Save Our Post Offices - Davey

1.16.00pm BST (GMT +0100) Mon 16th Oct 2006

The Liberal Democrats will today put themselves at the head of a nationwide campaign to save Britain's post office network following the Government's failure to take the tough decisions necessary to save our Post Office and Royal Mail services.

After reports in today's Financial Times that the DTI is set to back another major Post Office closure programme ('Thousands more Post Offices face axe'), the Liberal Democrats have used their House of Commons opposition day to call for urgent action.

Commenting, Liberal Democrat Shadow Trade and Industry Secretary, Edward Davey MP said:

"Thousands of post offices have closed or will close because of the deliberate decision by Labour ministers to remove government business.

"It now seems that the Government's solution to 'stabilise' the Post Office will involve thousands more branch closures, bringing hardship and financial exclusion to millions.

"Ministers' attempts to falsely blame technology verge on the fraudulent given increasing letter volumes and their own central part in the massacre of the Post Office network.

"Ministers are claiming to be taking the tough decisions when in reality they are ducking them.

"Only the Liberal Democrats have proposed a major reform of Royal Mail that will enable it to compete in the newly liberalised letters market, whilst also raising the cash for investment that the Post Office network desperately needs."

ENDS

Notes to Editors

In an interview with the Financial Times, Alistair Darling said he was "determined to give the Post Office certainty...we've got to put it on a long term stable footing". According to senior government figures Alistair Darling will warn MPs that the status quo is not an option.

Postcomm in its press release accompanying the publication of their annual report issued on 12 October 2006 said "Postcomm, the independent regulator for postal services, today urged the Government to make the tough and overdue decisions needed to plan the future of the Post Office network. The Government must take into account the wider social role played by Post Offices in local communities as well as the imperative of establishing a sustainable, stable business."

Age Concern said on the publication of their Rural Post Offices Report on 27 September 2006 that "Thousands of pensioners risk being cut off from their community unless the Government steps in to rescue rural post offices, warns a new report published today by Age Concern."

Decisions which the Government has presided over that have a detrimental impact on the Post Office network include: withdrawing the Post Office Card Account in 2010, removing passport and TV licences from Post Offices, refusing to make a decision on the Social Network payment after 2008, not releasing necessary investment funds of up to �1.3Bn announced in May or to address the proposals by Royal Mail for an Employee Share Trust.

The Liberal Democrats are the only party to have a coherent policy that will secure the future of both the Royal Mail and the rural and urban Post office network:

First, we would separate Post Office Ltd - who oversee the sub-post offices - from Royal Mail. We would keep Post Office Ltd fully in the public sector, helping retain key Government contracts. By separating them from Royal Mail, local post offices would be free from current restrictions on developing new business with other mail companies, and could, for example, exploit growing internet shopping.

Second, we would free Royal Mail to borrow on the capital markets, just like its competitors. Rather than the taxpayer having to shell out for new machines for Royal Mail, as Ministers are proposing, we think that investment should be done on commercial lines. To free Royal Mail from Treasury rules so it can invest, we would establish a new share ownership structure for Royal Mail. The Government and a John Lewis style employee trust would together own 51% of the shares. That means the employees would, for the first time, be given a share in the business they work so hard for. Then, half of the remaining shares would be offered for sale to small investors and individual employees with the rest being offered for sale to the market.

Third, we would make a huge investment into the Post Office Network itself. Using the money raised from the sale of 49% of Royal Mail shares we could invest an estimated �2 billion - without asking the taxpayer for a penny. For the first time for decades, local sub-post offices would have a future. This Liberal Democrat investment fund would focus on helping sub-postmasters and mistresses build long term viable businesses. It would offer start up and investment capital, business training, IT development and marketing support. For the first time for decades, we could see the number of sub-post offices increasing, with new sub-post offices opening.