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1 in 3 Post Offices to close due to pay cut

 

Thousands more post offices could disappear over the next two years, the National Federation of Sub-Postmasters warns today.

Squeezed: Sub-postmaster Bhavna Desai faces a pay cut.

It says a 'totally unacceptable' pay cut being imposed on its members is putting around a third of businesses in danger of collapse.

George Thomson, the federation's general secretary, said a 'double squeeze' of falling income from Post Office Limited, and soaring staff and utility bills meant many post offices were struggling to stay afloat.

And he warned that with just 11,500 remaining across Britain, another 3,000 were at risk of closing.

Post Office Limited pays all the country's 9,000 sub-postmasters a fixed income, known as a 'core tier payment'. Although the amount varies according to the size of the business,

all receive a minimum of £10,000 a year. But Mr Thomson said this is set to drop this month by an average of £100 a month, or £1,200 a year.

At the same time, the second tranche of sub-postmasters' income - the commission paid on transactions - is also being cut.

Santander, owner of Alliance & Leicester and Abbey, is due to change its contract with its business customers from September 1 - a move which could cost sub-postmasters more than £2million a year.

Three years ago, if a business went to a post office to get £100 in change, the sub-postmaster would have been paid £1.20. Today that fee is 60p and this will become 40p in September.

At the same time, the transaction fee for depositing a cheque for £500 will fall 19p to 14p. 'Advalorem' payments, which vary according to the size of the cheque or cash deposit, will also fall from 22p per £1,000 to 16p.

In a letter to Royal Mail chairman Donald Brydon, Mr Thomson warned that subpostmasters, who are self-employed, felt 'totally abandoned' by the firm. He revealed more than 50% take home less than £1,000 a month, according to a poll of 755 federation members.

One in seven said they 'took nothing at all' last month, and were instead relying on their savings and pensions to keep going.

Talks over the bitter pay dispute, which started in November, have broken down, and the federation said yesterday that it would 'not sit idly by and allow this to happen'.

It said it was planning to do everything possible to ensure 'the British public and their

elected representatives at all levels are made aware of the unfair treatment of sub-postmasters'.

Mr Thomson also revealed many are furious that they are struggling at a time when Royal Mail is believed to have made record profits and postmen have managed a generous pay rise.

The Communication Workers Union recently negotiated a 7% salary increase for postmen over the next three years, starting with a 2% rise this month.

And Mr Thomson claimed Post Office Limited will shortly reveal record profits of £62m and bonuses of 'at least £10m' for its executives - figures the company claimed are 'speculation'.

A Post Office spokesman said that it had done all it could to ensure the best possible deal for sub-postmasters, whose average pay rose 5% last year.

'We expect many subpostmasters to see their remuneration increase further despite tough trading conditions,' he said.

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'It's like a third woirld sweatshop'

Bhavna Desai has run her post office in Swinton, Manchester, for 20 years - but fears it may not survive for much longer.

The 50-year-old said her income has plunged to such an extent that her business is on the brink of collapse.

In 2008/09, her total gross pay fell 18%, while last year it decreased by a further 6%.

She has been forced to make two of her four staff redundant and said the commission she used to receive for processing utility bills has been slashed from 14p to just 6p. And with her income set to fall again this year, she is worried about the effect on the community and her elderly customers if her post office closed down.

'When a post office shut down a few years ago, it hit the whole parade of shops,' she said. 'It is like a ghost town.

'I used to run a thriving business which had a lot of respect in the local community and it felt very worthwhile. Now I feel like I'm working in a Third World sweatshop.'

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