Post offices - blame the Single Market

IN an attempt to justify another round of post office closures, Ministers highlight the loss of four million weekly customers in the past few years – which is hardly a surprise, but rather the natural consequence of the abolition of pension books in 2005.

IN an attempt to justify another round of post office closures, Ministers highlight the loss of four million weekly customers in the past few years - which is hardly a surprise, but rather the natural consequence of the abolition of pension books in 2005.

In 2000, a government report pointed out that about two-thirds of benefits were being paid over a post office counter, in excess of £60billion a year: 18million recipients were still using post offices, and while the handling charges were below one per cent, they totalled £400million, a third of the annual revenue of the post office network.

Although there had been a gradual drift towards direct payment into bank accounts, many people still found it far more convenient to get cash at their local post office.

So, when this government decided that all recipients should be compelled to "migrate" to direct payment, it took that decision knowing perfectly well that this would have a devastating effect on the post offices.


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Why? That remains something of a mystery, but here is one plausible theory: because the traditional payment system gave a hidden state subsidy to post offices, and the European Commission was about to challenge it under single market rules on free competition.

MURIEL PARSONS

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