Royal Mail sell-off 'a disaster for rural areas' say critics

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Privatising the Royal Mail will be a “recipe for disaster” for rural areas and hammer the “final nail in the coffin” of the Post Offices network, Labour has claimed.

The Opposition’s warning of the Government “playing politics with the postage stamp” followed ministers this summer backing a £3 billion stock market flotation of the Royal Mail.

Labour MPs and the unions warned the universal service obligation – delivering to every home – would be put at risk, arguing the lack of profit in remote deliveries would mean the post dwindled.

The Government insists the six-day-a-week service is enshrined in law and second-class post will not cost any more.

But in a Commons backbench MPs’ debate on the future of rural postal services, Labour Shadow Business Minister Ian Murray said the privatisation was an “ideological firesale”.

He said it was right that rural areas were treated the same as urban parts of the country, even if it was more costly for the Royal Mail to reach them.

But he claimed households and businesses in the countryside already face private parcel delivery companies routinely charging a high premium for delivering to remote or rural areas or to islands – or simply refuse to deliver at all. And if the trend continued following the Royal Mail sell-off, it would have knock-on effects for the Post Office, he said.

The Royal Mail has agreed a 10-year deal to keep using post offices to sell stamps and handle parcels after the company is broken up at privatisation – but there are fears over the future once the deal expires.

Mr Murray said: “It’s a recipe of disaster and a recipe that will be hardest felt in rural areas.

“Privatisation of Royal Mail will signal the final nail in the coffin for the Post Office network.”

Labour MP Peter Hain, a former Cabinet minister, said Royal Mail rivals should be forced to deliver post to remote areas to prevent rural postal services “all but disappearing”.

He said under the Postal Services Act 2011 new terms could be drawn up to make such demands of rival delivery companies without having to resort to changing the law.

Speaking during a debate on postal services in rural areas in the Commons, he said: “Royal Mail needs a level-playing field where its competitors also have an obligation to deliver up remote Welsh mountains or the Scottish islands or Yorkshire Dales.”

Dan Rogerson, Liberal Democrat MP for North Cornwall, said withdrawing any postal services would be a “huge source of anxiety” in the rural Westcountry.

But he said the 2011 Act meant the post was “more protected” than under Labour, which sanctioned mass closure of rural post offices.

He said: “Any party that signalled it was abandoning its support for it would not prosper electorally.”

Business Minister Jo Swinson told MPs the “over-arching objective” of the reforms was to make sure the postal service was accessible to everyone.

She added the “six-day-a week delivery to the home or premises of every individual in the UK, a six-day-a-week collection from every access point, that is post boxes or post offices in the UK” will “all continue to apply in the event of Royal Mail being sold”.