Post Office Closures

Debate between Rachael Maskell and Marion Fellows

Tuesday 19th October 2021 Westminster Hall

[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.

[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.