Post Office Network

John Lamont Excerpts

Thursday 25th April 2019 Westminster Hall

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

It is an absolute pleasure to serve under your chairmanship, Dame Cheryl. I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing what is undoubtedly a very important debate.

I know from my constituents how important the post office network is to rural communities such as those that I represent in the Scottish borders. When the post office in Eyemouth closed temporarily last year, I received a huge number of complaints, letters and emails from residents worried about how they would access their benefits, pensions and other postal services. In fact, the reaction was as strong as the opposition to losing a local bank branch or another public service such as a local library. That desire to protect the local post office network needs to be put to good use. Local people certainly have a role to play in supporting their post offices, but I wonder how many people understand how postmasters earn a living. Perhaps we all need to do a better job of communicating that we all must use our post offices and spend money there as often as we can to ensure their survival.

I absolutely agree that the post office network provides an invaluable service, which needs to be protected. I find it hugely concerning that the National Federation of SubPostmasters has found that one in five sub-postmasters is considering closing or downsizing in the near future. What should our reaction and response be to that, and how should the Government react?

Tim McCormack, who lives in Coldstream in my constituency, ran the post office in Duns for a number of years. He has been a very vocal critic of the network transformation project, and is calling for radical reform. There is clearly a need to look again at whether the current model has put post offices on a sustainable footing for the future. I urge the Minister and the Government to look closely at the issue. Do we need to increase the network subsidy? Can the Government do more to support postmasters who provide over-the-counter services on their behalf? For example, the Post Office’s contract with the Department for Work and Pensions to provide the Post Office card account runs out in 2021. Will the Minister raise with Government colleagues the income and footfall that such services provide for postmasters, and press for the contract to be renewed for a further period?

I note your comments, Dame Cheryl, at the start of the debate about ongoing legal action, which is an important issue. I will not go into that case, but it is important that the Government consider the possible outcomes of that litigation, and how that might impact on the sustainability of the post office network. As the hon. Member for Motherwell and Wishaw indicated, as banks have closed, a number of banking services have been transferred to the post office network. There would clearly be a big impact for many communities who are now completely dependent on the post office network if that network was not on the same footing as it is today.

Some have argued that the post office network in Scotland should be devolved to the Scottish Government and the Scottish Parliament. That is not something I support. That would cause all sorts of added costs, and would not in itself solve the problem. Of course, it is already open to the Scottish Government to provide financial assistance to post offices for providing non-postal services, so some extra support could be provided by Holyrood if—[Interruption.] Dame Cheryl, is this not telling? We are talking about a very serious issue here, which affects all our constituents, and all a group of SNP Members can do is to barrack and shout at someone who is trying to provide a constructive solution.

[Dame Cheryl Gillan (in the Chair)]

Order. I am not going to allow any barracking. This will be a civilised debate under my chairmanship.

[John Lamont]

Thank you, Dame Cheryl. I am very grateful for your intervention. I think it is appropriate that we conduct ourselves in a civilised manner, and I am happy to do that.

Notwithstanding my concerns about the post office network, it is important to put the issue in context. Despite a significant reduction in the network subsidy since 2011, across Scotland we have lost just over 2% of post offices, which is roughly the same loss as has been experienced in England. In my constituency, we have lost two of 46 post offices. It is not the case that the network is falling apart.

The Post Office has gone from making a £120 million loss in 2012 to becoming profitable again, which is undoubtedly a good thing. I also very much welcome the recent announcement from the Post Office that it is increasing the amount of money it pays postmasters for carrying out banking transactions. That is clearly long overdue; the issue has long been a matter of complaint among postmasters in my constituency in the Scottish borders. I end by reiterating the importance of the post office network to rural communities.

[Jim Shannon (Strangford) (DUP)]

On rural communities, which is where the hon. Gentleman and I are coming from on this, should there not be an absolute commitment from this place, and from the Government, to safeguarding and securing what can be seen as the last bastion of social interaction for elderly and vulnerable people in isolated rural communities? The importance of that cannot be underlined enough.

[John Lamont]

The hon. Gentleman makes a critical point. For many communities and small towns across Scotland and the entire United Kingdom, the ability to access cash, financial services and benefits is critical. As banks and cash machines close, there are very often no other alternatives. It is critical that we in this place do something to ensure that people in those communities, including the most vulnerable older people, can continue to access such services, and to ensure that we can sustain our high streets, and shops and businesses in these communities, which are dependent on cash. The post office network is an important part of that. People are clearly using postal services differently, and that trend will inevitably continue, which reinforces the need for the UK Government to continue to monitor and review the sustainability of the network.

I conclude by again congratulating the hon. Member for Motherwell and Wishaw on bringing this important debate.

--- Later in debate ---

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Dame Cheryl. I congratulate my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) on securing this debate on a matter that is critical for many communities in Scotland and the other nations of the UK. She talked about the respect for, and recognition of, post offices. Few things upset communities more than a post office closure. She also pointed out the folly of the Tory Government’s non-intervention policy, and the parlous state of sub-postmasters, following the cuts that they have had to endure to their livelihoods.

My hon. Friend rightly mentioned that it is good news that there is a new banking transaction deal, but why the six-month wait? There is no good reason for that. It should happen now. She talked about the consequences of poor pay, and the 1,016 temporarily closed branches, 134 of which—some 13%—are in Scotland. She talked about the effect of Crown branch closures, and the failure of the franchising system to recognise unions, which others mentioned, too.

The hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) talked about his worried constituents and the desire to protect the network. It is a telling figure that one in five sub-postmasters is considering closing or reducing their services. His speech was good up to then—until he said, as is usual for the Tories, that he wants the Scottish Government to pick up after the failure of the Westminster Tory Government, without the powers or levers to be able to do so.

[John Lamont]

My point was that powers are available to the Scottish Government to support the provision of financial services through the post office network—a point that the Library has just confirmed. There are opportunities available to the Scottish Government to provide additional assistance beyond what the UK Government can provide, because post offices are a reserved matter. There are levers and powers available to the Scottish Government, if they choose to use them.

[Drew Hendry]

I do not intend to go too far off track, but I must respond. It is absolutely typical of the Tories to say that we have to fix every mess and failure at the expense of the Scottish public and services in Scotland. That is a ridiculous proposition.

Returning to the core debate, there was enormous consensus among hon Members. My hon. Friend the Member for North Ayrshire and Arran (Patricia Gibson) pointed out that businesses across communities lose money if post offices close. She said that people are cynical about the politics of the Westminster Government, who make no commitment to post offices and then wring their hands at the consequences. She talked about hand-counting thousands daily, and everything that involves. She talked about the post office being the last place for face-to-face contact in communities. It is more than just a commercial entity, and older and more vulnerable people are the most affected by closures.

It is telling that Later Life Ambitions, a pensioners’ organisation, points out that the post office is important in day-to-day life, because older people, who are often the most vulnerable people in society, rely on post offices. They are a lifeline; they offer access to pensions and benefits, and let people pay bills, get advice and even socialise. Does the Minister acknowledge that this is a social issue, too? For those who do not or cannot communicate digitally, post offices are very important. They are used by 42% of consumers over 65, and 31% of disabled consumers.

The hon. Member for Coatbridge, Chryston and Bellshill (Hugh Gaffney) talked about working with my hon. Friend the Member for Motherwell and Wishaw, and about post offices needing to be run in the interests of people. That is absolutely correct. In talking about franchising policy, he highlighted that WHSmith has been voted worst retailer. It is notable that the jobs it advertises are particularly low-paying.

In a very telling speech that hit home with me as a fellow MP representing a rural community in the highlands and islands, my hon. Friend the Member for Argyll and Bute (Brendan O’Hara) shared concerns that post offices are being run down and prepared for privatisation. He talked about the catastrophic effect that can have on rural communities, particularly in the highlands and islands, where often there are huge distances between the services that people rely on. My hon. Friend talked about the stability policy of the UK Government; Argyll and Bute has lost 20% of its post offices, with six post office closures in the last two years. The drastically reduced funding has put post offices in a very vulnerable place, and the public have no faith in the UK Government protecting rural post office services. He was also right to point out the success of Cairndow, and to congratulate those people on taking matters positively into their own hands to try to do something for their communities.

My hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) talked about the transaction charges, and so he should, because his work should be commended. I congratulate him on forcing action, not only through his Adjournment debate, but through continued pressure and engagement. He talked about the impact of the systemic degradation of services in towns and villages and, importantly, the issue of community designation. It is a good thing to have community designation, but the problem is that rural and semi-rural post offices are losing out, while cities can gain. The criteria are too black and white, especially the three-mile rule.

The hon. Member for Glasgow North East (Mr Sweeney) talked about the unsustainable model imposed on the post office network, and shared his concerns about franchising. When there are bank closures in our communities, we have all been told, “Don’t worry; the post office network will pick up the slack.” He also talked about the toxic conditions for the people who run post offices, many of whom got into the job because they thought it was a great thing to do for their communities, a proper career and a valued position in the community. My goodness, how they have been let down by how they have been treated. He predicted a massive failure over the next five years if there is no action.

[Philip Davies in the Chair]

Post offices are not just business; they are focal points for many communities. This issue is about communities and their health and wellbeing, as well as the national and local economic impact. For many, the shiniest jewel in the crown has been prised out and cut up for the profit of those who do not rely on or even need a post office. In 2017, Citizens Advice found that people valued their community post office more than a local pub, a bank branch or a library. Does the Minister acknowledge that importance? In rural areas, 36% of businesses use post offices at least weekly, and 62% of small businesses use them at least once a month. Over 500,000 businesses are registered in rural areas—that is one in four companies—and they contribute more than £200 billion to the economy. These people are creatives and innovators who use post offices to send goods and pay bills. According to Citizens Advice, eight out of 10 of them will lose money if local post offices are closed. Will the Minister take notice of that?

We in the SNP—and others, as we have heard—are clear that we want our Post Office to remain robust, and to serve our businesses and communities, but that is not a priority under the UK Government’s management. Consequently, the Government should devolve power to us to ensure that the Post Office is protected. Under the current policy, there has been a mass exodus of postmasters, often leaving communities branchless. My hon. Friend the Member for Motherwell and Wishaw should be commended for arguing for fair hourly rates for postmasters, but the Minister must undertake to commission independent analysis and answer the big questions about fairness.

As we have heard, pay levels are leading to a major exodus of postmasters. Rather than watch the Post Office crumble, the UK Government should support postmasters and ensure fair remuneration. As was pointed out, the publicly owned Post Office’s North Star initiative is aiming for a £100 million profit by 2021. That is all very good, but postmasters’ pay has declined by £107 million since 2012. The majority of postmasters now earn less than the minimum wage. In many cases, they cannot even get out; their businesses are now too unattractive to sell.

The National Federation of SubPostmasters has raised the issue of sub-post office closures with the UK Government and the Government-owned Post Office Ltd. The federation’s spokesperson said:

“Our records show around two-thirds of closures are due to the resignation of the sub-postmaster— and a survey of our members conducted earlier this year gives an insight into why sub-postmasters are resigning. Income is dropping over time, the majority earn less than the national minimum wage for running their post office—and therefore earn less per hour than their staff—and as many as a third took no time off last year.

We agree with Marion Fellows that Scotland has been hit hard by sub-post office closures. This is a particular problem for rural areas in Scotland, as well as across the UK, where people rely on their local post office for vital postal and banking services.”

Action on transaction charges is welcome, but why wait? Why not give the same rates to local branches and main post offices? Around 90% of post offices in the highlands and islands are local branches, not main post offices. Will the Minister challenge that with the Post Office? As my hon. Friend the Member for Motherwell and Wishaw pointed out, there must be a vision for the post bank, and it should be properly funded.

There is more pressure on post offices than ever, given the loss of local banks through short-sighted closures by the Royal Bank of Scotland, Halifax Bank of Scotland and others. Now we find that TSB is starting the process of shortening hours, which is always the cynical first move in reducing a branch’s viability to the point where its closure can be justified. As we heard, all those banks say, “It’s okay, you can use the post office,” but we cannot if they have gone.

Even where post offices remain, Robert Cockburn, a constituent of mine who runs the post office in Drumnadrochit, says the workload is absolutely punishing. He often has to run his business as a single-manned operation, so while he goes behind the screen for the time it takes to deal with a transaction, he loses out on custom from people who come to his business and might have bought goods to help sustain him.