Page last updated at 17:56 GMT, Wednesday, 27 October 2010 18:56 UK

Cable announces 1.3bn funding for Post Office

The Post Office will receive £1.3bn of extra funding over the next four years, Business Secretary Vince Cable has announced.

Mr Cable told the Commons the funding would be used to reform the network and secure its long term future, reversing years of decline.

On 27 October 2010, during second reading of the Postal Services Bill, which sets out plans to privatise Royal Mail, Mr Cable told MPs: "I can announce today £1.34bn of new funding for the Post Office over the spending review period.

"The funding will be used to reform the current network, to change the underlying economics and so reverse the years of decline and secure its long-term future."

He added: "I repeat - there will be no programme of closures under this government and the Post Office will be able to invest, improve its offer and win new revenue streams."

The government also announced it would take on the Royal Mail's multibillion-pound pension shortfall as part of its plans.

Shadow business secretary John Denham accepted that "doing absolutely nothing is not an option" but criticised the privatisation plan.

He said: "Today's bill could see the Royal Mail, this national asset, pass into foreign ownership or pass to short term investors interested only in the quickest possible profit."

Mr Denham continued: "We will oppose this bill, although we do not oppose every element in it, because we believe that abandoning the commitment to keep Royal Mail as a publicly-owned organisation is wrong."

You can watch part two of the debate here.

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