EU delivers hammer blow to Royal Mail plans . . .

[the deliverer]

EU delivers hammer blow to Royal Mail plans with ban on State help

From UKIP website:

The UK Government will be helpless to prevent huge job losses and a looming pensions disaster when the Royal Mail is privatised, due to EU regulation

Paul Nuttall MEP, UKIP Deputy Leader points out that Westminster will be hamstrung by the same EU regulations that forced it into privatisation.

“It was of course three successive EU Postal Services Directives that created this mess, and under the same law the Government will be banned from giving the Royal Mail any state aid if it catastrophically fails.

“The Postal Services Directive made it clear that the market for mail delivery had to be opened up to competition. As a result, the more profitable services such as business mail were forced to compete with cheaper foreign competitors while Royal Mail was lumbered with the costly hand-delivery and sorting processes. On top of that, as life has moved progressively online we are sending fewer and fewer letters. The Royal Mail was doomed.

“Now the final nail is in the coffin and the Royal Mail will become fully privatised, it’s going to really struggle to compete in the market place. In order to survive there will have to be closures. There will have to be job losses. These employees’ shares that are being championed by the Prime Minister will be completely and utterly worthless. But under EU state aid rules the UK Government will be strictly forbidden from helping the Royal Mail with taxpayers’ money. It will also be forbidden to help plug the £9 billion pension pot deficit.

“We will be left with a completely destroyed Royal Mail, once a proud British institution that did so much more than just deliver letters. We can thank the EU for that, and we can also thank the EU when Westminster finally wakes up and realises there’s a disaster in the post.”

Notes:

• The directives forced Royal Mail to take the burden of the universal obligation to deliver all personal mail, while being forced open up to competition in the business mail section of the service to foreign competitors.

• Business mail is the profitable side of the service which helps to pay for the less profitable personal mail. However the EU has allowed companies to compete with Royal Mail for business mail, thus reducing the vital income that they needed to survive. This has of course made the service much poorer. Many of the foreign companies which now compete with Royal Mail, such as DHL, are foreign state subsidised.

• It was EU state-aid laws which resulted in the closing of thousands of Post Offices several years ago. These EU rules are intended to stop the government intervening to "distort" the EU Common Market by favouring one company over the other - but in practise what happened was that the Government was banned, by the EU Commission, to give the Post Office network the subsidies it needed to keep every branch open - which led to large-scale closures up and down the country.

• Labour MEP, Brian Simpson, championed the legislation and helped to force it through the EU parliament! Yet the Labour party now pretend it's a bad thing to privatise the mail

• There were several votes in the EU "parliament" on this privatisation of the mail service and at every stage it was only UKIP that voted against. Labour, Lib Dems and the Tories all voted in favour of these EU laws.

[fishtank]

First of all no offence to you but..you do realise that's mostly bollocks.

Some of it is guesswork,some of it is just plain daft,some of it is out of date and some of it is just lies.
There is a tiny sliver of truth running through some of it...but it's mostly anti-EU bollocks and I don't appreciate having such an important issue as my future used for some petty Euro-bashing.

[TrueBlueTerrier]

UKIP have been frugal with the truth and based their claim on state aid on this gem from the EU

Under Article 107 of the Treaty on the Functioning of the European Union, State aid is defined as any aid granted by a Member State or through State resources which distorts competition by favouring certain undertakings and which affects trade between Member States. The basic rule is "no State aid".

But as USO provider (RM), can get state aid - its not banned even when privatised, its just that there are conditions on giving state aid. http://ec.europa.eu/competition/sectors ... ts_en.html" onclick="window.open(this.href);return false;

However, aid necessary for an undertaking to perform a service of general economic interest like the post may be allowed under certain conditions. For example, Member States can compensate, but not overcompensate, a USP (universal service provider) for the net cost of the public service.

I do wonder though if the next bit is a chicken or egg scenario

Also, where postal incumbents - as a legacy of their past as State administrations - have to pay higher pension costs for civil servants, unlike their competitors, Member States can provide relief as long as it does not put the incumbents in a better position than their competitors.

[pants123]

First of all no offence to you but..you do realise that's mostly bollocks.

Some of it is guesswork,some of it is just plain daft,some of it is out of date and some of it is just lies.
There is a tiny sliver of truth running through some of it...but it's mostly anti-EU bollocks and I don't appreciate having such an important issue as my future used for some petty Euro-bashing.

fishtank,,, i hope your right as saying its mostly bollocks, as that is scary reading....