because they do not have the support that they need from the Government. It is not worth their while; the postmasters who are closing in my constituency tell me that they do not have the support that they need. If we are to save what was once rightly claimed to be the front desk of Government in our communities from becoming an adjunct slotted into shops that are willing to put up with it, we need something to be done quickly.

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

We have all heard the point about post offices being the front desk of Government, but at the same time we are told that Government services will be digital by default. Is not the root cause of the problem the lack of strategy that would stem from a coherent Government position?

[Christine Jardine]

My right hon. Friend is absolutely right: there is no coherence to the Government’s position. Digital services do not work for everybody. Not everybody wants them. As with so many of our public services—buses, trains, the NHS and water—we need a recognition that this issue needs action now. It needs investment, and better support for those who supply the services. The reality is that some people will not be able to lead their lives as they would wish without the services that our post offices have traditionally offered, which are being undermined. Most do not want to; they enjoy the comfort of having a post office. They enjoy being able to pop in, particularly in rural communities, and buy their stamps, or collect their pensions.

This week, I was at my office in Edinburgh West. A gentleman stopped me in the street and asked me, ironically, whether I knew where the nearest post office was. Fortunately, I did. He had an A4 envelope in his hand. He said, “I need to get a stamp and post this, and I can’t find one,” so I directed him along the road. A post office is a simple thing, but they are vital to communities up and down the country. If the Minister, or the Prime Minister, has any doubts I would be more than happy to take them to a post office in Edinburgh West and introduce them to the many people who use the services that are still available—but I would quite like to do it while I still can, and while they are still there.

Rural Postal Services: Sustainability

Alistair Carmichael Excerpts

Wednesday 25th October 2023 Westminster Hall

[Jamie Stone]

Yes, indeed. I completely agree with that. I hope that some constructive thinking will now be forthcoming. As I have said already, this is part of our social fabric.

Earlier, I touched on loss of income for shops. The post office at Bettyhill will lose almost £7,500 a year. As I have said, that could mean not only further post office closures but shop closures. Pillars of rural communities will be demolished by cost-cutting tactics: we see all too much of that in the highlands, with that weary drumbeat of closures and cutting back.

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

This comes on top of a situation that most sub-postmasters and sub-postmistresses already face, where the individual transaction costs that they are paid for are actually more than the money they are given from the Post Office. Does that not make the bleak scenario that my hon. Friend outlines look rather inevitable?

[Jamie Stone]

My right hon. Friend represents the furthest constituency—even further away than mine—so he indeed knows what he is talking about.

Money is lost. There are, however, other ways to ensure the sustainability of rural post offices. We have heard how we can do this from the numerous interventions, for which I thank all hon. and right hon. Members.

Post Office Horizon IT Scandal: Compensation

Alistair Carmichael Excerpts

Tuesday 18th July 2023 Commons Chamber

[Kevin Hollinrake]

Certainly, we have learned the lesson in this place to heed those warnings more quickly. I am sure the new management of the Post Office have seen what has gone wrong, and we are clearly keen to make sure it never happens again. I do not think we will be able to say we have learned the lessons and this will not happen again until we have received the final results of the inquiry and then decided what action can be taken against the individuals responsible, because that will be the ultimate deterrent in stopping these things happening again.

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

The significance of Sir Wyn bringing forward an interim report of this sort is something that should not be underestimated. I was with the hon. Member for Motherwell and Wishaw (Marion Fellows) in the APPG meeting this morning and it was clear that, as far as the chief executive of the Post Office is concerned, in dealing with historical matters such as this, he sees it as a major barrier to changing the culture within the Post Office. Whether that is a reason or an excuse remains to be seen, but he has to ensure that that barrier is removed so that there can be no further excuses about changing the culture.

[Kevin Hollinrake]

I agree, and we are determined to play our part in that of course. I was very grateful for the report and I have read the recommendations. Clearly, there is a lot of detail in the report that I want to study and consider fully, but I thought it was very helpful. I did not see anything in the recommendations I immediately objected to. As I say, I want to make a good study of those things, but a number of different processes have to take place. We have to give due process the time to do its work in making sure that we establish exactly what has gone on, so that we can put those matters right.

Heritage Sites: Sustainability

Alistair Carmichael Excerpts

Tuesday 20th June 2023 Westminster Hall

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

It is a pleasure, Mr Dowd, to serve under you today. I congratulate my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing this debate, and on the way in which he put the case for what he charmingly termed “the far north”, or the start of the south, as we in the northern isles call it.

I flatter myself that we know a thing or two about heritage sustainability in the northern isles; we have been doing it for 5,000 years, after all. Since 1969, Orkney has been home to a UNESCO world heritage site—the heart of neolithic Orkney, incorporating Skara Brae, the stones of Stenness, Maeshowe and the Ring of Brodgar. However, that is just the start of it, because there is so much more archaeology peppered around the northern isles, and of course we have in Kirkwall St Magnus Cathedral, which is a relatively late addition to our portfolio, being a mere 12th-century construction. Most recently, we have had a very important addition in the Scapa Flow Museum in Hoy, which does a tremendous job in retaining historic artefacts that take us back to the first and second world wars—a time when Orkney and Scapa Flow were at the heart of the nation’s defence.

Of course, for some time now, Shetland has been designated a UNESCO global geopark. Earlier this year, the Government gave their support to the Zenith of Iron Age Shetland, which is also acquiring UNESCO status as a world heritage site. There are also Mousa, Old Scatness and Jarlshof. Jarlshof is a 4,000-year-old settlement. Can the Minister give us any update on support for the Zenith of Iron Age Shetland? Obviously, it was never going to be a fast process; we know that. However, if he can give us an indication of what his Department is doing to sustain that process, it would be most appreciated.

In many ways, heritage defines what we are about in Orkney and Shetland. It is one of the things that marks us out as being very different from the rest of the country, and we are enormously proud of it. It now brings in a huge amount of business, and a huge number of people from right across the world for tourism. That is both an opportunity and, if we are not careful, something of a threat. It has developed in Orkney and Shetland a tremendous visitor economy, all made up of small and medium-sized enterprises; in particular, there is now an army of well qualified and well trained tourism guides who are able to offer a great visitor experience to people coming to the northern isles.

In recent years, however, we have seen an enormous growth in cruise ship traffic. That has been enormously valuable, especially financially, to the community, but there are challenges given the sheer number of people who come to visit sites such as Skara Brae, Maeshowe and the Ring of Brodgar. I commend everybody who has been involved in the management of that influx of tourists, because they have balanced the needs of maintaining the integrity of our world heritage site while making sure it is open and accessible to those who visit our islands.

The other threat to all built heritage, of whatever age, is climate change. We see that manifesting itself in so many different ways. Skara Brae on Orkney has been listed as a site that, because of its sheer location, is particularly vulnerable to the threat of climate change. It would be an absolute tragedy for our country if we were to lose such a site. I would like to see our Government in Scotland and the UK Government in Westminster come up with a more strategic and co-ordinated approach to ensure that these very important sites are maintained for future generations.

Sub-postmasters and Sub-postmistresses: Remuneration

Alistair Carmichael Excerpts

Tuesday 23rd May 2023 Westminster Hall

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

I beg to move,

That this House has considered remuneration for Post Office sub-postmasters and sub-postmistresses.

It is a pleasure to serve with you in the Chair, Mr Twigg. The House has spent a fair amount of time in recent months considering the question of the Post Office and dealings with postmasters and postmistresses, but most of that has been in relation to the very long tail of the Horizon scandal. I make absolutely no complaint about that.

I have had debates in here and in the main Chamber where I have said that, in my view, the basic reason that whole scandal was allowed to happen was the culture that existed within the senior management of the Post Office. Basically, the people at the top just did not trust those at the sharp end of the businesses. As I have dealt with constituency cases relating to Horizon and seen some of the more recent advents, such as the bonus payment paid to Nick Read, the chief executive of the Post Office—in an act of utter tone-deafness—my concern is that the culture remains unchanged. If it has changed, it has not changed to the extent or at the speed that we would like.

A recent poll on the question of confidence in the board of the Post Office on the Facebook group Voice of the Postmaster attracted no fewer than 367 votes, and it was a 100% vote for no confidence. I mention Voice of the Postmaster because that is, as it were, the provisional wing of the organisation representing sub-postmasters. I have always worked very well with the National Federation of SubPostmasters over the years, but I increasingly hear concerns from sub-postmasters that the way in which the federation is constituted makes it difficult for it to represent sub-postmasters in the way they would want to be represented. I do not know the truth of that. It is not my job, or even the Minister’s, to reach a final decision on that at the moment, but I think we have to be aware and respectful of concerns when we hear them. There is clearly a job of work for Ministers and Post Office management to be done in that regard.

Figures provided by the Post Office recently in a conference call to postmasters and postmistresses show that it had a revenue and income last year of £915 million, while its total capital and spend on historic matters, which excludes compensation, was £85 million, and the compensation schemes cost £63 million. The Post Office employed 3,500 people, with a people cost—I assume that is a wages bill—of £180 million. A fairly crude arithmetic would suggest an average salary in the region of £48,000.

I would contrast that with what I and, I suspect, many of us around the country hear when we speak to the sub-postmasters and sub-postmistresses in our communities. My interest was really caught by one of the sub-postmasters in Shetland, Brian Smith, who runs the Freefield sub-post office in Lerwick, which is one of the bigger sub-post offices in Shetland. He came to me, showed me the figures and said quite simply, “How do I make a living from this?”

I went back to see my constituent last week and he showed me his remuneration note. He is open for 51 hours per week, with two people serving. He pays above minimum wage, but at minimum wage that would be £1,071 per week, which would be £4,641 per calendar month for wages only—before even turning on a light switch or heater. His income from the post office in that month was £4,153.56. I can find no better illustration of the mismatch between what sub-postmasters need by way of remuneration and what they actually receive.

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

My right hon. Friend is laying bare the facts. In my constituency of North East Fife, we have lost a number of post offices since I was elected because a franchisee pulled out, as it simply does not make any money. It is easier to have a Costa Coffee machine than a Post Office counter for making money. People are not coming forward to reopen post offices, so remote communities are subject to being served by a Post Office van, when it is in operation. Does he agree that we need to do something?

[Mr Carmichael]

I absolutely agree. I see this process happening and it has not happened suddenly; it has been happening for years. People retire, give up or for whatever reason decide they do not want to continue and nobody comes forward, so the post office remains nominally open, but in fact there is no service in the community—there might be some from another branch or wherever, but frankly the core of what the sub-post office is about is lost.

I think of the example of the post office in the village where I live. It is in the village shop. It was bought recently by somebody who had given up a career—of 51 years, he tells me—in IT, so he was not doing this to increase his income. He has transformed the shop. He has taken what was a good Orkney country shop and brought in a whole range of different fresh foods—Orkney fish, Orkney beef, everything. The quality of what we can get in that shop now is phenomenal, but he tells me it costs him to have a sub-post office counter in the business. It should not be costing somebody like that. That should be something that adds value, but we are seeing the determination and commitment of sub-postmasters and sub-postmistresses around the country being taken advantage of.

[Christine Jardine (Edinburgh West) (LD)]

rose—

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

rose—

[Mr Carmichael]

Oh my goodness! I am spoilt for choice. I give way to all three Members, but very quickly.

[Christine Jardine]

I agree completely with my right hon. Friend: remote areas have been hit hard by the declining number of post offices, but we are also seeing that in cities. One of the problems it brings is that post offices were meant to replace the counter services of many bank branches that have closed, so we have many elderly pensioners who are not online and now have even fewer options for getting their pension or going to the bank.

--- Later in debate ---

[Mr Carmichael]

I give way to the hon. Member.

[Jim Shannon]

I commend the right hon. Gentleman for bringing the debate forward. He is absolutely right, and the same thing applies in my Strangford constituency. The wages and remuneration have to reflect—they do not at this point—the hours committed, the staff employed, the contribution to the local community and the social engagement for people of a senior generation. Those things are critical, and they must be reflected accordingly in the money for wages.

[Mr Carmichael]

I give way to my hon. Friend.

[Jamie Stone]

In the north-west of my constituency, Mr and Mrs Mackay run a general store in the village of Durness in Sutherland. It is a fact that supermarket deliveries and mail order are threatening the store’s viability. That is something we should guard against.

[Mr Carmichael]

Absolutely. With your indulgence, Mr Twigg, I took those interventions together because we had three different communities all telling us the same story. It is a story of commitment from sub-postmasters and sub-postmistresses that is not being met through their remuneration. The point made by my hon. Friend the Member for Edinburgh West (Christine Jardine) should be emphasised, because isolation is not something that affects only those in rural communities. There are people who live in isolation in cities and towns. For them, a post office and access to a post office is an important service, and they stand to lose out as a consequence of the constant salami slicing that we see.

Another postmistress in my constituency from Orkney spoke about the different changes that she has to work with. She told me:

“A lot of mail and packages are left with us for collection. Every item has to be accounted for, processed in and processed out. We are quite often having to produce a proof of postage for mail that is paid for online. This takes some time checking that the correct postage has been paid. The changes to customs requirements have added on much more time to the process than what they claim”

—that is the Post Office—

“This is particularly true for Drop and Go accounts where we have to input the senders details for every package. This information could be pre populated…The Post Office do not provide all the items that may be required to meet their standards—for example, a shredder.”

The list of things that are done for communities by people running sub-post offices was shared by my constituent Juliet Bellis, who runs the sub-post office in Fetlar, an island community in Shetland with 68 residents. She makes the point that elderly and infirm residents there rely on the post office to charge up their electricity keys. She says:

“I am contracted to open for 8 hours per week but I have trained up everyone who works in the shop so that, if the shop is open, the post office is available. That means in the summer you can get access to the post office 7 days a week, from 11am to 4pm; in the winter, we only open for five days a week—from 11am to 2pm.

The post office is therefore getting 35 hours from me in the summer and 15 hours a week in the winter. For this I get paid £390.90 per month…slightly above the current minimum wage if I opened for 8 hours per week.”

[Duncan Baker (North Norfolk) (Con)]

I thank the right hon. Member for bringing such an important matter to the House. I was a postmaster, and I have often said in the House that I am the only serving MP to have been in that role. Indeed, it is wonderful to see Calum Greenhow, the chief executive of the National Federation of SubPostmasters, in the Public Gallery.

Despite the Post Office’s commercial revenues increasing by about £100 million over the last few years, the actual revenue that sub-postmasters have earned in that time has fallen substantially, by 12% in just the last three years. As the right hon. Member said, of the 11,700 post offices that operate around the country, only 9,500 are full-time services, simply because of the lack of viability. Does this not show that we must give this great British institution the power to pay people properly for running post offices?

[Mr Carmichael]

The hon. Gentleman is absolutely right, and I do not think we are going to have much contention in this debate. The same point was made to me by Valerie Johnson, who is the sub-postmistress at Baltasound, Unst. She pointed out that holiday pay is contracted to cover roughly £5 per hour, but there has been no update since 2016. That is probably the sort of thing that produces the outcome to which the hon. Gentleman just referred.

The final point I want to deal with relates to bank charges. As we know, we are pushing more and more banks into using the Post Office, and the figures that have been put to me show massive disparities between the amounts that can be paid in on a daily or annual basis. For Barclays, the limit is £3,000 per transaction but only £10,000 per year. For Danske Bank, it is £1,000 per day and £5,000 every 180 days. Ironically, the Post Office instant saver account has a limit of £1,000 per day or £10,000 per year, as does the Post Office reward saver. Brian Smith told me just last week that when people hand over their takings and pay money into bank accounts through the post office, it does not know whether that person is anywhere near the account cap. If the post office staff spend time counting out the money, only to find that they cannot take it because the customer has exceeded the cap, that is a source of enormous and legitimate frustration for them.

Mr Twigg, you may think that I have just about vented my spleen and exhausted everything that I have to say, but today it has been brought to my attention that negotiations between the Post Office and the Driver and Vehicle Licensing Agency are reaching a crisis point. At present, 6 million DVLA transactions, worth something in the region of £3.2 million, are made through post offices every year. I am told by the Post Office that the likeliest outcome is that it will get a 12-month extension to the agreement, which would take it to 31 March 2024, but that the DVLA is not committing beyond that point.

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

Does the right hon. Member agree that the Government’s pledge—made many years ago and never kept—that local post offices would be the “front office of Government” is really beginning to sound more and more hollow, and that they are likely to be in breach of the Equality Act 2010 and indeed their own policy on access to cash and social inclusion, if this change goes ahead?

--- Later in debate ---

[Mr Carmichael]

The hon. Lady is absolutely right, and I pay tribute to her work as chair of the all-party parliamentary group on post offices.

The point that really stands to be made about the Post Office and the DVLA is that these are two public bodies. Negotiating a deal between two public bodies is about access to a public service. I confess that I was always sceptical about post offices being the “front office of Government”, because it is difficult for a Government to say that they use the Post Office as their “front office”, when at the same time they are telling everybody else that everything is digital by default. There is a somewhat mixed message between those two options, and we will have to decide which it will be, because if we try to do both, we will never succeed in either regard.

The concern that we might now be reaching the point of losing the contract has to be taken seriously. It is clear that the Post Office is taking it seriously, and it is incumbent upon those carrying out the negotiation to understand that they are the people negotiating on behalf of post offices and those who issue licences. They are behaving as if they are in some hardball negotiation between Gordon Gekko and The Wolf of Wall Street. They are losing sight of the fact that they are there for a specific purpose, and they should focus on that.

We have an army of public servants, the length and breadth of this country, who provide a tremendous service for our communities. We have heard a small part of it service represented here today, and if I take nothing else from this debate, it is that we need to find another opportunity to go over this ground in more detail. That army, like all armies, needs leadership, and that is where we are losing the opportunity at the moment. They need leadership; they need respect for the work they do; and above all else they need fair pay for the work that they do for our communities.

--- Later in debate ---

[Kevin Hollinrake]

I agree. I hope the hon. Lady will forgive me if I gave her the wrong impression. I am not saying that it should be either/or, but we should leave it to customers to decide how they want to access services.

[Mr Carmichael]

The Minister is absolutely right. We cannot dictate to people how they do things. But surely with the example of the cash limits on bank deposits, that is exactly what we are doing. If we say, “You’ve had your limit; you can’t pay in any more money here,” then we have taken away the option for them to use the post office. Let us not forget that they are probably using that option as a sop to the Government here, because they were making all sorts of promises about it being the last bank in town.

[Kevin Hollinrake]

I understand that cash deposit limits are a crucial issue, and we are determined to find a resolution. It is not about something imposed by the Government or even the Post Office; it is about money laundering concerns. The FCA was concerned about the post network being used for money laundering purposes. The right hon. Gentleman and I have both spoken about the need to tackle economic crime, so that is the reason behind it. My concern is whether those measures are proportionate and appropriate. I think there should be ways round that. Some banks are interpreting the advice differently.

I will turn to some other issues that the post office network is facing. One is the disruption to business caused by the dispute between Royal Mail and the Communication Workers Union. Hopefully, that has nearly come to its end. Letter volumes are on a long-term decline, with a 50% reduction in the last 10 years. Foreign currency exchange is another important revenue stream, which was obviously challenged between 2020 and 2022. Again, that should be returning to normal.

There is no silver bullet to solve those problems, but, nevertheless, there are some opportunities for the future. We see that the Post Office needs to adapt to today’s economic environment. There are initiatives under way, such as post offices becoming parcel hubs—not only for Royal Mail; there are now new partnerships with Amazon, DPD UK, Evri and DHL, and that is a benefit to consumers and potentially postmasters.

Positive steps to diversify the business are critical. The right hon. Member for Orkney and Shetland highlighted what a tremendous job his post office is doing in terms of fresh produce and fish. Diversification is very important for any business; when a part of a business is struggling to make ends meet, it should add further businesses to that outlet. There has been significant investment in the replacement for the Horizon system. The new system should make transactions easier and more efficient, which should help sub-postmasters with the amount of time it takes to do their work.

The Government have stepped in for the short term, with things such as business rates support worth £13.6 billion, and the £23 billion over an 18-month period to help with energy costs. We are keen to help all businesses through a difficult time, not least the post office network, which has received £2.5 billion of central Government funding over the last 10 years, and will receive £335 million over the next three, including the £50 million a year subsidy to safeguard services in uncommercial parts of the network.

I take the right hon. Member for Orkney and Shetland’s point on the Post Office’s senior management bonus situation—a matter that we took very seriously. The Post Office itself is doing its own inquiry into the circumstances around that and we have committed to undertaking an independent review of the issue. It is important that we wait for the outcome of the review before we make a judgment on that situation, but it is something that we are taking seriously.

I thank Members for their contributions to the debate. It is encouraging that we are all on the same page on this issue; we all want to ensure we have a sustainable network, and we need to have a grown-up conversation about how we do that.

Oral Answers to Questions

Alistair Carmichael Excerpts

Thursday 18th May 2023 Commons Chamber

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

What are the Government doing to ensure that the genomics data of British businesses held by British genomics companies that then trade or do deals with Chinese companies, such as BGI Genomics, is protected? Is it not somewhat naive, given the terms of the national security law, to think that GDPR alone is sufficient protection?

[Nigel Huddleston]

Through a variety of mechanisms and across multiple Departments, the Government give advice to companies investing overseas. In terms of dynamics the other way around, the Investment Security Unit carefully analyses investment in the UK, particularly relating to acquisitions in 17 sensitive areas. We are very careful at analysing and we will continue to keep a close eye on those two-way relationships.