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Postmasters' pay

Volume 664: debated on Monday 9 September 2019

The petition of Residents of Chilton,

Declares that no postmaster should be paid below the minimum wage; further that a related petition on this matter has received significant local support.

The petitioners therefore request that the House of Commons urges the Government to call on the Post Office Ltd to review postmasters' pay to prevent postmasters being paid below the minimum wage.

And the petitioners remain, etc.—[Presented by Phil Wilson, Official Report, 10 July 2019; Vol. 663, c. 411.]


Observations by the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kelly Tolhurst):

The Government recognise the key role postmasters play in ensuring Post Office branches thrive and remain at the heart of communities across the UK. That is why we committed in our 2017 manifesto to safeguarding the post office network and protecting existing rural services. Since 2010, the number of branches in the network has been at its most stable for decades, at over 11,500. The Post Office has invested significantly in the network to enable its branches to operate more effectively and efficiently.

While the Post Office is publicly owned, it is a commercial business. The Government sets the strategic direction for the Post Office—to maintain a national network accessible to all and to do so more sustainably for the taxpayer—and allows the company the commercial freedom to deliver this strategy as an independent business. The contractual relationship between postmasters and Post Office Limited is an operational matter for the Post Office.

I would like to reassure people that the Government and the Post Office care deeply about the thousands of postmasters who operate the network and who are independent, self-employed business people. We understand how important it is that running a post office is attractive and sustainable for them.

Since 2012, as part of the network transformation programme, for the majority of branches it has been important that the delivery of post office services is combined with a good retail offer for the Post Office to be successful. For around 3,200 community branches, where a retail offer is not viable, Post Office Limited pays some fixed remuneration to reflect this.

To explore what more can be done to ensure postmasters are adequately remunerated, on 13 June, I chaired the first in a series of quarterly working group meetings between the Government, Post Office Limited and the national federation of sub-postmasters. I, together with Post Office Limited, also kicked off a comprehensive review of postmasters pay, involving postmasters, commercial partners and the NFSP. The aim of the review is to identify products and services that could see an increase in the variable fees paid to postmasters to ensure postmasters are rewarded fairly for the vital services they provide.

On 1 August 2019 Post Office Limited announced two interim changes in agents’ remuneration which they will immediately implement as the review progresses. These include bringing forward the date that postmasters would receive an increase in remuneration for cash deposits from October to August and increasing fixed remuneration for around 3,200 community status branches, which are effectively the last shop in the village. It is worth noting that cash deposits are the fastest growing banking transactions under the banking framework agreement, so postmasters are set to benefit greatly from this increase.

These first steps will make a real difference to postmasters’ incomes and help those in rural branches, who are the lifeblood of their communities. Post Office Limited is fully aware that more needs to be done to enhance the value of the Post Office and they will be announcing further measures in the winter. The Government look forward to seeing further positive outcomes as the review continues in the coming months.