Closure of 500 to 600 branches would tear the heart out of communities

Two out of every three post offices in the west Highlands face closure in the next few years unless the UK government backs a plan to create a national PostBank, according to the leader of the UK’s subpostmasters.

George Thomson, the general secretary of the National Federation of SubPostmasters, warned Scottish politicians to stand up for the post office network which he described as at the heart and soul of hundreds of small Scottish communities, or risk it disappearing for good.

“If you draw a … line from Glasgow to Inverness, two thirds of the rural post offices west of this line are not viable as they currently stand,” Thomson told the Sunday Herald. “That’s a fact. We face the closure of 500-600 more post offices in Scotland unless the politicians of all persuasions start to appreciate the

seriousness of the situation.”

He added: “When the UK faced financial Armageddon last year, and the banks’ ATM network was within hours of running out of cash, emergency contingency plans were being made by the government across the UK with the Post Office to ensure that people on child and disability benefit, and pensioners received cash. We were an important national asset then. Yet the government is not willing to make a commitment to creating a national PostBank, which would help keep hundreds of post offices open.”

Thomson, who was a subpostmaster at Tranent, East Lothian, before being elected as the UK general secretary, started work in the Post Office in 1979. His wife now runs the post office branch as subpostmistress.

“We’ve been to Leeds and Cardiff to talk about our six-point plan which includes the establishment of a Postbank – but in Scotland the politicians have not woken up to the consequences yet for local communities. We’re urging them to do something.”

“We’ve got this unique network of 12,000 offices across the UK. It is half the size that it used to be – but it is still a national asset. In 2000, there were 18,393 offices, so we’ve had a drastic closure programme since May 2007. We’re at a critical [stage] but we can’t allow the network to fall any further. Yet subpostmasters are being driven out of business because they can’t afford to make a living.”

Most subpostmasters operate as small businesses. Due to their reduced incomes many earn the equivalent of the minimum wage, relying on extra cash from general stores or gift shops to survive.

Over the last ten years a number of services have been taken away from post offices, including the loss of Post Office card accounts and the loss of the TV licence contract. Post offices have also faced increasing competition from the internet and privatised postal services.

Highland postmasters are calling on the Royal Bank of Scotland , now owned by the Government, to join its network, so that banking transactions can be carried out in post offices. Clydesdale Bank and Lloyds Banking Group are already part of this scheme, which brings in revenue for post offices.

Thomson has had two meetings with Lord Mandelson, the Business Secretary, about setting up a UK PostBank which will meet the government’s targets of increasing competition and choice for financial services. The Department of Business, Enterprise and Regulatory Reform and Regulation estimates the cost of a national PostBank would be £2 billion.

THE Post Office Limited – which Thomson described as a ‘financial basket case’ – currently receives a Network Subsidy of £150 million a year, to support essential infrastructure, but this is not paid to individual post offices.

“Everyone seems to think a PostBank is good idea but no-one is prepared to back it with the kind of cash it will need,” said Thomson. “I agreed with the banking bailout. But in the last few weeks Lloyds Banking Group and RBS have had another £30 billion to prop them up. Since the early 1990s, we’ve had more and more commercial services taken away from us, so we need to have something to replace this.”

“Politicians talk about how important post offices are for the fabric of our local communities – and local people write to them more on this issue than almost anything else – but when it comes to the concept of a PostBank they are just not delivering. A PostBank will stabilise the network and make amends for some of the terrible mistakes of the past.”

He said that in the 1980s the Post Office was the envy of the world. But £5 billion has been taken out when there should have been investment in post offices and sorting offices. Thomson wants National Savings and Investments, which was part of the Post Office from 1868, merged back and for the banking licence from Northern Rock, which was nationalised by the UK government in 2008, to be handed over to them.

Jeremy Purvis, the Liberal Democrat MSP for Tweeddale, Ettrick, and Lauderdale, said: “We are in favour of a PostBank and we’d like FiSab, the Financial Services Advisory Board, to look at this matter and help the Scottish Parliament make a recommendation

to the UK government about how it might work.”