Post Office Network

Gavin Newlands Excerpts

Thursday 25th April 2019 Westminster Hall

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to see you in the Chair, Dame Cheryl. I congratulate my hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) on securing this important debate. I was pleased to go along to the Backbench Business Committee—my old hunting ground—to support her application. I am delighted that she spoke so well to set out the many issues that post offices face, both now and in the future.

In my own work on post office sustainability, I have concentrated on two things: the deeply unjust banking transaction rates paid by the banks to the post office, and the definition of community post offices, which is unfair to many post offices that are community in practice but not in definition. I was encouraged by the level of interest in those issues in my recent Adjournment debate.

I take this opportunity to apologise to the Minister: my 12-and-a-half-minute speech ended up taking nearly 10 minutes longer than that because of the sheer number of interventions—it was one of the more popular Adjournment debates. That left her insufficient time to respond to the many points and questions that were raised. Hopefully, she will have sufficient time to answer those questions today.

I pointed out during that debate that negotiations were under way between the banks and the Post Office on remuneration. I asked the Government, as owners of the Post Office, to apply pressure to ensure that the rates were fair. That uplift would help ensure the sustainability of our local post offices. On that occasion, the Minister did not give any indication that they would do so, perhaps because of the lack of time. That debate followed a long engagement with concerned sub-postmasters in my constituency, and I know that other hon. Members have had plenty of engagement in their constituencies across Scotland and the UK.

I have been in almost constant engagement with the Post Office on this matter, and I wrote to Ministers and 16 of the biggest banks. The majority of banks responded positively, but one of our biggest banks said that it was not directly involved in negotiations, and that UK Finance was representing the industry and could give further details. That was news to UK Finance, which said:

“UK Finance is not party to negotiations and therefore cannot comment on the specifics of what is a commercial matter.”

I wonder whether that bank—I will not say which bank for fear of embarrassing it, but it is one of the UK’s biggest—was actually party to those negotiations at all.

Despite all that, I was very pleased that last week, following the constructive engagement of the National Federation of SubPostmasters, many Members of this House and the CWU, the Post Office announced that, from October 2019, it will raise the rates of payment that sub-postmasters receive for taking personal and business banking deposits. Those increases represent nearly a threefold uplift on current rates and were warmly welcomed by sub-postmasters at the NFSP conference.

That is a great win for post offices, and, as my hon. Friend said, it is a significant first step towards securing their long-term financial future. One wrinkle remains: the different rates passed on by Post Office Ltd to the various types of post office—local or community, for example. Further engagement with Post Office Ltd on that issue is still required to ensure a level playing field.

That announcement came during the NFSP conference, which resulted in other good news in that, for the second year running, the NFSP Mails Segregation Team’s work has improved sub-postmasters’ mails segregation performance, resulting in a bonus payment of £1.8 million that will be shared among sub-postmasters. The NFSP has said that it will continue to work with their sub-postmasters, with the aim of increasing the size of any future payment and, as I said, it welcomes the changes to this key area of remuneration, which are a significant first step.

The NFSP stressed, however, that there are still some areas of concern to be addressed, including the level of public and business knowledge of the many services that the Post Office provides. Now that it receives a fairer deal for providing some of those key services, it is to its advantage to provide those services to a higher number of customers. That is especially the case with banking services.

Another area of concern, which has been mentioned, is safety. Further changes are required to help protect postmasters from the risks associated with handling large volumes of cash. That has come up in my visits to local post offices and meetings with sub-postmasters.

As we have heard, the post office is a community institution in Scotland and across the UK. As countless household names slip away from the high streets, the post office remains ever present, providing not only postal services, which have become a declining proportion of its business, but benefits administration, banking services and useful public spaces, fewer and fewer of which are now available.

Many of our post offices face increasing pressure and long-term financial uncertainty. In our modern, digital world, with Amazon, online groceries and deliveries, and online banking, many of our small village and town centres—particularly in rural and semi-rural areas—face systemic degradation and challenges unlike anything they have seen before. That comes at a time when large and profitable banks are upping sticks and leaving the high street, so that the Post Office, which already had an important role in our communities, has only become more important and prominent.

The community designation of post offices is a good thing. The Government currently provide funding, administered by the Post Office, to many small town and village post offices once they have received that designation. Designations have to have rules, and the problem is that many rural and semi-rural post offices miss out, while some city post offices, which do not need the additional assistance, meet the criteria. The rules by which branches qualify are set by the Government.

In theory, that funding is supposed to protect those post offices that are the last shop that can provide post office services to the community. However, those criteria are perhaps a little too black and white. One criterion is the distance from any given post office to the next one—a three-mile minimum that is calculated in total ignorance of the situation on the ground. Two post offices in my constituency of Paisley and Renfrewshire North are affected by that: in Bridge of Weir and in Houston.

The Bridge Community Centre in Bridge of Weir—where, incidentally, I have a constituency advice surgery on Saturday morning at 10.30, should anybody need any assistance—[Interruption.] Other surgeries are available, I am sure. That centre is the perfect model for what a real community post office should be; it is run by the local community for the local community. However, because of the three-mile rule, it does not qualify for any community designation funding. The public transport links, which were previously poor, have been slashed in recent months. The centre also does not qualify because there are other retailers in the village who could provide that service, but the fact is that no other retailer in Bridge of Weir wanted to take on the Post Office franchise.

The next closest post office is a 10-minute walk from the nearest bus stop, assuming that someone has been able to catch one of the very infrequent buses and has waited God knows how long to get a bus back to the village. The community was left with a choice: have no local post office, or take it on themselves. They chose the latter, and should be commended for doing so and provided with some assistance. The situation is made worse by the importance of local post offices to the elderly and those with additional support needs. Many people who fall into both groups may already have extra difficulty getting around.

Today, and at other times, I have heard similar stories emerging from other constituencies. The community subsidy remains vital and supports many branches that might not otherwise be commercially viable. Under current plans, the Government subsidy to the Post Office is due to be cut in the coming year and to end entirely in 2021. I strongly urge the Minister to reconsider that course of action, or many more community post offices will close and many communities be left with no post office and no bank.

As we have heard, post offices are closing, and those closures disproportionately affect Scotland. Forty post offices closed in Scotland between 2011 and March last year, compared with 297 in England. When we take population into account, Scotland’s closure rate is one third higher than that south of the border. Given Scotland’s unique and challenging geography, which includes 94 inhabited islands, keeping viable post offices in place is clearly of even greater importance to Scotland than to other parts of the UK.

In conclusion, we must recognise that the local post office is disproportionately important to small towns and rural communities. It has been an institution and often a community lifeline through centuries of change and turmoil. The modern age has not made things any easier for the post office, but I am confident that if the right action is taken it will continue to play its important and irreplaceable role.

I agree with many colleagues from different parties that privatisation is not the answer to that challenge—the Post Office must remain in public hands—and the Government must recognise their role in it. Yes, a Post Office banking deal is a large step in the right direction, but there is plenty more to do, and for my constituents one decisive action that the Government could take swiftly is to review the community designation to pay fairly and pay the right people so that more post offices remain sustainable and stay open for our communities.

--- Later in debate ---

[Kelly Tolhurst]

I understand the hon. Gentleman’s concern about the CWU and perhaps the conversations with WHSmith, but the union’s relationship with an independent retailer such as WHSmith is a matter for it. It is not for me to direct an independent business. I know the hon. Gentleman and his passion for this subject well, so I am sure he will do all that he can, in his role and with his experience, to ensure that communication takes place.

[Gavin Newlands]

I had the time to advertise my surgery on Saturday in my speech, and I look forward to attending the Minister’s Tea Room surgery, where we can discuss some aspects of my speech in more detail. For the public record, will she give me and the people in Bridge of Weir and elsewhere in my constituency a commitment at least to look at the community designation of post offices? I am asking her to commit not to changing that but to looking at where there may be shortfalls.