PARLIAMENTARY DEBATE
Future of the Post Office - 14 July 2025 (Commons/Commons Chamber)
Debate Detail
Contributions from Gareth Thomas, are highlighted with a yellow border.
Gareth Thomas
The Parliamentary Under-Secretary of State for Business and Trade
With permission, Madam Deputy Speaker, I wish to make a statement on the Green Paper that we are publishing today on the future of the Post Office.
Post offices have stood as a cornerstone of British national life for generations, serving constituents in every part of the UK. They are a lot more than just places to send letters or collect parcels; they are hubs of economic and social activity. They are a lifeline to small businesses, provide access to essential services, including everyday banking services, and are a critical part of our high streets. They also have a unique role in rural areas, particularly permanent branches, and act as the beating heart of communities.
In recent years, however, the need for change has become clear. Twelve months ago, we inherited a Post Office in crisis—declining financial sustainability, unstable leadership, a network struggling to maintain services, and a reputation shattered by the Horizon scandal and its appalling treatment of sub-postmasters, as Sir Wyn Williams’s first report last week underlined only too clearly. This Government are determined to strengthen the Post Office network, and today’s Green Paper begins a national dialogue on the future of the Post Office so that we can create a modern, resilient and financially sustainable organisation.
We recognise that the Post Office, just like other postal services around the world, faces significant challenges that are driven in no small part by changing consumer habits fuelled by the digital transition, changing high streets and a changing economy. We want a Post Office network that the public uses, values and, above all, trusts. We want branches to be visible on the high street, in rural and urban areas, and in all communities, offering a wide range of in-person services.
I do not believe that people are ideologically wedded to a smaller or bigger Post Office; they just want a Post Office that works for them, their businesses and their communities. Our preferred approach is for the overall size and shape of the Post Office network to remain the same so that we minimise the impact on communities. We want to strengthen branches to modernise them and expand what they do. There are, though, a range of strong views on the Post Office network, so we will carefully consider all the views put to us about its future.
We need a Post Office that not only preserves its role in providing vital services to communities, but embraces the needs of modern Britain. The challenges are significant. Many branches are not profitable for the postmasters running them. Average weekly customer sessions have declined by 34% since 2007, and the shift to online services continues. While some services, such as parcel drop-offs and banking transactions, are growing, others, such as Government services, have seen significant decline. But we are also seeing innovation across the network. Drop and collect branches are being rolled out to meet the growing demand for parcel services. Over 160 banking hubs are now operational, with a commitment to roll out 350 by the end of the Parliament. As the banks continue to close branches, we are keen to support the Post Office to improve and develop the banking services it provides. Working with our Treasury colleagues, we will host joint discussions on this issue with the Post Office and the banking sector in the coming months.
Above all else, we know the Post Office needs stability, which we are committed to providing. We are backing that commitment with over £500 million investment during this Parliament, including up to £136 million in this financial year to invest in new technology and replace Horizon. Horizon should have gone long ago. Instead, it will be many months yet before it is replaced. Fujitsu should only be part of the Post Office’s grim past, not its current and immediate future. We are determined to end the use of Horizon and draw a line under Fujitsu’s involvement with the Post Office. The task of replacing Horizon is hugely complex. It has been embedded in the Post Office network for more than two decades and remains critical to the delivery of the essential services that many of our constituents depend on from the Post Office. Never again must we allow the Post Office to put blind faith in its technology.
We will support the implementation of the Post Office’s transformation plan, which aims to make the company more efficient, enabling it to continue offering cash and banking services in the coming years. We will also fund innovative equipment for postmasters to help customers beat the queues. Indeed, this plan aims to achieve operational and financial stability by 2030 and includes a commitment to boost annual postmaster incomes by £250 million by the end of the decade. Already, a £20 million uplift has been delivered in 2024-25, with £66 million planned for this financial year.
After all the Post Office has put its people through, it is now essential that it reorientates its culture towards postmasters, involving them in central decision making. The first steps have been taken with the creation of a consultative council and the election of postmaster non-execs. I am acutely aware that there are those who say that more is needed and, indeed, that is why in this Green Paper we are exploring options for further strengthening those structures.
In the longer term, we are open to more fundamental reforms. Two ideas that have been put to us include the potential mutualisation of the Post Office—giving postmasters and communities a much greater stake in the organisation—and a charter model that separates the Government’s role in setting the purpose from the board’s role in running the business. We will assess other suggestions for the Post Office’s long-term future, including on its future commercial direction, such as closer working with Royal Mail. These are perhaps not decisions for the moment, but we want to begin the debate and conversation now, so we are ready to act when the time is right.
The Green Paper is an important step towards rebuilding trust in the Post Office and embedding a culture of transparency, accountability and compassion. It is important to stress that no decisions on changes to governance arrangements will be made until after the inquiry’s final report to allow us all to consider Sir Wyn Williams’s recommendations on governance issues together with Green Paper responses.
This is a once-in-a-generation opportunity to reimagine the Post Office. The Green Paper is ambitious but grounded in reality. It asks difficult questions about how we ensure long-term sustainability while protecting essential services. We want to hear from everyone with a stake in the Post Office’s future. The Post Office must be modern, resilient and trusted. The Green Paper will be, I hope, the first step in delivering that vision, and I commend this statement to the House.
Post offices have stood as a cornerstone of British national life for generations, serving constituents in every part of the UK. They are a lot more than just places to send letters or collect parcels; they are hubs of economic and social activity. They are a lifeline to small businesses, provide access to essential services, including everyday banking services, and are a critical part of our high streets. They also have a unique role in rural areas, particularly permanent branches, and act as the beating heart of communities.
In recent years, however, the need for change has become clear. Twelve months ago, we inherited a Post Office in crisis—declining financial sustainability, unstable leadership, a network struggling to maintain services, and a reputation shattered by the Horizon scandal and its appalling treatment of sub-postmasters, as Sir Wyn Williams’s first report last week underlined only too clearly. This Government are determined to strengthen the Post Office network, and today’s Green Paper begins a national dialogue on the future of the Post Office so that we can create a modern, resilient and financially sustainable organisation.
We recognise that the Post Office, just like other postal services around the world, faces significant challenges that are driven in no small part by changing consumer habits fuelled by the digital transition, changing high streets and a changing economy. We want a Post Office network that the public uses, values and, above all, trusts. We want branches to be visible on the high street, in rural and urban areas, and in all communities, offering a wide range of in-person services.
I do not believe that people are ideologically wedded to a smaller or bigger Post Office; they just want a Post Office that works for them, their businesses and their communities. Our preferred approach is for the overall size and shape of the Post Office network to remain the same so that we minimise the impact on communities. We want to strengthen branches to modernise them and expand what they do. There are, though, a range of strong views on the Post Office network, so we will carefully consider all the views put to us about its future.
We need a Post Office that not only preserves its role in providing vital services to communities, but embraces the needs of modern Britain. The challenges are significant. Many branches are not profitable for the postmasters running them. Average weekly customer sessions have declined by 34% since 2007, and the shift to online services continues. While some services, such as parcel drop-offs and banking transactions, are growing, others, such as Government services, have seen significant decline. But we are also seeing innovation across the network. Drop and collect branches are being rolled out to meet the growing demand for parcel services. Over 160 banking hubs are now operational, with a commitment to roll out 350 by the end of the Parliament. As the banks continue to close branches, we are keen to support the Post Office to improve and develop the banking services it provides. Working with our Treasury colleagues, we will host joint discussions on this issue with the Post Office and the banking sector in the coming months.
Above all else, we know the Post Office needs stability, which we are committed to providing. We are backing that commitment with over £500 million investment during this Parliament, including up to £136 million in this financial year to invest in new technology and replace Horizon. Horizon should have gone long ago. Instead, it will be many months yet before it is replaced. Fujitsu should only be part of the Post Office’s grim past, not its current and immediate future. We are determined to end the use of Horizon and draw a line under Fujitsu’s involvement with the Post Office. The task of replacing Horizon is hugely complex. It has been embedded in the Post Office network for more than two decades and remains critical to the delivery of the essential services that many of our constituents depend on from the Post Office. Never again must we allow the Post Office to put blind faith in its technology.
We will support the implementation of the Post Office’s transformation plan, which aims to make the company more efficient, enabling it to continue offering cash and banking services in the coming years. We will also fund innovative equipment for postmasters to help customers beat the queues. Indeed, this plan aims to achieve operational and financial stability by 2030 and includes a commitment to boost annual postmaster incomes by £250 million by the end of the decade. Already, a £20 million uplift has been delivered in 2024-25, with £66 million planned for this financial year.
After all the Post Office has put its people through, it is now essential that it reorientates its culture towards postmasters, involving them in central decision making. The first steps have been taken with the creation of a consultative council and the election of postmaster non-execs. I am acutely aware that there are those who say that more is needed and, indeed, that is why in this Green Paper we are exploring options for further strengthening those structures.
In the longer term, we are open to more fundamental reforms. Two ideas that have been put to us include the potential mutualisation of the Post Office—giving postmasters and communities a much greater stake in the organisation—and a charter model that separates the Government’s role in setting the purpose from the board’s role in running the business. We will assess other suggestions for the Post Office’s long-term future, including on its future commercial direction, such as closer working with Royal Mail. These are perhaps not decisions for the moment, but we want to begin the debate and conversation now, so we are ready to act when the time is right.
The Green Paper is an important step towards rebuilding trust in the Post Office and embedding a culture of transparency, accountability and compassion. It is important to stress that no decisions on changes to governance arrangements will be made until after the inquiry’s final report to allow us all to consider Sir Wyn Williams’s recommendations on governance issues together with Green Paper responses.
This is a once-in-a-generation opportunity to reimagine the Post Office. The Green Paper is ambitious but grounded in reality. It asks difficult questions about how we ensure long-term sustainability while protecting essential services. We want to hear from everyone with a stake in the Post Office’s future. The Post Office must be modern, resilient and trusted. The Green Paper will be, I hope, the first step in delivering that vision, and I commend this statement to the House.
Caroline Nokes
Madam Deputy Speaker
I call the shadow Minister.
18:09:50
Dame Harriett Baldwin
West Worcestershire
I thank the Minister for advance sight of his statement. The Post Office really is the Heineken of Government services: it reaches parts of the UK that other arms of government do not. The Post Office is much more than a business; it is a vital part of the UK’s social and economic fabric. It connects communities, supports local economies and ensures access to essential services across the country. From rural villages in constituencies like mine to inner cities, postmasters are trusted figures who provide a lifeline for people who rely on face-to-face services, particularly the elderly, the digitally excluded and small businesses. The network plays an increasingly important role delivering banking services and hubs as the traditional bank network continues to close. While the number of letters sent has declined and more Government services are online or direct to bank accounts, there are areas where the Post Office has seen strong growth: bank deposits to post offices are up by 68%, parcels up by 68% and tracked priority mail has risen by 72%.
The Minister promised that the Government would publish the Green Paper on the Post Office in the first half of 2025, so I will give him that—it was nearly there. The Government clearly want to get this consultation out before recess when there is arguably less parliamentary scrutiny. I would like to take this opportunity to encourage the public to respond to the consultation over the summer.
The Green Paper seeks to reduce the taxpayer subsidy over time, but of course, with 50,000 workers throughout Britain, the Post Office itself faces a £45 million hike in its bill from the national insurance jobs tax. The post offices that are eligible for retail, hospitality and leisure business rates relief have seen a 140% increase in their business rates. The Employment Rights Bill will cost the Post Office another £8 million. It is no wonder that Nigel Railton, the Post Office chairman, blamed the autumn Budget for increasing costs and said that it was why the Post Office needs a fresh start.
The Minister told the House on 8 April that
“access criteria have already been published that commit the Government to provide 11,500 post offices.”—[Official Report, 8 April 2025; Vol. 765, c. 750.]
He says in the Green Paper that his preference is to maintain the size of the network. Will he commit today to there being 11,500 post office outlets at the end of this Parliament? Did the Government consider reducing the branch requirement in the Green Paper? If so, why did they change their mind? Was he advised by his officials that it would take the closure of one in five post offices to end the network subsidy? If that is not what he was told, what was he told? Where is the cut-off point for that subsidy?
The Minister says that the Government will consult on a change to access requirements as it could be argued that they are too stringent, but for rural areas they are not. Approximately 14% of post office branches are the last shop in the village—there are many such branches in my constituency—so will the Minister confirm that rural branches will not be closed just to be replaced by others in city centres? Does he not realise that for many rural areas, the post office is the only shop for miles around and is therefore the only place one can access free cash?
How much did the Post Office get from the framework agreement with the banks? Should it not get a better and more long-term agreement? How much will the Government ask Fujitsu to pay towards the £2 billion estimated cost of compensating the postmasters who were wrongly accused over the Horizon system? The Minister appears to have kicked Post Office mutualisation into the long grass. I can see why he would not want to do it during the time of the inquiry, but could there be a pilot during this Parliament?
Post offices and the postmasters who run them are the backbone of our local communities, so I urge the public to take this opportunity to champion their local post office and reply to this summer consultation.
The Minister promised that the Government would publish the Green Paper on the Post Office in the first half of 2025, so I will give him that—it was nearly there. The Government clearly want to get this consultation out before recess when there is arguably less parliamentary scrutiny. I would like to take this opportunity to encourage the public to respond to the consultation over the summer.
The Green Paper seeks to reduce the taxpayer subsidy over time, but of course, with 50,000 workers throughout Britain, the Post Office itself faces a £45 million hike in its bill from the national insurance jobs tax. The post offices that are eligible for retail, hospitality and leisure business rates relief have seen a 140% increase in their business rates. The Employment Rights Bill will cost the Post Office another £8 million. It is no wonder that Nigel Railton, the Post Office chairman, blamed the autumn Budget for increasing costs and said that it was why the Post Office needs a fresh start.
The Minister told the House on 8 April that
“access criteria have already been published that commit the Government to provide 11,500 post offices.”—[Official Report, 8 April 2025; Vol. 765, c. 750.]
He says in the Green Paper that his preference is to maintain the size of the network. Will he commit today to there being 11,500 post office outlets at the end of this Parliament? Did the Government consider reducing the branch requirement in the Green Paper? If so, why did they change their mind? Was he advised by his officials that it would take the closure of one in five post offices to end the network subsidy? If that is not what he was told, what was he told? Where is the cut-off point for that subsidy?
The Minister says that the Government will consult on a change to access requirements as it could be argued that they are too stringent, but for rural areas they are not. Approximately 14% of post office branches are the last shop in the village—there are many such branches in my constituency—so will the Minister confirm that rural branches will not be closed just to be replaced by others in city centres? Does he not realise that for many rural areas, the post office is the only shop for miles around and is therefore the only place one can access free cash?
How much did the Post Office get from the framework agreement with the banks? Should it not get a better and more long-term agreement? How much will the Government ask Fujitsu to pay towards the £2 billion estimated cost of compensating the postmasters who were wrongly accused over the Horizon system? The Minister appears to have kicked Post Office mutualisation into the long grass. I can see why he would not want to do it during the time of the inquiry, but could there be a pilot during this Parliament?
Post offices and the postmasters who run them are the backbone of our local communities, so I urge the public to take this opportunity to champion their local post office and reply to this summer consultation.
Gareth Thomas
I am grateful to the hon. Lady for encouraging sub-postmasters and anyone who is interested in the future of the Post Office to contribute their views to the Green Paper.
As the hon. Lady rightly set out, and as I hope I underlined in my statement—the Green Paper is certainly very clear on this—we think that branches up and down the country are a vital part of our country’s economic and social fabric, and we are determined to strengthen the post office network so that they can play a continuing and even more effective role in our economic and social lives.
The hon. Lady rightly underlined the significance of banking services going forward. As an aside, she mentioned the decline of other traditional post offices—letter volumes have halved since 2011. That helps to underline the significance of banking to the future of the Post Office. We are clear that the Post Office could offer more if the banks are willing to work with it. The successful completion of the banking framework negotiations was an encouraging sign in that regard. As I set out in my opening remarks, we are, alongside Treasury colleagues, determined to sit down with the Post Office and the banks to see what more we can do together. There is a commitment to 350 banking hubs over the lifetime of this Parliament, but if we can improve the way in which the banks work with the Post Office, we could see a much more significant role for the Post Office in the provision of banking services on far more high streets up and down the UK.
On national insurance contributions, I gently say to the hon. Lady that difficult decisions had to be made in the Budget because of the financial situation that we inherited, but we have taken a range of decisions to steady the network. I am sure that she is grateful to the Chancellor of the Exchequer for the additional finances put aside to invest in the future of the Post Office.
The hon. Lady quite rightly underlined the broader point that Fujitsu has a moral obligation to contribute towards the cost of the scandal. As I have said, we need to wait for the final report by Sir Wyn Williams to understand the full sense of Fujitsu’s culpability.
Lastly, on mutualisation, as the hon. Lady alluded to, we think it right to concentrate in the short term on prioritising the financial and operational stability of the Post Office, given its significant challenges. In the longer term, it may well be possible to make serious and sustained governance changes. I have a genuinely open mind on that question and will look carefully at the views we receive on it in the Green Paper.
As the hon. Lady rightly set out, and as I hope I underlined in my statement—the Green Paper is certainly very clear on this—we think that branches up and down the country are a vital part of our country’s economic and social fabric, and we are determined to strengthen the post office network so that they can play a continuing and even more effective role in our economic and social lives.
The hon. Lady rightly underlined the significance of banking services going forward. As an aside, she mentioned the decline of other traditional post offices—letter volumes have halved since 2011. That helps to underline the significance of banking to the future of the Post Office. We are clear that the Post Office could offer more if the banks are willing to work with it. The successful completion of the banking framework negotiations was an encouraging sign in that regard. As I set out in my opening remarks, we are, alongside Treasury colleagues, determined to sit down with the Post Office and the banks to see what more we can do together. There is a commitment to 350 banking hubs over the lifetime of this Parliament, but if we can improve the way in which the banks work with the Post Office, we could see a much more significant role for the Post Office in the provision of banking services on far more high streets up and down the UK.
On national insurance contributions, I gently say to the hon. Lady that difficult decisions had to be made in the Budget because of the financial situation that we inherited, but we have taken a range of decisions to steady the network. I am sure that she is grateful to the Chancellor of the Exchequer for the additional finances put aside to invest in the future of the Post Office.
The hon. Lady quite rightly underlined the broader point that Fujitsu has a moral obligation to contribute towards the cost of the scandal. As I have said, we need to wait for the final report by Sir Wyn Williams to understand the full sense of Fujitsu’s culpability.
Lastly, on mutualisation, as the hon. Lady alluded to, we think it right to concentrate in the short term on prioritising the financial and operational stability of the Post Office, given its significant challenges. In the longer term, it may well be possible to make serious and sustained governance changes. I have a genuinely open mind on that question and will look carefully at the views we receive on it in the Green Paper.
Clive Efford
Eltham and Chislehurst
I welcome my hon. Friend’s statement and the consultation on the Green Paper. Does he agree that we should see the withdrawal of banks from high streets like mine in Eltham as an opportunity for the Post Office to expand what it can offer, not just to individuals but to small businesses in local communities? That is an opportunity rather than a burden for post offices, and we should seek to maintain them wherever possible.
Gareth Thomas
I agree with my hon. Friend about the even greater role that banks could play on our high streets by working with the Post Office. It is one area that Post Office senior management has identified as key to the Post Office’s commercial future. We have set aside significant sums of money to invest in new technology to make it easier to work with the banks and do even more. I hope that banks and the financial services community will recognise that they have a considerable opportunity to do more in providing services to all our constituents by working with the Post Office. I look forward to sitting down with the Post Office and the financial services industry, alongside Treasury colleagues, to see whether we can take advantage of that opportunity.
Caroline Nokes
Madam Deputy Speaker
I call the Liberal Democrat spokesperson.
Sarah Olney
Richmond Park
I thank the Minister for advance sight of his statement. The Liberal Democrats welcome today’s announcement about putting local post offices on a more sustainable footing.
Post offices are an important part of our communities, providing a number of critical services on our local high streets, from community banking and foreign exchange to the provision of Driver and Vehicle Licensing Agency services. Often their services act as a lifeline, especially for the elderly, those with limited transport options and those in areas without reliable access to online services. Currently 99.7% of the population live within three miles of a post office, and 4,000 branches are open seven days a week. In the past three years, nearly 2,000 high street bank branches have closed across the UK, resulting in local post offices being the only place where local communities can access banking services.
As the Government bring forward their necessary reforms, it is vital that essential local services and post office jobs are protected. Will the Minister assure me that under this proposal no post office will be closed until a consultation with each local community has been undertaken? Although we welcome the increased digitisation of services, which will boost accessibility for those who cannot use face-to-face services, as well as productivity across the public sector, how will the Government ensure that post offices remain financially viable?
Post offices are an important part of our communities, providing a number of critical services on our local high streets, from community banking and foreign exchange to the provision of Driver and Vehicle Licensing Agency services. Often their services act as a lifeline, especially for the elderly, those with limited transport options and those in areas without reliable access to online services. Currently 99.7% of the population live within three miles of a post office, and 4,000 branches are open seven days a week. In the past three years, nearly 2,000 high street bank branches have closed across the UK, resulting in local post offices being the only place where local communities can access banking services.
As the Government bring forward their necessary reforms, it is vital that essential local services and post office jobs are protected. Will the Minister assure me that under this proposal no post office will be closed until a consultation with each local community has been undertaken? Although we welcome the increased digitisation of services, which will boost accessibility for those who cannot use face-to-face services, as well as productivity across the public sector, how will the Government ensure that post offices remain financially viable?
18:20:00
Gareth Thomas
I am grateful to the hon. Lady for her welcome for the Green Paper. She rightly underlines the significance of the Post Office, particularly to the digitally excluded, to the elderly and to people in rural areas. Given the other part of my ministerial brief, which is on small businesses, I recognise just how important the Post Office is to small businesses up and down the UK.
The hon. Lady also underlined the significance of banking services for the Post Office. I hope I have made it very clear today that we think that there is an opportunity to go even further to bring more banking services to all our communities through the Post Office.
The hon. Lady asked about what happens when individual post office changes are being contemplated. A set of consultation arrangements has been in place for some time, and we are not seeking to change it. Whenever an individual post office changes, I recognise that it can be unsettling for local communities; there is always an appetite for that branch to be put back in place as quickly as possible. It is therefore important that whenever such a change is contemplated, the Post Office moves quickly to engage with local communities, including the hon. Member who represents the community.
On financing, we have set aside at least £500 million over this Parliament to invest in the Post Office. More than half of the network is loss-making; not enough was being provided to the Post Office to fund the network, which is why we increased the funding to cover the loss-making part of it last year. We have done so again this year and will continue to do so.
The hon. Lady also underlined the significance of banking services for the Post Office. I hope I have made it very clear today that we think that there is an opportunity to go even further to bring more banking services to all our communities through the Post Office.
The hon. Lady asked about what happens when individual post office changes are being contemplated. A set of consultation arrangements has been in place for some time, and we are not seeking to change it. Whenever an individual post office changes, I recognise that it can be unsettling for local communities; there is always an appetite for that branch to be put back in place as quickly as possible. It is therefore important that whenever such a change is contemplated, the Post Office moves quickly to engage with local communities, including the hon. Member who represents the community.
On financing, we have set aside at least £500 million over this Parliament to invest in the Post Office. More than half of the network is loss-making; not enough was being provided to the Post Office to fund the network, which is why we increased the funding to cover the loss-making part of it last year. We have done so again this year and will continue to do so.
18:20:00
Chris Vince
Harlow
I thank the Minister for his statement. As a fellow Labour and Co-op MP, I welcome the inclusion of mutualisation among the long-term ideas for the Post Office. Does he agree that post offices, particularly in rural communities like Little Hallingbury in my constituency of Harlow, are a vital part of the community and that they therefore lend themselves to that model of business?
18:20:00
Gareth Thomas
I commend my hon. Friend for championing the Post Office branches in his constituency. He rightly underlines the importance of branches in rural communities; they have an essential role in communities up and down the UK.
As my hon. Friend will recognise, I have some history in the area of mutualisation. I am sympathetic to mutuals; I do think that it is important that we address the immediate challenges that the Post Office faces in its financial and operational sustainability before we contemplate long-term changes. There are risks with mutualisation, so we need to consider the pros as well as the cons before making any long-term change, but that is why the Green Paper is important: it will allow that debate to begin.
As my hon. Friend will recognise, I have some history in the area of mutualisation. I am sympathetic to mutuals; I do think that it is important that we address the immediate challenges that the Post Office faces in its financial and operational sustainability before we contemplate long-term changes. There are risks with mutualisation, so we need to consider the pros as well as the cons before making any long-term change, but that is why the Green Paper is important: it will allow that debate to begin.
18:20:00
Christine Jardine
Edinburgh West
A number of semi-rural and suburban communities across my constituency—Newbridge, Blackhall, Ratho—have lost their post offices recently. Their banks have also gone, so there is a dearth of local facilities. At the same time, the Horizon scandal has undermined public trust across those communities. Does the Minister agree that one of the main problems in protecting the Post Office and making it sustainable will be that lack of public trust? How will he overcome it?
18:20:00
Gareth Thomas
The hon. Lady is absolutely right that the reputation of the Post Office has taken a huge hit as a result of the Post Office scandal, and it will take a long time for trust to return. There is a series of steps that we have to take to rebuild that trust. There is the obvious challenge, which the House considered last week, of delivering redress to the victims of this appalling scandal, but there are also things we have to do to improve the trust between the existing postmasters in every community and the senior management of the Post Office from now on. The Post Office’s establishment of a consultative council and a postmaster panel and its commitment to improving postmaster remuneration are important first steps in that regard. The Green Paper provides an opportunity to think about what else the Post Office can do.
18:20:00
Katrina Murray
Cumbernauld and Kirkintilloch
This is an issue that has been highlighted by others in the Chamber, and my constituency is no different: it has been subject to a significant number of bank closures and ATM removals. In Cumbernauld, the precincts or the surrounding villages, the post office is the one place where people in local communities can access cash. Given that so many small businesses are still cash-first, what will the Minister do to ensure that access to cash remains within a post office setting?
18:20:00
Gareth Thomas
I commend my hon. Friend for championing the post office in Cumbernauld and the communities around her constituency that depend on it and on the Post Office more generally. The most significant thing that we can do to help small businesses to access and deposit cash close to where they operate is to continue to try to improve the banking services provided through the Post Office. I hope that the banking industry will seize the opportunity of the Green Paper to work with the Post Office and with the Government to explore what more we can do collectively in that regard.
Claire Young
Thornbury and Yate
In rural areas such as my Thornbury and Yate constituency, it can be difficult to travel to post offices in towns because of the lack of buses. If the Government are considering relaxing the distance and access criteria for post office provision, will they take that issue into account in setting new criteria?
18:20:00
Gareth Thomas
As I hope I made clear in my opening statement, and as the Green Paper certainly makes clear, our preference remains keeping the current size of the network and maintaining the access criteria. I say gently that there are strong views on that question, including some within the sub-postmaster community, but our preference at the moment is to maintain the current size of the network and the existing access criteria, because of the significance of the post office to every rural and urban community.
18:20:00
Ms Julie Minns
Carlisle
I thank the Minister for his statement and his clear recognition of the importance that the post office plays in rural constituencies such as mine. Sadly, residents in some of the remotest parts of my Carlisle constituency have been adversely impacted in recent months by the sudden closure of post office outreach services. However, the closure of an outreach service is not currently subject to the same consultation requirements as the closure of a permanent branch. As part of the proposals for the future of the Post Office, will the Minister consider strengthening the requirements relating to the closure of outreach services?
18:20:00
Gareth Thomas
I am happy to consider any submission that my hon. Friend wants to make to the Green Paper. Indeed, I am happy to consider the thoughts and ideas of hon. Members across the House. My hon. Friend mentioned a particular issue in her constituency; if it is helpful, I am happy to meet her to discuss it in more detail.
18:20:00
Pete Wishart
Perth and Kinross-shire
Scotland has seen an 8.3% decline in post offices, while London has seen an increase of 9.3% across the past decade. The Minister will know that outreach offices help people in rural areas and post offices to thrive. The Green Paper recognises that, but the Government seem to dismiss it. What is he going to do to help rural post offices? Will he reconsider his attitude and his views towards outreach offices? What will he do to reduce the number of post office closures in Scotland?
Gareth Thomas
The most important thing that we can do to help Post Office branches in rural areas in Scotland, and indeed across the UK, is to prioritise improving the commercial future of the Post Office. In that regard, it is important to invest in new technology—a replacement for Horizon is critical—and in technology to enable the banks to provide more banking services to all our communities using the Post Office, as I hope they will. The key priority for Governments across the UK, if we are to improve the opportunities for every branch to better serve every community across the UK, is to improve the commercial fortunes of the Post Office. The Green Paper sets out plans to do so, but I welcome views from across the House on what more we can do.
Luke Akehurst
North Durham
I thank the Minister for his statement. He knows from previous questions I have asked that I am concerned for the future of the Chester-le-Street post office, which is moving from having directly managed branch status to franchise status. I also welcome what is going on with the post office in Stanley, which has become a much-needed banking hub. Does the Minister agree that with a little more commercial flair and imagination about what services are provided, the Post Office should not be a business in retreat but could play a significant role in increasing footfall on high streets up and down the country, helping to reverse their decline and encourage regeneration?
18:31:14
Gareth Thomas
My hon. Friend is absolutely right; with good will on all sides, and with financial and operational stability, which I think we are beginning to see, there is a significant future ahead for the Post Office. As he says, the Post Office can continue to play an important role in reviving our high streets. The opportunity for banks to work with the Government and the Post Office to provide more banking services to all our constituents through the Post Office, could play a key role in helping to revive the high street and meet the needs of our constituents.
Caroline Voaden
South Devon
Since the election, three post offices in my constituency have closed—in Churchstow, Aveton Gifford and Dittisham—through the resignation of postmasters and, in one case, the death of the local postmaster. Each time, the Post Office says that it is carrying out a review, and each time it quickly decides to close the post office and, as the Minister himself said, the beating heart of those communities is then lost. Dittisham residents must now travel nearly 5 miles to the nearest branch. There is no bus, so elderly residents who do not drive cannot get to the nearest post office. Will the Minister guarantee that while the consultation is ongoing, no more rural post offices will be lost, and that as part of the Government’s thinking, more flexibility could be built into the Post Office’s business model, so that innovative and enthusiastic potential postmasters who want to reopen post offices in some of these villages can be allowed to do so?
Gareth Thomas
One crucial issue that we considered when we developed the Green Paper was how to address postmaster remuneration, because in some communities the Post Office has struggled to find people who are willing to take on the running of a franchise. It is important that Post Office senior management have improved postmaster pay, with £20 million last financial year, a commitment to £66 million this financial year, and a plan to go even further. I hope that will make a significant difference to the ability to find people to take on franchises, and not just in urban areas but in the rural areas the hon. Lady describes. She will forgive me for not knowing her constituency as well as she does, but if she wants to contact me about particular issues with branch closures, I would be happy to look at those.
Jo Platt
Leigh and Atherton
I welcome the Minister’s statement, and the announcement of a national dialogue about the future of our Post Office. As a fellow Co-operative party Member, I welcome the model of mutualisation, which would also suit our local branch. Given the decline of Leigh’s high street, the announcement of changes to our main post office was a major concern. Can he reassure staff in Leigh that they will not lose their jobs as a result of franchising? Will he confirm whether the Communication Workers Union has been fully consulted on the changes affecting our community?
18:34:57
Gareth Thomas
My hon. Friend has long been a proud member of the Co-operative party and is interested in mutualisation, and I look forward to discussing these issues with her in due course. Discussions on the franchising of the remaining Crown post offices are still ongoing, both with franchisees and local communities, and specifically regarding arrangements for staff. The Post Office and the Communication Workers Union are continuing to talk to each other about how to manage the transition, and I welcome the positive dialogue that has taken place between them both.
Helen Morgan
North Shropshire
I was pleased to hear the Minister say that the overall size and shape of the post office network should remain the same so that we can minimise the impact on communities, but in my constituency the size and shape of the Post Office is rapidly shrinking because of the fundamental fragility of the way it is set up. The retirement of a single sub-postmistress, because of rents going up on her shop, has led to the closure of outreach services across the constituency. The access criteria consider someone to be within three miles of a post office if that post office is an outreach service and open for a single hour a week. That is not acceptable for rural communities, many of which do not have a bus for many hours during the day. Will the Minister commit to looking at a sustainable model for rural post offices, so that people can genuinely access cash and the other services they need, particularly if they do not have a car?
18:37:07
Gareth Thomas
I completely accept the significance of the Post Office in rural communities in particular, but it is equally essential that we have access to Post Office services in urban areas. The hon. Lady references the fragility of the Post Office, and that has certainly been the case in certain communities when finding postmasters who are willing to step forward and take on the role of running a Post Office franchise. That is why the initial steps that the Post Office management have taken to increase postmaster remuneration are important, by helping to make the role more attractive. It is also important that the Post Office has established a consultative council, to look properly at the way that postmasters are consulted and involved in big decisions about the future of the Post Office. If the hon. Lady thinks it would be useful, I would be happy to speak to her separately about the specific issues that her constituents face, and to understand a little more about the specific problems she has raised.
Tom Gordon
Harrogate and Knaresborough
I thank the Minister for his statement, and I add my thanks to our postmasters, including Andrew Hart in my constituency. Last year, residents in Knaresborough faced a prolonged period without a Post Office service. I had extensive communication with Post Office officials about service continuity, minimum standards, types and awards of contracts, and I found them evasive when I asked them questions about that. As the Minister says, such issues of governance will be addressed in the inquiry, but how might that feed into the Green Paper consultation? Will he meet me to address some of my concerns about the issues that we are facing locally?
18:38:40
Gareth Thomas
In principle, I am very happy to meet the hon. Gentleman to discuss the issues with post offices in his constituency. He gives me the opportunity to put on the record my appreciation for the work that all our postmasters do. They are hugely important servants of all our communities, and they play a crucial role for our constituents—I am grateful to the hon. Gentleman for that opportunity. The Green Paper is an opportunity for people in rural areas as well as urban areas to come forward with their views about the future of the Post Office. I hope that all hon. Members will encourage their constituents to think about taking that opportunity, and take a moment to send in their comments.
Andrew George
St Ives
I am pleased that the Minister has announced that the overall size and shape of the network will remain the same, and he has also indicated that remuneration must be part of the consultation. As he will know—I have corresponded with him on this matter—the towns of Porthleven and Newlyn in my constituency have been without post offices for a number of years, because no one is prepared to take them on at the remuneration levels that are available. Is the Minister prepared to consider whether he sees those post offices more as Government offices, and to expand their role in terms of information, connectivity, and feedback across a number of Government Departments, to build up the services available in post offices? If he is meeting people, will he meet me to discuss how we can resolve the situation in my constituency?
18:39:33
Gareth Thomas
The hon. Gentleman is right that we need to make the task of running a post office more attractive. That is why improving both the culture, so that postmasters feel listened to, and the remuneration are hugely important immediate tasks. The best commercial opportunities for post offices lie in the provision of banking services, rather than Government services. I hope that the banks and the financial services industry will have heard the message from Members from all parts of the House: we want them to do more to work with Government to take advantage of the potential opportunities. As I have committed to meeting other hon. Members to discuss local issues, I had better do the same for the hon. Gentleman.
18:41:51
Sarah Dyke
Glastonbury and Somerton
I thank sub-postmasters across Glastonbury and Somerton, and across the country, in particular Jim Gordon from Martock. Many post offices in my constituency have closed in recent years, including those in Somerton, Butleigh, Charlton Adam, Charlton Mackrell, Keinton Mandeville and Sparkford, depriving their communities of a vital service. I recently met Mr and Mrs Thievendran from Somerton Stores, who are interested in opening a post office on their premises but are unable to do so because of the prohibitive costs involved. The owner of the Baltonsborough Village Store was considering doing the same but told me that the costs are extraordinary. What steps will the Minister take not only to put existing post offices on a sustainable footing, but to help rural towns and villages without a post office to regain one?
18:43:23
Gareth Thomas
As I have said, in our view we should retain the current size of the network and the current access criteria, which are key to ensuring that every community, whether rural or urban, has good access to post office services. I encourage the hon. Lady to reach out to the Post Office to discuss the particular issues facing the businesses to which she has referred, which are interested in running post office branches but feel unable to do so, to see whether anything can be done to ease those local challenges.
More generally, the issue the hon. Lady raises partly speaks to the challenge of increasing postmaster remuneration. Post Office senior management clearly recognise that: there was a £20 million uplift in postmaster remuneration in the last financial year, there will be a £66 million increase this year, and Post Office management are committed to looking to go even further. I hope that will make the opportunity to run a post office much more attractive, and may address some of the financial challenges she raised.
More generally, the issue the hon. Lady raises partly speaks to the challenge of increasing postmaster remuneration. Post Office senior management clearly recognise that: there was a £20 million uplift in postmaster remuneration in the last financial year, there will be a £66 million increase this year, and Post Office management are committed to looking to go even further. I hope that will make the opportunity to run a post office much more attractive, and may address some of the financial challenges she raised.
18:43:59
Martin Wrigley
Newton Abbot
I was slightly concerned that the franchising of Crown post offices, such as the one at Teignmouth in my constituency, has already gone ahead, prior to the consultation. Turning to a different issue, Royal Mail is obligated to provide a post box within half a mile of any house, but many new estates in my constituency have no access to a post box—they are just not there. Will the Minister put pressure on Royal Mail to ensure that post boxes are provided?
Gareth Thomas
I thank the hon. Gentleman for raising that specific matter. I will happily draw the attention of the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), who is responsible for Royal Mail, to that issue. The hon. Gentleman will have to forgive me, but I am not aware of the details of the issue in his constituency, but he may want to write to us at the Department so that we pass the details directly to Royal Mail.
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