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Madam Deputy Speaker (Ms Nusrat Ghani)
Before we begin the next statement, I remind the Front Benchers that there are time limits on each of their statements. In particular, the Liberal Democrats tend to be running over.
Madam Deputy Speaker
I know—not the present Front-Bench spokeswoman, but they have been all afternoon. Please keep within time limits.
The Parliamentary Under-Secretary of State for Business and Trade (Blair McDougall)
With your permission, Madam Deputy Speaker, I would like to make a statement on the Government’s response to the results of the “Future of Post Office” Green Paper. We published the Green Paper in July, starting a national conversation about the future of the Post Office, an institution that has served every community in every corner of the United Kingdom for generations. More than 2,500 people took the time to respond to the consultation, including postmasters, small businesses, service providers, community groups and members of the public. We also held dedicated discussion groups with postmasters and citizens across the country. I therefore start by thanking every respondent; their views provided a wealth of insight, and have been carefully considered.
I am pleased to announce that we are publishing the Government response to the consultation today. Our response must echo the clear call we heard from respondents. They told us that they want a strong and convenient post office network, built around permanent, full-time and full-service branches that offer a wide range of essential postal, banking and Government services. They want a Post Office that is reliable, modern and transparent, and that puts postmasters at the heart of decision making. As such, I can confirm today that the Government will keep the minimum network size of 11,500 branches and will retain all six geographical access criteria, ensuring that communities across the UK continue to have local and reliable access to postal services, including rural and remote areas.
Alongside maintaining the network requirements, we are introducing a new requirement that at least 50% of the network must be full-time and full-service branches. This requirement sets 50% as an absolute minimum, and we expect the Post Office to continue to operate substantially above it. We are setting this requirement to ensure that the full-time, full-service branches remain the backbone of the network for the foreseeable future, as those are the branches that deliver the greatest social value and the strongest customer service. At the same time, we are not blind to the challenges facing the Post Office, and have built in an evidence-based process so that we know when it is the right time for Government to look at the post office network again.
However, stability requires investment. That is why over the next two years, the Government will provide up to £483 million to support the transformation of the Post Office, on top of network subsidy funding to support the costs of delivering Government policy, which will be £70 million in financial year 2026-27. This investment funding will modernise branches across the country. It will support new in-branch technology and the delivery of new products and services that will make sure the Post Office can do what its customers need it to do, while keeping its identity and its role at the centre of so many UK high streets. The funding will also enable a major technology transformation programme within the next five years that will transition operations away from Fujitsu and ultimately replace the Horizon system. Postmasters must be able to trust the technology that they use; it should make their jobs easier and help them spend their time doing what they do best, which is serving their local communities. The days of the Post Office relying on outdated systems must end, and this programme lays the ground for a modern, resilient and fit-for-purpose organisation.
The consultation reinforces the importance of the Post Office for post, of course, but also for banking and access to Government services. I would like to address some specific points about each of those areas. First, on postage, respondents told us that they value the Post Office as a multi-carrier parcel hub and want more choice and convenience in how parcels are sent and received. We will support the Post Office’s efforts to innovate in this space while ensuring that essential services remain accessible.
Secondly, on banking, the public were clear that the Post Office plays a critical role in ensuring communities have access to cash and in-person banking. Being able to access essential banking services such as cash withdrawals and deposits is valuable to many Post Office customers, in particular small businesses, and respondents expressed an appetite to increase their offer. Last month, the Government held discussions between the Post Office and the banking sector to explore where they may be able to work together on a commercial and voluntary basis to better meet the needs of individuals and businesses. Those discussions were based around areas of mutual interest such as banking services, financial inclusion, modernisation, and the importance of continuing to improve financial crime safeguards. Those conversations are ongoing.
Finally, on Government services, colleagues will know that many services have moved online. However, respondents told us strongly that vulnerable, digitally excluded and rural customers continue to rely on the Post Office for in-person services. In that spirit, we have established a cross-Government group to look at developing a common physical front door for Government services, expanded assisted digital support, and new propositions such as prescription collection and identity verification.
At the heart of the Green Paper and of today’s Government response is the need to strengthen the relationship between the Post Office and postmasters. The Horizon scandal was one of the worst miscarriages of justice in modern British history, and while the Government remain focused on delivering redress to victims as rapidly as possible, we must also ensure that the culture that enabled those wrongs can never return. The Post Office has already taken steps to rebuild trust, including the postmaster panel, a new consultative council, embedding postmasters in key teams at the Post Office’s head office, and the election of postmaster non-executive directors to the board.
However, we agree with respondents that more is needed. As such, I can confirm today that the Post Office will develop a culture strategy with measurable objectives that covers employees, postmasters, strategic partners and customers. The Government expect that plan to be in place by this summer. To ensure that these reforms genuinely meet the needs of postmasters, the Government have commissioned an independent external evaluation of the initiatives the Post Office has implemented to strengthen postmaster engagement, which will report later this year.
Our long-term goal is a Post Office that is financially sustainable, adaptable to changing markets and less reliant on Government funding, but this transition must be responsible and realistic. Respondents were clear that stability comes first, particularly while the Horizon inquiry continues. That is why the Government will provide £37 million of funding to the Post Office in the next financial year to support with the costs of administering redress and responding to the inquiry. While the Green Paper explored long-term governance ideas such as mutualisation or a charter model, the Government will not make any decisions on structural reform until after the final report of Sir Wyn Williams’ inquiry. In the meantime, we will work with the Post Office to ensure that the organisation demonstrates financial discipline, generates a trading profit by 2030, and continues to reduce reliance on taxpayer subsidy while protecting access for communities that depend on it.
This Green Paper process and the thousands of responses we received show the enduring importance of the Post Office to the life of this country. The Government’s response sets a clear direction: we are maintaining a strong and accessible network, backing postmasters through major investment and cultural reform, modernising services for a digital age, and setting the Post Office on a path towards long-term financial and operational stability. The Post Office must be modern, resilient and trusted, shaped by the communities it serves and built around the people who run it. With today’s response, we take a major step towards that future.
I commend this statement to the House.
Dame Harriett Baldwin (West Worcestershire) (Con)
I thank the Minister for advance sight of his statement, and—I do not often say these words—I warmly welcome the decision that he has announced. It seems that the Government have abandoned the risk, posed by their earlier proposals, that they would shutter thousands of local post offices, especially in rural areas. It is a great relief to those in villages and high streets that the Government have listened to the people who engaged with the consultation and the 180,000 who signed our petition, and have heard the calls from the readers of The Mail on Sunday, the Express, The Daily Telegraph and other media outlets, all of whom were outraged by the possibility that the Government would close their much-valued local post offices.
By keeping the minimum network size at 11,500 branches, as it was throughout the 14 years we were in government, and by retaining all the geographical access criteria, the Minister has avoided a U-turn. In fact, I would describe what he has done as avoiding a chasm that was opening up in the road in front of him, and avoiding it niftily. The campaign that we led showed how important it is to voice the concerns of the vulnerable, those who are digitally excluded and the small businesses that rely so much on our precious post office network. May I add my thanks for the hard work of every postmaster and postmistress in Britain who keeps that network going?
However, it is not all sweetness and light for me today. The post office network, like so many retailers, faces a tax hike—in this case, a hike of £45 million—because of the national insurance increase. Many post offices are also seeing increases of more than 100% in their business rates. The chairman of Post Office Ltd, Nigel Railton, made it clear that it was precisely because of the rising costs resulting from the changes in national insurance and the national living wage that the business needed a fresh start. We cannot claim to support the backbone of the network while breaking its back with tax hikes. The Conservatives have always stood up for our nation’s high streets, and we would introduce a permanent 100% business rate relief for retail, leisure and hospitality businesses whose premises are under the rateable value threshold of £110,000.
I have a few questions for the Minister. He announced a requirement for at least 50% of the network to be full-time and full-service. I believe that the number today is 79%. Is that not a downgrade, and what does he expect from the other 29%? Will he confirm that no small rural branches will be consolidated and replaced by city-centre hubs under the guise of this new 50% full-service requirement? Will he please expand on the minimum service that he would expect those smaller branches to deliver?
The Minister committed himself to a technology transformation programme to replace the Horizon system within the next five years. I heard about the first two years of funding, but will he give us some details about how the current system will be maintained after those first two years? He mentioned the importance of the post office network, given the number of banks that are closing branches all over the country. Has a new, specific agreement been made with the banks to provide additional support for post office branches in areas where banks are closing? What update can he give the House about the discussions with Fujitsu and its financial contribution towards Post Office redress?
The Minister has clearly been forced to listen. He has been forced to do a pre-U-turn on the proposals to reduce the size of our precious post office network. He has been forced to admit that our high streets deserve better than the managed decline that was a risk under those earlier proposals, and this is a victory for all our constituents.
Blair McDougall
I think that if I am praised much more from the Opposition Benches, I will be drummed out of the Brownies.
I welcome the hon. Lady’s response to my statement. I believe that there is consensus across the House on the important role that post offices play in our communities, and particularly in our high streets and remote villages. I join the hon. Lady in welcoming the campaigning of Mail and Express readers, who have voiced very clearly the importance of post offices to their communities. In my capacity as both postal services Minister and small business Minister, I also echo her words about the essential function of post offices in providing a place for small businesses to drop off their takings.
The hon. Lady referred to the costs faced by the Post Office, which is a point well taken. The Government are putting £483 million into the transformation of the Post Office to ensure that it has a financially sustainable future as a business on our high streets and in our villages. She asked specifically about support for the IT transformation. Of the more than £500 million that the Government have committed to transformation, including the money already spent before the Green Paper, £136 million is committed to technology and to replacing the Horizon system, which is a major priority for us. However, that transformation investment—beyond what we are putting into IT—will also enable the Post Office to do new things. The debate about the Post Office often concentrates on the idea of its being the last place to do things, but, having talked to the management of Post Office Ltd, I am greatly encouraged by their wish for it to be the first place that people think of in connection with cash and other high street services.
The hon. Lady asked about the additional 50% trigger, and, entirely fairly, raised the question of what it would mean for rural areas. The criteria for access to the full set of services that a branch provides are being maintained, so those protections are still there. This is very much an additional protection, rather than an alternative to the protections that were already there for rural post offices. For example, “drop and collect branches” that do not offer the full service are included in the 11,500 criterion, but are not included in the access criteria. This is about protecting access to as full a range of services as possible.
Finally, let me respond to the hon. Lady’s question about Fujitsu. When I met Fujitsu representatives shortly before the end of last year, I made very clear our belief that—as they have said themselves—they have a moral responsibility to contribute substantially to the costs of redress. They have said that they wish to wait until Sir Wyn’s inquiry before making a decision on that, but we will continue to have those discussions.
Mr Clive Betts (Sheffield South East) (Lab)
I warmly welcome the Minister’s statement. May I raise two specific issues relating to post offices in my constituency?
First, Mosborough post office, a fairly small but growing business, is on the margins of viability. Will the Minister think again about how small post offices in communities that rely on them can be supported? Secondly, the Lloyds bank branch in Woodhouse—the last bank there—has closed. Woodhouse is an old mining community. We thought it was an ideal place for a banking hub, and we had someone willing to run it: Richard Trinder, the sub-postmaster at Handsworth post office. However, the plan was turned down because the banks were not prepared to fund it The Minister mentioned discussions with the banks and the Post Office about a voluntary agreement. Will he have a look at what he might do to enforce such agreements, and change the criteria for banking hubs when they could be vital to local communities?
Blair McDougall
My hon. Friend has made some important points, particularly about the smaller post offices which, as he says, are often the ones that struggle and may be less able to invest directly to tackle some of their problems. The money that we are putting into network transformation is important because it can enable those that may be struggling at the moment to become viable businesses. Just before the end of last year, Treasury Ministers and I chaired a banking roundtable. As my hon. Friend says, we are talking about a voluntary relationship, but all the banks recognise the critical importance of the post offices and of access to banking services for their customers, especially in the light of recent high street bank closures. That recognition is, obviously, shared by the Government.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Olney
I thank the Minister for advance sight of his statement, and I promise to set a good example for colleagues by keeping my response brief.
As the Minister has laid out, the responses to the consultation underscored the importance of post offices as community hubs that provide vital services, not least to NHS patients through the delivery of important medical correspondence. Some 99.7% of the population live within three miles of a post office, and 4,000 of these branches are open seven days a week. That is an increasingly important statistic, given the rapid closure of high street services such as banks over the past decade. The Minister has said that at least 50% of the network must be full-time and full-service branches. Many people rely on the post office to provide vital services, so can the Minister confirm that we will not see a reduction in the number of full-time branches and that he will ensure that opening hours continue to meet the needs of working people?
The Minister also referred to the important community banking service that post offices provide, but he did not provide specific assurances to the House about other services provided by the Post Office, such as Driver and Vehicle Licensing Agency services and Passport Office services. He mentioned expanded digital services, but these will not help many of our constituents who live in remote areas with poor broadband access or difficult phone service access. Can he provide a commitment that the Post Office will continue to provide physical services for people who will have difficulty accessing DVLA and passport services digitally? Can he confirm that these will remain in post office branches beyond March 2026, and will he commit to multi-year contracts, in particular with the DVLA?
Blair McDougall
I thank the hon. Lady for welcoming today’s statement. On the additional protection that we are bringing in, I reassure her that in addition to maintaining the network of 11,500 post offices, the access criteria stipulate that 99% of the UK population must be within three miles of a post office outlet, 90% must be within one mile, 99% of those living in deprived urban areas must be within one mile, 95% of the total urban population must be within one mile, and 95% of the total rural population must be within three miles. Then we have the additional protection, particularly in rural areas, that 95% of the population in every postcode district must be within six miles of a post office. They will all be maintained, which should reassure her.
The hon. Lady makes a point about ensuring that post office hours match people’s lives, which is something that postmasters are doing already. I visited a post office in Acton that stays open at weekends and till 11 pm, so that other retailers, such as grocers, can come and put in their takings.
Finally, we recognise the importance of post offices for vulnerable people and those who, for whatever reason, might struggle with the choices that many other people are making about accessing Government services online. That is one of the key reasons why we are keeping the network at the level it is at the moment. As I mentioned in my statement, we are also doing work across Government to look at the idea of a single front door for face-to-face Government services and the role that the Post Office can play in that. We are looking to enhance the role that the Post Office plays.
Tom Hayes (Bournemouth East) (Lab)
I welcome the announcement of £483 million to invest in our post offices around the country, and I join the Minister in thanking our postmasters and postal staff, particularly those at the Southbourne Grove, Malmesbury Park, Hengistbury Head and Sea Road post offices in my constituency. What happens at Royal Mail affects our postal services—it is unavoidable—so I am concerned about the adoption of the optimised delivery network in Bournemouth and more broadly. The Minister and I were recently at a meeting with the Post Office in which we had a private discussion about its future. Does he agree that the work of the Government in this area is key to building pride in our communities, tackling antisocial behaviour and having a diverse mix of offer on our high streets? That is the only way in which we will truly regenerate our high streets in Bournemouth and across the country.
Blair McDougall
I pay tribute to my hon. Friend for campaigning for his own high streets, and particularly for his local post office network. He is absolutely right to say that our response recognises the importance of post offices as anchors in high streets—they help drive footfall. The community hub model that the Post Office is piloting is an example of how we can build on that and expand post offices’ role as anchors in high streets, but he is right: this has to be seen across the wider effort that we are undertaking to make high streets somewhere people choose to go, to make them more attractive and to make them places where people choose to shop. High streets and high street businesses are not just part of the community; they are where our communities are made.
Mike Wood (Kingswinford and South Staffordshire) (Con)
Kingswinford is the largest town centre in my constituency, but it has been without a post office since the Midcounties Co-operative closed the store in which the post office was located. That loss has become even more significant since Lloyds bank announced this month that it was closing the only bank in the town centre. The Minister has spoken about retaining a minimum post office network, but what will the Government do to help re-open post offices in town centres that do not currently have a post office, such as Kingswinford?
Blair McDougall
The hon. Gentleman makes a really important point: it can be really devastating when a post office closes, particularly in a small community. There will always be churn within the network—there will be businesses that succeed or fail as post offices. Our job is to make sure that the overall criteria are there and that the overall level of access is there for people.
The hon. Gentleman asks what we can do to bring businesses and post offices back to areas such as Kingswinford. The transformation investment that we are putting in is so important, because that is what makes the overall business profitable, but it also enables the Post Office to give a better deal to postmasters, which makes it a more attractive business to open in communities like his.
Adam Thompson (Erewash) (Lab)
High streets in towns like Long Eaton have come under growing strain in recent years, not least because of widespread bank closures, but around one in five people is still not using online banking—a group that disproportionately includes older and disabled residents. I am fighting hard for the establishment of a banking hub in Long Eaton. Given the clear need for accessible financial services, what role does the Minister envisage for post offices in supporting the regeneration of high streets in Erewash, and what support is he providing to strengthen the Post Office’s financial services?
Blair McDougall
I pay tribute to my hon. Friend for the campaigns that he runs in defence of his local high streets. Just before the end of the year, we brought together Post Office Ltd and the high street banks to begin a discussion about the future of banking and financial services within the Post Office and the role that it plays, not just in ensuring that people have access to banking services but in bringing footfall to local high streets. The revenue that the Post Office receives from the financial services and banking side of its business has doubled over a period in which its revenue from delivering letters has declined, so we are absolutely clear about the importance of the Post Office’s banking services to the future of local high streets.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I have a particular interest in this matter, because the world’s oldest post office is in Sanquhar, in my constituency, which has operated continuously since 1712, despite some scares in recent years. The Minister would be very welcome to visit it. I urge him to get some urgency into the discussion with the banks, because there is significant confusion between the banking hub legislation and rules and the role of the Post Office. For example, in Sanquhar, although the Bank of Scotland has provided a banking adviser to come to the community following the closure of its branch, it will not allow that person to meet people within the post office. Likewise, in Moffat, where we had a bank closure, the post office will not operate a vital cash machine that is required in that community. Will the Minister increase his efforts to get the banks and post offices together to get a co-ordinated approach?
Blair McDougall
I was going to make a cruel joke about the right hon. Member remembering the opening of that post office, but I am too fond of him to do that. He pays tribute to it, and I would gladly visit, perhaps on the way back to my constituency from Parliament one weekend. I have relatives in his part of the world, so perhaps I can double up on my reasons to visit.
As I have mentioned, we absolutely understand the centrality of banking services to the sustainability of the Post Office. We had that roundtable, and even though the banking framework has just been renewed, we have already started conversations on this. Ultimately, those will be conversations between two commercial entities, but we are facilitating them, because we recognise their importance.
Jessica Toale (Bournemouth West) (Lab)
Last year, I ran a community campaign to save Westbourne post office, which mobilised thousands, and the post office was kept open. I also put pressure on Post Office Ltd to reopen a full service post office in Bournemouth town centre after the WH Smith closed, and one is opening in May. Residents should not have to fight so hard for their post offices. They provide a vital lifeline, especially for older and more vulnerable residents, allowing them to access government services, and for our local businesses, as we have heard. How will the Minister ensure that post offices remain a fixture on our high streets, and play a crucial role in revitalising our high streets and town centres?
Blair McDougall
My hon. Friend is a constant campaigner on behalf of local post offices, and I am not surprised that she had that victory. I look forward to visiting her constituency, and she can perhaps introduce me to the local postmasters while I am there.
I have mentioned the transformation programme that we are funding, and while there will always be churn in the network, with some businesses closing and some opening, that should be part of a natural cycle, rather than because of business distress. The transformation programme is about making sure that there is good postmaster remuneration, so that businesses succeed, and I will continue to work with my hon. Friend to make sure that the post offices in her constituency—and everywhere—thrive.
Aphra Brandreth (Chester South and Eddisbury) (Con)
I welcome the Government’s commitment to retaining the minimum network size of 11,500 post office branches. The Minister will know that I have campaigned extensively on this issue, not least because I do not have a single bank branch in my entire constituency. There is a particular need for post offices in rural areas where other service provision is limited. What support will be given to rural villages like Kelsall and Threapwood, where the post offices are closing? Despite every effort, there has been no possibility of reopening a branch in those villages.
Blair McDougall
I remember responding to a debate in which the hon. Member campaigned vociferously on behalf of post offices in her constituency, and I think today is tribute to the campaigning done by her and by other Members on these issues. I remember her telling me that her constituency not only does not have a post office, but does not have a McDonald’s, which is extraordinary. Again, we are maintaining the access criterion that means that the Post Office has to maintain accessibility for people in rural areas, but ultimately it is by making businesses profitable and making the remuneration for postmasters attractive that we will achieve what she seeks to achieve.
Dr Scott Arthur (Edinburgh South West) (Lab)
In a previous statement, I learned that the directly managed post office in Wester Hailes in Edinburgh South West was to close. It was a really concerning time for the community, but Mohammed Arshad and his sons Aamir and Adam stepped up and absorbed the service into their shop, Plaza News. Residents now have longer opening hours in which to access services, and they can do their banking, pay bills and get their passport checked. It is the most British of places; people queue to send their parcel via Royal Mail, Parcelforce, DPD or, if they are feeling brave, Evri, while browsing wool, knitting needles and knitting patterns in the aisle. It is a fantastic place. While news of the transition was concerning, particularly when it first broke, I really think that the community has ended up in a better place. Can the Minister reassure Mohammed and his sons that what has been announced today will enable them to serve their community more, rather than less?
Blair McDougall
I am very happy to reassure Mohammed and his sons about that, and to thank them for the work that they do for the community. My hon. Friend mentions the post office staying open for longer; that is typical of postmasters, who are not just running a business, but have a really clear sense that they are serving their community. That is why getting this right, and succeeding with the vision that we have set out in this Green Paper, is so important.
Andrew George (St Ives) (LD)
I welcome the statement, and I welcomed the opportunity to meet the Minister to discuss these issues. A lot of people are talking about either reopening post offices—indeed, the Post Office want to see them reopen—or avoiding closure, and he knows that it all comes down to remuneration. As he will have heard, a post office operator needs to sell at least 450 stamps every hour just to achieve the national minimum wage level of remuneration. That clearly is the reason why in Porthleven and Newlyn, where the Post Office want to reopen post offices, no one is interested in taking on those services. What can the Government do to ensure that the remuneration is sufficient to ensure that the network targets he has outlined can be achieved?
Blair McDougall
I thank the hon. Member for taking the time to meet me to make the case for post offices in his area, which he did with some passion. From conversations not just with him and other hon. Members, but with postmasters, I am left in no doubt about the importance of ensuring that the Post Office improves renumeration for post offices, because that is how we will ensure that the network thrives and survives. We are putting half a billion pounds into network transformation, so that all the businesses, including those in hon. Members’ constituencies, are sustainable.
Danny Beales (Uxbridge and South Ruislip) (Lab)
I welcome the statement, and the Government’s response in the Green Paper, particularly the commitment to 11,500 branches—branches will be focused on high streets—and the focus on accessibility. In the light of that, does the Minister agree that it is ridiculous that the Uxbridge post office branch is set to close in May? Today, we found out that TG Jones, the current operator, has withdrawn from the contract for a future branch, and has ended its search for a replacement. Will he join me in urging Hillingdon council to pull its finger out, stop blaming others, and do all that it can to secure a new site, using its own assets if necessary, and in urging the Post Office to ensure that we maintain a post office in Uxbridge town centre?
Blair McDougall
I will perhaps use more parliamentary language than my hon. Friend did, but I absolutely would encourage everyone to work together to ensure that his constituents have access to postal services. I recognise that, while there is obviously good news today about maintaining the overall size of the post office network and the access criteria, that is little comfort for those in a community where there is such churn in post office services. I will very happily work with him on the issue that he raises.
Kirsty Blackman (Aberdeen North) (SNP)
In rural areas, the loss of post offices is an issue, but it is also an issue in cities, particularly when the local transport network does not necessarily link people with the post office. My community is still reeling from Spar closing the post offices in its shops. Will the Minister give us some comfort by saying that he believes that the remuneration package being offered will not just keep postmasters in the job, but encourage new postmasters to take up the job, particularly given that, as has been stated, we face another round of Bank of Scotland closures?
Blair McDougall
The hon. Member makes a really important point about the impact of the closure of a post office on an area. As I have said, we are maintaining the overall network, but there are still areas where there are issues. The Government obviously do not directly set the remuneration, but we are supporting the Post Office in ensuring, through its transformation, that it is profitable enough to make running a post office business more attractive. Ultimately, that is the long-term answer to the issues in her constituency, and all hon. Members’ constituencies.
David Taylor (Hemel Hempstead) (Lab)
I welcome the Minister’s statement, in which he referred to post offices being multi-carrier parcel hubs. One such carrier is Evri, and I visited its depot in my constituency of Hemel Hempstead last week with the GMB London region rep Danni Egan. I met dedicated couriers who were doing vital and often undervalued work. How do the Government plan to support private couriers, and companies that are willing to work alongside trade unions to ensure that these workers, too, get better pay and conditions?
Blair McDougall
My hon. Friend is always a doughty fighter for the rights of working people. The employment rights Minister, my hon. Friend the Member for Halifax (Kate Dearden), just disappeared from the Chamber, but was here a moment ago; she has brought through important changes to make sure that when it comes to people’s working environment, there is a floor of decency. Ofcom is looking at other private parcel couriers and the service that they provide, and I will certainly work with my hon. Friend the Member for Hemel Hempstead (David Taylor) on these issues.
Sir Julian Lewis (New Forest East) (Con)
Following an exemplary local campaign and petition, it is a relief to record that the Post Office has just reversed its decision not to reopen the post office in Lyndhurst, often referred to as the capital of the New Forest. Can the Minister explain whether there is any overall Government plan to co-ordinate the disappearance of banks with the emergence of banking hubs and the expectation that post offices will take on some banking responsibilities? Would it be a possible source of income for post offices if they could charge the banks in exchange for undertaking to take in cheques on accounts held with those banks? At the moment, I believe it is very hit and miss which banks allow people to pay their checks into a post office, and which do not.
Blair McDougall
Most banks do provide services, although I know there have recently been issues around Lloyds and the availability of cheque-cashing. I am really pleased to hear that the Lyndhurst branch has been saved, and I congratulate the right hon. Gentleman and campaigners on that. The banking framework is an increasingly important part of post offices’ income, and at the heart of that is the relationship whereby the post office is paid for providing services that have disappeared because of a lack of high-street bank branches. That is very important to the financial stability and future of the Post Office.
Steff Aquarone (North Norfolk) (LD)
One of the key services that the Post Office supports in North Norfolk is our bank hubs. These are crucial to our market towns, which have lost high-street banks, and to those living in nearby villages. However, I am frustrated about the number of banks that fail to provide crucial services in these hubs. I note the Minister’s comments about the voluntary and commercial basis of participation, but has he considered reviewing the Financial Services and Markets Act 2023, with a view to widening the requirement to include access to banking services? That would be of huge help to my rural residents and businesses.
Blair McDougall
The hon. Gentleman makes an incredibly important point. I have only been a Minister for four months, but I have already learned that it is not a great idea to trespass too far into Treasury Ministers’ territory; however, I will certainly discuss the point that he raises with colleagues there, and obviously our overall strategy is to make sure that there is access to financial services through the post office in as wide a range of communities as possible.
Sir Ashley Fox (Bridgwater) (Con)
I thank the Minister for his statement, and welcome his commitment to maintaining a minimum network size of 11,500 branches and all six geographical access criteria. Currently, 79% of the network is a full service branch, so why have the Government set the new 50% requirement, which is so much lower than that? Is that to allow the Post Office to downsize by stealth?
Blair McDougall
No, it is not, because all six of the criteria remain, and they will guarantee access to the fuller range of services that the Post Office provides. I am happy to give the hon. Gentleman that reassurance.
Lisa Smart (Hazel Grove) (LD)
I do not think it will have surprised any of us to hear the Minister talk about the response from our communities, who say how much they value services in a physical post office. My constituents in High Lane and around the Fiveways in Hazel Grove still mourn the loss of their post office branch, but when I talked with Post Office Ltd and local retailers after the closures, they said that it was just not viable to offer those services, as the remuneration, and the business model, just did not fit in with their needs. The Minister talked about the desire to reduce the reliance on Government funding, and about looking at additional services, like prescription collection. Will he say a little more about where he sees the business model going for the Post Office, so that we can ensure that running a post office or delivering post office services is viable, and so that my constituents get the services that they need, where they need them?
Blair McDougall
Obviously the business model of the Post Office is a matter for the Post Office, but it would say to me that it is about continuing that central role of banking and financial services through the Post Office, and about experimenting with new models like the hub of the high street, where post offices can partner with other organisations that perhaps do not want the full expense of their own high street presence but can use the vast network of the Post Office. Finally, it is about the technological transformation that we are funding, which will improve the customer experience and improve the renumeration for sub-postmasters.
Helen Morgan (North Shropshire) (LD)
I welcome the Government’s announcement today that they are going to maintain 11,500 branches, but in my constituency, outreach services that were only available maybe for an hour or two each week anyway in Cockshutt, Clee, Weston Rhyn, Knockin, West Felton and Ruyton XI Towns have all been lost because of the retirement of a single postmistress in Trefonen. The current criteria have not protected those services, and the distance criteria are not incredibly helpful when there is no public transport that can be relied on, and for a business it is an incredible waste of time to have to get in the car and drive three or maybe six miles to another post office to post something. What can the Minister say to my constituents who are faced with long journeys to get to post offices? What likelihood is there of a post office reopening in their area, and how will that help them deal with these access problems of public transport and efficiency when they are running their businesses?
Blair McDougall
The hon. Lady makes a really important point, and an hon. Friend asked earlier whether this is part of a wider need to regenerate high streets. It is also true that it has to be part of a wider strategy to support rural businesses like the ones the hon. Lady mentions. I have spoken many times about what we are going to do to improve postmaster remuneration through the transformation investment that we are putting in. Perhaps before I sit down and we move on to the next debate, I can also say some words of encouragement: there is a new generation of postmasters coming through, and not only is it a fantastic business opportunity for people, but it is an extraordinary opportunity to serve their community and become a key and valued figure, particularly within communities like the hon. Lady’s.