Tag: UK

The Government’s “cavalier” stance on the Post Office closure programme is threatening the future of Europe’s largest retail network, Tories warned.

Shadow industry secretary Stephen O’Brien said the Government’s failure to recognise and promote the network’s strategic community value was an “indictment” of ministers’ record.

They had exhibited “a genuine lack of concern over the relentless Post Office closure programme being inflicted on almost every rural, suburban and inner city community,” he protested.

Royal Mail is state-owned despite some abortive attempts at privatising it, but the management team of Allan Leighton and Adam Crozier has tried to introduce a private sector ethos at the loss-making postal operator.

Last year, the government lent Royal Mail £3bn to help it avoid bankruptcy and fund a three-year recovery programme involving cost- cutting and redundancies. As Royal Mail has promised to repay the cash, it is debatable whether this counts as a subsidy, and the loan was cleared by the European Union’s state aid watchdog. But about £450m of the funds is being spent on subsidising the rural post office network, largely owned and operated by private businessmen and women. The government bail-out is designed to prop up the countryside post offices until 2006 but after that Royal Mail is hoping to come up with a longer-term solution for their funding. Postcomm, the postal regulator, is examining the future of the network and is to publish a report on other ways that the offices can make money. This will help the Department of Trade and Industry decide whether to keep funding the network after 2006.