Adjournment Debate: Rural Post Offices (Derek Thomas)

- Heamoor, 

- Guval, 

- Carbis Bay, 

- Leedstown, 

- Praa Sands, 

- Newlyn, 

- Crowntown

- Lizard

- Porthleven

- St Keverne


These are communities that have either lost their post office branch or the branch is at risk of closure. The Government is clear that there is no ‘post office closure programme’ but the only way to secure these rural services is to enjoy the confidence of existing sub-postmasters and the confidence of businesses who could consider hosting a post office counter in their outlet.


My belief is that large numbers of Sub-postmasters have lost confidence in Post Office Ltd and for businesses considering taking on a post office service within their current establishment, the word is out there that it is not a viable business and they would do well to leave well alone.


This is not something I’ve stumbled upon recently. I’ve been working with post office branches, post office LTD and local communities for over three years now. Despite an extraordinary effort by all those concerned including local post office LTD personnel we have not yet been able to resolve the difficulties faced by sub-postmasters. 


It is vital that we secure the future of the rural Post Office network which, as we know, is integral to rural communities, often forming the hub of commerce within these villages and providing banking and Post Office services constituents would otherwise be unable to access.


The problem of post office closures is not a West Cornwall issue alone, although I would argue - if we can resolve some of our particular challenges, these solutions could be applied elsewhere, strengthening the network for all who need it.


The National Federation of Sub-Postmasters, with whom I have been working closely, inform me that in 2018 8% of Post Offices have seen temporary closure. With 66% of these closing due to the resignation of the postmaster. For many postmasters, the business is not viable nor fair financially. This is particularly the case in rural constituencies like my own and has a profoundly adverse effect on customers who rely on the vital services the Post Office provides.


Earlier this year I sought the support of constituents in West Cornwall, calling on the Government and PO Ltd to: 

- make sure that sub-postmasters have a viable business

- to force banks to pay sub-postmasters a fair price for their services

- to increase services available to rural post office branches


 I contacted about 10 thousand people and received over 1700 responses. This is a greater response than any previous local campaigns and show how important the issue is to my rural constituency. They agree with me that it is in everybody’s interest to have a viable post office network which creates thousands of jobs and sustains communities.


It is vital that the Government intervene to ensure sub-postmasters have a viable business. Post Office Ltd take responsibility for the post office network on behalf of the Government and it is my view that they are falling short. This is despite the Government’s £2.4bn investment in the network since 2013. People expect to get value for money.


Overall remuneration to Postmasters fell again last year by £17m and predicted to fall by a further £10m. The rural post office network is not in a good place yet PO ltd reported profits of £36m in the year 2017/18.


I have been working with one particular community on the Lizard. The current arrangement, which ensures the local community has access to post office services both in the summer and winter, can not be maintained and nor should it - but the post office have spectacularly failed to find an alternative arrangement that maintains a service for the community and treats the current post office master, who has given several decades to his community, with respect. In a meeting with the CEO of post office ltd on April 24th this year I was assured of her commitment to find a solution. There has been no further communication from her or her office. The solution has been left for the local community and local PO representative (who’s responsibilities span the entire Duchy of Cornwall) to find a solution so, three years on - no change.


In a recent meeting with the Minister for Rural Affairs I proposed a winter payment plan which recognizes that the footfall over the winter is considerably reduced so that their business can be sustained through quieter off-peak periods. This will maintain the service for those who live in the area all year round and ensure that the service is open when the visitors descend. 


I also stressed the need for a dedicated mobile service so that post office services can be provided quickly following a post office branch closure. 6 of the 7 post offices closures I see in West Cornwall leave local residents with no easy access to post office services since their branch has closed. 


I’m grateful that Lord Gardiner and his officials agreed to meet with the Chief Executive of the Post Office Ltd to explore these demands.


A post office branch must be a viable business for the owner and I’ve long argued that post office ltd has no vision or plan for rural post office branches. It is now for the Minister to intervene and find a bespoke solution that supports post offices during the winter to maintain an essential service all year round.


We are all acutely aware of the decline in high street banks. Now that most banking transactions can be made in a post office branch this offers a real opportunity for the post office network. 


The reality is that despite post office banking experiencing strong growth of £20m as reported in the PO’s own financial report this year. Of the £20m only £3m filtered through to Postmasters. The industry average charge to a business depositing £1000 in local and community branches of the Post Office is £10 of which they will only receive 24p for the transaction. In a mains branch the figure is slightly higher at 37p per £1000. For are least one of my former post offices it was the banking that broke the camel’s back. He was handling 10s of thousands every week, taking the risk and the responsibility but being paid a few hundred pounds each year for the privilege. The community no longer has a post office branch.


The Government shares some responsibility for the services that are available over a post office counter. As we speak DWP are writing to people who use the post office account to receive their money to encourage them to switch to a bank account. They can still do the transaction at a post office for as long as it survives but the DWP are sending a worrying message regarding the government’s commitment to the post office by encouraging people away from the Po account. I’ve met and received some reassurance from the DWP Minister on this issue. The Government needs to be taking steps that help our Post Office and help our vulnerable constituents. Not creating confusion and divorcing each other from their source of support.


For many the Post office is the only access to the benefits system and the Post office also relies upon this service for customers. Furthermore, a sub-postmaster is also someone who looks out for vulnerable customers and can often be the person who reaches out to those who are lonely and isolated. 


There is an added dimension and potential threat to the post office network that must be considered. Royal Mail and the Post Office are different businesses, facing different challenges. In order to maintain the Post Office in public ownership and enable private sector investment in the Royal Mail letters and parcels business, the Post Office Ltd was separated from Royal Mail Group Ltd in April 2012. To ensure the continuation of their existing business relationship, at the time of separation, the management of Royal Mail and the Post Office put in place a commercial contract between the 2 parties (with the longest possible contract length permitted by law). This commercial agreement is coming to an end and negotiations have started to establish their future relationship. They compliment each other well and are natural business partners. The Chief Executive of Royal Mail has said it would be “unthinkable” that there would not always be a strong relationship between Royal Mail and the Post Office.


However, already I understand that Royal Mail have introduced a service where people post items directly through the counter at the sorting office by-passing the post office and are also trialling a local collect service using a national convenience store rather than the post office network. It would not be right for the Minister to intervene in a commercial contract but she must press Post Office Ltd to ensure they are doing everything to be competitive and tender for these new services.


There is no time to waste. Thousands of post offices are at risk. This is an opportunity for the Government to reaffirm it’s commitment to local businesses and it’s recognition of the essential and valuable work of the rural post office network. 


For the sake of rural post office branches and for all those who value and depend on their services my plea to the Minister to

- make sure that sub-postmasters have a viable business

- force banks to pay sub-postmasters a fair price for their services

- Ensure across Government Departments of a commitment to increase services available to rural post office branches