Rural Post Offices

Lord Henley Excerpts

Tuesday 9th July 2019 Lords Chamber

[Baroness Redfern]

To ask Her Majesty’s Government what steps they are taking to ensure that rural post offices are able to (1) continue, and (2) extend, the services they provide to rural communities.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, in 2017 we committed to safeguarding the Post Office network and protecting rural services. The Government have invested over £2 billion since 2010 to ensure the long-term sustainability and resilience of the network. We believe that the Post Office network is delivering all services in accordance with the contractual requirements set by the Government.

[Baroness Redfern (Con)]

I thank the Minister for his reply. Rural post offices are the backbone of many communities. Does he agree that when this review is concluded, the emphasis should be on paying a fair fee to reflect the vital services rural post offices provide, their long hours and the other services for which the payment is still far too low?

[Lord Henley]

My Lords, I agree with my noble friend about the value that we place on the Post Office, and rural post offices in particular. That is why we made that commitment in the 2017 manifesto. Obviously, I cannot make any commitments for the future beyond 2021, when current agreements come to an end. But bearing in mind the commitment we have made and the value we see in the Post Office network, it is exceedingly likely that something similar will be there.

[Lord Wigley (PC)]

My Lords, is the Minister aware of the growing evidence from rural areas, particularly in Wales, of increased crime because of the closure of banks in those areas? Some businesses are having to go 40 or 50 miles to find banks. In those circumstances, can the services available through the Post Office be extended to reduce that danger?

[Lord Henley]

My Lords, I am not aware of that connection with the closure of banks in rural areas causing an increase in crime, but I am aware that there is a decline in bank services in certain areas. I think of my own small nearby town, where both the banks have gone. The important thing is that with the agreement that the banking industry has come to with the post offices, they can provide a great many of the banking services that people require, such as paying in cheques and so on. I could go on in great detail for the noble Lord but there are agreements between the banking sector and the Post Office to help deal with that.

[Lord Fox (LD)]

My Lords, the Minister speaks a good game but the truth is that sub-postmasters and sub-postmistresses are leaving their jobs in the hundreds, if not the thousands. The review is taking time but by the time it ends, there will be too few post offices and none in many rural areas. What will the Government do that is different from what they are doing now? If they keep doing the same thing, the problem will be worse.

[Lord Henley]

I regret to say that what the noble Lord says is complete and utter nonsense. The Post Office network is broadly stable, at about 11,500 branches. Obviously, there are occasional closures for reasons beyond the Post Office’s control; for example, an individual postmaster might retire for reasons of ill-health or the business behind a branch might not be sustainable. However, the Post Office has the means of providing postal services in those circumstances. The important point is to make it clear that the network, the numbers within it and the coverage of that network are broadly stable.

[Lord Hain (Lab)]

My Lords, I refer to my entry in the register. Is the Minister not being incredibly complacent? There have been thousands of closures of rural post offices over the years. I have pressed the Government in the past, and do so again, to look at and adopt the example of the post bank in France. This is a profitable business, has not seen closures on anything like the scale we have, and provides a banking service which rural communities—and many towns—have completely lost. It is a solution to both problems.

[Lord Henley]

My Lords, I simply do not agree. The network is broadly stable. We have seen 400 new post offices open in the last couple of years; the coverage is there. The Post Office itself is now broadly making a profit after 16 years of loss. As a result, that network can be maintained, and we will do what we can to maintain it.

[Lord Marlesford (Con)]

My Lords, will my noble friend suggest to the Post Office that it promotes the banking service more? I have been a client of this wonderful service for 10 years. It has the great advantage that you can put money in and withdraw up to £1,000 a day from any post office, however small, at any time. It is particularly important for rural areas. It is more secure than a hole in the wall, because your card is taken by somebody behind the counter and put into their machine, rather than swiped in public. The Post Office should be promoting this much more.

[Lord Henley]

My Lords, my noble friend is right to draw attention to the banking framework agreement. We are grateful for the work that the Post Office and the banks have done together. Post Office Ltd handled over 128 million banking transactions on behalf of the high street banks; that represents growth of around 12% year on year. The implications of the new framework agreement with the National Federation of SubPostmasters was announced at its conference and has led, in some cases, to a doubling or even trebling of the fees that agents can receive from the banks.

[Lord McNicol of West Kilbride (Lab)]

My Lords, the Post Office recently announced that it is closing and franchising a further 74 Crown post offices, leaving up to 700 jobs at risk. This means that, since 2013, 224 Crown offices have been shut, representing a 60% cut in the Crown network. Will the Government finally intervene and end the closure of Crown post offices by introducing a new condition in the Post Office’s funding agreement?

[Lord Henley]

My Lords, again, the important point is that our post office network is now making a profit and is broadly stable. The Question is about rural sub-post offices, but the noble Lord referred to Crown post offices: there will be occasions when some of those have to be closed. It is coverage that is important; I assure the noble Lord that some 93% of the population live within one mile of their nearest post office and almost 99% of the rural population within three miles of one.