Post Office closures 'Cannot be avoided'

THE Prime Minister defended sweeping changes to the Post Office network yesterday that could lead to 3,000 branch closures and thousands of staff losing their jobs.

He told the House of Commons that the Post Office network, which has more than 17,500 branches, was “not sustainable” without the changes that will be smoothed over with a Pounds 270 million government grant to refurbish branches or pay compensation where branches are closed.

Mr Blair added that closures could not be avoided without spending “very large sums of public money”, despite a Labour Party manifesto commitment to maintain them.

Union leaders, who rallied outside the Houses of Parliament to lobby MPs, condemned the reorganisation proposals as an act of vandalism that would hit services.

PM tempers post office plans with Pounds 270m aid
Financial Times; Apr 11, 2002

Tony Blair yesterday defended the government-backed restructuring of the post office network as he came under fire from his own MPs for plans that could lead to swathes of branch closures.

Labour backbenchers, supported by trade unions, hit out at the cuts, warning of a public backlash. The attack came as more than 1,000 postal workers converged on the Commons to lobby MPs.

In prime minister’s questions, Mr Blair revealed that the cuts would be accompanied by a Pounds 270m rescue package. He denied that restructuring the post office network would lead to 3,000 closures, as has been suggested.

The prime minister said that more than 95 per cent of the urban population would still live within a mile of a post office.

He warned that failure to deal with rising losses would cost the taxpayer heavily. “If we were to give a guarantee that no post office – no matter what the circumstances – would close, the bill would run into hundreds of millions of pounds more.”

Members of his own party voiced concern. Alan Simpson, Labour MP for Nottingham South, said there was a “deep groundswell of unease” at the changes planned for the postal sector.

“There are certain things that are symbols of how this society works and a universal postal service that is seen as being an entirely public service is one of them.”

But Colin Baker, general secretary of the National Federation of Subpostmasters, said the closures were “not going to destroy a nationwide network”. Post offices would be “bigger, brighter and better”.

Although special arrangements and funding are to be directed at keeping open between 500 and 1,000 sub-post offices in deprived urban areas, critics said the closures could hit those on lower incomes.

Ray Sill, who runs a small post office in an impoverished part of Newcastle with his wife Jane, agreed. They would be very unhappy at the impact closure would have on many customers – especially elderly people. “We go beyond the call of duty, filling in forms and advising people,” he said.

However, he said he would probably have to accept a closure plan, if the compensation were acceptable. Profitability had been hit because more people were receiving benefit payments through bank accounts.

“Everything we are paid is related to transaction volume,” he explained. “My income is going down every year.”

Copyright: The Financial Times Limited 1995-2002

Consignia confirmed yesterday that between 2,000 and 3,000 of 9,000 urban Post Offices would be closed over the next two years.