By Steve Bargeton, political editor

SCOTLAND’S NEW nationalist government was on collision course last night with UK ministers over the controversial decision to close thousands of post offices.

Trade and industry secretary Alistair Darling announced yesterday that about 2500 post offices—a fifth of those left in the UK—are to close by 2009.

Although there are no details of where the axe will fall, the decision could sound the death knell for hundreds of rural post offices in Scotland.

Yesterday the first meeting of the new Scottish cabinet under First Minister Alex Salmond described the decision as “deplorable.”

Later, he said, “I would share the view of the overwhelming majority of people, not just of Scotland but elsewhere, that this is a savage destruction of the post office network.

“We were hoping for more in terms of a change of mind in the government to save far more of the operations because so many communities, not just rural communities incidentally but rural communities in particular, depend on the post office network.”

The Nationalist leader said he did not regard the issue as party political, adding he was convinced many Labour politicians would be opposed to the plans.

While acknowledging the subject was a reserved matter, he said, “We will be looking positively at what we can do as a government to help with some of the worst effects. We are looking now productively and positively to try to help.”

Tory shadow Scottish secretary David Mundell also condemned the decision, saying it showed “a lack of vision.”

He said, “It means countless villages will lose their only shop and millions of vulnerable people will lose a service they depended upon.”

Jo Swinson, the Liberal Democrats Scottish affairs spokesman, said of the Government’s proposals, “Their plan is designed to save money and has nothing to do with meeting the long-term needs of people who rely on post offices for essential services.”

Holyrood Finance secretary John Swinney, who has been briefed on the situation by UK ministers, updated colleagues.

The First Minister’s official spokesman said that a full ministerial statement would be made to parliament next week.

Asked if the cabinet had decided to fight any post office closures north of the border, the spokesman said that “constructive” ways were being considered to deal with the situation.

He also confirmed that no figure had been given to the cabinet on the number of post offices earmarked for closure in Scotland.

Mr Darling said the 14,000-strong branch network could not be maintained because of £4 million-a-week losses, leading to closures across the country over the next two years.

The news followed a consultation, which attracted thousands of responses, many from groups representing pensioners, workers and local community groups who opposed such huge cuts.

Andy Furey, of the Communication Workers’ Union, said, “Unfortunately it seems the Government had already premeditated the future of 2500 post offices across the UK throughout the sham that was called a consultation period.”

Gordon Lishman, director general of Age Concern, said, “We’re not convinced that the Government has taken on board the need for postal services to be part of a positive, coherent and sustainable rural strategy.”

The Government also unveiled a £1.7 billion package, including an annual subsidy of £150 million, to prevent further closures and help the Royal Mail attract new business.

No details of where the cuts will fall were given, but consultations will now be held to identify branches to close.

Mr Darling said, “The Post Office must plan a proper national network and innovate—to look more at post offices where people are, be it through mobile offices, village halls, community centres or pubs.

“Local people can now play a key part in consultations into the area plans that will be led by the Post Office.

“We are playing our part and will continue to. This balanced package gives the Post Office network the chance to compete.”

A Post Office spokesman said, “Post Office Ltd’s task now is to look carefully at the strict criteria set by the Government and plan how best to implement them across the country.”

Millie Banerjee, chairman of Postwatch, said, “This will not be a popular decision, but there is a broad consensus among those who have been considering the future of post offices that quite severe pruning is necessary if the remaining network is to be sustainable.”

Colin Baker, general secretary of the National Federation of Sub-Postmasters, said, “Today’s announcement must be seen as an opportunity to take the first vital steps towards building a post office network that has a future, one that is viable and sustainable. It is time to look forward, not back.”

Shadow trade and industry secretary Alan Duncan said, “This government already holds the record for closing post offices faster than any other. They are now going to shut at least a further 2500 branches over the next two years.

“This confirms many people’s worst fears. Our post office network is about to be decimated. By the time of the next election this government will have closed over one third of the entire post office network.”

Nigel Stapleton, chairman of postal regulator Postcomm, said, “Steps to secure the long-term sustainability of the post office network must now be the priority.

“The Government’s time-table for closures is ambitious and it is vital that, at the same time, post offices are being given the right range of services and products to give them a long-term future.”

The 800 smallest rural branches reportedly serve just 16 people a week at a cost to the taxpayer of £17 per visit. Around 1600 branches serve fewer than 20 customers a day, losing £8 for every transaction.