Future of Postal Services

Paulette Hamilton Excerpts

Tuesday 10th January 2023 Westminster Hall

[Tahir Ali]

My hon. Friend makes a very important point. If a post office operates as a franchise, it can close shop and go at any time. When someone is providing a public service, they have a duty of care towards the community. In rural areas, post offices are usually the only contact that people—especially elderly people—have with someone who is providing them with a service.

The value of postal services must not be overlooked. Citizens Advice reports that one in five residents visit the post office at least once a week, and in rural areas that figure is one in four people. That shows the continued importance of post offices to constituents.

[Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)]

I thank my hon. Friend for securing such an important debate. Post office staff work really hard, including in Erdington, Kingstanding and Castle Vale. We have seven post offices, but I understand that, despite one in five people visiting post offices every week, there are serious concerns about franchises being lost across the country. Does my hon. Friend agree that the Government should fulfil their duty and ensure that post offices are protected?

[Tahir Ali]

My hon. Friend makes an important point: we should not just look at the Post Office board; the Government have a role to play. I am sure that the Minister will respond to that.

Online shopping is growing exponentially in the UK, with the parcel market growing to over 50% of all post since 2010. Over 130 million parcels have been sent in the UK by small businesses. That has placed pressure on the postal sector to hire more employees and open more post office branches, with 11,365 branches open by March 2022. The postal service has worked hard to keep up with the surge of technology by signing contracts with Amazon, DHL and DPD, among others, to introduce click and collect services, and reaching agreements to deliver parcels to post office branches to meet higher customer expectations.

Despite all the changes, however, there are big cracks in the post office network that gesture towards a bleak future. Government funding for post offices through the network subsidy and investment grants declined from £410 million in 2012-13 to just £120 million in 2020-21—a reduction of 71%. Post office branches have been opened, but out of the 11,000-plus post offices, only 4,000 are open seven days a week and many provide only partial outreach services. By September 2021, over 1,200 branches had closed, which is double the number five years ago.

The accessibility of branches has become a massive issue in recent years; some constituents, especially in rural areas, only have a few post offices near them, and those either work on a part-time basis or are temporarily closed. Not all residents are tech savvy—I am not, either—meaning that post offices are a necessity for some, especially for banking. Over 110 million banking transactions were carried out in post offices in 2017. The number of branch closures has been rising steadily, and it is becoming harder for communities and businesses to access post offices.

The Government have played their part in creating an uncertain future for postal services by severely downplaying their role in helping the community and the economy, and significantly reducing investment in the network. Nick Read, the chief executive of Post Office, expresses the same concerns. He stated that the Government “should not overlook” the role of post offices and postmasters in keeping national and local communities connected, and urged the Government to extend their support for post office branches with energy bills beyond March 2023 to keep the postal service alive.

The CWU has described the continued selling off of post offices as “backdoor privatisation”, an assessment I agree with. It is evident that the increase in parcel delivery and collection, along with e-commerce, gives the Post Office a new opportunity for future growth. That is why we must continue to foster and grow our post office network through investment and not through sell-offs to the highest bidder.

To conclude, I have some pertinent questions for the Minister. First, at a time when the Government claim to be levelling up the nation, what are they doing to increase the presence of post offices in rural areas where elderly populations are reliant on these services? Furthermore, as more post offices are partial outreach services open for an average of five and a half hours a week, what impact assessment will the Government undertake to ensure that every member of the public has sufficient access to these vital services? Will the Government commit to restoring the post office network grant to previous levels as a means of providing real investment and modernisation to the network?

Do the Government agree that Royal Mail should see being the universal service obligation provider as a competitive advantage, rather than as something to be whittled away over time? Do they accept that those hard-working postal workers who put their lives on the line during covid-19 should be considered essential workers key to the national infrastructure? Will the Government confirm that they stand against the restructuring of Royal Mail into a casualised, gig economy-style service, which will prove detrimental to both staff and service users?

Will the Minister explain the reasoning behind allowing Vesa Equity to acquire a controlling stake in Royal Mail, particularly given the threat it poses to the future of both Royal Mail and universal UK postal services? Finally, does he agree that a postie is there for life, not just for Christmas?