Local Post Offices

Neil Coyle Excerpts

Thursday 30th January 2025 Commons Chamber

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

I was pleased to support the hon. Member for Taunton and Wellington (Gideon Amos) in securing the debate. It was not the first time I helped him as, in a funny quirk of fate, I house sat for him more than 20 years ago— I think it was 22 years ago, but he is welcome to correct the record if I have got the dates wrong.

I thank my London Bridge post office manager Priya and her dedicated team, including Clive and the Communication Workers Union members whom I am proud to serve. They in turn support and serve the London Bridge and Borough High Street community in extremely busy circumstances with massive footfall. That is why there is so much concern about the branch, as demonstrated by the petition to save the London Bridge post office started by London Bridge and West Bermondsey councillors Emily Hickson, Sam Dalton and Sunil Chopra. Hundreds of people have already signed that petition, which is on change.org, should anyone want to add their signature.

I went to the branch two weeks ago to meet the team and saw for myself how busy and loved it was. My constituent Mary—a lovely older lady—was there paying her rent at the time, but it is not just old ladies using post offices. This post office demonstrates how a diverse range of post offices is affected across the country as this branch is hugely busy and serves a massive and vibrant business community at Borough Market and around London Bridge. Of course, it also has London’s fourth-busiest train station right on its doorstep, providing commuter customers on Borough High Street.

I visited specifically because of the question mark over the branch’s status. I thank the Post Office for answering some of my questions and for joining me on that visit, but it is disappointing that the branch is in that position, not least because we have a new ministerial team, Government Ministers have stated that there will be £50 million of additional funding and there remains a commitment from the Government to ensuring that every community has access to a post office branch, which is incredibly welcome.

I am proud to have stood and won last year on a manifesto that said Labour would look for ways to strengthen the network in consultation with sub-postmasters, trade unions and customers. I am glad that the Government formally recognise that

“The UK-wide Post Office branch network is an essential part of the UK’s economic infrastructure, supporting high streets”

and “businesses”. That is incredibly refreshing after years of mismanagement and mixed messages from mixed Ministers from two different parties since 2010.

It is really useful to see the Minister in his place. We may disagree on one issue during the six nations, but he has been a massive champion of post offices and has said on the record that the Post Office should do more when it comes to providing banking services. He has been a doughty champion for the Co-operative party and a champion of post offices having a broader banking and financial footfall, whether that be through a credit union or banking. I hope to hear more from him on those issues. Like posties, he now has to deliver in office as a Minister. [Hon. Members: “Oh.”] Thank you.

I hope that we will hear when the Green Paper will be published. I think the aim is by the end of July. I hope that it will cover Link and the access to cash campaign, which is already part of that discussion, and that there will be space to talk about the future of business rates for post offices and whether there could be a community interest exemption.

I want to flag up a couple of concerns about how the London Bridge branch has been handled by the Post Office. It has an incredibly small team of less than 10 full-time equivalent, and they are incredibly busy, but they have met every target set by the Post Office, including a currency transfer increase last year of more than 20%—we are talking about millions of pounds there. The team have taken on additional services where possible, but those services they have lost have been the responsibility of the Post Office nationally and not the local branch. Sadly, they feel blamed for national Post Office failures.

Rent is also not the local branch’s responsibility; it does not determine the rent that it pays for its prime Borough High Street location. It is disappointing that the Post Office did not seek a rent reduction in 2020. I saw how, during the covid crisis, rents for commercial and residential premises fell for the first time in the 20 years I have lived in the borough. However, the Post Office failed to negotiate or seek a reduction. That is not the responsibility of the individual staff, who feel they are now being held culpable for a failure that sits elsewhere. It is hard to imagine an equivalent site locally that would be cheaper. If the branch moved away from its high street location, it would lose business and commuter footfall, which could reduce turnover. Those making decisions need to be mindful of that.

As was mentioned by the right hon. Member for Orkney and Shetland (Mr Carmichael), there is a lack of respect shown to customers and the workforce in the handling of this. Specifically on this site, the Post Office website said that an alternative provider was available on Blackfriars Road. Well, the Post Office shut that post office two years ago this month. It was supposed to reopen—the Post Office said it had bidders for it last summer—but, since my visit two weeks ago, the Post Office has now stated that it will not reopen the Blackfriars Road site at all, which is a massive disappointment for many in SE1 and the local area. The failure to communicate that—again, not a local responsibility—shows a lack of respect. The Post Office is supposed to follow principles of community engagement in how it handles these issues, but that has not been the case in Blackfriars. It must not happen again.

For people worried about that specific site, I want to flag up that there is a lot of interest in running it with an alternative provider. However, that must not come at a loss of services or a loss of rights for the workforce that the state picks up down the line, and all costs must be taken into account. When more is known—we think that will be in April—I will organise a public meeting with local representatives of the Post Office, the CWU and others, which I will advertise as soon as I can for everyone worried about this great community asset.

--- Later in debate ---

[Dame Harriett Baldwin (West Worcestershire) (Con)]

This has been an excellent debate, and I congratulate the hon. Member for Taunton and Wellington (Gideon Amos) on securing it and thank the Backbench Business Committee for awarding it. A consistent theme throughout the debate has been the important role the post office plays in communities across our land, providing what the hon. Member beautifully described as friendly access to key services that connect people, that service communities, particularly those without banks, and that help those unable to use the internet to connect to Government services. In West Worcestershire, we are fortunate enough to have 31 post offices, including some mobile services, and I put on record my thanks to all the friendly sub-postmasters and mistresses who provide those services.

Over the course of the debate we heard about places across the UK: Dunstable and Leighton Buzzard, South West Devon, South East Cornwall, Orkney and Shetland, Bermondsey and Old Southwark, South West Hertfordshire, Chelsea and Fulham, Didcot and Wantage, Glasgow North East, Stockton West, North Durham, Boston and Skegness, Bournemouth West, Thornbury and Yate, Leeds South West and Morley, and Wokingham, and in interventions we heard about Newton Abbot, Dawlish, Teignmouth, Basildon and Billericay, Dulwich, and Tiverton and Minehead. And I dare say, Madam Deputy Speaker, you feel strongly about the post office in Romsey. We can see just how incredibly valuable that network of friendly institutions is across the country.

I am afraid to say, however—and I break it gently to the Minister—that Labour’s Budget of broken promises is threatening that network. Through the national insurance jobs tax, the hike in business rates and the incoming employment regulations, Labour is hiking the cost of doing business, as swathes of post offices are facing tens of millions more in tax and red tape. Those pressures mean that the Post Office has been forced into assessing the future of more than 100 Crown post office branches. Rumours abound that when the Green Paper is published, it may include a consultation on the reduction in the number of post offices to below 11,500. Will the Minister put paid to that speculation by telling the House when the Green Paper will be published?

As the Post Office and its branch network are major employers, with more than 50,000 full-time equivalent workers, another impact is that the Post Office could face an extra £45 million bill as a result of the national insurance hike, according to the Institute for Fiscal Studies. Post offices are often eligible for retail, hospitality and leisure business rates relief, and they face a huge increase in their business rates as the relief falls from 75% to 40%. According to the Government’s own impact assessment, the Employment Rights Bill will cost businesses across the country £4.5 billion. Proportionately, given that Post Office has 50,000 employees, the Bill will cost the Post Office over £8 million. The House does not have to take that from me; I will quote the chairman of the Post Office, Nigel Railton:

“It almost goes without saying: we are a business in need of a fresh start – and urgently… And at the recent Budget, we saw…costs rise with National Insurance Contributions, National Living Wage and business rates.”

[Neil Coyle]

Will the shadow Minister give way?

[Dame Harriett Baldwin]

I will. I am sure that the hon. Gentleman does not like hearing that news.

[Neil Coyle]

It has nothing to do with hearing the news. I just wonder whether the shadow Minister can remind us how of many Crown post offices were lost while she was in government.

[Dame Harriett Baldwin]

I am just getting to that—the hon. Gentleman is absolutely on point with where I am going. Sadly, it was under the previous Labour Government that the network really shrank in a major way, when the number of post offices went into sharp decline, before it then stabilised in the 2010s. In fact, during the entire time that we were in coalition with our Liberal Democrat colleagues, and then in government ourselves, the network remained above that 11,500 figure. It takes action, as we have heard clearly this afternoon, to maintain that precious network.

[Neil Coyle]

Will the shadow Minister give way?

[Dame Harriett Baldwin]

I have already given way to the hon. Gentleman, thank you very much.

--- Later in debate ---

[Neil Coyle]

But you did not answer my question.

[Dame Harriett Baldwin]

I have given way.

The previous Government worked to enter into a new partnership with post offices and came up with the idea that people could confirm their identity in person. That is a way of using that valuable network across the land. We recognise that vulnerable people sometimes struggle to verify their identity online. We also began the initiative to help communities dealing with bank closures by setting up a network of banking hubs. I was pleased to hear the Minister confirm earlier today that he will continue backing banking hub delivery through the Post Office, but does he consider that the framework negotiations between the Post Office and the banks, which are in their final stages, are going well?

One year on from ITV’s historic programme “Mr Bates vs the Post Office”, I want to put on record my thanks to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) for all he did to address the issues raised in that programme. Can the Minister detail the progress his Government are making on the compensation for sub-postmasters?

I want to raise the issue of Fujitsu, which designed the Horizon IT system that has destroyed so many lives and livelihoods. Under the previous Government, there were discussions with Fujitsu about providing a share of the compensation to the victims of the Horizon scandal, and Fujitsu confirmed that it will pause bids for Government contracts until the public inquiry is concluded. However, this month it was reported that the Government have awarded new contracts to Fujitsu. When Labour was in opposition, many Labour Members criticised awards made to Fujitsu, so can the Minister provide an update on the Government’s current approach?

--- Later in debate ---

[Gareth Thomas]

I gently say to the right hon. Gentleman that we are where we are, and it is important that we move forward. I will come to the question of directly managed branches in a second.

To ensure that we are planning properly for the future, we will publish a Green Paper before the summer to seek the public’s views, insights and experiences to help shape the future of the Post Office. In the meantime, we are taking steps to continue to support the network. Along with the annual £50 million subsidy, we have provided a further £37.5 million to support the Post Office network next year.

Our thinking on the future of the post office will also be influenced by Sir Wyn Williams’s conclusions. We continue to support and encourage the chair of the Post Office, Nigel Railton, to shift the focus of the Post Office away from headquarters and towards postmasters. The Post Office, with our support, is reviewing its costs, as its financial position continues to be challenging. We are working with the senior leadership at the Post Office on future opportunities, beginning with banking, so that the company can increase its product offers and commercial revenue going forward. The Post Office has set up a new consultative council that will work with senior management on how these new plans are taken forward. It is a first, but none the less important step to change the culture of the Post Office.

Building a sustainable future for the Post Office is imperative. It has had many false new starts. Nearly half of its branches are not profitable or make only a small profit from post office business. Postmaster pay has not increased materially for a decade. Mr Railton is looking to deliver a reduction in the Post Office’s costs and, as I have alluded to, an increase in its commercial revenues. He has also set out an intention to transform the service and the support that postmasters receive from the Post Office, which we have strongly encouraged. He has announced ambitions for a new deal for postmasters, and I am pleased that the Post Office recently made a £20 million immediate one-off payment to postmasters to increase their remuneration.

On the future of directly managed branches, I appreciate that it is challenging for communities that lose their post office service. I speak from experience, having had Harrow’s directly managed branch close in 2016 and transfer to a franchise service instead. I am always happy to challenge the Post Office on specific concerns that Members have at constituency level. However, the Post Office operates as a commercial business, and the company has the freedom to deliver the branch network within the parameters we set.

I know there is concern about the future of DMBs, and it is important to underline that no definitive decisions have been taken on the future of any individual directly managed branch. I have made clear to the Post Office that there must be discussions with unions and other key stakeholders. I am pleased to hear that the Post Office has seen positive engagement from independent postmasters and strategic partners, who have expressed their interest in taking on DMBs. It is encouraging that there continues to be such interest in the chance to run a post office.

[Neil Coyle]

I look forward to working with the Minister on the future of the franchise in my constituency. Is he aware that there were 373 Crown post offices in 2010 but that by 2024 that number had fallen to 115? The shadow Minister either did not know that figure or did not want to admit it.

[Gareth Thomas]

Funnily enough, I am aware of that statistic; my hon. Friend makes his point powerfully.

We were clear in our manifesto that that we would seek to strengthen the Post Office network in consultation with postmasters, trade unions and customers, and that remains very much our ambition. That is one of the reasons why we are working closely with the Post Office in providing funding to support the replacement of the Horizon computer system. The Post Office’s future lies particularly in cash and banking. With the right support from the financial services industry and engagement with groups such as Cash Access UK, there is clearly more that the Post Office could offer on the high street through banking hubs and the Post Office network. We are beginning to work with the Post Office to improve its banking offer on the high street.

The Government are strongly committed to ensuring the long-term sustainability of the Post Office. It is a national asset that provides an invaluable public service in all our constituencies. There are certainly challenges ahead, but we continue to work with the Post Office to ensure that it is fit for the future. We always welcome views on the network. I thank those hon. Members who secured the debate and all other hon. Members for their contributions.