27 October 2010
Business Secretary Vince Cable has announced a £1.3bn cash injection for the Post Office network, ruling out a closure programme but leaving open the option of mutualisation.
The package was announced as the government’s Postal Services Bill, which includes proposals for privatising Royal Mail, had its second reading in the House of Commons today.
Cable said the £1.3bn, to be allocated over the next four financial years, would more than double the public subsidy paid to the Post Office in the past two years, and would help reduce queues and increase opening hours.
He said: ‘A large proportion of the last government's funding was spent on closing post offices.
‘Our strategy is completely different – it addresses the underlying economics of the network, while maintaining its size and reach.’
The government has pledged that there would be ‘no new programme’ to close more of the UK’s 11,500 Post Office branches. However, Cable said that branches could be taken over by communities, sub-postmasters or Post Office employees.
The Bill also sets out plans for selling off Royal Mail, with 90% of shares available to private investors, and 10% to be given to staff. However, its pension deficit, estimated at up to £10bn, is to be transferred to the Treasury.
