Privatisation of Post Office mad, says MP

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Angus member’s fury at mandelson plan
Privatisation of Post Office mad, says MP

By David Perry

Published: 21/10/2008

Mike Weir
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Business Secretary Lord Mandelson was told last night by the SNP he would be “barking mad” to privatise the Post Office in the middle of a recession.

Angus MP Mike Weir, the party’s business spokesman at Westminster, lashed out as it became clear that at least part-privatising Royal Mail is at the top of the agenda.

It followed the observation from Lord Mandelson that 10 years after leaving the former Department of Trade and Industry he is surprised this is still an unresolved issue.

The new peer believes – subject to a report expected to warn that Royal Mail’s business as it stands is unsustainable – that he needs to attract private capital to keep the Post Office going.

The report is expected to warn that something will have to be done because of a huge pensions deficit and the loss of business to private postal firms.

A huge concern is how to fund Royal Mail to deliver everywhere in the UK at the same price – the universal service obligation.

A second major worry is that the Department for Work and Pensions may award the contract to replace the Post Office Card Account – through which benefits and pensions are paid – to someone else, forcing the closure of thousands more post offices.

Mr Weir, who will be cross-examining Lord Mandelson today when he gives evidence to a Commons committee, said: “The idea that the Post Office must face privatisation is a step too far even for Lord Mandelson.

“In the current economic climate at a time when billions of pounds have had to be spent keeping our banks afloat, the idea that you can sell shares in Royal Mail is frankly barking mad.”

Mr Weir said what is needed is a system of ensuring that private mail companies which use posties to deliver their mail pay the Post Office the full cost of doing so.

Inverness, Nairn, Badenoch and Strathspey Lib Dem MP Danny Alexander said: “Peter Mandelson should be guaranteeing that people all over the UK will be able to send and receive letters on an equal basis as they do at the moment and ending the programme of cuts in the Post Office network.”

He said selling a minority stake in Royal Mail “makes sense only if all the money raised is used to support the Post Office”.

North-east Tory MSP Alex Johnstone said the Post Office should have been privatised years ago.

He said many people are concerned other businesses add extra charges to deliver in the north and north-east, and any changes now may result in Royal Mail having to do the same as other companies.

“There is a genuine risk of a reduced service and that the commitment to a universal service may be under threat,” added Mr Johnstone.

Ochil and South Perthshire Labour MP Gordon Banks said he wanted his party to stick to its manifesto commitments against full privatisation of the Post Office and keeping the universal service obligation.

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