Botched Royal Mail sell-off hitting rural areas

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The Scottish National Party has said the botched sale of the Royal Mail – in which taxpayers lost out on millions of pounds - will be affecting rural areas of Scotland this Christmas as Royal Mail recently warned that increased parcel delivery competition has hit revenues.

Earlier this month a report published by former city minister Lord Myners revealed the UK Government could have made £180m more from the sale of Royal Mail – further underlining the shambolic nature of the sale.

The sale has also put the Universal Service Obligation (USO) – which ensures delivery of letters to all areas of the UK – under threat. Royal Mail boss Moya Greene told the BBC recently that increased competition was threatening the company's ability to deliver letters to all parts of the country and that "cherry-picking" of urban mail routes by competitors "undermines the economics" of its nationwide delivery service. The warnings on profits have come from Royal Mail ahead of a crucial period, the Christmas season.

77 per cent of Scots disagreed with the UK government decision to privatise Royal Mail. A report by Westminster’s Business Select Committee found taxpayers lost £1 billion over the privatisation of Royal Mail because the coalition underestimated demand for shares. Ministers involved were also accused of being afraid to fail over the sell-off last year and of receiving “poor quality” advice.

Mike Weir MP, SNP Westminster spokesperson on postal services said:

“Rural areas of Scotland will be suffering the consequences of the UK government’s botched sell-off of Royal Mail this Christmas.

“The privatisation of Royal Mail has been nothing but a shambles since day one – and as Lord Myner’s report revealed earlier this month, taxpayers lost out on millions. The people who are paying for this incompetence are the individuals and businesses in rural parts of Scotland who need and should have the same postal services as the rest of us.

“A privatised postal service in a competitive market will undoubtedly put pressure on government to reduce the terms of the Universal Service Obligation, as its competitors cherry pick the profitable urban routes leading to a reduced service in rural and less affluent areas. Now we are told there is a ‘material risk’ to the USO – and that the delivery service across the UK will come under ‘unmanageable strain’.

“Royal Mail should never have been privatised and it is painfully clear that the UK government should never have sold off a valuable public asset at well below its true value and despite all the warnings. We know the majority of Scots were totally opposed to the privatisation of Royal Mail - more than any other part of the UK. We need a postal service that meets the needs of our communities and one which is brought back into public ownership.

“This is especially poignant at Christmas since this is the one time of year when there continues to be a substantial number of letters sent as people stay in touch with friends and family through cards and family letters. Rising prices have already made this more costly, loss of a universal service will make it impossible.”

Ends

Note to Editors:

Royal Mail privatisation £180m underpriced, review says: http://www.bbc.co.uk/news/business-30527392" onclick="window.open(this.href);return false;

Royal Mail shares fall sharply on concerns over competition: http://www.bbc.co.uk/news/business-30110817" onclick="window.open(this.href);return false;

Taxpayers lost out in sale of Royal Mail: http://www.parliament.uk/business/commi ... --on-publ/" onclick="window.open(this.href);return false;

Poll – 77% of Scots oppose Royal Mail privatisation:: http://d25d2506sfb94s.cloudfront.net/cu ... sation.pdf" onclick="window.open(this.href);return false;

http://www.snp.org/media-centre/news/20 ... vatisation" onclick="window.open(this.href);return false;