“Newcastle-upon-Tyne or Newcastle Emlyn” – universal Royal Mail under attack, says AM
12:50pm Friday 11th October 2013 in News
LABOUR AM for Mid and West Wales, Joyce Watson, has warned that Royal Mail privatisation will have a devastating impact on rural communities.
Speaking in a Senedd debate on Wednesday (9 October), Mrs Watson condemned UK Government plans to sell off Royal Mail, saying the decision threatens the future of rural post offices and mail services.
She said: “Royal Mail delivers the same service whether you live in Newcastle-upon-Tyne or Newcastle Emlyn. That is under threat.”
In a letter to Mrs Watson, UK business minister Michael Fallon MP argues that the Postal Services Act 2011 protects universal coverage, and that the sell-off will secure the future of Royal Mail. He writes:
“Royal Mail will continue as the UK’s designated universal service provider, making deliveries to all addresses, rural and urban, on a six-days-a-week basis regardless of its ownership.”
However, Mrs Watson rejected the minister’s claim saying: “The Postal Services Act is written on paper, not in stone. Universal coverage is only possible because profitable parts of the service subsidise the socially valuable but unprofitable ones.
“Since deregulation in 2006, Royal Mail’s competitors have been freed from many of the regulations that bind it, including universal coverage. The ability of the private sector to cherry-pick highly profitable deliveries has enabled it to undercut the Royal Mail. If one party has restrictions that the other does not, how does that create competition?”
In the Senedd debate, Mrs Watson asked communities minister Jeff Cuthbert how the Welsh Government can help rural Post Offices prepare for the likely sell-off:
“Post offices in my region have a fragile existence and rely upon the Royal Mail for the business to survive. The Postal Services Act separates the Post Office’s counter network from the Royal Mail, and even though there is a recently signed business agreement between the two, they cannot guarantee that a new private owner, free to do as they choose, will honour that agreement in the long term. So, how is the Welsh Government supporting rural post offices to ensure that they can adapt to the potential marketplace changes?”
The minister replied: “I take the point very much from Joyce Watson about the assurances that we can give about rural post offices. I think that the information that we have already released about the moneys for the post office diversification fund shows very much our commitment to the continuation of viable post offices in all areas in Wales.”
Under the Welsh Government’s Post Office Diversification Fund (PODF) scheme, Post Offices can apply for funding to upgrade services and premises. There are three categories of grant which comprise the PODF – capital grants of up to £5,000; capital grants of between £5,001 and £20,000; and revenue grants of up to £500 for business advice.