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News - 15 December 2006

Business group expresses anger at post office 'carnage'

The UK will lose 2,500 of the remaining 14,000 post offices. Should we be angry or should we just be relieved it wasn’t 7,000 as previously predicted?

The Federation of Small Businesses (FSB) is angry. Alistair Darling, the Secretary of State for Trade and Industry has announced the decision to close 2,500 post offices across the UK. It is understood that some post offices will be closing as early as summer 2007.

The FSB's survey of small firms and their attitudes to the postal service (see story in Knowledgebase entitled Can we afford to lose any more post offices?) demonstrated the substantial impact that these closures will have on local businesses. A persuasive 82% of small firms reported that the closure of their local post office would adversely affect them. Small businesses employ 12 million people and the potential for this decision to have a negative knock-on effect on the economy is considerable.

The FSB believes that the Government is making a mistake by considering the Post Office's potential £200m loss for this year in isolation. After the Government took several services from post offices in the last few years this situation was bound to arise. But the wider social contribution and added value to the local economy made by post offices is not taken into account by this crude financial calculation. Mobile post offices and other arrangements will only take the edge off the blow. The closures will still hit many small firms hard.

Clive Davenport, FSB Trade and Industry Chairman, said, "Small businesses pay their taxes to fund services such as the post office network on which they depend. Removing this service while taxes remain the same is simply not on.

"This carnage on high streets across the UK is completely unacceptable and very short-sighted. Whatever money the Government saves from these closures will be lost in tax revenue due to decreased small business productivity. Small firms employ 58% of the private sector workforce. We have to ask if it is sensible to put a large proportion of those 12 million jobs at risk to save what is, in Government spending terms, a small amount of money.

"With the Government wanting to reduce congestion, pollution and road journeys, how can forcing business owners to travel further to deposit cash and access the mail system fit in with this policy? This announcement does not demonstrate joined-up thinking from the Government. It should be reversed while there is still time," said Davenport.

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