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Post Office future to be outlined Post Office future to be outlined
(about 2 hours later)
The government is set to confirm its plans for the future of the Post Office later, including how many branches it expects will have to close. The government is set to confirm its plans for the future of the Post Office, including how many branches it expects will have to close.
Trade and Industry Secretary Alistair Darling will reveal the level of grant it will give to subsidise the running of rural post offices.Trade and Industry Secretary Alistair Darling will reveal the level of grant it will give to subsidise the running of rural post offices.
It is thought the new funding package will result in the closure of up to 3,000 offices.It is thought the new funding package will result in the closure of up to 3,000 offices.
The Royal Mail currently receives £150m a year in a deal which expires in 2008.The Royal Mail currently receives £150m a year in a deal which expires in 2008.
The Royal Mail has said the size of the network depended on the level of government funding it receives.The Royal Mail has said the size of the network depended on the level of government funding it receives.
Losing businessLosing business
The Department of Trade and Industry has described the current size of the network of 14,000 post offices as "unsustainable".The Department of Trade and Industry has described the current size of the network of 14,000 post offices as "unsustainable".
Mr Darling said the Post Office was serving four million fewer customers than two years ago and was losing £4m a week, up from £2m last year. Mr Darling said the Post Office was serving four million fewer customers than two years ago and was losing £4m a week, twice as much as in the previous year.
He said there was a need to strike a sensible balance between closing those branches with too few customers and providing a national network of post offices.He said there was a need to strike a sensible balance between closing those branches with too few customers and providing a national network of post offices.
"We need to deal with that but we do need to ensure we have a national network because we recognise the importance of the Post Office to people the length and breadth of the country," he said."We need to deal with that but we do need to ensure we have a national network because we recognise the importance of the Post Office to people the length and breadth of the country," he said.
Post offices were hit after the decision to pay pension and child benefit directly into bank accounts.Post offices were hit after the decision to pay pension and child benefit directly into bank accounts.
TV licences, driving licences and passports have also gradually switched to being sold online or through other retailers.TV licences, driving licences and passports have also gradually switched to being sold online or through other retailers.
CompensationCompensation
The BBC learned at the weekend that between 2,500 and 3,000 post offices - mostly in rural areas - face phased closure after the government announcement.The BBC learned at the weekend that between 2,500 and 3,000 post offices - mostly in rural areas - face phased closure after the government announcement.
It is understood there will be compensation packages of £40,000 to £70,000 for sub-postmasters.It is understood there will be compensation packages of £40,000 to £70,000 for sub-postmasters.
General Secretary of the Federation of Sub-postmasters, Colin Baker, said his members provided a social service which was dearly loved.General Secretary of the Federation of Sub-postmasters, Colin Baker, said his members provided a social service which was dearly loved.
He accepted there was a financial case, insisting talks were needed on how to create a sustainable network for the future.He accepted there was a financial case, insisting talks were needed on how to create a sustainable network for the future.
"The government have had that viewpoint recently that they can do without the Post Office which I think the nation this year has told them in resounding terms, that they can't.""The government have had that viewpoint recently that they can do without the Post Office which I think the nation this year has told them in resounding terms, that they can't."
You cannot carry on putting a massive amount of public subsidy into this Prime Minister Tony BlairYou cannot carry on putting a massive amount of public subsidy into this Prime Minister Tony Blair
Prime Minister Tony Blair insisted on 12 December the consumer and not government policy was to blame for potential post office closures. Speaking earlier this week, Prime Minister Tony Blair said: "You cannot carry on putting a massive amount of public subsidy into this.
He said: "You cannot carry on putting a massive amount of public subsidy into this. "Now we will look for ways in which we hopefully can stabilise the situation, and give the majority of post offices a way forward for the future."
"Now we will look for ways in which we hopefully can stabilise the situation, and give the majority of post offices a way forward for the future. The reason why post offices have continued to close is because people have made an individual choice to transact their business differently, he said.
"But the reason why under the previous government and under this government post offices have continued to close is not because it has been government policy to close them - it has been because people have made an individual choice to transact their business differently."
Labour MP Kate Hoey, who chairs the Commons All Party Post Office Group, said it was time the government made a commitment to the network.
Campaigners say thousands of elderly people across the country are worried about the closures.Campaigners say thousands of elderly people across the country are worried about the closures.
Age Concern's director general Gordon Lishman said: "It's time the government started listening to the people who use and depend on their post office."Age Concern's director general Gordon Lishman said: "It's time the government started listening to the people who use and depend on their post office."
The Federation of Small Businesses urged the Secretary of State to rethink his plans and to delay closures to give small firms time to alter their ways of working.
Sandy Bruce Lockhart, chair of the Local Government Association, said it was determined to make sure local people suffered as little as possible and that essential products continued to be delivered.
A long battle by campaigners has seen four million people sign a petition calling for rural post offices to be saved.A long battle by campaigners has seen four million people sign a petition calling for rural post offices to be saved.