Local Post Offices

Gareth Thomas Excerpts

Thursday 30th January 2025 Commons Chamber

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

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

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

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

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

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

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

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

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

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

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

[Mr Carmichael]

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

[Gareth Thomas]

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

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

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

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

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

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

[Neil Coyle]

I look forward to working with the Minister on the future of the franchise in my constituency. Is he aware that there were 373 Crown post offices in 2010 but that by 2024 that number had fallen to 115? The shadow Minister either did not know that figure or did not want to admit it.

[Gareth Thomas]

Funnily enough, I am aware of that statistic; my hon. Friend makes his point powerfully.

We were clear in our manifesto that that we would seek to strengthen the Post Office network in consultation with postmasters, trade unions and customers, and that remains very much our ambition. That is one of the reasons why we are working closely with the Post Office in providing funding to support the replacement of the Horizon computer system. The Post Office’s future lies particularly in cash and banking. With the right support from the financial services industry and engagement with groups such as Cash Access UK, there is clearly more that the Post Office could offer on the high street through banking hubs and the Post Office network. We are beginning to work with the Post Office to improve its banking offer on the high street.

The Government are strongly committed to ensuring the long-term sustainability of the Post Office. It is a national asset that provides an invaluable public service in all our constituencies. There are certainly challenges ahead, but we continue to work with the Post Office to ensure that it is fit for the future. We always welcome views on the network. I thank those hon. Members who secured the debate and all other hon. Members for their contributions.

[Madam Deputy Speaker (Caroline Nokes)]

I call Gideon Amos to wind up.