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Tuesday, 15 February, 2000, 20:29 GMT
Lifeline for village post offices

Tony Blair's commitment to the countryside has been questioned


Subsidies may become available to keep afloat struggling rural post offices, according to the government.

The announcement of a cash lifeline by Trade Secretary Stephen Byers could see ailing post offices, which form a key part of village life, propped up by central government or local councils.

Mr Byers told MPs of his plans during a Commons debate on the government's proposals to give the Post Office greater commercial freedom.

'Subsidies where appropriate'

Plans to turn the Post Office into a public limited company have sparked warnings from some union leaders and Labour MPs that greater commercial freedom could lead to the closure of smaller post offices.

But Mr Byers told the Commons an amendment would be introduced to "enable a subsidy to be provided where it is appropriate to do so".

He said: "I don't think we should just jump to the conclusion that we should always be looking for a subsidy coming straight from central government.

"There may be other public organisations that may want to invest, local authorities for example may feel it is appropriate.

New regulator

"It may well be that at some time in the future a subsidy to maintain a post office is something we would want to look at."

The Bill will also set up a new independent regulator, the Postal Services Commission, with powers to protect the interests of postal users.

It will ensure people across the UK will pay the same price for postal services no matter where they live.

Bank threat

But ministers plan to switch benefit payments from the Post Office counters and pay them direct into people's bank accounts from 2003.

Benefits will still be available for those who chose to get them from post offices but the move could have an big impact on the business of some smaller sub-post offices.

Shadow Trade and Industry Secretary Angela Browning said the Bill was full of "muddle and confusion".

She accused Mr Byers of being "timid" by deciding not to privatise the body, saying: "I have no doubt that you would have liked to privatise the Post Office."

But when challenged to reveal her party's own plans on the issue Ms Browning said: "Any policy that this party puts forward will be based on what we inherit - I can't second guess what we might inherit and I'm certainly not going to speculate now on what might be in the Conservative manifesto."

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See also:
28 Jan 00 |  UK Politics
Post Office to become plc

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