RM may not deliver to an independent Scotland under EU Law

[TrueBlueTerrier]

Royal Mail may not deliver to an independent Scotland under EU law, expert warns

http://www.dailymail.co.uk/money/news/a ... paign=1490" onclick="window.open(this.href);return false;

An independent Scotland will face soaring stamp prices and could lose Royal Mail services altogether, a leading expert warned last night.

Royal Mail currently delivers anywhere in Britain for a single price, under what is called the ‘universal service obligation’.

But an independent Scotland would be forced by EU law to establish its own postal service.

Under the current system, easy to reach parts of England subsidise the postal delivery service in remote parts of the Highlands, where the costs to Royal Mail are significant because of the distances involved.

Any company offering postal services in Scotland would have to charge significantly more, a leading expert warned.

Gert Zonneveld, analyst at stockbroker Panmure Gordon, said: ‘Because Scotland is typically reasonably sparsely populated it’s probably quite costly to distribute.

‘If Royal Mail will cover Scotland it will need to generate an appropriate return on sales, which may result in a significant uplift in prices for users of the mail system in Scotland.’

Mr Zonneveld was the first City analyst to publicly accuse the Government of selling Royal Mail on the cheap in last year’s privatisation.

He was openly criticised by business secretary Vince Cable, but ultimately proved right when shares soared on the London Stock Exchange.

Yesterday he said a new postal service in Scotland would ‘result in a complete recalculation of costs’.

It is not currently known whether Royal Mail would automatically pull out of Scotland in the event of a ‘Yes’ vote.

Government sources said it would be up to the Governments of Scotland and the rest of the UK to decide as part of the independence negotiations.

But in time Scotland will be forced to establish its own provider under EU law.

Mr Zonneveld said it was likely that Royal Mail would be kept on in Scotland ‘as an interim agreement’.

Using the firm, which already has an established network of postboxes and around 12,000 staff north of the border, would also be a cheaper option for a new Scottish Government than establishing its own state-owned service from scratch.

Mr Zonneveld added: ‘There is no doubt that something will need to change. But would Scotland on its own with a mail system have higher prices that the rest of the UK? You have to say yes.’

It is not known how much more expensive Scottish stamps could be, but a recent Citizens Advice Scotland investigation found that some parcel firms were charging up to six times more to deliver in rural parts of the Highlands.

A report from regulator Ofcom showed that Royal Mail charges business customers 27 per cent more if they are in rural areas than in urban areas such as major cities.

A spokesman for Royal Mail said: ‘The Scottish independence Referendum is a matter for the Scottish people and we await the outcome of the Referendum. Any negotiations following the Referendum would be a matter for the UK and Scottish Governments.’

A spokesman for Ofcom said: ‘Ofcom is independent of both the Scottish and UK Governments and has no position on whether there should be any constitutional change.’

The Department for Business, Innovation and Skills, which rules on the universal service obligation, refused to comment.

Dave Ward, deputy general secretary of the Communications’ Workers’ Union, said: ‘It’s not clear what the implications would be on Royal Mail’s Universal Service Obligation in an independent Scotland, the pension schemes our members are enrolled in or how it would affect the roll-out of broadband services to the inaccessible rural communities in Scotland.

'Independence would have a significant impact on the ability of these companies to invest in their networks.’

[TrueBlueTerrier]

Moderator dons appropriate headwear

[spiderj]

Tinfoil hat required?

[beezet]

Its okay we will post our letters in england when we cross the border or send them to china who will forward as international mail

[Cut Off King]

Yet another pointless article aimed at scaring yes voters,

If English polititions think Scotland is such a basket case,incapable of running there own affairs, why are they FIGHTING SO VERY HARD to keep them ?

If I didn't know any better, I'd think that there must be money, power & oil involved.

The fact is that IF there was to be a yes vote, there would follow 18 months of negotiations in which polititions of BOTH sides will do deals & shift positions to secure a deal that both can live with.

[the deliverer]

Is Scotland seen as a loss leader by RM?. Less revenue, less profit - no dividend.

[hans solo]

i will take my redundency package now then

[Lounge Lizard]

i will take my redundency package now then

[Tiddler]

i will take my redundency package now then

So might several others in the UK, as if Scotland are no longer part of the USO then the need to fly mail around parts of the UK will cease possibly leading to several job losses in airport hubs that fly into/out of Edinburgh, Aberdeen, Inverness.

This could give Moya the opportunity to save millions of pounds per year.

[Lounge Lizard]

i will take my redundency package now then

So might several others in the UK, as if Scotland are no longer part of the USO then the need to fly mail around parts of the UK will cease possibly leading to several job losses in airport hubs that fly into/out of Edinburgh, Aberdeen, Inverness.

This could give Moya the opportunity to save millions of pounds per year.

But if it's not going to fly into/out of Edinburgh, Aberdeen, Inverness then it's going to go by road into/out of Edinburgh, Aberdeen, Inverness.

[Tiddler]

True it will probably go by road but won't help people keep their jobs in airport hubs.

If classed as international mail then won't need to be there next day which weakens the need for a USO. And when the USO disappears no need to fly mail anywhere. More job losses, service will then become 5 days a week (or less) meaning even more job losses in RM.

It may mean a little bit more work for lorry drivers initially but in the long term it will be a domino effect!

[Lounge Lizard]

True it will probably go by road but won't help people keep their jobs in airport hubs.

If classed as international mail then won't need to be there next day which weakens the need for a USO. And when the USO disappears no need to fly mail anywhere. More job losses, service will then become 5 days a week (or less) meaning even more job losses in RM.

It may mean a little bit more work for lorry drivers initially but in the long term it will be a domino effect!

But jobs will be lost and the USO eroded whether or not Scotland gets independence.

[DGP1]

I would assume it would be a similar system to RM in NI and An Post, mail within the island is charged at one price so it's just the same all over.

[Ryan5ear]

Is Scotland seen as a loss leader by RM?. Less revenue, less profit - no dividend.

Orkney, Shetlands and the Outer Hebrides have cost the UK government £210 million pounds a year in subsidies to Royal Mail. - See more at: http://www.otmltd.com/docs11/latest_new ... HLfm.shtml" onclick="window.open(this.href);return false;

[subbie]

What utter rubbish, Royal Mail prior to privatisation received no public subsidy, however Post Office Ltd did, £210m a year as it happens, and it was used in a very minor way to keep open PO branches in places like the Scottish Islands and other rural areas across the UK, whilst using the majority of the state subsidy to squander on Old St fantasy projects and Directors bonuses.

Whoever wrote this article is simply scaremongering, from what I have seen Scotland are prepared and have a plan for their own Postal Service, as opposed to Vince down in Westminster who has no such plans.

Subbie