Post Office Closures

Clive Betts Excerpts

Tuesday 19th October 2021 Westminster Hall

[Mr Clive Betts (in the Chair)]

I remind all Members of the guidance from the House of Commons Commission and the Government to wear masks and to give other Members appropriate space when entering or leaving the room.

I recognise that the House rightly paid tribute to Sir David Amess, given the tragedy of his killing last week, but we should also remind ourselves that Sir David was a highly respected and long-serving member of the Panel of Chairs. In other circumstances, he might have been in my place today. Without getting formal, we will all want to think our own personal thoughts about the contribution that Sir David made as a Chair and in other ways as a Member of this House, about the incredible loss and grief felt for him, and about his family at this time.

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[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.

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[Jamie Stone]

My final point is simply this: where there is a post office service being conducted in a retail premises that is not a post office—a newsagent or some other business—there is an issue. I can think of an example in my constituency, where privacy tended to be invaded. Someone would be queuing up and talking to the lady about his or her pension or whatever, but the people behind wanted to buy a copy of the Daily Record or whatever. The person at the counter was uncomfortable with the feeling that the person behind could hear what was being said. That is perhaps an issue for another day, but I say to the Minister that we must remember that for some transactions in post offices, or however we do it in the future, there is a confidentiality aspect. I have no doubt that the Seaboard Memorial Hall in my constituency will do an excellent job and will tackle that privacy aspect of the work as well.

[Mr Clive Betts (in the Chair)]

There are two more Members who wish to speak. As long as we finish by 10.28 am for the wind-ups, we have time for both hon. Members.

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[Jim Shannon]

The hon. Gentleman is absolutely right. When the Minister sets out his vision for post offices, as I hope he will, he has to retore confidence in the post offices so that they can see a future for themselves financially and viably.

Yesterday morning I had a lady in my office thanking my staff for persevering with her attendance allowance form. She had been notified that her appeal had been upheld. I listened as my staff members reminded her that this additional money was hers, and that she should use it to make her life easier—to get a cleaner or to help pay for a taxi rather than walking everywhere. She said something that struck me and was very important: “I will get a taxi to get my post office money.” It was very clear what she was saying. “I can’t use this card stuff, and they help me to get my cash where I can get all my bills sorted. I don’t know what I will do when they don’t do cash anymore.”

This is replicated dozens of times across my constituency, and I know it is replicated across all of the United Kingdom of Great Britain and Northern Ireland. The availability of the help and support that post office staff provide to vulnerable people in our communities cannot be overstated. That lady also said that her life would be turned upside down if she could not get her pension and her money sorted. She said, “The girl in the post office put some money on my gas and electric, and my TV licence bill. She does it all.” This lady is in close contact with the people in the post office. I am so thankful for all those staff who take the time to do what those in a busy petrol filling station simply cannot; I mean no disrespect to them, but it does underline the importance of post offices.

With more and more bank branches closing down, the role of the post office for vulnerable people and for businesses that cannot lodge cash easily without it is more vital than ever, so I urge the Government to ensure that we play our part in the retention of post office services. We should remember that although a large number of people operate online for the majority of things, there is also a large vulnerable section of society who do not operate online and who are frightened to do so because of security concerns. Again, I seek the Minister’s reassurance in relation to this security issue. I will give him another example, which concerns one of my constituents, because I do not believe that the vulnerability of some elderly people to scams can be underlined enough.

Only last month, a man in my constituency lost a substantial amount of his savings because he was scammed through an online system. Many of our older people and other vulnerable people are increasingly refusing to try any online payments, just because they are not sure whether they have the security that they need so much. My parliamentary aide’s mother had a discussion with her private pension provider regarding the transfer of a bulk payment. Coincidentally, that afternoon she received a message on her phone, apparently from HMRC, regarding an outstanding tax bill. Let us be quite clear—HMRC does not make telephone calls to tell people about tax bills. If someone receives such a call or message, it is a scam, and that is a fact. Indeed, I received a phone call here at Parliament just before the recess, telling me to contact a particular number immediately in relation to something similar. I contacted my accountant and asked him about it, and he said, “Jim, HMRC do not contact you about any HMRC business by phone. They will contact you by letter. If you get a phone call supposedly from them, it’s a scam.” He was quite clear about that.

The mother of my parliamentary aide, Naomi, rang her, and Naomi told her mother to do nothing about the message until she had looked at it. It was a scam, but one timed in such a way as to be believable. Not everyone has a child who understands the tax system so well that they can spot a scam, which perhaps underlines the importance of this issue.

Fears about these issues make people’s ability to head to their local post office and have a local, friendly staff member help them to pay their bills safely and to get things sorted out vital. How important it is to have the accessibility to that service from someone an individual knows and who has a face they recall and trust—trust that has been built up over many years. I believe that every speaker today will endorse that.

The post office is vital. It is okay to have all the other shops and petrol stations where people have access to a post office service, but people also need to have someone they know. Post offices give that reassurance, so they are vital, and we must do our part to protect them. In doing so, we must protect our service provision, which is even more important for our elderly community, who rely on it and cannot do without it.

[Mr Clive Betts (in the Chair)]

Finally, I call Kirsten Oswald to speak.

[Kirsten Oswald (East Renfrewshire) (SNP)]

It is very kind of you to call me to speak, Mr Betts. Thank you. I was not down to speak in this debate—

[Mr Clive Betts (in the Chair)]

Oh, I am sorry.

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[Mr Clive Betts (in the Chair)]

I thank the hon. Member. I called her because she was on the list of people who had requested to speak.

[Kirsten Oswald]

I am delighted.

[Mr Clive Betts (in the Chair)]

Always here to help!

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[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.