Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: UK Politics
Front Page 
UK Politics 
Talking Politics 
Mayor News 
Government Guide 
People in Parliament 
A-Z of Parliament 
Political Links 
Despatch Box 
Talking Point 
In Depth 

Reeta Chakrabarti reports for BBC News
"Another threat to rural community life"
 real 28k

Friday, 28 January, 2000, 15:03 GMT
Post Office to become plc

The Post Office has long argued for greater commercial freedom

The government has unveiled legislation which will allow the Post Office to become a public company to provide the service with a 600m cash boost.

The government will retain all the shares in the new public limited company and has insisted rural post offices will be protected by its plan to shake up the running of the service.

Under the proposals contained in the Postal Service Bill, the Post Office will receive a 600m cash boost over the next five years.

The bill proposes
Post Office to become a PLC
Independent regulator to be established
Government dividend halved
To enshrine in law a universal service at a uniform tariff
The service will be given greater commercial freedom to invest in the business, while a new consumer council will be established to monitor the organisation.

The Post Office has welcomed the proposals contained in the Postal Services Bill as a "springboard" to fight growing competition.

Trade and Industry Secretary Stephen Byers said modernisation was the key to the Post Office's future.

Claimants will still receive benefits at the Post Office
"It has served the country well for more than 350 years, but now it needs to change so that it can compete effectively in a rapidly changing domestic and international market," he said.

"Greater commercial freedom will ensure the UK has a world-class postal service for the 21st century offering consumers lower prices and better service while maintaining its highly valued public services."

The Post Office will now be able to borrow at commercial rates and its annual dividend to the government will be halved.

The bill will also enshrine in law a universal service at a uniform tariff.

An advertising campaign is to be launched confirming the government's commitment to the Post Office network and reassure claimants they would be able to collect benefits in cash after 2003, when changes to the collection system will be in place.

Post Office chairman Neville Bain said: "For the first time we are being given commercial freedoms which are vital if the Post Office is to achieve its ambition to be one of the world's top complete distribution companies.

"It gives us a springboard to meet and beat the growing competition around us."

Search BBC News Online

Advanced search options
Launch console

See also:
17 Nov 99 |  The Company File
New freedom for Post Office
30 Nov 99 |  Business
Post Office goes into red

Internet links:

The BBC is not responsible for the content of external internet sites
Links to other UK Politics stories are at the foot of the page.

E-mail this story to a friend

Links to more UK Politics stories