Guarantees sought over Royal Mail services

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2010-11-24
SNP Business and Enterprise spokesperson Mike Weir has warned that LibDem Postal Minister Ed Davey is “throwing post offices to the wolves” with his refusal to include in the Postal Services Bill any guarantee of future business from a privatised Royal Mail.

Speaking in the committee stages of the bill, Mr Weir raised serious concerns about the lack of any future protection, and said that the current Royal Mail management’s affection for Post Office Ltd was not sufficient safeguard.

Mr Weir said:

“The current management may well have a very considerable attachment to Royal Mail, but will a new owner of the business necessarily feel the same way? What happens when the commercial profit motive really kicks in? How much will sentimentality govern the actions of Royal Mail?

“The rationale behind the privatisation is to make the new company look for efficiency savings and cut costs. It is inconceivable that the new company will not look at how it can do so with its relationship to Post Office Ltd.”

Mr Weir added that, whilst current management said they “do not see retailers as a particularly serious threat” the situation in New Zealand, where a competitor had set up an alternative network based on retail outlets, showed what could happen.

Mr Weir said:

“A privatised Royal Mail focussing purely on its mail delivery needs could look to an alternative that meets these needs rather than the much wider scope of the traditional Post Office. We have already heard evidence that a network of 7,000 outlets could meet the current criteria for the universal service obligation.

“Unless there is protection written into the bill for the Post Office limited the minister could be throwing our much treasured local Post Offices to the wolves following the privatisation of Royal Mail.”