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News - 26 February 2006

Rural post offices get a reprieve

The European Commission has given the green light to the Government's £300 million support package for rural post offices. The Federation of Small Businesses (FSB) has been lobbying heavily on behalf of the post offices and is delighted with the decision.

The arrangement, valid from April 2006 to the end of March 2008, will safeguard rural post offices and was announced by the Minister for Competitiveness, Barry Gardiner MP, in September 2004. It was given final approval under state aid rules by the Commission last week.

Clive Davenport, FSB Trade and Industry Chairman, said, "Rural post offices are an indispensable lifeline for small businesses. With the declining number of rural bank branches in many areas, the post office is the only option for many firms for their day-to-day banking needs.

"Post offices also generate footfall for surrounding businesses. Keeping them in place is vital and we welcome this announcement.

"However, we are concerned that this deal is only for two years. With the threat to end the payment of benefits through post offices by 2010, a more enduring solution is needed. Maintaining rural post offices is essential for the viability of many small businesses and we hope that the Government and the Royal Mail Group will come up with a plan for the long-term."

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