Post Office Closures

Marion Fellows Excerpts

Tuesday 19th October 2021 Westminster Hall

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

I beg to move,

That this House has considered the effect of post office closures on local communities.

It is a real pleasure to serve under your chairmanship, Mr Betts, and I will add my own tribute to Sir David. He was a wonderful man and will be sadly missed by everyone across Parliament.

I extend my thanks to the Backbench Business Committee and to all the Members present. I am sure they will be speaking about how important and valued their local post offices and post office staff are, and about the effect of post office closures on their communities. This debate on the effect of post office closures on local communities is important.

I thank the Minister for attending. I am glad that he is still in post. It is imperative that the UK Government have someone overseeing the Post Office brief who understands it, who can see that the Horizon scandal is concluded satisfactorily, with all its victims and their families compensated, and who will ensure that the post office network continues unabated.

Post offices are at the heart of our communities. They are used most regularly by the most vulnerable members of society—the elderly, people with disabilities and those who are unable to work, for example—and more than nine in 10 people agree that post offices provide an essential service for them or others. Communities suffer when post offices close, whether temporarily or for good. Local residents and businesses suffer serious inconvenience. For some, the withdrawal of perhaps their only regular human contact causes real misery and hardship.

As chair of the all-party parliamentary group on post offices, and on behalf of all its members, I thank postmasters and post office staff—those key workers— across the UK, who have served us well throughout the pandemic. They have been a lifeline to many people through their work at the heart of our community.

The APPG on post offices is close to my heart, as the plight of sub-postmasters in Motherwell and Wishaw was one of the first campaigns I was involved in. We have no secretariat for the APPG and I am very grateful for the additional work that my staff put in to ensure that the APPG runs smoothly. We are a big-tent APPG, with MPs and peers from all political parties and none, and diverse organisations such as the National Federation of SubPostmasters, the Communication Workers Union, Citizens Advice, the Association of Convenience Stores, and the Countryside Alliance. All those organisations are testament to the importance of the post office network across the UK.

[Kirsten Oswald (East Renfrewshire) (SNP)]

That broad range of stakeholders my hon. Friend has just told us about reflects the fact that a broad range of communities are still focused on the need for post offices in their local areas. Does she agree that we must heed the asks of community organisations? Broom, Kirkhill and Mearnskirk Community Council is keen to secure post office services in its local area, because it knows how much they matter for the most vulnerable in our society, as she said.

[Marion Fellows]

I thank my hon. Friend for her intervention. What she says is absolutely true. I am sure that all of us present and further afield would vouch for the real feeling for post offices across the entire UK. In fact, I have been known to say in the APPG that the reason I took on its chairmanship was to ensure that there was a network of post offices in an independent Scotland—that network is right across the UK.

We have also spoken to franchisee representatives, and we hold regular meetings with the CEO of Post Office Ltd and the Minister. Recently, the APPG decided to be less reactive and more proactive in its approach to sustaining the network. The APPG is currently compiling a Post Office action plan, to provide an outline vision for the network going forward. I hope the UK Government and Post Office Ltd will carefully and seriously consider the proposals put forward by members.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I am extremely grateful to the hon. Lady for giving way, for securing this debate and for the work that she does on behalf of our post offices. I am sure that, like many hon. Members, she has received representations over recent weeks from charities based in her constituency that are very concerned about commercial banks levying charges on their activities. For many of those charities and community groups, those charges are going to be prohibitive. Does she believe that the Post Office could fill the void that is being left by the commercial banks by providing a community banking service, expanding banking services, safeguarding the Post Office and helping to improve the lives of our communities?

[Marion Fellows]

I thank the hon. Gentleman for what he has said. Yes, I think that it could. Although the Post Office was almost coerced into taking on banking, it is something that we need to seriously look at. There are models in other countries’ post office networks, and there have been studies. That is an excellent suggestion.

As we all know, the UK Government are the owners of the post office network; they cannot sit idly by, allowing closures and the impact that they have on local communities and economies. The public expects the Government to play a proactive and direct role in preserving and growing the network. Post offices may not be the first things that spring to mind when thinking of public services, but whenever a post office closes it is always missed. Post offices are, without a doubt, valued public assets and must remain so. Closures not only create an inconvenience but harm local businesses and the welfare of local people, given that the most vulnerable people rely on post offices for access to cash.

[Wendy Chamberlain (North East Fife) (LD)]

I thank the hon. Lady for giving way and for her work with the APPG on post offices. In my constituency, which is facing four closures, the answer in the short term seems to be mobile services. Does she agree that those are simply insufficient for communities and that we should be urging the UK Government and the Post Office to look for longer-term solutions?

[Marion Fellows]

Absolutely. I thank the hon. Lady for intervening. Her constituency was one of the most affected by the SPAR closures in Scotland, to which I will refer later, as well as outreach services.

It is devastating for everyone when a branch is closed, especially when it happens in a rural community where the post office may be not only the last shop in the village but also the last bank.

[Rachael Maskell (York Central) (Lab/Co-op)]

I am really grateful for all the hon. Lady does on behalf of post offices. In York, in my short time in Parliament, we have lost post offices in Acomb and Tang Hall, we have lost two in Clifton and we have lost our Crown post office—it is now placed in a WH Smith, which is far more inaccessible than it was previously. Does she agree that, before any post office closure, there should be a community consultation about how that estate could be repurposed as a community service?

[Marion Fellows]

Absolutely. I know how hard the hon. Lady has worked for her constituents in York and with regard to the Crown post office closure there.

Post offices support local businesses. Half of those who started selling online during the pandemic have used the post office to post items, while three in four marketplace sellers say that if their local post office were to close, it would become difficult to send items to their customers. In my constituency of Motherwell and Wishaw, communities have experienced both temporary and permanent closures, notably the permanent closure of the Brandon Street Crown branch in Motherwell town centre. Sadly, many Crown branches have been closed—decisions typically opposed by the communities affected. Unlike smaller branches, Crown post offices offered a wide range of services, which made them service hubs at the heart of communities.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

While post office closures present a real issue for local communities, some initiatives have the potential to provide great support to those communities. Cambuslang in my constituency is home to a post office bank hub, which has massively increased access to banking services, and I was delighted that the Economic Secretary to the Treasury visited the constituency last week to hear all about that fantastic initiative. Does the hon. Member agree that the focus should be on rolling out these multi-purpose initiatives?

[Marion Fellows]

I thank the hon. Member for her intervention. I, too, visited Cambuslang a number of months ago, and it is a great initiative. The local community council fought hard for that pilot, and it was doing great work. I think there is a way forward through that kind of initiative, which again I will come on to.

There are multiple reasons for branch closures, but at the root of many of them is the issue of sub-postmaster remuneration. Post Office Ltd must agree a fair deal with sub-postmasters. The Horizon scandal has undoubtedly damaged the relationship between Post Office Ltd and sub-postmasters and staff, and the ongoing work to repair that relationship must continue. Now more than ever, it is essential that sub-postmasters are properly remunerated. Many of the sub-postmasters I have spoken to have said that they have handed in their keys because they simply cannot afford to live on the income they make from running a post office. Some sub-postmasters have even reported that they have been earning less than the minimum wage.

That is simply not good enough. Citizens Advice has found that the number of temporarily closed branches has doubled since 2013, and that two in three remain closed for over a year and two in five for over two years. Poor remuneration is not just forcing sub-postmasters to retire or postpone retirement; it is preventing a new generation from taking up the role, as they see no value in it. The UK Government must provide the funding, and Post Office Ltd must agree to guarantee a minimum income for every sub-postmaster so that their hard work pays off and running a post office can be an attractive opportunity.

Another reason for concern is the over-reliance on franchise postmasters—not independent sub-postmasters, I hasten to add, but large retail chains. Only this year, SPAR announced the closure of 31 of its 48 Scottish counters. If a larger retail partner were to go into administration or decide that having a post office counter was not worth their while, that could leave hundreds of communities without a local branch. I fear that Post Office Ltd is fighting a losing battle with large franchisees and putting all its eggs in one basket to meet the national access criteria. CJ Lang has said that it made more money from putting a Costa machine into a branch than it did from running a post office. That is an outstanding critique of what is wrong with the post office network at the moment. Can the Minister outline what the Government’s contingency plans are in the event that a large partner decides to close its branches, or close altogether? It is not just up to Post Office Ltd to sort this issue out.

As banks leave high streets and town centres, post offices are filling the gap. Over 4,300 bank branches and building societies have closed since 2015—over a third of the entire network. In fact, post office branches now represent 60% of all the UK’s branch-based cash access points. Banking and access to cash must therefore be part of the long-term vision for the network. In September, Post Office Ltd announced that it had taken in £2.9 billion of deposits, with that figure expected to rise to over £3 billion this month. Many local businesses are using post office branches to make deposits, and others who rely on cash are using those branches for withdrawals. As post offices take on a greater financial role, the security of branches and staff must be reviewed. In my discussions with sub-postmasters, they have raised concerns about security. I hope that the Minister will elaborate on what steps he has taken and what discussions he has had, or will have, with Post Office Ltd on the issue of branch security.

[Rachael Maskell]

I am grateful to the hon. Lady for being so generous. When a company in the rail industry cannot operate, an operator of last resort is backed by the Government. To maintain these community assets, surely we need a model whereby the Government step in; and would that not also be a step towards what is really needed, which is to look at nationalising the Post Office, which we know our communities really do want?

[Marion Fellows]

I thank the hon. Lady for her intervention; again, she hits the nail right on the head. I welcome the pilot of the post office banking hubs. However, I am aware that many sub-postmasters are concerned about the impact they will have on existing branches, and I share their concerns. We cannot have branches in competition with and cannibalising each other. The full impact on existing branches must be watched closely.

However, I give full support to the private Member’s Bill in the name of the hon. Member for North Norfolk (Duncan Baker), who unfortunately cannot be here today. It aims to establish in law that major banks will be obligated to provide banking services through local post office branches.

Banks have been let off the hook. They are abandoning town centres, villages and customers. Not only should banks be mandated to provide their services through post offices via the banking framework, they must be made to pay for the outreach and banking services that the post office network provides. At present, many sub-postmasters are subsidising the running of these services. That cannot be allowed to continue. Will the Minister confirm today that the Government will back the Bill from the hon. Member for North Norfolk and, if not, what alternatives will be put in place?

Post offices are just one means of accessing cash, and losing a bank branch can make it much more difficult for people to access cash. The UK Government previously committed to an access to cash Bill, which has not yet been forthcoming. We are hurtling towards a cashless society, which will undoubtedly impact the most vulnerable people. Measured action is needed so that cash can be available free of charge to those who prefer it. Can the Minister confirm whether it is still the Government’s intention to introduce a Bill in the coming parliamentary term?

I understand that some of this is under the auspices of the Treasury, but we cannot keep passing the buck and going backwards and forwards, nor can we have the silo mentality whereby one Government Department is responsible for the money to post offices and the Minister has to say, “Well, it’s not my job, it’s the Treasury.” We need joined-up thinking on this.

The Post Office has massive potential to provide not just banking services, but a range of services. The UK Government have previously committed to making post offices the front office of Government. With over 11,500 branches across these islands, they are perfectly placed to be that, but the UK Government have pulled service after service from the network, most notably the Post Office card account. One million people used a POCA in 2019 and this has fallen since the forced migration of recipients to bank accounts.

However, for many, a bank account is still out of reach. It is also an additional and unnecessary hoop for people to jump through to receive their benefit payments or pensions. It makes no sense that when banks are leaving and post offices remain, a greater emphasis would be put on banking.

Other services, such as biometric enrolment and HMRC payments, have also been removed. Whenever the UK Government remove a service, that means less income for the post office network and its sub-postmasters, which makes closures more likely. The income derived from these services can be small, but proves how important it is to encourage people to use their post office services.

The Minister has heard me speak many times on post offices, as has everyone else in this Chamber. That is because they are an important service that people across the UK recognise, use, value and need. It is vital that the post office network continues in spite of the difficulties that Horizon has forced on to Post Office Ltd. I appreciate that the Government have given money, but I and many others are concerned that the situation will lead in the end to a diminution of post office services. I plead with and urge the Minister to make sure that the post office network continues, grows and thrives, and that those who run post offices on our behalf are suitably recompensed.

[Mr Clive Betts (in the Chair)]

Six Members have indicated that they would like to speak. In order to start the Front Benchers at no later than half past 10, I would suggest about six minutes for each Back Bencher. I call Andy Slaughter.

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[David Linden (Glasgow East) (SNP)]

It is, as always, a great pleasure to serve under your chairmanship, Mr Betts, although I must say that I miss seeing my friend Sir David Amess sitting in that chair, here in Westminster Hall. If the hon. Member for Strangford (Jim Shannon) is a season ticket holder for Westminster Hall, then I am an aspiring season ticket holder. Of course, another Member who was in here very often—if not in the chair, then on the Benches opposite—was Sir David.

As this is the first opportunity I have had, I place on record my sincerest condolences to Sir David’s wife Julia, to his children, and to his staff—particularly Gill, who worked for him and has been such a support to the all-party parliamentary group on fairs and showgrounds, which David led superbly. I know that we will all miss him enormously.

I also want to acknowledge and thank my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) for initiating this morning’s debate. She is a tireless campaigner for post offices, whose work has shown their importance to our local communities right across these islands.

[Marion Fellows]

I crave everyone’s indulgence; I lost the last five pages of my speech, but I really must use this opportunity to raise a couple of issues. A moratorium on the closure of Crown post offices, which was negotiated by the Communication Workers Union, is due to end next year. Will the Minister please confirm that it will continue? Will he also speak to other Departments within Government to find out what other services they can put into post offices, with charges that will help sub-postmasters’ remuneration?

[David Linden]

I congratulate my hon. Friend on being so versatile as to ask questions to the Minister through me. I feel like the Cilla Black of Westminster Hall here in pulling people together, but she is right to place on record those questions to the Minister. I join her in paying tribute to the Communication Workers Union, which has campaigned tirelessly on Crown post offices. We very much reaffirm to the Minister the need to see more progress.

Over the course of this debate, we have had 11 contributions from Members in all four constituent parts of the UK. That in itself shows that this is not an issue that affects only Scottish MPs, but that there are wider issues around the sustainability of the post office network right across these islands. In my own consistency of Glasgow East, even in my short time as an MP we have seen the closure, both temporary and permanent, of post offices in Cranhill, Garthamlock, Tollcross and Parkhead. That is four post offices in the four years I have been here.

The closures have had far-reaching consequences for my constituents, and many have felt the absence of the postal services in their local area. Post offices provide essential services for local communities across these islands, from mailing and posting to accessing pensions and benefits. On the subject of benefits, the decision by the Department for Work and Pensions to move away from the Post Office card account is particularly damaging for the sustainability of post offices. As I have said many times before in the House, we must ensure that vulnerable people and particularly our older constituents still have access to cash. I will return to that point later.

Despite all the vital services they provide, post offices are routinely being shut down across these islands. In 2001, there were just over 1,900 post offices in Scotland; pre-pandemic, their number had dipped to 1,300, and we know there have been further casualties in the network since then. In August alone, my small urban constituency saw the closure of not one, but two post offices, in Garthamlock and Parkhead. Though there may be light at the end of the tunnel for residents in Parkhead, the broader picture suggests that local services in the east end are being decimated, with communities being abandoned as the post office network collapses like a pack of cards. Put simply, it leaves my constituents and I continually worrying about which post office will be the next to close. I have a lot of time for Mark Gibson at the Post Office, but every time I see his name in my inbox it spells out that yet another closure is coming.

As part of the campaign to save Garthamlock post office, I and a hard-working local councillor, Ruairi Kelly, met with CJ Lang & Son Ltd to better understand how the situation came about and continues to crop up. I also met with Calum Greenhow from the National Federation of SubPostmasters. I have raised this issue in the House before, but through my meetings it has become clear that Post Office Ltd struggles desperately to get sub-postmasters to take on branches and indeed keep them on. For many, it is an inescapable fact and a financial reality that branches are not economically viable, forcing them into the difficult decision of closing down. For operators such as CJ Lang, which at the end of the day is a private enterprise, that is a black and white commercial decision, which I understand from a very crude profit/loss perspective.

I think it was my hon. Friend the Member for Motherwell and Wishaw who mentioned that in many cases, it is more profitable for CJ Lang to have a Subway store or a Costa machine. That highlights some of the major problems. Clearly, there are problems with the fundamental business model for post offices, which needs addressing. That is something that I and many other Members have raised with the British Government, but it appears thus far to have fallen on deaf ears. As we see post offices being closed, we risk inflicting huge and long-lasting damage on local communities, which rely heavily on post offices and the services they provide, particularly after banks have long taken flight.

The importance of post offices in providing access to cash is a particularly prevalent issue in my constituency in the east end of Glasgow. The consumer group Which? has recently undertaken research that identifies 259 communities from across the UK with poor cashpoint provision or no ATMs at all. The Federation of Small Businesses has reminded us that when an area loses cashpoints, it has real impacts on surrounding small businesses: sales fall as customers who want to pay with notes and coins are left in the lurch, and footfall drops as shoppers head to other areas with greater access to cash. The recent decision by Barclays to continue allowing customers to freely access cash at post offices was the right one.

We need to see continued support from banks for the post office network, not least because we know that banks, when—I was going to say when consulting, but actually more often when giving us notification of closures in our constituencies—often say to us, “Oh well, the Post Office can step in and backfill,” only for the post office network to be eroded further after that.

In the 2020 spending review, the Treasury announced £227 million worth of investment in the Post Office, including a subsidy of £50 million to protect customers’ access to essential services in commercially challenging locations. I question whether £227 million of funding is enough, but it is a step in the right direction. I hope the Minister can provide an update today—specifically on which locations have been deemed to be commercially challenging, how the money will be allocated and what the timescale will be. Given that I lost not one but two post offices in the space of the month this summer, I suggest the east end of Glasgow ticks the commercially challenging box without a doubt.

Thus far, the British Government are failing way short of meeting their responsibility to provide and uphold postal services in our communities. As a constituency MP, I am clear that the continued threat to post offices puts vulnerable and older constituents in Glasgow at grave risk of losing yet more vital services in an area that has already been hit extremely hard. To be blunt, Ministers in Whitehall must stop viewing post offices through a narrow commercial prism; instead, they must see them as pieces of vital community infrastructure that need protection and investment. I say to the Government very clearly that they cannot level up communities when shutters are being pulled down.

--- Later in debate ---

[Marion Fellows]

I thank everyone who has taken part in this debate. As ever, it has been cross-party and hon. Members have put passion and experience into their contributions, and I welcome that. I also welcome the Minister’s comments. He and I are old comrades in arms; he has visited the APPG and will be coming back soon, as will Nick Read and others, because this has to go forward. I am concerned that the Post Office has been put on a path of managed decline and that the Horizon scandal will affect that. We must not lose sight of Horizon. People deserve justice and just compensation but it cannot be at the expense of the network. It is vital that we recognise the work of people in post offices: sub-postmasters, Crown post offices and those independent retailers who do so much to enliven and help their local communities. I see that I am running out of time but this is important. I have written on behalf of the APPG to the Chancellor demanding that he give money to post offices so that they continue to be a vital part of our local communities and also help in town regeneration and levelling up.

Question put and agreed to.

Resolved,

That this House has considered the effect of post office closures on local communities.