Post Office Network

Marion Fellows Excerpts

Tuesday 10th March 2020 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I beg to move,

That this House has considered the post office network.

It is a pleasure to serve under your chairmanship, Mr Gray. I was tempted to add to the motion this morning so that it read, “That this House has considered the post office network while we still have it.” In 2017, Citizens Advice found that people value having a post office in the local community more than a local pub, bank branch or library. Sixty-two per cent. of small businesses—more than 2 million—use them at least once a month, and in rural areas post ofices are vital, with 36% of rural businesses using them at least weekly.

[Chris Elmore (Ogmore) (Lab)]

I am grateful to the hon. Lady for giving way so early in her speech. I congratulate her on securing the debate. She mentioned bank branches in rural areas, but in lots of constituencies—in hers as much as in mine, I am sure—only one or two banks are left, so the post offices are the true infrastructure that residents now rely on for getting access to cash and general banking services. Does she agree that if more post offices close, whole communities will be cut off, with some people having to travel many miles to find additional banking services? We really cannot afford that.

[Marion Fellows]

The hon. Gentleman makes a vital point, which I will cover later.

Post offices matter to everyone. We are not all digitally inclined. We are not all able to access digital services online, and poorest and most vulnerable people in our society are the ones who are most affected by post office closures.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I congratulate the hon. Lady on securing this debate. I agree entirely with what she is saying. In my constituency of Torfaen, post office branches have survived by going into other businesses—into chains or independent businesses. Does she agree that where contracts are in place for that to happen and circumstances lead to change, those post offices need to be supported and the contracts kept under review?

[Marion Fellows]

Absolutely. In constituency business, I too have heard of people taking on a post office in their existing business and being told that it is the new nirvana and things will only get better, but it is the existing customers who use the post office service in the shop, and there is no huge increase in turnover. It is important that post offices branch out. Longer opening hours are welcomed by many, but the whole point is to keep post office services available right across the regions and across all areas.

Rural businesses are more likely to use post offices to send deliveries and pay bills, and twice as likely to use them to withdraw or deposit cash. As hon. Members have said, banks are closing, so post offices become even more vital.

[Kirsten Oswald (East Renfrewshire) (SNP)]

I thank my hon. Friend for giving way. The decrease in the number of banks and post offices in our constituencies is of significant concern to local people. There is a real problem in terms of access to cash, which is particularly pressing for elderly and more vulnerable constituents.

[Marion Fellows]

Absolutely. I was outside Wishaw post office, which was temporarily shut, when a disabled constituent came to get her benefits. She did not have enough money to get on the bus to go to the next post office, which is a fair distance away. She could not have walked. She had to phone her daughter to come and collect her to take her to access cash. This is 2020 and that is still happening. People need cash. In a previous debate in this room, the then Chair of the Treasury Committee gave a forensic and detailed account of how post offices let down local people if they close, because access to cash is still vital to the most vulnerable people and to all of us. Most of the taxi drivers in my constituency do not accept cards, and that is the case across the UK. We cannot force people. The Government should not try, through Post Office Ltd, to force people to go down the digital and no-cash route.

Scotland is being hardest hit by the postmaster crisis across the UK. Although since 2009 post office numbers have remained reasonably constant, last year they fell by 1%, and since the early 1980s the number of post offices has almost halved.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I am grateful to the hon. Lady for securing this debate. When I speak to my local postmasters, one concern I hear is about the nature of the contract that they are supposed to take on. The length of hours requires them to keep extra staff at the tills. Will she join me in questioning the Minister about the terms of the contract and what is expected of sub-postmasters to make the services as feasible and as affordable as possible?

[Marion Fellows]

That will be one of my asks of the Minister. I have numerous asks, which might not surprise those present.

The Scottish post office network has the highest number of temporarily closed branches or temporary operators in the UK. Figures from Post Office Ltd show that of 1,016 temporarily closed branches, 134 are in Scotland, representing 13% of all temporarily closed branches; 52 of the 315 branches run by a temporary operator are in Scotland. Temporary postmasters step in when a postmaster leaves and a permanent postmaster cannot be found. This is becoming more and more common. People do not want to take on post offices in the present climate because of the difficulties involved.

The Tories’ continued refusal to support postmasters and the post office network particularly affects Scottish communities. I am sure other Members will testify to the importance of post offices in their own nations and constituencies. Some have already done so by intervention. What does the Minister propose to do about it? If she sees it as a matter for Post Office Ltd, will she ask it what it intends to do about it?

[Liz Twist (Blaydon) (Lab)]

I thank the hon. Lady for securing this debate, which resonates throughout all our nations. The post office in Blaydon’s shopping centre closed some years ago, and the Post Office has been unable to find anyone to take it on. Does she agree with me that post offices are absolutely central to the health of our high streets and that the Government must adopt a more flexible approach to supporting the opening or reopening of post offices?

[Marion Fellows]

I thank the hon. Lady for her intervention. I totally agree with her. I learnt about the circular flow of income and cash many years ago. If we cannot withdraw money from the post office, we cannot nip next door to the baker’s and buy a bun or a loaf of bread, and the baker cannot use it to pay staff. Things come to a halt. It is basic economics, or economics 101 as it is now referred to.

Communication Workers Union officials have also queried the wisdom of closing Crown post offices—those directly managed by Post Office Ltd—given that the company is profit making. The union notes that franchising causes people to leave the service because jobs advertised by firms such as WH Smith, which holds a very large number of franchises, are lower paid than those at the post office. Last year's decision to turn 74 Crown post offices into franchises in WH Smith stores is also alarming, particularly given reports that franchising is being done without consultation with the existing local post offices, meaning the competition risks destabilising the network further. I believe we heard from the hon. Member for York Central (Rachael Maskell) in a previous debate that that happened in York. The Crown post office was closed, put out to franchise, and opened next to an already franchised smaller post office branch.

There must be more consultation and strategic consideration on franchising. That is a particular concern of the all-party parliamentary group on post offices, whose chair, the hon. Member for Sheffield, Brightside and Hillsborough (Gill Furniss), is in the Chamber. Last year, the Post Office’s director of sales and trade marketing stated that it has no contingency plan in the event that WHSmith, which has experienced 14 consecutive years of sales decline, collapses. If WHSmith collapses, what will happen to the Crown post offices? We must ensure that further franchising happens only in consultation with other businesses.

The UK Government must provide more incentives for new postmasters to open post offices that are independent of major chain shops. Will the Minister look at that and instruct Post Office Ltd accordingly? It is appalling that this year the majority of sub-postmasters earned less than the minimum wage for running a post office. The pay increase announced in November will not take place until next month. It is vital that the Minister acts to ensure that profits are not increased at the cost of a cut to postmasters’ pay, forcing permanent post offices to close. Will the Minister take urgent action to review the sub-postmaster contract introduced in 2012? I think I can safely say that it is no longer fit for purpose.

The National Federation of SubPostmasters has raised sub-post office closures with the UK Government and the Government-owned Post Office Ltd. A spokesman said:

“Our records show around two-thirds of closures are due to the resignation of the sub-postmaster”.

The spokesman pointed to low pay as the prime reason, saying that

“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.”

Last year, an NFSP survey warned that one in five towns could lose its post office in the next year. Surveying a thousand workers found that 22% are planning to close, pass on the business or downsize staff. Sub-postmasters have been forced to go without holidays and take on extra jobs to make ends meet.

[Owen Thompson (Midlothian) (SNP)]

We often find in situations such as the one in Loanhead in my constituency, where the Bank of Scotland is completely abandoning the community by shutting the bank branch, that the Post Office is expected to step in. We are very fortunate to have an excellent post office in the community that is willing to do so, but those increased pressures surely contribute to stress for postmasters, which adds to the points that my hon. Friend made about the potential for closure. If post offices close, what then for our communities, where the post office has been the final vestige, picking up the pieces after the bank has abandoned them?

[Marion Fellows]

I totally agree. The crux of the matter is that if we allow things to continue as they are, there will be a continual and continuous decline in the post office network until it reaches a tipping point and is no longer viable. We will all lose out, but the most vulnerable in our society will be affected the most.

In 2019, it was announced that from April sub-postmasters will receive better financial remuneration from Post Office Ltd for key banking services that they provide to the public. At the NFSP annual conference, the Post Office Ltd announced that it will raise the rates. That is great—it will be a threefold increase—but we must ask ourselves why the Post Office felt the need to do that and why it was not done earlier. A local sub-postmaster came to me and said that he was getting the grand rate of £1.88 an hour for dealing with cash intake to his branch. He will feel much better that he will get more money, but post offices are taking the place of banks, and that is not always right.

I was part of a group of Scottish National party MPs who tried to ensure that banking service provision is properly remunerated. To be fair, the issue was also raised by Members from other parties. I raised the issue at Prime Minister’s questions, and my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands) raised it during an Adjournment debate that he led last year. If people think that I sound repetitive, it is because I am being repetitive. Since I came to this place, five Ministers have been in place; today’s Minister is the sixth to have responded to a debate on post offices in which I have spoken. That cannot go on.

We welcome the changes that are happening, but it is vital that the details prove sufficient to protect postmasters’ livelihood and the network. Further improvements are needed to help to future-proof sub-postmasters’ business. The announced measures must not be the end of Post Office Ltd’s actions.

[Kirsten Oswald]

My hon. Friend is making a persuasive speech about the importance of post offices to our communities. She is hitting the nail on the head: it is about the service being sustainable. These services are at the heart of our communities. In East Renfrewshire, people in both rural and suburban communities are extremely concerned that post office services are no longer available to them. It is having a significant impact on their daily lives.

[Marion Fellows]

I totally agree. Across the House, in all the debates that we have had, there has been consensus and unanimity about what needs to be done. Time and again, folk have urged the Government to take action; many Members present have attended many such debates, and I welcome some new Members too. The Government have sat on their hands and done very little to improve post office network viability.

The National Federation of SubPostmasters said in November:

“It is imperative that we anticipate and adapt to future changes in the marketplace to ensure that subpostmasters are equipped and incentivised to grow their footfall and income. That is the only way we will be able to guarantee the long-term success of the overall business. This year we have looked to stabilise, next year and beyond we can look to sustain and grow.”

Sub-postmasters cannot do that on their own. They need support from Post Office Ltd and the Government, who are the single shareholder in that business.

There are major questions about the handling and oversight of the Post Office by the Department for Business, Energy and Industrial Strategy, under its various guises, over decades. The Department has failed post offices, and change is needed. For example, in 2016-17 the former chief executive officer, Paula Vennells, received a major pay increase, while postmasters took a pay cut. At a time when the network is damaged, that seems unwise. I might even put it slightly more strongly than that. I asked the previous Minister for postal affairs for an independent review into postmaster pay. I know I have said this already, but I will keep saying it: we want a review. Will the Minister commit to one?

I will talk briefly about the Horizon cases. We had a debate in Westminster Hall on Thursday, during which we heard some appalling stories. The Horizon scandal is not just the fault of this Government; it has been going on for years, under Labour and under the Lib Dems in coalition. I do not want to make it a party-political issue. Mistakes have been made and they need to be rectified. We cannot just say that a big boy or a big girl did it and ran away. It does not matter who caused it. This is the point that we are at, and we have to move forward and secure a future for our post offices. I do not care who does it; I just want it done, and so do my constituents.

The Minister was in the Chamber last Thursday, when the hon. Member for Telford (Lucy Allan) led the debate on the Horizon scandal and its impact on postmasters and post office workers. We heard of appalling cases of injustice in which victims were imprisoned, were given community service, or lost homes, businesses and reputations. Victims were pressurised into paying money to Post Office Ltd to avoid criminal charges, even when they knew they had done nothing wrong. Post Office Ltd covered up what it knew about the Horizon system and recklessly spent public money trying to avoid blame. The Minister’s response to all of this was lacklustre.

As I have said, since I was elected almost five years ago, I have faced five Ministers—as of today, six—in an effort to get Tory Governments to understand the importance of post offices and those who run them and work in them. I feel as though I have been battering my head off a brick wall, but rest assured that I will continue to fight for our post offices, alongside colleagues from across the House, because our communities need them. Victims of the Horizon scandal must be recompensed. Will the Minister meet Post Office Ltd to ensure that those who run and work in our post offices will not be the ones who pay the price for this scandal?

The Government once said that the Post Office should be the “front office” for Government services. Is the Minister still committed to that, and is she aware that the BEIS post office subsidy, which is paid to Post Office Ltd to ensure there is funding to maintain post office networks in rural locations, has tapered off? The Business, Energy and Industrial Strategy Committee’s inquiry into the post office, which was published in October last year, said:

“A re-think of how the Post Office is being funded for its role in supporting wider social and community goals is urgently required. This includes valuing the sub-postmasters and Post Office staff who deliver the services. It means making the Post Office a key channel for Government to reach customers. It requires ensuring that the Post Office brand continues to maximise opportunities with commercial partners, such as the banks and Royal Mail, so fees can be reinvested into the network and sub-postmasters fairly paid. Finally, it requires creative thinking on how the Post Office can continue its social purpose and maintain the high regard in which it is held by the communities it serves.”

A national post office network provides an essential public service. I do not think this Government and previous Governments get that; they do not understand that although many of us Members will go months before we cross the threshold of a post office, that is not how it works for the majority of our constituents. I have talked a lot about rural areas, but my constituency, in which I live, is an urban constituency, and a number of post offices have closed in Motherwell and Wishaw. Two Crown post offices have closed, numerous post offices closed in 2010 or thereabouts, and thereafter there has been a continual drip, drip, drip of closures and postmasters handing back keys. To provide that essential public service, a national post office network needs Government subsidy. The Business, Energy and Industrial Strategy Committee has expressed concern about what will happen if the network subsidy payment that supports the operating costs of the post office network is withdrawn after 2021. The Committee said it was concerned that

“the PO and many sub-postmasters and retailers who run POs will not be able to fill the gap in funding with other revenues. Many sub-postmasters are already struggling and thinking of leaving their POs and the removal of £50 million in subsidies could tip many over the edge. It could also convince some retailers and retail chains who host POs that it is no longer viable. This would have a damaging effect on the PO network. It should be avoided at all costs.”

I agree with all of that.

That Select Committee report was published in October 2019, but I do not think it has gone anywhere. We have had an election, which has represented another step back. There has not been a continuous push from Government to do what is needed, and although I understand that the general election had an effect, we need the Government to take up the reins again. What is the Business, Energy and Industrial Strategy Committee doing an inquiry on this morning? Post offices—isn’t that strange? That only underlines the importance of the post office network. If I do just one thing today, I want to convince the Minister that this is so important that we require something other than platitudes and warm words from Government. If I can do that, I will feel that I have at least done something.

[Liz Saville Roberts]

The hon. Lady is making a powerful point. Does she agree that it is concerning that the Government seem to be prioritising digital by default? In effect, that means prioritising the banks that are able to make more money—increasing those banks’ profits—over the needs of many of our vulnerable constituents who will never be able to access digital or who may prefer, for very good reasons, to manage their own finances through cash.

[Marion Fellows]

I said earlier that there was unanimity across this Chamber, and there is. I thank the right hon. Lady for her intervention, and of course I agree with her.

It is really important that the Government and the Minister give us some surety that they are still pushing, in the spending review, for this subsidy to continue; I have already described the costly effects that might occur if it does not. A number of Government services are disappearing from our post offices; for instance, the Government have put post offices at a severe disadvantage when it comes to applications for passports. Why is it much cheaper to apply online? I remember that when I applied for my first ever passport, I filled in the form wrong three times. The nice lady in the Crown post office in Wishaw sent me back and told me to fill it in again. I was a teacher then, and I was busy—I could make all sorts of excuses—but I would not have got that passport if she had not said, “No, do this and this.” Of course, being me, I had left it until the last minute. I had three young children, a full-time job and a husband who thought that going on holiday just meant not working for two weeks. That is the kind of vital social service that post offices provide.

I have spoken about this issue to other Members on many occasions. One Welsh Member, who is not here today, told me about the valuable service that his mother’s local post office used to give her when she went in. Because the postmaster knew her PIN, he helped her to get her money out and to put it into different pockets for different things, and really just helped her along. Postmasters in my own constituency have told me that they feel hamstrung now. They cannot provide the kind of service that they used to, simply because they have so little time. They are trying so hard to make money to live on that they cannot spend the time that they used to with their more vulnerable customers.

Is the Minister aware that since October 2019, the Post Office card account has no longer been available to new claimants and pensioners? There has been an invidious, insidious attack on the Post Office card account for a number of years. In 2015, a local sub-postmaster came to me with a very official-looking letter from the Department for Work and Pensions addressed to a constituent. It said, more or less in these words, “You must have a bank account in order to get your benefits and your pension.” For years, the Post Office card account has been used successfully by pensioners and claimants. They could go into their trusted local post office and draw money out on it without having to worry about having a bank card and going overdrawn, or about the difficulty of setting up a bank account. Many people do not have a passport or a driving licence, and they have never had a bank account and find it difficult to open one. The Post Office card account was ideal for those people, but now it is gone. Are there any plans to bring it back?

[Kirsten Oswald]

I appreciate my hon. Friend’s generosity in giving way. My constituents have raised the same issues with me. If the Post Office card account has to end, it would be useful to hear what measures the Minister plans to put in place so that people who need to use that kind of account are not disadvantaged by the creeping closure of post offices in our communities.

[Marion Fellows]

I agree with my hon. Friend that that all matters. I am an old person—[Hon. Members: “No!”] I know everyone is shaking their head in amazement. I understand this issue. People who have been using those accounts should be able to continue to do so, and that seems to be happening. Those who are retiring later, thanks to other Government plans, should still be able to go into their post office and use it as others have been able to. Post offices are the focus and the heart of any town or small community, or anywhere rural.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

The hon. Member makes an important point about people who are not digitally enabled, particularly older or disabled people. Does she agree that the closure of post offices also disadvantages small business owners, who frequently use post offices to collect and post parcels, and that that affects local economies?

[Marion Fellows]

I absolutely agree. When the Crown post office in Motherwell closed, one of the biggest lobbying efforts I had was from small business owners who could nip into Motherwell town centre to deposit their cash. With the closure of different banks, they now struggle and have to find somewhere else. The Motherwell Crown post office became a small retail business with two counters instead of six. That post office used to have queues out of the door at certain times of the week, and the town centre benefited from people withdrawing and spending cash. That does not happen now, because although the post office does an excellent job—I have used it—it does not have the required capacity.

The CWU has raised the loss of service and expertise that can occur when post offices are taken over by chains such as WHSmith. The employees are TUPE-ed over, but within a year their pay is cut and they leave, so the business no longer has the expertise to help and serve communities when they need it.

The Minister has been taking note of all my asks, and I hope that she will respond positively. Rest assured that if she does not, I will be back, along with many of the hon. Members who are present. I look forward to yet another debate about post offices in the main Chamber on 19 March, thanks to the work of the all-party parliamentary group on post offices, of which I am a proud member.

--- Later in debate ---

[Marion Fellows]

I thank everyone who has taken part in this debate, whether through interventions or speeches. I do not want the Minister to take this personally, because I could have said it innumerable times to many other Ministers, but we do not just want to hear kind words from the Government. We do not want the Government to say, “We will press Post Office Ltd”; we want the Government to tell us what they are going to do. That was missing quite a bit from the Minister’s response.

I want to pick up on one thing. It seems as though where the Government find that Post Office Ltd is making a profit, that is fine—everything in the garden is lovely; we are moving forward and the Post Office is doing really well, because it is making money—but how much money will the Post Office be making when the full cost of the Horizon scandal hits? It is not just about the people who have been taken to court and whose cases are going through the criminal court review procedures; it is about the people who paid the Post Office money because they did not want to be prosecuted, and who were harassed and harangued into doing that. It is about the cover-up. The Government cannot sit back and let the post office network flounder because of the great cost coming down the line for the Post Office as a result of Horizon.

That does not even cover things such as franchising. Franchising is not good. It has been proven, especially where Crown post offices are franchised, that franchising leads to expertise being lost: people leave, there is a reduction in the services provided and everyone loses out. I honestly hope that the inquiry that the Business, Energy and Industrial Strategy Committee is carrying out prods Ministers into effort and deeds, instead of kind words. Post offices need to be kept, and they need to prosper. We need them to support our communities.