End Of The One Price Post?

The company’s latest results show that the service, which was described as “part of the fabric of our society”, has made a loss in excess of £100 million last year, compared with the profit of £50 million two years ago.

A lot of this loss has been accredited to the fact that postal services were opened up to competition in January 2006. This has led to rivals creaming off much of the profitable business post sector, which was mainly used to subsidise the normal stamped post for private and small business customers.

It has now been revealed that Royal Mail is losing 6p on every first or second class letter sent by conventional stamps. Mr Crozier Stated that the universal service is “under threat like never before.” He went further to attack the postal regulator Postcomm, “We are very clear that the answer, in part at least, has got to involve regulation reduced to a minimum so that Royal Mail has the freedom to compete fully in both the postal and wider communications market.”

The cost of the universal service is enourmous for Royal Mail, which made an overall pre-tax loss of £77 million in the year to March 30th.

It is not just the remote rural addresses that are expensive for delivery. Many large properties, particularly in the south, have very long drives, which eat up petrol and time. In London, it is costly to deliver because postman’s pay is higher in the capital than elsewhere.

Yesterday, the consumer body Postwatch said the universal service, which is enshrined under the Postal Services act of 2000, must be protected. At this time they refused to comment on how the service could be made cost effective.

Mark Steele

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