Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): We welcome to the meeting Glyn Roberts, who is chief executive of Retail NI, and Chris O'Reilly, who is a board member of Retail NI. Chris is a business owner in my constituency and a very respected one too. I invite Glyn to make an opening statement.

Mr Glyn Roberts (Retail NI): Chair, thank you for the opportunity to present today. You have our submission, which we sent some time ago. I will set the context in which Retail NI and its members operate on the banking side, and Chris will go into more detail on the post office situation. Chris is a sub-postmaster. You are aware that the Finance Minister hosted a summit on access to finance some time ago. Chris represented us at that. I was at the previous one, when Minister Murphy was in the role. At those, we outlined the important role that our members play in this area.

It is worth pointing out that 80% of post offices in Northern Ireland and a significant number of the 1,800 ATMs are in Retail NI stores. Those are not exclusively grocery stores. You will find post offices in pharmacies as well, and some of our pharmacy members have post offices in them. There are 441 post offices in Northern Ireland.

The community role is worth pointing out, because, sometimes, that is the missing link. We can be very focused on the economy, jobs and access to finance. Our members, who you can find in every village, town and city of Northern Ireland, very much see the importance of that community role. In many respects, the provision of ATMs and post offices has filled the void that was left by so many banks closing their branches. There are understandable reasons for the bank closure programme, but it is not restricted just to many rural areas. Indeed, on the Ormeau Road, which is in your constituency, Chair, not a single bank is left. In Ballyhackamore, where our office is, you would be hard pushed to find a single bank left along the length of the Upper and Lower Newtownards Roads. ATM provision is equally an issue for some of our members who are on that road and in your constituency.

It is also worth pointing out the impact that the ATM robberies had. The previous time that we had a serious number of those robberies was in 2018 and 2019. Those robberies, during which terrible damage was done to many rural stores, further accelerated the decline of ATM provision. Whilst we still have the occasional attack, they are, thankfully, becoming few and far between.

I have a number of things to point out. It is worth saying that the decline in cash usage has stabilised. It still remains the second most popular way to pay. Indeed, the number of people who use mainly cash for day-to-day spending has hit a four-year high. That is partly related to the cost-of-living crisis. UK-wide figures show that some 1·5 million adults used mainly cash in 2023, which was the first rise since 2019. The Financial Conduct Authority (FCA) points out that Northern Ireland has a higher reliance on cash than any other region, with 13% of adults here saying that they use cash to pay for most things, including bills, compared with just 5% in England and Wales and 7% in Scotland. Of course, as constituency MLAs, you know that many people who are on benefits and many pensioners use cash to budget. The provision of access to cash, whether it is through ATMs or bank branches, is not really just a problem in rural areas; as I pointed out, it is becoming an important issue in urban areas.

Just 110 bank branches now remain in Northern Ireland, which is the equivalent of 5·8 per 100,000 of the population, according to 'Which?' in September 2024. When any high street business closes, there is a knock-on effect. We have seen that, when banks close their branches, as with the closure of any other high street business, it starts a domino effect, because it means that there is less footfall for surrounding traders. You then start to see that domino effect. Northern Ireland has the highest shop vacancy rate and the highest levels of dereliction of any part of the UK. That is an important issue. Understandable as it is that fewer people are going into bank branches, it still leaves a void. In an obvious and significant way, that contributes to the decline of the high street. We welcome the new rules from the FCA that mean that banks will have to give more consideration to a local community's cash needs when they decide to close a branch.

We have a number of asks, some of which are in our report. We want to consider a number of things. Obviously, the Finance Minister reactivated the rural ATM rates relief, and that was welcome. Doing so required a vote in the Assembly, and, when the Assembly was down, we tried to get the Secretary of State to reactivate it via Westminster, but that was not to be. That is an important measure. We looked into the issue, and, given the fact that it is not just a rural town or village issue but is just as much an urban issue, we ask that the extension to urban areas of that ATM rates relief with the same conditions as in rural areas be considered.

Likewise, there are three levels of rates relief for post offices. We would like full relief for post offices to be considered in order to stabilise that part of the market. Obviously, that would relate to the part of the store that has the post office. As you know, Chair, we are trying to get a significant amount of rates relief in other areas for different reasons. We also want local, regional and national governments to actively look at what extra services could be provided to post offices. Whilst we welcome the banking hubs, Retail NI would like to see a post office-first approach, if you like, to that to see what more we can do to enhance the post office network.

I will conclude by saying that it is worth pointing out that our members who operate post offices and ATMs do not make any money out of it, pretty much. Those are footfall drivers for them, but they recognise their role as community retailers and the role that they play in supporting their customers. They recognise that that is an important role, which they are prepared to do. You are seeing our members stepping up and providing a hands-on response to the bank closure programme.

Mr Chris O'Reilly (Retail NI): Thank you, Glyn, and thank you, everybody, for the opportunity to give evidence.

The Chairperson (Mr O'Toole): I should say, "Thank you" to you, as a business owner, because we recognise that you have businesses to run, so your time is more valuable than others'.

Mr O'Reilly: I consider this a very good investment of my time [Laughter.]

The Chairperson (Mr O'Toole): I hope so.

Mr O'Reilly: I will articulate today the fact that I am paying for the right to access cash. That is what I want to share. I put a similar point to the Minister at the banking round table. However, I would like to flesh that out a little bit in the context of the Post Office. I think that you will hear from the National Federation of SubPostmasters (NFSP) at some point as well, but I will whet your appetite before the big guns roll in behind that. I will give you a granular understanding of what it is like for me as a business operator to sustain the right to access to cash, as the banks are disappearing off the high street. With 441 post office branches across Northern Ireland versus 110 bank branches, we are going to be the forum for providing that access.

Post office viability is in a precarious position right now. You will have seen the topical stuff around the Horizon inquiry, but the lesser crime that has been committed against postmasters over a longer period is that we have not been getting the adequate pay rises to allow us to sustain the post office network. The network is in a precarious position.

I will romanticise a bit and take you back to the heart of lockdown, when the social value of the post office was fully appreciated and we kept people connected. As we came out of that and into the energy crisis, it was the post offices that delivered those payments to people overnight across the whole of the UK. It is a very powerful network, from the point of view of community contribution and from the functional end. As an infrastructure mechanism, however, it is massively underfunded, and I will give context to that.

The network went through transformation activity between 2015 and 2018, and a class action is being brought about by a number of postmasters to say that there was a very poor outcome for postmasters who went through that transformation. We had our base wage removed from us, and we were cajoled on to a commission-only network. That commission-only network has, in turn, not provided enough pay rises for us to remain sustainable. At this point in time, 70% of postmasters across the UK earn less than the living wage from their post offices. Indeed, I supplement the three post offices that I have with my retail proposition.

I will lose approximately £80,000 this year operating three Post Office branches. That is the deficit that will come about from that. The network transformation model that was sold to us back then was that we would become the front end of government. We would have that funnel of footfall coming towards us and would generate more transactions, which would offset the wage that we would lose and, in turn, would keep us sustainable and viable. The exact opposite has happened. The Government have digitised and have stepped away from the post office counters. Indeed, one of the small government services that we have remaining with us, which is the Driver and Vehicle Licensing Agency (DVLA), is on a ticking clock because central government may or may not extend that contract.

When a bank leaves the high street, it will, on average, save about £600,000 in that closure. That is the bank's prize for closing. We would articulate that the right to access to cash needs to be paid for by banks and government. It needs a bigger contribution than that which we are currently getting. Cash is not leaving society, as Glyn discussed; indeed, in December, we postmasters took more cash over our counters than at any point in our history.

An element of that has to do with closures, but we are seeing that cash usage in society has stabilised. At a time, my business's transactions would have been 60% cash and 40% electronic. Coming out of COVID, it lurched down to about 70% and 30%, and the percentages are staying there. I do not see any drop-off in cash usage.

The Chairperson (Mr O'Toole): Is that 70% card usage?

Mr O'Reilly: Yes, it is now 70% card and 30% cash.

The Chairperson (Mr O'Toole): Given what we talked about before, that is probably relatively higher than in the rest of the UK.

Mr O'Reilly: Yes, it is higher. On the flip side, we are seeing a change in consumer behaviour. Anecdotally, one hears at the counters — at the tills in the store and the post office — that people whom one might perceive as being less financially sophisticated are using cold, hard cash as a budgeting mechanism. They take out money and put it in their purse or wallet, and that is an effective way for them of controlling and managing their income.

In my three branches each month, I handle approximately £2·5 million in cash, either in or out of the business, and I earn about £5,500 from doing that. That is 35% of my overall income, so banking has become a big part of what the post office network now is. It used to be a very small remunerator, but it is now the second pillar from an income contribution perspective, behind mail. For the same period, 35% of my staffing costs will be £7,000, there or thereabouts, so I am losing £1,500 a month from handling cash. That is a back-of-a-fag-packet calculation, but if it were forensically analysed, it would not be too far wrong. In my eyes, I am therefore subsidising the right to access cash.

On Glyn's behalf, I recently attended the banking round-table event with the Minister. The CEO of the Financial Conduct Authority was there and was very positive about how 99·9% of people in an urban environment are less than 1 mile away from accessing cash. My comment back to him was, "Yes, because I am paying for it". In simple terms, that is exactly how I see it. I have spoken about the precarious nature of the post office network. Post Office Ltd has now finally recognised that 50% of postmasters' businesses and post offices alone are not viable and are instead loss-making businesses. The Post Office has therefore produced a transformation plan, which is that an aspirational £250 million will be paid to postmasters over the next five years to increase our wages and ensure the viability of the network. Some £120 million of that is due to come in the 2025-26 fiscal year, which is a couple of months away. That is all subject to central government approval and the Government putting extra funding into the post office network. The transformation plan has not yet been presented to the National Federation of SubPostmasters, so, as a postmaster, I do not understand what it looks like. How am I supposed to budget for a small business, employing just over 90 people across the city, when I have National Insurance and living wage increases coming and when energy costs are not necessarily abating? I do not know what future income I will have or whether that income will arrive at my door come April or beyond, because the Government and Post Office Ltd have yet to make that clear.

My ask, which is pretty immediate, is this: what pressure can you bring to central government and Post Office Ltd to bring clarity to how our network will be supported? I ask that because we are in a precarious position. It is very nice to hear the top-line aspiration of a quarter of a billion pounds over five years, but where is the detail? When am I getting my pay rise so that I can sustain my business?

Leases will expire on some of my premises, and I am trying to make commercial decisions about whether to remain open or about when I can refurbish my sites and reinvest. Should I just take out the post office and use that space to create additional selling space that will generate income for me? Please, as MLAs, will you put pressure on central government to give me the understanding that I require? The European Banking Authority (EBA) has now concluded version 4.0 of its reporting framework, and we have no idea of what our pay rise will be for handling cash. That conversation has been concluded. I ask that we can understand what budget we have to take ourselves into the next fiscal year.

The Chairperson (Mr O'Toole): That is a framework that is agreed among the banks.

Mr O'Reilly: It is a commercial arrangement between Post Office Ltd and the banks.

The Chairperson (Mr O'Toole): Does UK Finance negotiate on behalf of the banks or do the banks appoint someone?

Mr O'Reilly: I am not over the granular detail of that. All that I know is that those two guys will debate my pay rise.

The Chairperson (Mr O'Toole): On the extra investment of £250 million that is effectively supposed to be for a pay rise for sub-postmasters, that is for the Whitehall Department in London, which changes its name every five minutes, to determine. I think that is now called the Department for Business and Trade (DBT).

Mr O'Reilly: Yes, I believe so.

The Chairperson (Mr O'Toole): We can certainly correspond with that Department, and I am sure that we will be happy to do that. Sorry. Go ahead, Chris.

Mr O'Reilly: The banking framework is in place. We also need to ensure that, with the proposed roll-out that there is of banking hubs on to the high streets, as Glyn said, a post office-first approach is needed. If we can provide banking services, the postmaster should be protected first, because we cannot have another government-led initiative that potentially takes more revenue away from our counters. We therefore ask that the postmaster be put first. Thankfully, if a banking hub were to come to the Ormeau Road, I would get the opportunity of first refusal as the postmaster for the area. That offers me some solace. A post office-first approach should be where we are at. From a local and central government point of view, we can do more to promote the role that the post office provides in the banking network. Consumer Council for Northern Ireland (CCNI) research came back reasonably recently that stated that only one in two people recognises that there are basic banking facilities available at a post office counter. If we can therefore get a marketing plan to stimulate footfall, it will make life a little bit easier for us. The Government and the banks need to do more on that, instead of having me try to market that on my own.

The Chairperson (Mr O'Toole): On that, there is a differential banking market position here, meaning that 80%-plus of the market is taken by the traditional big four of AIB, Danske Bank, Bank of Ireland and Ulster Bank. We have Nationwide, Santander and so on as well, but those four are still the dominant players in personal banking. Should they do more? I do not know exactly how the framework that has been agreed works and whether those banks put money behind their marketing. Should the locally based banks be doing more to support post offices?

Mr O'Reilly: Absolutely. When a branch of a bank closes, there is a mechanism that kicks in. I have done this, and it is a very awkward exercise. I go into the branch that is closing and canvass. I basically say to the folk who come into the bank that they can still bank up the road at the post office. Trying to sell the brand is hard at the moment, given what it has gone through over the past 12 months, after the —.

The Chairperson (Mr O'Toole): Because of Horizon?

Mr O'Reilly: Horizon and the Bates drama. When I watched the Bates drama on ITV last year, halfway through the second episode, I was texting into my National Federation of SubPostmasters WhatsApp group saying, "Guys, we are going to get pummelled here, because it is going to look as if it is us who have defrauded and prosecuted people".

The Chairperson (Mr O'Toole): Even though it was people like you who were prosecuted.

Mr O'Reilly: The general public probably did not realise that we are independent investors in a franchise, so there was a spin that needed to be put on that. Trying to sell the Post Office brand as a trusted brand involves a big recovery process. The more that we can get —.

The Chairperson (Mr O'Toole): I will bring in other members to ask questions in a second. Thinking about the average person, I will pick somewhere in England at random: Barnsley. You operate on the Ormeau Road in my constituency. In the past few years, Bank of Ireland and Ulster Bank branches there have shut.

Mr O'Reilly: First Trust.

The Chairperson (Mr O'Toole): There were several. I think that, at one point, all of them were represented on the Ormeau Road, but they are all gone now. If it were Barclays, HSBC and Santander all shutting on a road in Barnsley, I do not know but I think that there might be a framework in place requiring them to speak to the local sub-postmaster. Part of their argument when they close, of course, is that people still have the post office and can still bank with other banks. Is that happening here with the local banks?

Mr O'Reilly: Post Office will be contacted, and it will send a representative to that bank's branch during the closure period to communicate to its customers that the branch is closing and that they can do banking at their local post office. I am invited to be part of that process. That is it. It is a pretty fruitless process. You end up with very few leads off the back of it. Some small businesses that are heavily reliant on that branch will come to you very quickly, but the message needs to be amplified that the banks are leaving the high street and are not going to service people for cash, so, if people need cash, the post office is the place to come and get it. We will not charge a pound for them to take it out of an ATM or whatever else. We will give it to them free of charge. From a post office point of view, we need more services at our counters. From a legislative point of view, we are not even on an level playing field with postmasters across the water.

Another big area of development is pick-up and drop-off (PUDO) at the post office. You have all done online shopping. You do not want it left at the front door, so you get it delivered to your local postmaster. Evri has been outsourced in Northern Ireland, which makes it a more costly model to run here. That means that fewer postmasters have access to it. I am lucky enough to have access to Evri on the Ormeau Road. I have only recently got it. Park Centre and Queen's do not get that. DPD is in most postmasters' branches across the water. DPD is not available in Northern Ireland in the PUDO model, because, when Post Office negotiated the contract, it neglected to realise that DPD Ireland is a different entity from DPD UK. Post Office Ltd would not pay for the EPOS interface or for all the IT technology that was needed to interface one business with the other.

The Chairperson (Mr O'Toole): Post Office UK would not pay, but DPD Ireland does deliveries here.

Mr O'Reilly: For DPD Ireland, you would have to pay to integrate into its IT platform rather than integrating into DPD UK. It looked into the Northern Irish market and said, "Well, that's going to be so small that we'll never see our money back out of that".

The Chairperson (Mr O'Toole): Was it DPD that did not bother or Post Office?

Mr O'Reilly: It was Post Office.

The Chairperson (Mr O'Toole): Presumably, it has that for An Post.

Mr O'Reilly: I do not know anything about the Southern market, truthfully. What I am articulating is that the cost to operate for a Northern Irish postmaster is even more precarious than it is for those across the water, because we do not get the same opportunity to drive revenue. Our commercial rates are significantly higher, and we are not getting rate relief either, so our backs are to the wall. That comes through in my numbers. When I first invested in the business and moved in to operate it, I probably would have cleared a profit of £10,000 to £15,000.

The Chairperson (Mr O'Toole): From cash handling?

Mr O'Reilly: No, from the whole model. In the three branches, we probably would have broken even throughout the year and then made a profit at peak, which is December. I am now in a significant loss-making position through operating those assets. If we can get the Government to say that they will provide the funding that, the Post Office has said, it needs, and if they underwrite it and we can develop, we will take our liabilities, which is what they are at the moment, and turn them back into assets, which will leave us in a better position. In the long run, that will leave all post offices in a better place to be able to support the right to access cash.

The Chairperson (Mr O'Toole): After we have taken questions on this bit, I may ask you both a question or two about the broader picture with commercial banking, as in the availability of credit and customer service. I am not asking for commercially sensitive information. You have been very helpful and given us an honest picture through your proposition, Chris. Is there anything else from the broader membership, Glyn, about access to capital, customer service etc? We will focus on the Post Office banking bit first.

Ms Forsythe: Thank you both for being here today. Glyn, is there any data available on what, from my experience, seems to be a move from our local businesses back to using more cash? I see a lot more signs that say, "Please use cash if you can". Although businesses have a card machine, they are really encouraging the use of cash. Is that something that is significant or about which you have any information?

Mr Roberts: It is safe to say that I would struggle to find a Retail NI member among our thousands that is cash-only. It is important to stay one step ahead of where your consumers are. We process card payments from a smartphone or from a smartwatch now as well, and we still accept cash. Cash is important. Occasionally, you see businesses — in the main, they tend to be more on the hospitality side, such as food-to-go or small cafes — that say cash-only. In one sense, I understand that, but they are doing a disservice to the large proportion of the population who rely on their card and do not carry cash. It is also important that retailers are able to accommodate cash payments and card payments. On the other extreme, there are small coffee kiosks — I have seen them in Belfast city centre — that are card-only.

The solution lies somewhere in between, and it is to make sure that both are accepted.

To back up some of the points that I made earlier, I will say that it is important that we do not pigeonhole every elderly person as not being tech-savvy. I got told off when I was speaking about that on the radio by my parents, who are in their 80s. They use their banking app all the time, including to send their grandchildren Christmas money, and they navigate the app very well. It is important that we do not say that all people above the age of 65 carry a wad of cash, because that is not the case. Retailers need to be flexible and be aware of who their consumers are. Yes, while client cash usage has stabilised, the vast majority of transactions are still done by card, and it is important that every retailer is able to accommodate that.

Ms Forsythe: I totally agree with you. My 89-year-old granda is very tech-savvy and is on every app going, and he keeps me right a lot of the time.

Should there be more support for retailers or the likes of post offices that are trying to host free ATM services on their premises?

Mr O'Reilly: I will take that one, if you do not mind. I have an ATM in the MACE on the Ormeau Road that is now turned off because I have come out of my commercial contract with the supplier, which was recently bought over by Pivotal. I decided to turn the ATM off when the interest rate spiralled. The cost of handling cash brought a significant cost to the ATM provider that was supplying me. The rate of 5p a transaction that I was getting for each customer who used the ATM dropped from 5p to 0·1p, so it was not even covering the electricity that the ATM was drawing down. I was outside the contract, so I was well within my rights to turn it off. Are we getting enough support to provide free cash? No, because 0·1p a transaction will not support us. That then has a knock-on effect on surrounding businesses. People who are in the Errigle Inn or on their way to one of the other pubs in the evening who come in to get out some cash cannot get it.

Ms Forsythe: Following on from footfall, I get a lot of feedback in my local towns that people come in to get their cash and then get a few things, especially if an ATM is in the post office or a shop. That is really useful feedback, especially because, when a bank branch closes, the first thing that people are looking to get is not necessarily a new banking hub but a cash machine. That has been my experience in my constituency. The banking hubs do not all come with cash machines, and certainly not with 24-hour cash machines outside the premises.

Mr O'Reilly: The ATM model of 10 years ago was really good. A company would agree to put in an ATM, but I would lodge my own cash in it, and doing that brought my banking charges down. I would probably not be able to generate enough cash now to put in an ATM, and that is why there are so many intermittent outages of ATMs. The model that I chose for the MACE on the Ormeau Road was to have the cash company support the cash going into it, so I had nothing to do with it. It was almost a rented ATM, and I got less commission off the back of it. I was never going to generate the cash, nor did I particularly want to take the risk of having to put the cash into the ATM, because my insurance has a whole pile of hoops that I have to jump through to be able to do that. If it runs out of cash during the day, technically I cannot fill it. I have to wait until the store closes, when no members of the public are in. There is therefore nowhere near enough support.

Ms Forsythe: Is it fair to say that insurance and the practicalities around having a cash machine are significant?

Mr O'Reilly: Insurance has been a real challenge over the past three years. It has jumped significantly, and, despite mitigations that we have put in, we are not seeing the cost drop. The indications are that it might be a little bit softer when I go to market in March. There seems to be a little bit more of an appetite among insurers to take that risk, but, no, it is north of £20,000.

Mr Roberts: The ATM robberies did not help either.

The Chairperson (Mr O'Toole): Is it £20,000 just to insure the ATM?

Mr O'Reilly: No.

Ms Forsythe: The policy intention is there from the Finance Minister. She has rate relief on rural ATMs in particular, so the intention is to support them in principle. Going a bit further, however, by supporting retailers and post offices to get footfall would make an impact.

Mr Roberts: Central to our message is viewing our high streets as community hubs, not just places of business. The post office is at the centre of that, along with the grocery store, the pharmacy and so on. That model is still relevant today, because it is not just about economics, jobs or business but about a sense of community. I often like to describe our members as not just community retailers but community entrepreneurs, because their business model is to be at the heart of the community. That is not just a strapline: being so is integral to their business model, and that community ethos of keeping your feet firmly established in the local community is probably why Northern Ireland has a higher density of independent retailers and small businesses than any other part of the UK.

Ms Forsythe: How many post offices are left in Northern Ireland that are providing stand-alone functions?

Mr O'Reilly: Stand-alone?

Ms Forsythe: Yes. In my area, for example, most of them are now Post Office counters in shops. I am in quite a rural area, so I appreciate that the situation is not the same everywhere.

Mr O'Reilly: It is the Crown branches — the directly managed branches — that are earmarked for closure, the ones that sit independently. I know of no post office in the land that can operate on its own and turn a profit.

Ms Forsythe: I cannot visualise the hub as you have described it, because, in a lot of the areas near me, it is so long since there was that. The move towards banking hubs is seen as being something positive, because, rather than doing all their banking standing in a line at the back of a busy supermarket, people are able to do it in a banking hub. Having banking go from the post office into the shop and then out to the banking hub may be part of the problem. As you say, should the consideration be to recreate a post office hub?

Finally, you said that you want a post office-first option for banking hubs. You get first refusal on the banking hub. I want to understand a bit more about the post office-first option.

Mr O'Reilly: It is about understanding what the banking hub is bringing. How many services is it bringing? My understanding, albeit it is slightly ill-informed, so take this with a caveat, is that, at present, people cannot do much more beyond bring in cash to the banking hub. That conversation came up at the banking round-table event. The FCA is tasked with delivering the cash end of the banking business. There is no regulatory framework on providing the other services that come along with that. What actual banking services people can get at a banking hub would need to be questioned and understood. If it is a case of rocking up once a week for a paltry few hours, talking to a few customers for PR reasons and not doing anything other than lifting cash — something that can be done through a post office — why should the hub be there?

Say that whatever governance structures are put in place identify that the Ormeau Road needs a banking hub, yes, it should come to me, but, essentially, it will also dilute my business. OK, I get to operate inside the hub rent-free, because the banks cover the costs, but I still have to provide the labour. Judging by the modelling that I have articulated today, that does not look to be a particularly profitable process. Again, however, there is a fixed wage for banking hubs, which leads me back a little to the transformational stuff that happened in the Post Office in 2015 and to my saying that we have been sold a pup. If a fixed wage is having to be paid to operate a banking hub, surely to goodness there is compelling evidence to say that we need more to come into post offices to keep them sustainable. My articulation of the situation is very simple: it is a very, very precarious one. Without this transformational money that has been promised to us — promised but not received — would I exit my three services? With my commercial hat on, I should walk away from all three. That would mean a loss of jobs and the potential closure of sites, which is not the burgeoning economy that we are all striving towards.

Ms Forsythe: No, absolutely not.

Mr Roberts: It is not about reinventing the wheel. If there is a viable post office network or a post office in an area that can do what a banking hub does and with enhanced services, there will be not be that duplication. Is it a preference that, if it can be enhanced to do that, a local business should be? Yes, that is always a good thing.

Mr O'Reilly: I will maybe give you another working example. I recently started another limited company, and I could not open a business account in my branch: I had to do it completely digitally. That was frustrating, and there was no relationship building. What if I had not been technologically confident? Even as someone who is reasonably commercial, filling in the application forms, providing the IDs and getting the stuff from Companies House that I had to bring in was not easy. It was the first time that I had had to set up a bank account for a company for myself; it was very frustrating, and it took weeks. That also came across in the banking round table: the digital stuff is faceless. I have a local Ulster Bank that is the branch for our retail business, but I could not go into it and speak to somebody.

The Chairperson (Mr O'Toole): You have been banking with them for a long time, I presume.

Mr O'Reilly: Yes. The only benefit of me applying for the business account through that bank was not having to go through the know your customer (KYC) process. They knew that it was me and that I was not money laundering. That part of the process was less difficult.

The Chairperson (Mr O'Toole): You had to go through less process, but there was no customer service advantage for you?

Mr O'Reilly: No, not at all, and doing it digitally was a real barrier. I was reliant on inboxes and emails. Even in setting up the online banking, I did not get one of the notifications of one of the key numbers: allegedly the email had been sent, but it did not arrive and it was not in my junk mail. Digitisation has moved too far. If a banking hub is coming to a high street, it will be nothing more than a place for you to deposit money and for the bank to do a little bit of softer PR. That is why I would say, "Post offices first". The hubs are not doing anything more than we are, an approach that puts post offices first will funnel footfall towards a network that needs footfall growth.

Ms Forsythe: This is just a final point to note. In my experience, there definitely needs to be a bit more promotion of the generic capabilities of banking services in the post offices. Feedback on the banking hubs in different areas is coming through and learning from that is important. In my local banking hub, you have the desk where, as a post office function, you can lodge and deal with cash all the time. However, they have an office that has people from different banks in it on different days of the week. That has led to a situation where, if, for example, the Ulster Bank is there on a Monday, people who bank with Ulster Bank think that they can only lodge money there on a Monday. People think that they can only lodge with First Trust on a Wednesday for the same reason. That is a real challenge that the banking hubs are facing, whereas you can lodge and do your cash business at the post office any time. A real thread of miscommunication is coming through in that area. Promoting awareness of those services is definitely important.

Thank you very much; your evidence has been really informative and I really appreciate it. Your type of post office is not one that I come into contact with very much in my constituency, where the post offices are very much counters in supermarkets. Thank you.

Miss Hargey: Thank you very much, Chris and Glyn, for coming in. Obviously, we will follow up with you as well. On the post office issue that you have raised, Chris, there are some straightforward actions that can be taken. I assume that, as a Committee, we can probe Westminster and the Post Office itself. It fits into our inquiry, particularly on the issue of access to cash. One of the big issues here, as you say, is the increase in cash transactions being linked to poverty and levels of inequality here. One of the issues that emerged during COVID is that the larger supermarket chains deal a lot more in cash here in the North than they do across the water. That is an area that we want to look at as part of the inclusion piece.

Also, as you say, we should make financial power work for local communities and local places. As you say, Glyn, our arterial routes, local towns and city centres are important for retail. You touched on some of the Westminster stuff that we could be looking at, including the marketing plan and access to additional services, but what could we be doing locally, through the devolved Assembly, to encourage that type of approach? Are there further areas that you can identify?

I want to ask you about financial power locally. As we know, banks are beginning to go more online. The strength of the post offices and the credit unions is their face-to-face contact. Maybe a bit more marketing would encourage that. I want to ask Chris about the post offices: is there engagement or dialogue between you and the credit unions? Is there the potential to do some work collectively on these things that would be mutually beneficial? You are both on the high street and on our arterial routes. You will be aware that the Department is doing a piece of research into the cost of doing business to look at the wider implications. You touched on some of the issues around insurance, rent and the impact that the increase in National Insurance contributions will have. I am keen to hear from you, Glyn, or from Chris about some of the big issues and hurdles that will be coming down the line over the short to medium term to which we need to be alert.

Mr Roberts: Thank you for your questions, Deirdre. The Finance Minister has initiated a review of the various business rate relief schemes. The current rural ATM relief scheme is due to expire in March of this year, so there is an opportunity to look at that as well as at the urban dimension to all of this, because it is no longer just a rural challenge. I think that there is something there.

As I said, there are three levels of rate relief for post offices. Those need to be looked at, and we perhaps need to go further in that regard. That stabilises the network and the businesses that are there. That reinforces the points that Chris made about the challenges and cost of running a post office. If we were to tweak the rate relief for post offices and ATMs, that would take the edge off some of the costs. Where banks have closed and taken their ATMs with them, our members have stepped into that breach. A lot of them have paid high costs for that. The time when the ATM robberies were occurring was terrible. I recorded an interview for the BBC this week about the dozens of ATM robberies in 2018 and 2019 and the impact of that not only on the family-owned businesses but on the communities that they serve. The repercussions of the ATM robberies are felt to this day, and we should not underestimate their impact.

We welcome the fact that the Minister has initiated a cost-of-doing-business review. We have been keen to see that. Addressing the cost-of-doing-business crisis is the top concern for this Administration and the Westminster Government. In April this year, we will face a perfect storm: a triple whammy of increases in National Insurance, increases in the living wage and the rise in local and regional rates. I cannot overstate the impact that that will have not just on the members that Chris and I represent but on all small businesses and the economy as a whole: it is a freight train hurtling this way, and it will damage this region more than any other region of the UK, because of the high density of small businesses that we have. That also has implications for what we are here to talk to you about today.

It is crucial that we see government at all levels doing whatever it can to support business. As someone who has played a leadership role in two business organisations for nearly 25 years, I am desperately worried about what will happen in April. I am not in any way exaggerating what is going to happen. I worry that it will close businesses. We have already been surveying our members on the impact that there will be, which complements what the Finance Minister and her colleagues are doing in that regard. The initial survey results that I have seen are, quite frankly, scary. Responses include expansion plans being put on indefinite hold; the closure of branches; cutting back on staff hours; and cutting back on employing people. I have strayed slightly into another area.

The Chairperson (Mr O'Toole): We wanted you to.

Mr Roberts: I hope that that answers your question, Deirdre. Having that network to serve the local community is at the heart of what we want. Sometimes we forget that we are not talking about just business, our economy, our rates, our National Insurance and all of those complicated things; it is about serving local communities and making sure that they have access to cash. We have always seen our town centres and high streets as more than just places of business: they have to be community hubs that bring people together.

That community hub model, whatever the changes and whatever way we want to redefine 21st-century high streets, whether it is the Ormeau Road, the Upper Newtownards Road or the high street in any number of rural towns, is more important than ever.

Mr O'Reilly: Coming back to your point about collaborations between the credit unions and the post offices, I do not believe that there are any formal collaborations there. However, we both had similar points to make at the banking round table. The points that I articulated were very much reflected in what the credit unions were saying about the cost of handling cash. On the cost of doing business, the aim was to get the survey understood as quickly as we could. In very simple layman's terms, my business partner and I run a small family business that employs 90 people across our five stores. It will cost us at least £1,635 per person once the new rate for employers' NI contributions drops in and the new living wage structure drops in on top of that. That is just under £150,000 that we have to suck up overnight come April. There is no room to load that into prices, because the consumer has suffered enough over food-price inflation over the last number of years. Where do you go? You have to cut costs. What is your biggest operational cost? It is your payroll. Some may think that it will not affect the working person, but I cannot see how it will not.

The word to describe this is "crisis". I have been able to mitigate some of the cost increases over the years that I have been doing this, but this one is a doozy. I have just refurbished one shop in the Royal Victoria Hospital, but all my refurbishment plans are on hold, because I need to see how we will be impacted. The economic headwinds do not feel too great at the moment either, and I can see that in consumer spending. We have already had a very soft week in January. I was plus four going into Christmas and I am just now plus three coming out of Christmas, and I do not see that going the other way. That means that, when my revenue streams come back, my margins will come under pressure as well. I cannot articulate enough how concerning this is. I cannot see how it will not have a knock-on effect and drive us towards a downward spiral.

The Chairperson (Mr O'Toole): OK. Thank you for that. Deirdre, are you finished?

Miss Hargey: I think that that was it. I was going to ask about the post office stuff. I know that you might come in at the end, but, if there is anything that you did not cover, Chris, it would be useful if you can send it into the Committee so that we can send it on to Westminster or the Post Office centrally as well, and that would be useful. I know that you touched on the marketing plan and the EPOS issue —.

Mr O'Reilly: I am sorry to interrupt, Deirdre, but the immediate thing that everybody can do is put pressure on central government by saying, "Are you going to back this transformation plan for the Post Office and what does that look like?" and to ask whether you can share that with the likes of the National Federation of SubPostmasters. We have not even had an opportunity to input into that to know whether it is right and fitting.

The Chairperson (Mr O'Toole): We can correspond as a Committee on that. The Committee Clerk will check, but I presume that the Department for Business and Trade will be the lead Department on that. We will check that and, if members are agreed, that is something that we can act on.

I have one final question before we finish what has been a really useful session. There is a lot of homework for us to do and work for us to take forward. The cost of doing business is deeply concerning. The Department is doing that research and we will be holding further consultation events this year. You, Glyn, and, by extension, broader retail will get an invite to participate in that. We have the location and we are finalising the details. We want to hear more from you on that, and it will include the question of rates. We understand that finances are under pressure locally, but where there is an intervention, we need to understand what it can or cannot be.

My final question — you touched on it earlier, Chris — is about your relationship and your experience, as a small but established business, with your banking provider. You were very blunt, which is useful, and direct in giving your opinions in detail. If I were an executive at that bank, I would be concerned that an established business had had a very poor customer service experience. I do not want to put words in your mouth, but it sounds like that was your experience. What is your position on the local banks? We will start with them, because they are established, and we will then move to the broader perspective on alternative banking providers, because, obviously, some people use those. In your case, Chris, it is probably a bit harder — I do not know whether Monzo does business banking — to use some of the alternative banking providers if you are a cash-driven established business. I guess that some of the more pop-up-style businesses will be able to use alternative banking providers, because they are cashless or whatever. What is the position of Retail NI members on the quality of the banking services that they are being offered versus that across the water and even across the border, if you have that information? We do not have very much time, but an overview would be good if you have one.

Mr O'Reilly: It would probably be more helpful if we put something in writing.

The Chairperson (Mr O'Toole): Yes, that would be helpful.

Mr Roberts: Chris talked about the difficulties of setting up a bank account when he was establishing his new company. Retail NI works with not just established retailers and wholesalers but hundreds of small agri-food businesses to help develop their route to market. We help them connect to retailers like Chris and many others and develop their business in that way. One of the things that they mention is the hassle that they have had in establishing a bank account. In fairness to the banks, a lot of that is because of the legislation on money laundering and all of that. I absolutely understand that, but surely we need to have proper and structured dialogue on all those things.

You may want to reflect on the need to set up the access-to-finance summits on a more regular basis, because they are useful events. The Finance Minister indicated that she was open to that suggestion. The summits are very grand, big events. There probably needs to be more structured engagement between all the different players, including our members on the banking side such as credit unions, so that we can work through the issues and challenges. We are very ambitious for the region. We want to see the region become the best place anywhere on these islands to locate, start and scale up a business. Despite all the economic headwinds and all the challenges, that is definitely doable, but we need to have that structured dialogue. The problem with a lot of the banking stuff is that responsibility for it is not devolved. A lot of the post office stuff —.

The Chairperson (Mr O'Toole): That is why we are having the inquiry. It is important that, even if it is not devolved, we have the ability to get —. The market is devolved in large part, because we have an historic —.

Mr Roberts: Banking, insurance and post offices are not devolved matters.

The Chairperson (Mr O'Toole): The policy is not devolved, but the market is.

Mr Roberts: The problems are certainly devolved.

The Chairperson (Mr O'Toole): The problems are local.

Mr O'Reilly: On a slightly anecdotal level, I forgot — I probably blocked it out — that, when I went to another banking institution to open an account, I terminated the application due to the telephone interview, because it felt like I was being accused of being a money launderer.

The Chairperson (Mr O'Toole): Was that bank one of the traditional four here?

Mr O'Reilly: It was Danske Bank, if it forms part of the traditional four.

The Chairperson (Mr O'Toole): OK. This is most useful. We will hear from some of the representatives of the banking sector. Their relationship with someone like you, Chris, who has an established business, as well as their relationship with someone who is starting up after selling their stuff at a farmers' market or someone who is scaling up, is really important.

Mr O'Reilly: If you do not mind, I will say one last thing.

The Chairperson (Mr O'Toole): Go ahead.

Mr O'Reilly: This dawned on me as we came through that conversation. There are restrictive limits on the amount of moneys that can be deposited in a bank account at a Post Office counter. It depends on the account that you have and the bank that you are with.

The Chairperson (Mr O'Toole): You will have varying limits.

Mr O'Reilly: Correct.

The Chairperson (Mr O'Toole): So Barclays might have a different limit.

Mr O'Reilly: Let us say that you, as a small business owner, presented to me with £10,000. I would count out all that money and go to lodge it into your account, but I would be blocked from doing so if you had reached the capacity of what you were able to lodge. The limits might apply to a rolling week, a rolling month or a rolling year, depending on the bank and the account, of which we have absolutely no understanding. I would then lose that income, because I cannot complete the transaction. That small business owner would possibly move away from me, because they know that, if they go to a branch, they can make that lodgement. They then take a higher risk, because they store up their takings for longer so that they only have to do one trip to the bank, rather than coming multiple times to me. The anti-money-laundering laws that come about from that feel like they are a hammer that is being used to crack a nut. Why does the due diligence not fall back to the bank after the money has been received at our counters? The bank could then work from there, rather than have a blanket ban that prevents me from being able to turn people away.

Mr Roberts: I will conclude on this, Chair. A number of the main banks are members of Retail NI. We have had members that have had issues with the banks. A personal approach, using the contacts that we have in those banks, can lead to a resolution. That, at times, involves face-to-face engagement. We talk to the banks all the time, and one bit of advice that we give them is to be a bit more user-friendly and have a bit more of a human face. The traditional idea of the bank manager in the branch — the Captain Mainwaring — is all gone. In many respects, it is about working with the banking sector and having that dialogue, and that is why a proper forum on access to finance that meets on a fairly regular basis would be a very useful action.

The Chairperson (Mr O'Toole): That is really helpful, because we will, hopefully, produce recommendations.

I will wrap it up there, if that is OK, because we are over time. Thank you so much for your time. I genuinely thank you, because your time is valuable. There are specific bits of homework and actions. You made it clear that the first one is urgent. We are happy to correspond and make that clear to the Department, and we will ask for an urgent response on that. In that correspondence, we will also outline the Northern Ireland-specific context, which you outlined, and touch on the fact that, for example, there is an issue with the pickup and drop-off of packages.

Mr O'Reilly: There is one other part to that. Sorry, this is just how my brain works, Matthew. As postmasters in Northern Ireland, we have 50% less business opportunity, which makes us unique. Postmasters across the water serve, I think, one in 60,000 people per capita, and we serve one in 40,000. They serve 50% more of the population, so, again, the Northern Ireland post office model needs to be considered because we do not have the same access to population.

The Chairperson (Mr O'Toole): Presumably, that is because of rurality, but, at the same time, it means that there is less commercial opportunity. OK. We will make that point.

Mr O'Reilly: That links to the point that, in the UK, we have legislation that says that we must provide 11,500 post offices within the network. My experience of that in Northern Ireland is that I can be cannibalised, because an unviable branch outside my catchment area might close and then, all of a sudden, Post Office Ltd is obliged to site that branch somewhere. It will approach another retailer, which might come into my jurisdiction. That will be destabilising, because it will erode my business and my ability to keep it going, and it will almost put a noose around the neck of the person who takes it on, because, if it was not viable previously, what makes it more likely to be viable now? How that works is quite broken. There is less commercial opportunity per capita because of the number of branches that we have per capita compared with across the water. That and the higher operating costs are the big issues here.

The Chairperson (Mr O'Toole): We will definitely make those points, and we will seek more information from you in written form on the banking situation — as in, you, as banking customers, and in the post office context. There is lots more to follow up on. We will keep in touch with both of you. Thank you very much for your time, Chris and Glyn. It is genuinely appreciated, and there is lots more work for us to do.

Mr Roberts: Thank you.

Mr O'Reilly: Thank you.