Post rivals urge watchdog to bare teeth over Royal Mail priv

[TrueBlueTerrier]

Post rivals urge watchdog to bare teeth over Royal Mail privileges

http://business.scotsman.com/industry/P ... 3882691.jp

By NATHALIE THOMAS
PRIVATE postal operators are calling on the Government to take a "brave" decision to end Royal Mail's monopoly on large parts of the market as it considers the future of Britain's mail services.
Operators including TNT Post and DX, which employs a fleet of private sector postmen in Scotland, are pressing the Government to end the special privileges afforded to Royal Mail, such as VAT exemption, which they say prevent equal competition.

As the regulator PostComm considers responses to a consultation on the future of postal services, which closed on Friday, the operators are urging Sir Nigel Stapleton, PostComm's chairman, to take a brave stance. They hope the PostComm inquiry will set the tone for a wider review by the Department for Business, Enterprise and Regulatory Reform, which is due to report this summer.

James Greenbury, chief executive of DX, said: "The first decision PostComm and the BERR (Department for Business, Enterprise and Regulatory Reform] have t
o take is to actually take a position on Royal Mail. Our view is that Royal Mail is an institution left over from the 1970s. It has a number of advantages over all of the competition which have to be levelled out. They don't have to charge VAT and we do. It takes out 40% of the market."

Nick Wells, chief executive of TNT Post, said: "We need a level playing field. The market is still overshadowed by VAT distortion which closes off 40% of mail volumes to competitors."

The UK postal market was opened up to competition in 2006 but private businesses say they are still unable to break into key parts of the market.

Sources say Stapleton is likely to be sympathetic to their view, and PostComm has previously argued for a flat VAT rate of 5% for all providers – the Royal Mail included.

However, the change would need to be sanctioned by the Government and passed as legislation.


The full article contains 328 words and appears in Scotland On Sunday newspaper.
Last Updated: 15 March 2008 1:48 PM

[pinstripe]

I think postcomm should tell TNT to come back when they have opened up their own market to competition and after they have stopped complaining to Germany about the introduction of a minimum wage. Or how about this for an idea to create full open competition. Deliver your own bl**** letters!

[rhino49]

Will Royal Mail therefore be able to charge all the DSA users VAT on the services we provide for them which would raise THEIR price to the customers or am I missing something here. Ultimately - as I understand it, VAT IS ONLY PAID BY THE END USER i.e. the last person to part with money for a particular item or service and all handlers up to that point can claim it back if paid previous to the final sale or must pay it to customs and excise if received from the final sale.

How does the panel think this would affect us?

[Phantom]

Now that the bulk business mail has been carved up, private operators are struggling as there is nowhere else to make money. If Royal Mail have to charge VAT then this will push prices even more, even prices for DSA will rise.

I can't see this happening to be honest but you never know with stupid crazy labour/tory government.

[jemima]

The VAT will be useful extra income for the government. They could all have new kitchens paid for by the British public - oh, I was forgetting, they have those already. Perhaps they'll get a pay rise instead...

[k979aaa]

The VAT will be useful extra income for the government. They could all have new kitchens paid for by the British public - oh, I was forgetting, they have those already. Perhaps they'll get a pay rise instead...

Or maybe platinum plated pension's because gold is not good enough for them!.

[edinburghsteve]

All what this will do is encourage RM to cut the staff even more. Lets introduce Winter savings. Or 2 full walks.

[plodsie]

What a major f**k up by this government. They have got right problems now. These companies are right, if we are now ran as a business we should not be exempt from VAT. The upshot is that if we are liable to VAT, then we will have to put prices up - something Postcomm will probably not allow. So we will have to find other ways such as more staff cuts. This will only make the service poorer than it is, and only bring more complaints and more fines. The public are already up in arms at PO closures, and they will be up in arms at the service they are going to get. RM cannot take any more low blows and has no fight left in it. These parasites are going to drive a British institution to it's death, and to think it was a Labour government who was responsible for ripping up the working man's mail.
They'd better get ready for a backlash at the ballot box - where you will have to drop your postal vote at the nearest TNT depot.

[norbert]

Now that the bulk business mail has been carved up, private operators are struggling as there is nowhere else to make money. If Royal Mail have to charge VAT then this will push prices even more, even prices for DSA will rise.

I can't see this happening to be honest but you never know with stupid crazy labour/tory government.

most of that article would be laughable if it wasn't so serious -Postcon just sound like failed Tory Free-marketers , all ideology but nothing practical or workable

[POSTMAN]

However, the change would need to be sanctioned by the Government and passed as legislation.

Well that's f****d it for us for a start!