Post Office Network

Debate between Carol Monaghan and Marion Fellows

Thursday 25th April 2019 Westminster Hall

[Marion Fellows]

I totally agree with the hon. Gentleman. I have a temporary postmaster still in office in Wishaw after the sub-post office there was temporarily closed last year.

What the public are seeing is yet another managed decline of a valued public asset driven by a Tory ideology of non-intervention. The public are, through their elected Government, the owners of Post Office Ltd. They feel and have let their elected Members know that the Government should be driving action to ensure the sustainability and promotion of the post office network. I hope the Minister will outline not only the actions her Department has taken, but the further actions she will take in response to the concerns of communities, postmasters and Members here today.

The main issue undermining the sustainability of the post office network is the postmaster crisis. At the root of that is sub-postmaster pay. Scottish National party MPs and Members from all parties have heard over and again from their local sub- postmasters about how poor pay is a leading cause of closures in their constituencies; I have even had sub-postmasters contact me from England to complain about the level of pay they are receiving.

The National Federation of SubPostmasters—the organisation that represents sub-postmasters across the UK—has said that two thirds of branch closures are due to sub-postmaster resignations, and they have attributed that to low pay. Sub-postmasters’ general conditions are also poor, with as many as one third taking no time off at all last year.

A survey released this month by the National Federation of SubPostmasters found that one in five towns could lose its post office in the next year. Of the 1,000 workers surveyed, 22% plan to hand in their keys, pass on their branch or downsize. The Post Office’s 2017-18 annual report states that sub-postmasters’ pay has fallen by £17 million in one year. That is a 4.4% cut. Sub-postmasters sustained a brutal £27 million cut the year before. Looking at postmasters’ pay in the long term, we see that it has declined by £107 million since 2012.

As part of Post Office Ltd’s North Star initiative to create a profit of £100 million by 2021, it used cuts to sub-postmasters’ pay to increase its profits from £13 million to £35 million in 2017-18. That is while the majority of sub-postmasters earn less than the minimum wage for running a vital public service in their communities.

[Carol Monaghan (Glasgow North West) (SNP)]

I congratulate my hon. Friend on securing this debate. The issue has been raised by sub-postmasters across the UK, and I have had meetings with some in my constituency. My hon. Friend has talked about the job that sub-postmasters do. The sub-postmaster in Scotstoun, Ali Akram, has an old folks’ sheltered housing complex across the road. He considers the work he does there to be a vital community service. He goes way above and beyond his actual job—he helps the men and ladies package things up and properly address them and so on—but when we consider the pay of sub-postmasters, that is not valued at all.

[Marion Fellows]

My hon. Friend is completely right, and I have heard many similar tales from Members from all parts of the Chamber. One told me that the sub-postmaster who served his mother actually helped her with her banking, going way over and above what he was paid to do. At meetings with sub-postmasters, I have been told how they feel driven to help their communities, but because of the limited pay they are getting, they feel they will no longer be able to offer that valuable public service.

The majority of sub-postmasters earn less than the minimum wage for running a vital public service. Our postmasters are being overworked and underpaid while Post Office Ltd is allowed to hoover up their wages for its own profit, rather than properly remunerating the people responsible for that profit. What is the Minister’s assessment of the Post Office’s North Star initiative in general and in relation to the decrease in sub-postmaster pay? Postmasters are working hard for poor pay so the executive board can meet its arbitrary profit targets. There is no real pay-off to that, as it is fuelling the downfall of the post office network.

There is also no real strategy to deal with the crisis that the Post Office faces. Across the UK, 460 postmasters want to leave as part of the network transformation programme, but cannot do so until a new postmaster is found. Currently, there is interest, and interest only, in 90 of those branches, so 460 people are essentially being held captive because the remuneration rates are so poor that Post Office Ltd cannot find a new postmaster to fill the position.

I am aware that a deal has recently been struck that will increase remuneration on banking transactions, but that is only one small source of income for sub-postmasters, and it will not come into effect for another six months. What discussions has the Minister had with Post Office Ltd on remuneration for postmasters, and why is there a six-month wait before the new rates come into force? Our postmasters need better pay now, and the whole postmaster contract, introduced in 2012 under a Tory Government, needs to be reviewed. Will the Minister commit to urgent action to review the whole contract?

In February, the Minister wrote to me to say that she would ask Post Office Ltd for the hourly rates effectively paid to sub-postmasters. Her Department must conduct an independent analysis of that. Given the poor treatment of postmasters by Post Office Ltd over decades, it is essential that the injustices that they have faced and the oppositional stance from Post Office Ltd management are not allowed to continue and influence any findings or outcomes. The attitude of Post Office Ltd towards postmasters has been shameful, and caused the loss of dozens of jobs and ongoing legal action that is now sub judice. I hope that the Minister will commit to an independent analysis of remuneration to sub-postmasters, and to a thorough review of postmasters’ contracts.

Furthermore, our postmasters have already been paying the price for the executive targets of Post Office Ltd through poor pay. Any future unexpected legal costs payable by Post Office Ltd must not influence decisions on postmaster pay. Postmasters cannot be expected to continue to pay the price for the Post Office’s shortcomings. The Government must, for once, put the interests of working people ahead of the aims and aspirations of an executive board and profit. I hope that the Minister will commit to ensuring that the outcome of any court case will not affect any potential new deal for sub-postmasters.

The consequence of poor postmaster pay is that communities are left without a branch and the services that they need. In response to a written question last month, Post Office Ltd confirmed that 1,016 branches across the UK are temporarily closed right now. Of all 12 regions of the UK, Scotland is the hardest hit by the postmaster crisis, with the highest number of temporarily closed branches—currently 134, representing 13% of all temporarily closed branches. That is 134 communities without something as simple as a post office, and 52 of the 315 branches with a temporary operator are also located in Scotland.

Temporary closures are affecting access. In 2017, Citizens Advice reviewed the Government’s access criteria and raised two concerns, the first being that measuring proximity to a post office as the crow flies does not accurately reflect the distance that people have to travel. It estimated that, if more accurate measurements were used, the UK Government would have failed five out of six of their own access tests. This is an attempt to pull the wool over people’s eyes. The number of branches operating in the post office network has been tumbling, which is greatly affecting people’s ability to access post office services, both rurally and in urban areas.

The Post Office’s own figures show, between 2014-15 and 2017-18, performances getting worse in five of the six elements used to judge performance. There is no doubt that the postmaster crisis is a driving force behind access to branches and quality service, so what are the UK Government doing to improve access, while maintaining quality services?

Crown branch closures have also affected access. People can no longer access the full service that they had previously at their post office. Since 2013, the Crown network has been cut by a massive 60%. Although Crown branches make up only a small percentage of the branches in the post office network, they have historically represented 10% to 20% of the Post Office’s overall revenue. They therefore play a crucial role in the network’s past, present and future, and must be preserved. These branches are flagship stores in prominent locations, so the impact on local communities, and the network generally, of closing them can be massive. Smaller, franchised branches often do not have the same presence in communities, provide the same level of service or offer workers the same conditions. In 2012, a report from Consumer Focus found a drop in performance; it concluded that franchising resulted in longer queuing, poorer customer service and advice, poorer disabled access, and a reduced number of counter positions.

When Crown branches are removed from prominent places in town centres, that removes yet another reason for people to visit their high street. That in turn reduces footfall and the likelihood of people spending on our high streets, as opposed to shopping online. The businesses surrounding Crown branches often benefit from being near a post office, which affects their income. Speak to any person from any town and they will complain about the state of their high street and closed units. What assessment have the Government made of the impact of Crown branch closures on town centres?

It is not just communities and sub-postmasters who are getting a rough deal from the current strategy—so are workers who are TUPE-ed over from a Crown branch to a franchise. The majority of workers being TUPE-ed opt to leave the profession, and take with them their skills and experience. In 2014-15, only 10 out of 400 staff were TUPE-ed over to a new retailer. In 2016, only six in 200 were TUPE-ed.

The Communication Workers Union has expressed concerns about conditions and the loss of skills. New jobs with franchising partners such as WHSmith are advertised at lower rates than the very same jobs with Post Office Ltd. That affects not only workers and their families, but the economy of the local community. According to the CWU, it makes more financial sense for franchise partners to offer a settlement to get Crown workers out the door, and bring in new staff in fewer positions, on lower pay and with poorer conditions.

The UK Government cannot be allowed to shake off their responsibility. Just because jobs are franchised, that does not mean that Ministers can turn a blind eye to the lower pay and conditions. Ministers have a duty to staff working directly and indirectly for Post Office Ltd. Will the Minister take action to prevent a two-tier system, and to bring everyone up, not down, to the same standard, regardless of the type of branch in which they work?

WHSmith has informed the CWU that once staff are TUPE-ed to their franchises, the CWU will no longer be recognised, so new and existing staff are not only being given a poorer deal, but are not even being given the means of improving their situation. They are being told to like it or lump it. Every workforce must have the right to union recognition. A stipulation for any new franchise contract must be that unions—the CWU and others—be recognised. Will the Minister commit to ensuring that?

The CWU has also expressed concerns about the fact that WHSmith was voted worst retailer on the high street in a 2018 poll by Which?. It has appeared in the bottom two in the Which? survey in each of the last eight years. With that rating, customers cannot expect quality service, and workers cannot expect a quality employer. Given that these retailers are carrying out roles on behalf of the UK Government as the special shareholder of Post Office Ltd, what is the Minister’s assessment of the quality of the service and rates provided by retailers such as WHSmith?

The recent decision to turn another 74 Crown post offices into franchises in WHSmith stores is alarming, particularly given reports that franchising is occurring without consultation with existing local post offices, meaning that the competition risks further destabilising the network. There have even been cases where a new franchise was opened in a WHSmith that was less than five minutes away from a post office branch, without there having been any consultation with the existing postmaster. Such decisions can have a devastating effect on a postmaster’s income, and can lead to a branch closing. What steps will the Minister take to ensure that sub-postmasters are listened to, and that their branch’s sustainability is taken into account in the decision-making process?

Communities must also be consulted, and any consultation must be meaningful. When the Post Office “consulted” people in Motherwell about the franchising of the town centre branch, it was merely a rubber-stamping exercise; I conducted my own consultation, which found that the post office was well used and well valued by the local community, but the Post Office pushed on with its plans anyway. A proper consultation would have required Post Office Ltd to listen and react to what it was told, but it has not done so. Nor have the Government: they have constantly palmed off the public and hon. Members with claims that anything that relates to the Post Office is a matter for the Post Office. Can the Minister outline what major steps the Post Office has taken in response to communities’ reactions to Crown branch closures?

Last year, the Post Office’s director of sales and trade marketing told the all-party parliamentary group on post offices that it had no contingency plans in case WHSmith—a company with 14 years of declining sales—goes bust, which would leave communities with no post office and leave Post Office Ltd floundering, deepening the postmaster crisis. With 596 branches, Martin McColl is the largest retail operator, while One Stop has 179, so Post Office Ltd may be guilty of putting all its eggs in one basket. Can the Minister outline her Department’s contingency plans in case the larger retailers fail and their post office branches close along with them?

The post office network is being gutted by Post Office Ltd, and the UK Government are allowing it to happen. If the UK Government see a real future for post offices as a “front office for Government”, the physical network must be supported to maintain services and attract more people to opt in. More Crown branches are closing and more mobile post offices are being deployed, which is not attractive and does not represent the strong public institution that people once knew.

The machinery and skills needed to perform certain services are being lost as Crown branches close. Not only are private providers of services not opting in, but neither are the UK Government. The Home Office has chosen not to renew its contract for biometric services with Post Office Ltd, which means that fewer people are visiting their post office and less money is being spent. I accept that a competitive tendering process has to be undertaken, but why has Post Office Ltd not been competitive enough?

Will the Minister pledge to speak to her colleagues in the Home Office and other Departments about what services they can provide through the post office network? In their response to the 2017 consultation on the post office network, the UK Government pledged to look at what new products post offices could provide. New products serve not only communities but sub-postmasters, who can increase their income. New services could therefore be a way of preventing the mass exodus of postmasters. Since publishing their response, what products have the UK Government introduced? What products are being examined?

The preservation of existing services is important not only for the sustainability of the post office network and sub-postmasters’ incomes, but for particularly vulnerable people. For example, people who use Post Office card accounts to withdraw social security payments rely massively on that service. Typically, people are taken to a bank in their youth by their parents to open an account, but that is simply not the case for everyone, especially those who are most vulnerable. I have assisted constituents who needed to open a bank account but were unable to—not because they did not want to, but because they held no recognised ID, as they would then be pursued for debts and put in an even more difficult position. How do the UK Government plan to support those people when the card account contract expires in 2021? A commitment must be made to extend the contract, not just until 2024 but indefinitely. People must have the choice. Not extending the contract would be a choice by this Government to place yet more barriers in front of people to prevent them from accessing the support that they need.

One key way in which the network can achieve longevity is through banking transactions. The proposal from the CWU, in conjunction with Cass Business School, to form a post bank deserves serious consideration. With more and more banks closing in our communities, a post bank could be a viable public alternative that provided customer service on people’s doorsteps and in their communities while larger banks are abandoning them. It would require vision as well as will from the Government, but right now they have no vision—only a strategy for managed decline.

If the UK Government truly see a future for the post office network in which it can continue to have a prominent presence in town centres, so that people can still access an array of services, there needs to be a clear strategy. That strategy cannot simply be cuts dressed up as efficiency, or privatisation disguised as modernisation. The UK Government need to step up to the plate and ensure that this public service meets the standard that the public expect. Their key pledges must be to review sub-postmaster contracts, drastically increase and improve services, halt and reverse Crown branch franchising, commit to union recognition and better conditions for workers, actually listen to communities and sub-postmasters, develop a contingency plan in case retailers go bust, and assess the impact of the current strategy on town centres and vulnerable groups.

Fulfilling those pledges would be a major step towards a sustainable and doable strategy. However, I and many others have a suspicion that the Tories are overseeing the managed decline of the post office network as part of a deliberate strategy to underfund the service, making it poorer in order to lower confidence in it and justify a full-scale privatisation of the network. If that happened, I am sure it would be met with the same public opposition as the Crown closure plans.

The SNP believes that post offices should remain in our communities, that the franchising of Crown branches should be halted and that Crown branches should be re-established, so that people can enjoy more and better services, workers and sub-postmasters can enjoy better conditions, the post office network’s sustainability can be ensured and the commonweal can be served. A public service should serve the public, not the aims and aspirations of people on retailers’ executive boards or of Post Office Ltd, which is profiting from the feebleness of the UK Government, who refuse to act.

The post office network is in a postmaster crisis. The strategy of non-intervention is not coherent. Communities, sub-postmasters, workers and the network as a whole need action—and they need it now.

Oral Answers to Questions

Debate between Carol Monaghan and Marion Fellows

Thursday 14th February 2019 Commons Chamber

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

19. What steps he is taking to reduce potential disruption to travel in the event of the UK leaving the EU without a deal.

[Carol Monaghan (Glasgow North West) (SNP)]

21. What steps he is taking to reduce potential disruption to travel in the event of the UK leaving the EU without a deal.

Oral Answers to Questions

Debate between Carol Monaghan and Marion Fellows

Thursday 29th November 2018 Commons Chamber

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

2. What representations the Commission has received on bullying and harassment since the publication of the Cox report.

[Carol Monaghan (Glasgow North West) (SNP)]

4. What representations the Commission has received on bullying and harassment since the publication of the Cox report.

Further Education

Debate between Carol Monaghan and Marion Fellows

Wednesday 18th November 2015 Commons Chamber

[Carol Monaghan]

The number of young people not in education, employment or training in Scotland is even lower still.

There have been challenges in the college sector in Scotland. That was necessary to produce a sector that focuses on employability. In the past, courses were over-subscribed. Young people subsequently flooded the jobs market searching for positions that simply did not exist. We do not want to serve our young people badly by allowing them to waste several years of study only to be thrown on the scrapheap at the end of their course.

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

Does my hon. Friend agree that a lot of good work is done by colleges in Scotland in cases of mass redundancies? Under PACE—Partnership Action for Continuing Employment, the Scottish Government’s partnership on access and employability—Scottish colleges play an important role and are mandated to do such work on employability and retraining.

[Carol Monaghan]

Absolutely. I agree 100% that colleges in Scotland serve not just young people, but a wide sector of society.

The Scottish Government are determined that young people should leave college with the skills that employers want, so the right thing to do is to prioritise full-time courses for recognised qualifications to match true market need. In 2013-14, there were nearly 120,000 full-time equivalent college places in Scotland, exceeding every target since 2011.

[Marion Fellows]

Does my hon. Friend agree that further education provides a valuable second chance for adult returners, especially women, who did not achieve at school?