Post Office Closures

Debate between Chi Onwurah and Clive Betts

Tuesday 19th October 2021 Westminster Hall

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

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

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

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

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

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

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

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

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

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

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

[Mr Clive Betts (in the Chair)]

I ask the Minister to allow two minutes at the end for the mover to wind up.