Royal Mail Chief Exec Warns MPs Of Threat To Rural Mail Services

One of the UK's most remote post boxes on Bryher

One of the UK’s most remote post boxes on Bryher

Royal Mail’s Chief Executive has warned that postal deliveries in remote rural areas, like the Isles of Scilly, could be under threat unless the market is reformed.

Moya Greene was speaking to MPs on the Business, Skills and Innovation Committee yesterday.

She said the Royal Mail’s Universal Service Obligation, which means letters and parcels can be posted anywhere in the UK for a fixed price, would be difficult to maintain while private firms “cherry pick” the most profitable, urban delivery areas.

The Service Obligation runs until 2021, but Ms Greene wants a review into the system to be brought forward to 2015.

Any changes to the way Royal Mail operates could have profound implications for residents and businesses in Scilly.

Under the current arrangement, profitable city services – the ones that the private companies are keen to operate – support the Royal Mail’s rural delivery costs. In 2009, the Royal Mail told the Council that, if mail sent to Scilly was charged at its actual cost, each letter would cost £12.46.

Many islanders now use on-line companies like Amazon and eBay to buy goods, often delivered through Royal Mail, and any price increases are likely to be passed on.

Ben Julian, the co-owner of Churchtown Farm Flowers on St Martin’s says his business is one of the biggest users of Royal mail services in West Cornwall with around 90,000 packs of flowers and a further 150,000 letters and promotional leaflets sent out each year.

He feels any change to the Universal Service Obligation would have a “serious impact” on his company.

Royal Mail looks after the Julian’s distribution from the point when he hands over his packages on St Martin’s, taking care of the entire process of delivering to customers’ doors in one transaction.

Ben says he’s looked at using private couriers for his post but, because of the complexities here in Scilly, he says “they wouldn’t touch it with a barge pole.”

He has a lot of sympathy for the Royal Mail because they have to open up their delivery service to competitors at a minimal price. They ought to be able to charge a realistic rate to level the playing field, he says.