Government contracts and local cases highlighted as Carmichael leads Post Office pay debate

Orkney and Shetland MP, Alistair Carmichael, has this week questioned the “Gordon Gecko” negotiations between public bodies, and highlighted financial challenges faced by local post offices while leading a parliamentary debate on remuneration for sub-postmasters and sub-postmistresses. In the debate on Tuesday afternoon, Mr Carmichael noted a range of local businesses struggling to keep post office counters financially viable in calling for a new settlement. He warned that “hardball negotiations” between public bodies like the Post Office and DVLA risked losing sight of their need to service local communities.

Speaking on the issue of Post Office government contracts, Mr Carmichael said:

“Today it has been brought to my attention that negotiations between the Post Office and the Driver and Vehicle Licensing Agency are reaching a crisis point. At present, 6 million DVLA transactions, worth something in the region of £3.2 million, are made through post offices every year. I am told by the Post Office that the likeliest outcome is that it will get a 12-month extension to the agreement, which would take it to 31 March 2024, but that the DVLA is not committing beyond that point.

“The point that really stands to be made about the Post Office and the DVLA is that these are two public bodies. Negotiating a deal between two public bodies is about access to a public service. They are behaving as if they are in some hardball negotiation between Gordon Gekko and The Wolf of Wall Street. They are losing sight of the fact that they are there for a specific purpose, and they should focus on that.

“We have an army of public servants, the length and breadth of this country, who provide a tremendous service for our communities. That army, like all armies, needs leadership, and that is where we are losing the opportunity at the moment. They need leadership; they need respect for the work they do; and above all else they need fair pay for the work that they do for our communities.”

On the specific cases of sub-post offices in Orkney and Shetland, Mr Carmichael said:

“My interest was really caught by one of the sub-postmasters in Shetland, Brian Smith, who runs the Freefield sub-post office in Lerwick, which is one of the bigger sub-post offices in Shetland. He came to me, showed me the figures and said quite simply, “How do I make a living from this?”

“I went back to see my constituent last week and he showed me his remuneration note. He is open for 51 hours per week, with two people serving. He pays above minimum wage, but at minimum wage that would be £1,071 per week, which would be £4,641 per calendar month for wages only—before even turning on a light switch or heater. His income from the post office in that month was £4,153.56. I can find no better illustration of the mismatch between what sub-postmasters need by way of remuneration and what they actually receive.

“I think of the example of the post office in the village where I live [Evie]. He has taken what was a good Orkney country shop and brought in a whole range of different fresh foods—Orkney fish, Orkney beef, everything. The quality of what we can get in that shop now is phenomenal, but he tells me it costs him to have a sub-post office counter in the business. That should be something that adds value, but we are seeing the determination and commitment of sub-postmasters and sub-postmistresses around the country being taken advantage of.

“Juliet Bellis, who runs the sub-post office in Fetlar, makes the point that elderly and infirm residents there rely on the post office to charge up their electricity keys. She says:

“I am contracted to open for 8 hours per week but I have trained up everyone who works in the shop so that, if the shop is open, the post office is available. The post office is therefore getting 35 hours from me in the summer and 15 hours a week in the winter. For this I get paid £390.90 per month, slightly above the current minimum wage if I opened for 8 hours per week.”

“The same point was made to me by Valerie Johnson, who is the sub-postmistress at Baltasound, Unst. She pointed out that holiday pay is contracted to cover roughly £5 per hour, but there has been no update since 2016.”