Support for UK's Post Office gets Brussels approval

A total of GBP313 million of support from the UK government has been authorised by the European Commission in accordance with the EC Treatys rules on state aid.

This is to allow Post Office limited to continue to provide public services for the financial year 2007/08. These include an increasing range of commercial services such as lottery tickets, foreign exchange, telephone and insurance products as well as cash facilities, bill payment, licensing and, of course, Royal Mail, the UKs main postal services provider.

Public services are a vital part of the European economy, and the Commission recognises their importance, said EU Competition Commissioner Neelie Kroes. Aid can therefore be approved where the amount is strictly limited to what is necessary to cover the costs of public service obligations.

In 2003, the Commission approved a system whereby losses incurred by the entirely state-owned company in providing public service would be covered by government funds and in December 2006, the UK announced the intention to extend this for another year. The amount notified for the financial year beginning 1 April 2007 is GBP313 million (USD460 million).