Rural Post Offices

Lindsay Hoyle Excerpts

Thursday 13th December 2018 Commons Chamber

[Kelly Tolhurst]

I thank my hon. Friend for his point. He is right in what he says and I recognise that. I was going to come on to this later, but I will respond directly to his point now. The Government are the sole shareholder in the Post Office. It is right that we work with the Post Office, challenging it where necessary, and with constituency MPs and the community to make sure that we can deliver the right services for the community. As I always do when speaking about post offices at the Dispatch Box, let me say that we are committed to working with MPs and their communities, and we will continue to do so in order to maintain the branch network we have and to try to serve communities as best we can.

Outreach and mobile services are highly valued by the communities they serve, as they offer all the same services as bricks-and-mortar branches. They have been successful in taking key services such as everyday banking to customers, giving them vital access to cash in areas where there are no bank branches nearby. The Post Office directly contributes towards the costs of those outreach services, in conjunction with the postmaster running them, whose parent branch benefits from the transactional income accrued from the visits to outlying communities.

My hon. Friend raised important points about the specific challenge of running a post office in communities where seasonal trade and variation plays a significant role. I know that the Post Office listens to the community and the postmasters in St Ives by taking a more flexible approach to opening hours requirements across the year. That will allow branches to be more sustainable through the leaner, off-peak seasons, when their post office and associated shop has fewer customers. As he said, the issue was taken up by Lord Gardiner in his meeting with Paula Vennells, the Post Office’s chief executive officer, on 4 December. I understand that there will be a follow-up meeting with her in the constituency in the New Year to discuss this and other matters further. I am confident that this ongoing, frank and sustained engagement is the right way to proceed, so that the issues can be understood and a solution be provided for the benefit of postmasters, businesses and residents of St Ives.

Finally, I would like to take this opportunity to clarify some misconceptions about the Post Office’s franchising programme, particularly the assumption that franchising means closures and the downgrading of services. Those criticisms are misplaced. Post Office branches are not closing, but are being franchised, either on-site or by relocating to other high street locations. Franchising is nothing new; almost 98% of post offices across the UK are successfully operated by independent businesses and retail partners. Moving the directly managed Crown offices to retail partners has been instrumental in reducing losses in that part of the network.

My hon. Friend raised an important point on postmasters’ remuneration, especially for everyday banking services. As these services have developed and increased, I know the Post Office is looking at ways to better recognise the effort required of its postmasters for banking transactions. In fact, the Post Office has recently notified postmasters that their rates for banking deposits have been increased this year. I understand that the Post Office has now entered negotiations with banks on the next banking service agreement. The Post Office has reassured me that it will do all it can to ensure that postmasters are better remunerated for the vital services that they offer. I should add that the Post Office is picking up vital services in areas that banks have left. It is right that the Post Office does its best to make sure the banks accept the responsibilities involved and the work that post offices are doing on behalf of those communities and, we hope, properly remunerate them.

My hon. Friend also raised an important point about postmasters who cannot exit the business because of the absence of alternative operators to take over their branch. Although that is an operational matter, I assure him that the Post Office is taking it very seriously. As of November 2017, there were more than 450 branches of that type across the network. To help the remaining postmasters, the Post Office has extended the network transformation resignation timeframe to March 2020. That means that all parties can continue to work together to ensure that no communities are left without the invaluable post office services that they rely on. The postmasters affected will continue to receive both fixed and variable remuneration throughout that period. Where solutions are found, the postmasters concerned can leave while still qualifying for their leaver’s compensation.

My hon. Friend raised some particular issues relating to his constituents. I am not aware of some of the detail of those cases, but we are meeting in the new year, so I look forward to discussing those points and seeing how we can move forward.

I reassure my hon. Friend that all post offices across the network, including rural branches, are of the utmost importance to the Government. We recognise their value and importance, and we will continue to honour our manifesto commitments so that post offices can thrive and remain at the heart of our rural and urban communities. I thank my hon. Friend again for making his points, and for his hard work in support of access to post office services for his constituents. I assure him that I will continue to work with him and the Post Office to make sure that the constituents of St Ives receive the post office service that they deserve.

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

I am sure the House would like to wish all postal workers the best for Christmas and the new year, and to thank them for getting the parliamentary mail through.

Question put and agreed to.