Unions push for more pledges on Post Office

[TrueBlueTerrier]

http://www.guardian.co.uk/politics/2008 ... ice-labour



Labour MPs and unions are to build on their political triumph yesterday in persuading the government to let the Post Office retain the £1bn post office card account by demanding that a forthcoming review of the Royal Mail does not lead to further break-up.

James Purnell, the work and pensions secretary, delighted MPs by announcing that he was scrapping the two-year-old tendering process for the post office card account (Poca), which distributes benefits to 4.3 million claimants.

The move lifts the threat of closure from 3,000 post offices, mainly in rural areas. He refused to disclose the cost of the abandoned bidding process, or the compensation to thwarted private bidders.

The decision is part of a pattern of big policy moves by the Brown government designed to minimise backbench divisions and restore Labour's popularity.

Other decisions have included scrapping plans for 42-day detention without trial, giving women greater pensions equality, and reducing testing in schools.

Downing Street's aim is to secure a 35% rating in the polls by spring, as a staging post to win an election in spring 2010.

The Communication Workers Union said it was delighted by the decision, and praised Lord Mandelson, the new business secretary, for new thinking on the Post Office, including using its trusted brand with poorer customers to offer new financial services. It is thought Mandelson persuaded Brown of the importance of lifting the threat.

A CWU spokesman said it would have been "politically suicidal" for the government to have pressed ahead with branch closures, the inevitable consequence of giving the Poca to a private operator.

Explaining the decision to scrap a bidding process started two years ago, Purnell blamed the credit crunch, and the trust vulnerable groups consequently had in the Post Office, rather than banks.

The DWP said initially it had been legally obliged to tender the contract, but Purnell said yesterday: "When the facts change, the legal advice becomes different."

The Poca will now remain with the Post Office until 2015, leading the organisation to promise yesterday that it can maintain the current network.

Purnell vowed to boost advertising for the Poca, and look at whether credit unions can operate via post offices.

He told MPs: "The Post Office ... is seen as safe, secure and reliable as a provider of financial services. I believe that now cannot be the time for the government to do anything that would put that network at risk, particularly as post offices are often the only providers of banking services in both rural and deprived urban areas."

Alan Duncan, the Tory shadow business secretary, said the government had been looking at every way of giving the contract to someone else "but in the end, they simply did not dare".

[POSTMAN]

In 2015 with the credit crunch a distant memory,you know what's gonna happen dont ya..................