The Post Office network is in danger of becoming a "busted flush" under government plans to privatise Royal Mail to be unveiled today, sub-postmasters warn.
Without an agreement in place to guarantee that a privatised Royal Mail will continue to use the network of 12,000 branches across the country, there will be "far reaching consequences" for the Post Office, George Thomson, general secretary of the National Federation of SubPostmasters (NFSP) told the Guardian.
Some 2,500 post offices, many in rural areas, have been closed in recent years because of mounting losses and many more are thought to be under threat. Mail volumes are falling and other services branches offer, such as payment of benefits and pensions, are moving online. The Post Office relies on Royal Mail for about a third of its revenue.
The Guardian revealed this month that the government was planning to turn the Post Office into a John Lewis-style partnership owned by its staff who will get a greater say in how the network is run and will share any profits. This proposal is expected to be outlined as part of the postal services bill, which will get its first reading in the House of Commons today. The bill will allow Royal Mail to be privatised, possibly by floating it on the stock market or by selling it to another company. The government has promised to keep the Post Office, which is part of the Royal Mail group, in "public ownership".
But the NFSP is concerned that the Post Office will not survive as a standalone business. It has written to its members this week explaining the possible consequences of Royal Mail's privatisation.
Thomson wants the government to require the new owners of Royal Mail to continue to sell its products and services in post offices, rather than use other retail outlets, such as supermarkets, to post parcels. He also wants ministers to commit to using the network to pay and process benefits such as pensions.
He said: "We remain to be convinced that removing the Post Office from Royal Mail is a sensible thing to do. The consequences would be to make a bad situation worse. If it's struggling to survive as part of a large family it may find it impossible to survive as an orphan. It needs a long-term agreement with Royal Mail – the company would otherwise be a busted flush. There are too many sub-postmasters already hanging on by their fingertips."
