Post Office calls for ID contract to cut closures (UK)
Ministers are being urged by the Post Office to give it valuable contracts to take over the distribution of ID cards, biometric data, and e-passports, in a bid to save it from a further round of politically-damaging closures, and loss of customers.
The organisation is arguing in private talks with ministers that it is best placed to take on some of these contracts since it is already responsible for checking passport applications and has an existing national network to draw upon. Ministers in both the Department for Business, Enterprise and Regulatory Reform and the Home Office are stressing that they cannot hand out the contract without open commercial competition, but see both political and business advantages to a deal.
Ministers have met top figures in the Post Office to discuss the contracts, and other ways in which government can provide customers, after the Post Office was criticised for a sweeping closure plan.
Post Office retention of such contracts of national necessity is vital if ministers are to persuade the European Union that government subsidies remain lawful under EU law. Brussels has approved a subsidy of GBP 150m a year to enable the parent company Royal Mail, wholly government-owned, to run a network of 11,500 post offices by keeping loss-making branches open.
The government has sanctioned the closure of 2,500 post offices by the end of the year in a programme that has met fierce resistance across the country, but is designed to cut post office losses. The network lost GBP 200m in 2006-7, while Royal Mail is handling 3m fewer letters a day than last year.
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