PMQs: PRIME MINISTER MUST ACT TO PROTECT LOCAL POST OFFICES FROM CLOSURE

14th November 2018

The SNP’s Small Business spokesperson has called on the Prime Minister to reverse the tide of Post Office closures, as Postmasters struggle to survive on the contract introduced by the UK government.

Marion Fellows MP said the Prime Minister must intervene to ensure Postmasters receive a fair rate, and Post Offices stay open.

The MP has also written to the Tory minister for Postal Affairs, Kelly Tolhurst, today seeking a meeting over warnings that low pay levels are a leading cause of branch closures across Scotland – with postmasters taking an average pay cut of 4.5% this year, with 11,500 Post Office workers receiving a combined £17m pay cut.

The MP for Motherwell & Wishaw also relayed concerns over the decision by the Post Office Network to turn 74 crown branches into franchises run by WHSmith, and the subsequent impact this could have on rural communities and businesses who rely on these services.

Last year, a Citizens Advice study showed that over two million small businesses – 62% of small businesses in the UK – use Post Offices at least once a month. The research also revealed that people (49%) found Post Office branches more important than a bank branch (31%), library (29%), or a pub (25%).

Commenting, Marion Fellows MP said:

Post Offices are closing in their hundreds as Postmasters struggle to make a living on the contract introduced by this UK government – the Prime Minister must take action.

Through its North Star initiative, the publicly-owned Post Office is aiming for £100 million of profit by 2021 while Postmaster pay has declined by over £107 million since 2012. This UK government must take action now to save our Post Office Network and step in to ensure Postmasters receive a fair rate.

The SNP supports a strong network of Post Office branches which form the backbone of local communities and businesses throughout the UK. However, the recent decision to turn 74 crown Post Offices into franchises in WHSmith stores is also alarming – particularly given reports that franchising is being done so without consultation with existing local Post Offices, meaning the competition risks destabilising the network further.

This is of particular concern given that at a recent APPG meeting, the Post Office’s Director of Sales and Trade Marketing stated that they have no contingency plan in the event of WHSmith – which has experienced 14 years of consecutive sale declining – collapsing.

I urge the Prime Minister to review the sub-Postmasters’ contract introduced in 2012 and commit to ensuring that further franchising only happens with consultation.

I am also concerned by reports that the Post Office is spending £10m on legal costs on defence of a class action from around 600 Postmasters, pertaining to lawsuits of false accounting broad against them by Post Office Ltd since 2000, which appears to be the fault of errors in the Horizon accounting system.

The UK government must set out whether or not it had any communication with the Post Office about this course of legal action.