Royal Mail privatisation plans 'threaten survival of post offices'

Sub-postmasters want ministers to force the new owners of Royal Mail to use post offices for parcels and benefits

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."


Tim Webb

The GuardianTramp

Related Content

Article image
Royal Mail workers balloted on privatisation plans
Union sends ballot papers to 112,000 postal workers calling on them to back stance against selloff and consider industrial action

Rupert Neate

22, May, 2013 @3:58 PM

Article image
TNT Post fears Royal Mail privatisation will create monopoly
TNT says new rules will drive rivals out of Britain if Royal Mail is given discretion on allowing access to delivery network

Tim Webb

07, Dec, 2010 @5:13 PM

Article image
Royal Mail privatisation threatens rural post offices, warn opponents
John Denham joins critics of plans to privatise the Royal Mail, saying radical changes could spell disaster for country branches

Anushka Asthana, policy editor

23, Oct, 2010 @11:07 PM

Article image
Royal Mail staff vote against privatisation
More than 96% of 112,000 postal workers vote against sell-off despite each being promised £1,500 of shares

Rupert Neate

19, Jun, 2013 @1:35 PM

Haggling puts privatisation plan for Royal Mail at risk
Concerns grow over TNT's suitability as a private sector partner for Royal Mail, should parliament aprove part privatisation

Tim Webb

05, May, 2009 @9:46 PM

Royal Mail chief warns against full privatisation

· Plan to give 20% of company to the staff
· Stamp prices 'need to reflect cost of service'.

Mark Milner , industrial editor

18, Oct, 2005 @11:02 PM

Article image
Vince Cable recalled by MPs over Royal Mail privatisation controversy
Business secretary to answer claims that government vastly undervalued postal service following scathing NAO report

Rupert Neate

07, Apr, 2014 @11:30 AM

Article image
Goldman Sachs and UBS to lead privatisation of Royal Mail
Government announces selection of Goldman Sachs and UBS to advise on Royal Mail's sale and collect majority of fees

Rupert Neate

29, May, 2013 @6:08 PM

Article image
Royal Mail could be forced to sell businesses before privatisation
European commission may seek break-up as price for government takeover of debt-ridden Royal Mail pension scheme

Julia Kollewe

02, Jan, 2011 @7:51 PM

Article image
Royal Mail workers vote in favour of strike following privatisation
Postal workers will stage 24-hour strike on 4 November unless demands for improved pay and conditions are met

Rupert Neate

16, Oct, 2013 @2:57 PM