Local Post Offices

Debate between Neil Coyle and Gareth Thomas

Thursday 30th January 2025 Commons Chamber

[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.