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Thursday, 31 January, 2002, 11:14 GMT
Rural fears over post plans
Royal Mail is already losing 1m a day
Plans to open all Royal Mail services to competition within four years will mean the end of door-to-door deliveries in the countryside, a Scottish MP has warned.

The regulator, Postcomm, is proposing that from April, private operators should be allowed to collect or deliver mail from companies sending out more than 4,000 items at a time.

The market will then be opened up in stages so that by April 2006 there will be no restrictions, with competition for household deliveries.

The Liberal Democrat MP for Caithness, Sutherland and Easter Ross, John Thurso, said: "Our concern is that there is no way it's ever going to be profitable for the supplier to drive 10 miles up a dirt road to deliver one letter - which happens at the moment.

We have come to the conclusion that rural services are profitable, just like city services

Martin Stanley
Postcomm chief executive
"So, we have to make sure that proper funding is in place for funding for that in the future."

Consignia, which runs the Royal Mail, and the Communication Workers Union are also strongly opposed to the move.

Consignia still has a virtual monopoly on the collection and delivery of small items of mail.

It described the plans as "death by a thousand cuts" and revealed that it was already losing 1m a day on letter delivery.

'Juicy bits'

He said that promises of safeguards from Postcomm were too vague and added the government must take action to prevent the collapse of the Post Office.

Speaking on BBC Radio's Good Morning Scotland programme, Mr Thurso said: "What these proposals do is basically privatise and sell off and dispose of all the juicy bits to the competitors, leaving the Post Office unable to fund the universal service.

"It is particularly difficult for us here in Scotland, where there are rural areas in which clearly there is not going to be a profit in that service."

Inside rural post office
Rural post offices are said to be at risk
Mr Thurso said that while he accepted that it was good to have competition where good competition could exist, the example of Railtrack illustrated how the project could go wrong.

"Otherwise we will end up with another Railtrack situation with the Post Office in 10 or 12 years time."

However, Postcomm chief executive Martin Stanley said it was determined to deliver the best possible service to customers.

Mr Stanley said: "We are not tying their hands behind their backs. We spent a lot of time and effort looking into the issue of a universal service.

"We have come to the conclusion that rural services are profitable, just like city services.

More choice

"The reason being, it can be just as expensive delivering in city centre streets than in suburban areas or even rural areas."

Mr Stanley said that the project was not like Railtrack, but rather more similar to BT.

Customers would have more choice because of increased competition in the markets, he said.

"The service has been the same for over 150 years and we feel it is really time that the customers had a lot more choice."

John Thurso, Lib Dem Scottish Affairs spokesman
"It is particularly difficult for us here in Scotland"
Martin Stanley, Postcomm chief executive
"We have put a lot of effort into this"
Colin Wight reports
"Nine out of 10 letters are sent by business and government agencies."
See also:

31 Jan 02 | Business
Q&A: The Post Office crisis
31 Jan 02 | Business
Competition shake-up for post
21 Jan 02 | Business
Consignia names new chairman
12 Dec 01 | Business
Consignia backpedals on job cuts
12 Dec 01 | Business
Consignia clashes with the unions
14 Dec 01 | Business
Post strike threat withdrawn
26 Nov 01 | Business
UK post operator loses 1.5m a day
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