Ministers lift closure threat on post offices

Business Secretary Vince Cable – who won rapturous applause from conference delegates as he made a rousing speech in which he attacked excessive bonuses paid to "spivs and gamblers" in the City – said there would be no return to Labour's closure programme which has shut 2,500 branches in recent years.

Mr Cable revealed Royal Mail workers would be given at least 10 per cent of shares in the company if a sell-off went ahead but the Post Office branch network would remain in public hands.

The employee shares scheme is being billed as the biggest of any privatisation for 25 years as the Government seeks to attract private capital to Royal Mail.

Meanwhile Mr Cable went through with his fierce attack on unbridled capitalism and short-term decision making in the City despite business leaders questioning the tone of the speech after extracts were released in advance.

He received a standing ovation from party members as he pledged an inquiry into fat cat pay and corporate takeovers and admitted it was "not much fun" being in bed with the Conservatives, confirming his status – enhanced by his respected commentary during the economic crisis – as a party hero.

But he defended the coalition – in which he said the Lib Dems were "punching above our weight" – and effectively gave Lib Dem activists a green light to criticise coalition policy by saying the party had to "maintain our distinctive and progressive tax policies for the future".

Announcing his plans for Royal Mail, Mr Cable said "mutual ownership" would be promoted, spreading worker ownership alongside private capital.

He told delegates in Liverpool: "I want to announce today that employees in Royal Mail will benefit from the largest employee shares scheme of any privatisation for 25 years.

"The Liberal Democrats were the first and only party to call for an employee stake and we are now implementing it in Government."

Mr Cable said the plans did not include the sale of the Royal Mail's Post Office business, adding: "The much valued Post Office is not for sale and there will be no repeat of the previous closure programmes."

The announcement will come as a relief particularly to people in rural areas where many branches have closed over the past 20 years and communities have been denied a vital service.

Dozens of branches across Yorkshire and the Humber closed under Labour's latest round of closures.

A Postal Service Bill is expected next month, setting out the coalition's plans to privatise Royal Mail, which will be fiercely resisted by the Communication Workers Union (CWU).

Lib Dems highlighted the recent report by Richard Hooper CBE updating his 2008 review of the service which said Royal Mail was a company "on the brink". Ministers are prepared to privatise it in the long-term but have vowed to be flexible.

Unions immediately set themselves against the share proposals.

Billy Hayes, general secretary of the Communication Workers Union, said: "Any offer of shares to employees is deeply patronising for people who have invested their working lives to a public service."

Robert Hammond of Consumer Focus said: "Ultimately, the strength of Royal Mail depends on it delivering a first class mail service. This means maintaining the universal service and ensuring any changes to it are based on what will work for customers."

As Mr Cable defended his attack on the City – the "emotional" tone of which had been questioned by business leaders – he acknowledged his calls for restraint in bonuses had "infuriated" bank bosses but said he would not tone down his warnings about their behaviour.

"I make no apology for attacking spivs and gamblers who did more harm to the British economy than (transport union leader] Bob Crow could achieve in his wildest Trotskyite fantasies, while paying themselves outrageous bonuses underwritten by the taxpayer," he said, although he insisted he was not seeking "retribution".

"There is much public anger about banks and it is well deserved."

'Rabble-rousing' words fail to stir excitement

Vince Cable's attack on capitalism and "murky" corporate activities brought lukewarm praise from union leaders and baffled business leaders.

The speech caused a stir even before Mr Cable took to the stage, with extracts sparking consternation from industry.

CBI director-general Richard Lambert said it was "odd that he thinks it sensible to use such emotional language".

Former Trade Minister in the last government and ex-CBI chief Lord Digby Jones said he was behaving like a "Liberal rabble-rouser" rather than a Business Secretary.

Unite assistant general secretary Len McCluskey said: "Vince Cable states what every UK worker knows – neo-liberal policies are bad for Britain."

TUC general secretary Brendan Barber said: "Vince Cable is reflecting the widespread concern that not enough has been done to wean the City off its addiction to the high-risk, high bonus practices that caused the Great Crash of 2008."

Shadow business secretary Pat McFadden said Mr Cable's attempt at being in Opposition and in the government at the same time could not go on forever.

"As he bashes banks and capitalism, the real test will be whether growth returns and business gets the support it needs from the finance sector."