- 1:17 pm
- With permission, I will make a statement on the Post Office. Frankly, the Government inherited a Post Office that is simply not fit for purpose, following disinterest from the previous Government, a toxic culture in head office and years of under-investment.Our top priority remains delivering redress to those affected by the Horizon scandal. We have already taken significant steps to increase the payment of redress, which has nearly doubled under this Government. Let me be clear with the House, though. There are still complex cases to resolve, and we have identified gaps in the compensation process, but we are beginning to make progress. As of 31 October, £438 million has been paid to over 3,100 claimants. In July, we launched the new Horizon convictions redress scheme for victims whose convictions were overturned by legislation, and we have announced our intention to set up an appeals system for the much-criticised Horizon shortfall scheme.We were clear in our manifesto that we will work to strengthen the post office network in consultation with postmasters, trade unions and customers. The post office network provides critical services that are valued by communities across the whole of the UK. Their essential services go beyond post; they provide access to cash, banking and other financial services too. This Government recognise that access to cash remains particularly important to millions of people across the UK. Through its network of 11,500 branches across the UK, the Post Office continues to provide vital banking services to communities and businesses alike through the banking framework, and to protect access to cash.I know how highly this House rightly values postmasters and what they provide day in and day out to the communities they serve, but we have to recognise that the Post Office is far from perfect. We have seen this from the evidence given at the inquiry. It is clear that there needs to be a significant cultural change at the Post Office to ensure that it genuinely prioritises the needs of postmasters and delivers customers’ needs far into the future. It is also clear that more needs to be done to rebuild trust within the business and with the public who depend on its services. It is also no secret that the business is facing commercial challenges. Nearly half of its branches are not profitable or only make a small profit from the Post Office business, postmaster pay has not increased materially for a decade, and the company has a high cost base and needs to transform its IT system.Earlier today, Nigel Railton set out his ambition for the future of the Post Office, in his role as its chair. Postmasters have to be placed front and centre of the Post Office, and we agree that the culture of Post Office headquarters, in particular, needs to change fundamentally to deliver that. As part of this, the Post Office plans to reduce central costs and look seriously at other ways to deliver efficiencies, which should enable real-terms increases in postmaster pay.Mr Railton’s ambitions are a new deal for postmasters that puts postmasters at the heart of the Post Office. There will be stronger postmaster engagement in the running of the business. As part of this, a new postmaster panel will be established to enable current postmasters to work with the company to improve the support and training provided to postmasters. The Post Office will also set up a new consultative council that will work with the Post Office’s senior management on how these new plans are taken forward, to provide genuine challenge and maintain focus on the needs of postmasters. Mr Railton’s plan seeks to makes changes to the business, with the ambition of significantly increasing postmaster remuneration, and it sets out an intention to transform the service and support that postmasters receive from the Post Office.No decisions to close any or all of the remaining directly managed branches have been taken. The Post Office will continue to deliver on the 11,500 minimum branches requirement set by Government. We have made it clear to the Post Office that we expect it to consult postmasters, trade unions and other stakeholders before any individual decisions are taken. Aspects of the plans are also subject to Government funding and the outcomes of the upcoming spending review.Lastly, we have already set out our plan to publish a Green Paper to consult the public on the long-term future of the Post Office, not least on how it should be governed after a decade of decline. Doing nothing at the Post Office is simply not an option. There is more work to be done, but there has to be change. I commend this statement to the House.
- I call the shadow Minister.
- 1:22 pm
- I thank the Minister for his statement and for sharing an advance copy with me. Let me add from the Opposition Benches that the victims of the Horizon IT scandal deserve full redress and I welcome the efforts to hasten the roll-out of the payments being made, building on the work of my excellent hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). I note that we were promised an update on that particular matter by the Government in mid-November. I am not sure whether that was what the Minister was doing today, but please can he undertake to give this House regular updates on such an important matter?We also welcome the increased focus on postmasters. That is absolutely right. It is, however, with regret that we learn today that the Post Office feels it has no choice but to begin the process of making radical decisions to reduce costs. How has this come about? In common with many other town centre enterprises, the Post Office’s costs are skyrocketing. Business rates are going up, national insurance contributions are going up, the threshold at which national insurance becomes payable is going down and its obligations around the minimum wage are going up.There is a direct line of sight connecting today’s announcement and the Chancellor’s Budget, yet the Minister did not mention that once in his statement. The chairman of the Post Office himself said in his speech this morning that those changes have made business more difficult for Post Office branches. That is something for Labour Members to consider. Can the Minister guarantee that the Budget has had no impact on this decision? Alternatively, since that is not the case, does he acknowledge that this was the inevitable consequence of the burdens that his Government are placing on businesses, large and small?Will the Minister tell us when he first knew of the plans set out by the Post Office today and whether he approved the chairman’s statement? The Post Office chairman has made it clear that these plans are subject to Government funding, so can the Minister make a commitment from the Dispatch Box today that that funding will indeed be coming, and that we will not face six months of uncertainty while those negotiations continue? Did his Government do an impact assessment to determine the cost of the Budget measures on the Post Office and other local services? If they did that impact assessment, will they publish it, and if not, why not? Were they worried that the Post Office would not like the result? The measures in the Government’s Budget were clearly, as we see here today, a jobs tax. After today’s impact on 100 high streets, will the Minister go back to the Chancellor and ask her to nix the NICs increase?
- I am grateful to the shadow Minister for some of his comments. I am happy to confirm that I will keep the House updated on work around the future of the Post Office, as well as, even more importantly, on the work to ensure that all those sub-postmasters who were the victims of the Horizon scandal get full and fair redress. On that point, I should say at the outset that I have met a series of sub-postmasters who were victims of the Horizon scandal, and each of them certainly left their mark on me. Their stories will stay with me for a very long time, and in that regard I am sure that I speak for the whole House, given the conversations that Members have had with individual sub-postmasters in their constituencies. I am therefore acutely aware of my responsibility, and the Government’s responsibility more generally, to follow through on our commitment to speed up redress.The number of cases that have been settled with full and fair compensation has nearly doubled in the four months since we came into government, compared with the four months before. We have taken a series of additional steps to try to make it easier for sub-postmasters who were the victims of the scandal to get full and fair redress quickly, not least by fixing some payments for those applying under the Horizon shortfall scheme and similarly fixing some payments under the Horizon convictions redress scheme, which we launched back in July.The hon. Gentleman’s wider point about the Budget’s impact on the high street sounded like he was replaying his lines from last week’s Budget debate. I recall him being the right-hand man to Kwasi Kwarteng, who helped to do huge damage to businesses up and down the country and helped to drive interest rates to a 16-year high, so I gently suggest that he has more work to do to be convincing on his support for businesses.I hope the hon. Gentleman is willing to take responsibility for another impact, because more than 9,500 bank branches have closed over the past 14 years, which has had a considerable impact on the future of the high street. With Nigel Railton, our plan is to improve banking services and to roll out banking hubs, which I hope will make a significant difference.
- I call the Chair of the Business and Trade Committee.
- Today is the last day of the Horizon inquiry. I look forward to working with you, Madam Deputy Speaker, and with colleagues across the House to explore appropriate sanctions for those who clearly misled us as the scandal unfolded. I look forward to seeing the Minister and the Minister of State, Ministry of Justice, my hon. Friend the Member for Swindon South (Heidi Alexander), before the Committee on Tuesday 19 November to explore how redress payments can be paid faster.It is surely right that we aim to grow the top line of Post Office businesses, which has to mean that high street banks contribute more to the core business. What steps can the Minister take to ensure this happens?
- I welcome that the Committee’s first act is to look at redress for sub-postmasters who were victims of the Horizon scandal. I will happily appear next week to talk through where we are on compensation payments.My right hon. Friend is right to say that one of the bright spots in the Post Office’s future lies in banking, and the continuing commitment of its sub-postmasters is the brightest spot. With the right support from the financial services industry, there is clearly more that the Post Office could offer on the high street through banking hubs and the post office network. We will work with the Post Office, and the banks have a particular responsibility, given how many bank branches have closed, to work constructively with the Post Office to improve the banking offer on the high street.
- I call the Liberal Democrat spokesperson.
- I also thank the Minister for his statement.Post Office branches across the UK are a vital part of our local communities and high streets, with millions of people depending on them, especially in more rural areas of the south-west, such as my constituency. The news that 115 branches and around 1,000 jobs could be at risk is extremely concerning. I am pleased to hear the Minister’s reassurances, but the organisation needs reform. Local communities cannot be left without the essential services that post offices offer, especially as we see high street banks disappear. The Government must guarantee that local services and post office jobs are protected.We also urge the Government to take action to set the Post Office on a sustainable footing for the long term. The Liberal Democrats have put forward a proposal for mutualisation of the Post Office, which would give sub-postmasters more independence and control. We should encourage post offices to play a more active role in our local economies, acting, as Members have mentioned previously, as community banking hubs and Government services hubs.These post offices are often the only non-digital places where a local community can access Driver and Vehicle Licensing Agency services and passport services, or to prepay for their utility bills. These post offices are essential for some of our more elderly and vulnerable residents.The Government have announced that they are looking into broader reform of the organisation, and they will produce a Green Paper next year. Will the Minister assure the House that these proposals, including mutualisation and strengthening the services provided by post offices, will be properly considered so that we can ensure post offices are fit for the future?Madam Deputy Speaker, I have a final quick point—
- Order. You only have two minutes.
- I underline that no decision has been taken on any or all the directly managed branches. However, these branches cost significantly more to run than those run by franchisees. We have made it clear to the Post Office that, as it reviews these costs, it must talk to sub-postmasters, trade unions and other stakeholders.The more general point about ensuring that people in rural areas can access a post office branch is well understood within the Department and across Government. There has been no decision to change the commitment to run 11,500 branches or to change the level of Government funding provided to run the network across the country.I agree with the hon. Member for Chippenham (Sarah Gibson) that the Post Office can do more. That is one reason why we committed in opposition—and are delivering in government—to rolling out more banking hubs, which will be run by the Post Office. She made an interesting point about digital exclusion and the Post Office’s potential to do more in that regard.Lastly, given my background, I am interested in mutualisation, but I hope the hon. Lady will recognise that there are significant challenges in determining whether mutualisation is a realistic possibility at this stage. One reason for our commitment to publishing a Green Paper next year is to explore these issues in more detail.
- My hon. Friend is insistent that the Post Office continues to play a vital role in our communities. Given that the Horizon inquiry finishes today, will he say more about how sub-postmasters will now be considered by the Post Office in a way that, frankly, they have never been before?
- Each time I have met a sub-postmaster who was a victim of the Horizon scandal, I have been shocked by the way the Post Office treated them. I am sure other Members share that sentiment, having spoken to sub-postmasters in their constituencies who were also victims of the scandal.The Post Office’s culture must change fundamentally. I welcome Mr Railton’s plan to set up both a consultative council, to work with sub-postmasters on the Post Office’s commercial future, and a postmaster panel to provide more training and support for postmasters. One of the challenges for the Government, which is why we have committed to publishing a Green Paper, is to think through how we lock in that culture change. My hon. Friend, and indeed other Members, will be very welcome to engage with us during that Green Paper process.
- There is a massive difference between Crown post offices and sub-post offices. Crown post offices are more expensive to run: they offer a bigger range of services and they are dedicated to the work of the Post Office. Given those costs, the Minister will know that several Crown post offices in his constituency and in mine are under threat. Will he give a commitment to the House that none of those Crown post offices will be downgraded before the Green Paper is issued and the future of the Post Office is decided?
- As I have already made clear, no decisions have been taken to close any directly managed branch. There is a need to look at the costs that the Post Office incurs going forward, in order to make it fit for purpose over the next five to 10 years. As a result, we will need to look at the future of directly managed branches, but only once Post Office managers have talked seriously with sub-postmasters, trade unions and other key stakeholders, as we have made clear to the Post Office. That is the right way to proceed. We have also made clear we will not change the commitment to provide 11,500 branches, which will ensure everybody continues to have good access to a Post Office branch in every part of the country.