Liberal Democrats back £2 billion plan to save the post office network

12.00.00am GMT Sat 4th Mar 2006

The Liberal Democrats voted in favour of a £2 billion plan to safeguard the future of the Post Office Network and the Universal Service Obligation at their Spring conference in Harrogate.

The debate came just 2 weeks after the Royal Mail's Chief Executive warned that 10,000 branches could close over the next 4 years.

The plans will see:

· The establishment of an investment fund, likely to be up to £2 billion, from the proceeds of shares to modernise branches. This will provide support for opening new Post Office branches where there are serious gaps in the existing network, and start-up investment capital for sub-post offices wishing to diversify into offering additional services to local communities;

· Post Office Ltd separated from Royal Mail Group, with the retention of Post Office Ltd in the public sector, giving post offices the opportunity to develop new business;

· The establishment of a shared ownership model for Royal Mail with a 51% majority of shares divided equally between the Government and a trust for Royal Mail staff. 24.5% of the shares would be sold directly to staff and small investors, and 24.5% offered for general sale;

· A statutory guarantee to protect the universal service obligation (USO);

· Powers enabling Postcomm to place a levy on other operators who do not undertake the USO to pay towards its cost.

Commenting on the proposals, Liberal Democrat Shadow DTI Secretary, Norman Lamb MP said "We are witnessing the collapse of the Post Office network and the Liberal Democrats are the only party who are offering practical solutions to reverse this decline.

"This plan creates a £2 billion investment fund which revitalise the Post Office network and imposes a statutory obligation on Government to maintain both the network and the universal service obligation."