Future of the Post Office

Harriett Baldwin Excerpts

Monday 14th July 2025 Commons Chamber

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I thank the Minister for advance sight of his statement. The Post Office really is the Heineken of Government services: it reaches parts of the UK that other arms of government do not. The Post Office is much more than a business; it is a vital part of the UK’s social and economic fabric. It connects communities, supports local economies and ensures access to essential services across the country. From rural villages in constituencies like mine to inner cities, postmasters are trusted figures who provide a lifeline for people who rely on face-to-face services, particularly the elderly, the digitally excluded and small businesses. The network plays an increasingly important role delivering banking services and hubs as the traditional bank network continues to close. While the number of letters sent has declined and more Government services are online or direct to bank accounts, there are areas where the Post Office has seen strong growth: bank deposits to post offices are up by 68%, parcels up by 68% and tracked priority mail has risen by 72%.

The Minister promised that the Government would publish the Green Paper on the Post Office in the first half of 2025, so I will give him that—it was nearly there. The Government clearly want to get this consultation out before recess when there is arguably less parliamentary scrutiny. I would like to take this opportunity to encourage the public to respond to the consultation over the summer.

The Green Paper seeks to reduce the taxpayer subsidy over time, but of course, with 50,000 workers throughout Britain, the Post Office itself faces a £45 million hike in its bill from the national insurance jobs tax. The post offices that are eligible for retail, hospitality and leisure business rates relief have seen a 140% increase in their business rates. The Employment Rights Bill will cost the Post Office another £8 million. It is no wonder that Nigel Railton, the Post Office chairman, blamed the autumn Budget for increasing costs and said that it was why the Post Office needs a fresh start.

The Minister told the House on 8 April that

“access criteria have already been published that commit the Government to provide 11,500 post offices.”—[Official Report, 8 April 2025; Vol. 765, c. 750.]

He says in the Green Paper that his preference is to maintain the size of the network. Will he commit today to there being 11,500 post office outlets at the end of this Parliament? Did the Government consider reducing the branch requirement in the Green Paper? If so, why did they change their mind? Was he advised by his officials that it would take the closure of one in five post offices to end the network subsidy? If that is not what he was told, what was he told? Where is the cut-off point for that subsidy?

The Minister says that the Government will consult on a change to access requirements as it could be argued that they are too stringent, but for rural areas they are not. Approximately 14% of post office branches are the last shop in the village—there are many such branches in my constituency—so will the Minister confirm that rural branches will not be closed just to be replaced by others in city centres? Does he not realise that for many rural areas, the post office is the only shop for miles around and is therefore the only place one can access free cash?

How much did the Post Office get from the framework agreement with the banks? Should it not get a better and more long-term agreement? How much will the Government ask Fujitsu to pay towards the £2 billion estimated cost of compensating the postmasters who were wrongly accused over the Horizon system? The Minister appears to have kicked Post Office mutualisation into the long grass. I can see why he would not want to do it during the time of the inquiry, but could there be a pilot during this Parliament?

Post offices and the postmasters who run them are the backbone of our local communities, so I urge the public to take this opportunity to champion their local post office and reply to this summer consultation.

[Gareth Thomas]

I am grateful to the hon. Lady for encouraging sub-postmasters and anyone who is interested in the future of the Post Office to contribute their views to the Green Paper.

As the hon. Lady rightly set out, and as I hope I underlined in my statement—the Green Paper is certainly very clear on this—we think that branches up and down the country are a vital part of our country’s economic and social fabric, and we are determined to strengthen the post office network so that they can play a continuing and even more effective role in our economic and social lives.

The hon. Lady rightly underlined the significance of banking services going forward. As an aside, she mentioned the decline of other traditional post offices—letter volumes have halved since 2011. That helps to underline the significance of banking to the future of the Post Office. We are clear that the Post Office could offer more if the banks are willing to work with it. The successful completion of the banking framework negotiations was an encouraging sign in that regard. As I set out in my opening remarks, we are, alongside Treasury colleagues, determined to sit down with the Post Office and the banks to see what more we can do together. There is a commitment to 350 banking hubs over the lifetime of this Parliament, but if we can improve the way in which the banks work with the Post Office, we could see a much more significant role for the Post Office in the provision of banking services on far more high streets up and down the UK.

On national insurance contributions, I gently say to the hon. Lady that difficult decisions had to be made in the Budget because of the financial situation that we inherited, but we have taken a range of decisions to steady the network. I am sure that she is grateful to the Chancellor of the Exchequer for the additional finances put aside to invest in the future of the Post Office.

The hon. Lady quite rightly underlined the broader point that Fujitsu has a moral obligation to contribute towards the cost of the scandal. As I have said, we need to wait for the final report by Sir Wyn Williams to understand the full sense of Fujitsu’s culpability.

Lastly, on mutualisation, as the hon. Lady alluded to, we think it right to concentrate in the short term on prioritising the financial and operational stability of the Post Office, given its significant challenges. In the longer term, it may well be possible to make serious and sustained governance changes. I have a genuinely open mind on that question and will look carefully at the views we receive on it in the Green Paper.