Government privatisation plans in further disarray

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Government privatisation plans in further disarray

Post Office mutualisation plans falling apart

Responding to the news that the UNITE and CWU trade unions have withdrawn from the consultation on the mutualisation of the post office network, Save Our Royal Mail campaign director Mario Dunn said:

“This is yet another blow to the Government’s plans for the postal service. The 2011 Postal Services Act made a big mistake in separating Post Office Limited from Royal Mail. The separation and subsequent privatisation of Royal Mail will be devastating to the post office network”.

Post Office Limited and Royal Mail operate an inter-business agreement (IBA). However, privatisation threatens even that tenuous link.
Dunn said:

“The new owner of Royal Mail will be bound by the principle of the inter-business agreement but not its specific terms. Undoubtedly the transactional relationship between RM and POL works to the financial advantage of the latter. A new owner will inevitably recoil at terms that it considers to be disadvantageous and seek to reduce the transactional costs it incurs with Post Office Ltd, thus further undermining the post office network. They will also look to alternative retail outlets for their products and services, with the supermarket sector offering national scale.

“The post office network has been battered by the loss of key government contracts. Its revenue stream from Royal Mail activity is its largest and it can ill afford to see that decline. Yet privatisation makes that inevitable; the impact on the post office network, particularly in rural areas could be significant”.

Calling for the Government to stop and think before it is too late, Mario Dunn said:

“The Government should press pause on Royal Mail privatisation. Its impact will be felt far and wide, including on the post office network. Now that mutualisation plans are in total disarray the future for Post Office Limited is an uncertain one. This is one of the many problems that are a consequence of privatisation.

“Parliament and the public have had no real chance to consider the long term implications of privatisation, nor debate them. Ministers should listen to the nationwide concerns rather than press ahead with this dogmatic, ideological privatisation.”