Crown Post Offices: Franchising

Debate between Marion Fellows and Kelly Tolhurst

Thursday 10th January 2019 Westminster Hall

[Kelly Tolhurst]

I have heard what the hon. Lady has said today, and I will go away and look it. Every post office operates differently throughout the country. There is not a standard rule for all branches, but I will continue to look at the issues that have been highlighted. I care as much about our post office network as any hon. Member does, and that is not just because I am the Minister in post.

The Post Office’s financial performance has improved significantly, and consequently the Government funding required to sustain the network has drastically decreased and is set to decrease even further in upcoming years. It is the first time in 16 years that the Post Office has made a profit. There was a time back in the early 2000s when the Post Office had a deficit of more than £1 billion. Things have changed, and we are ensuring that we get value for money for the taxpayer while ensuring that we sustain the network.

[Marion Fellows]

The Minister is talking eloquently about the profits that the Post Office is making, but the people who run smaller post offices—the sub-postmasters —tell me that they cannot live on the new contract. When they have to hand back keys to local post offices, does she think it is right that the Post Office is making profit at the expense of these hard-working individuals?

[Kelly Tolhurst]

I understand why the hon. Lady has raised concerns about sub-postmasters, and she is absolutely right to do so. Whoever has my role in Government—whichever colour of Government—has a duty to defend the Post Office but also to hold it to account. Since being in post I have challenged the Post Office and will continue to do so. Yes, it is commercially independent and operates within terms. We represent the taxpayer, who is the shareholder and owner of the post offices. It is right that we hold the Post Office to account for decisions and that we exert influence where we can.

Changing consumer behaviour has been a serious challenge for post office and small retailers, including many postmasters, which is why in the autumn Budget we made decisions on business rates to ensure that we helped not only some of our sub-postmasters, but small retail more generally.

There is widespread misunderstanding that franchising is a closure programme that will lead to redundancies and the deterioration of services for consumers, but that is not the case. I appreciate that proposed changes to the delivery of post office services can cause concern in some affected communities, but post office branches are not closing—they are being franchised either on site or by relocating them to other high street locations.

Franchising has been common practice since 1635, when King Charles I issued a proclamation allowing the public to use Royal Mail. The model has endured to this day, and the vast majority—11,300 of our 11,500 post offices—are run successfully as a franchise or on an agency basis with retailers, whether large or small. Delivering post office services as part of a wider retail offer is a proven model that brings benefits to the community.

The hon. Member for Wigan raised concerns about the post office in her constituency, which is included in the 40 that will be taken over by WHSmith. Subject to consultation, WHSmith will take over the running of Wigan’s central post office. Let me be clear that the community in Wigan like other communities across the UK is not losing its post office. It will be relocated to a nearby WHSmith branch, and the services will be more accessible for customers.

Oral Answers to Questions

Debate between Marion Fellows and Kelly Tolhurst

Tuesday 8th January 2019 Commons Chamber

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

The Association of Accounting Technicians’ recent survey found that 73% of MPs agreed with its recommended changes to the prompt payment code, which are making the code compulsory, ensuring that larger businesses pay in 30 days and implementing a penalty regime. Will the Minister introduce those changes in legislation, to help the many small businesses that will benefit?

[Kelly Tolhurst]

I thank the hon. Lady for her question. As she will know, we launched the call for evidence in October, and it finished in November. We are reviewing the evidence presented. In October we made announcements to underpin, secure and make better the prompt payment code. The small business commissioner has delivered £2 million of collections for small businesses over the first year in his position. We will continue to work to ensure that small businesses get the payments they need when they should.

Oral Answers to Questions

Debate between Marion Fellows and Kelly Tolhurst

Tuesday 16th October 2018 Commons Chamber

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

And it continues to fight, as do I. Thank you all.

Some of our most important small businesses are local post offices. In 2017-18, post office profits rose to £35 million, while postmaster pay was cut by £17 million. Communities and the Post Office are facing a crisis as more and more postmasters resign, as they are undervalued and underpaid while executives receive a pay rise. What are the UK Government going to do to support sub-postmasters and make their businesses financially viable?

[Kelly Tolhurst]

Fundamentally, the Government absolutely support the post office network, and we are determined to make sure that it is provided across the country. As the Minister with responsibility for post offices, I have taken a particular interest in that since taking up my role. I am determined to make sure that we keep the network running across all parts of the country to benefit our communities.