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More post office closures loom as Mail profits double
Jonathan Prynn, Consumer Affairs Editor23 Oct 2008
Royal Mail warned of the threat of more post office closures today as it unveiled a doubling of profits to £177 million.
It said that if it did not win a key Government contract - the Post Office Card Account - which is currently out to tender there would have to be a further round of cuts. Pensioners and benefits claimants use the card to collect their money and it is a valuable source of customers and income for many post offices.
In a statement, royal Mail said: "This crucial decision is clearly central to the future of the branch network and Post Office Ltd has submitted a very competitive bid."
In the Commons today, MPs attacked the Government over its delay in awarding the contract.
Speaking at question time, Tory business spokesman Jonathan Djanogly said: "Given that there are some four million users of the Post Office Card Account and given that this equates to some 10 per cent of sub-postmasters' net income, is the Government not slightly ashamed that it continues to delay the tender process for its replacement?"
Tory Peter Luff (Mid Worcestershire), Business and Enterprise Select Committee chairman, said: "If the Post Office Card Account is not awarded to Post Office Ltd, many more post offices in my constituency and around the country will face closure."
The latest round of closures resulted in the loss of 169 post office branches in the capital. royal Mail said its profits rose from £86 million to £177 million in the first half of the year, mainly as a result of cost-cutting measures. The Post Office network turned a £7 million loss into a £28 million profit.
The royal Mail's pension fund deficit has widened by £1.1 billion to £4billion "due to changes in market conditions."
Reader views (7)
I wouldn't mind them making a profit quite so much if the level of service improved.. an hour to get a parcel posted queueing what a bore...
- Jane Willingale, London UK, 31/10/2008 16:58
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it is amazing, all the money that the goverment has pumped into the private banking system and we are still talking about post office closures
should they surley not be putting money into a system that is owened by the tax payer instead of lineing the pockets of these bankers who are hell bent on still retaining their perks & bonus
- Anthony Price, luton england, 24/10/2008 12:24
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Why are they putting out to tender a simple, solid bank account which works and doesn't rip people off systematically through grossly disproportionate penalty charges, smoke and mirrors, as a devil's bargain where customers get fleeced to placate the banks so the latter will agree to be taxed?
Hang on, I've just read back my own sentence to myself. Makes sense now.
- Reg, London, UK., 24/10/2008 10:29
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This is so typical of the UK of today, how on earth can they say they have to axe offices when their profits are up, but I agree with Stuart, London. When is all this silliness going to stop and we can get back to being normal and get rid of this GREED RIDDEN society, PROFITS above all else, and the people who work in these places are not considered one iota. Its a MAD MAD MAD WORLD, that we live in, and sanity needs to be brought to the fore, as I have said before, you cannot take it with you.
- Meg, Merthyr Tydfil, South Wales., 24/10/2008 09:58
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We have lost many rural post offices in our area so we are forced to go to the main town centre.
However, it has not taken on new staff and we have to wait in line for up to 45 minutes.
- Graham, Dorking, 23/10/2008 19:52
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Its not doubling profits through good business its slashing services that makes this business profitable.
- Stuart, London, 23/10/2008 16:53
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Presumably they're waiting to see who offers the biggest bung.
- L.Taubler, London / UK, 23/10/2008 16:30
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