Separate Scottish taxpayers 'face spiralling post costs'

[TrueBlueTerrier]

http://www.telegraph.co.uk/news/uknews/ ... costs.html" onclick="window.open(this.href);return false;

Taxpayers and post office customers would face “spiralling” costs to fund a postal service in an independent Scotland, the official watchdog that governs the UK industry has warned.

Consumer Futures told an inquiry by MPs that Scotland’s more rural geography could lead to the public subsidy and stamp prices becoming “substantially more expensive” as the cost would no longer be spread across the UK.

Robert Hammond, the statutory watchdog’s director of postal policy and regulation, said this could lead to a vicious circle with increased costs leading to less mail being sent, which in turn would force the postal service to increase prices.

This warning was echoed by the Communication Workers Union (CWU), which said that the financial black hole could be made good by cutting back postal services from six to five days a week or introducing different charges across Scotland.

Both organisations also raised concerns about steep increases in costs for sending mail between Scotland the remainder of the UK. The Royal Mail current charges Northern Irish customers “Europe” prices to send post to the Republic of Ireland.

However, the Royal Mail told the Commons Business, Innovation and Skills select committee that no planning had been conducted for independence and no discussions had taken place with the Scottish Government.

Adrian Bailey MP, the committee’s chairman said he was astonished by this omission. There are 1,425 post office branches in Scotland, two-thirds of which are in rural areas.

The committee, which is conducting an inquiry into the impact of independence on business, higher education and postal services, yesterday took evidence from the industry at Glasgow University.

MPs heard how that if a separate Scotland became an EU member, it would be required to provide a postal service with collections and deliveries five days per week with prices that are deemed “affordable”.

However, the UK goes further than required by providing a six-day service and charging the same price regardless where in the country the item is being sent.

Asked about a separate Scotland’s ability to replicate this, Mr Hammond told MPs: “It does raise a lot of problems, quite frankly, and a lot of concerns.”

Citing the expense of dealing with Scotland’s “rural nature”, he said: “Post could become substantially more expensive in Scotland. That, in turn, would trigger an already declining mail volume.”

He predicted this could lead to a “spiral” of costs as the operator would be forced to increase prices if fewer people were sending mail. People in rural areas would face becoming “more and more disadvantaged”, he said.

In a written submission, the CWU said: “There would likely be substantial changes to the postal service if the Scottish people voted yes in the referendum.”

The cost of delivering mail to rural Scotland is “currently subsidised by customers elsewhere in the UK”, the union said. After separation, this cost may be met by “significantly higher stamp prices” or “substantial costs to the Scottish taxpayer”.

The planned privatisation of the Royal Mail would have “significant implications”, it said, as a commercial company would be likely to “divest” itself of its loss-making Scottish operations after independence.

Neither would there be any guarantee that the Queen’s head would appear on stamps, the CWU said, as this was a requirement of UK legislation that would no longer apply after separation.

Jonathan Millidge, company secretary of the Royal Mail, admitted no discussions had been held about a separate Scottish system but it was currently an “integrated part” of the UK’s

“So it would take a lot of detailed planning and a lot of thought to see if that was separable from the rest of the UK network,” he said.

[Danelectro]

mr CWU should remind himself of the scenarios the CWU are predicting will happen if the impending privatisation of Royal mail UK is achieved its certainly more frightening than the problem of trying to set up a state run Scottish postal service,yes there would be problems but one way or another they would have to be solved.so no big deal...as for Neither would there be any guarantee that the Queen’s head would appear on stamps, the CWU said, as this was a requirement of UK legislation that would no longer apply after separation. im absolutely gutted

[Godric]

funny that the CWU in Scotland are saying different from the London based CWU, they seem to forget the network is already in place .... more scare stories from London

[Tman]

The cost of delivering mail to rural Scotland is “currently subsidised by customers elsewhere in the UK”

Just like most things then...