Royal Mail

The Government has put forward proposals to meet the challenges currently facing Royal Mail.

Royal Mail had a pension deficit of £5.9 billion at the last valuation (75 times the company's profits). The volumes of letters sent are falling year on year and Post Office Limited is dependant on a £150 million Government subsidy every year.

The proposals published on 26 February aim to protect the service whilst ensuring the security of postal workers' pensions.

The bill will enshrine Royal Mail in legislation as a publicly owned company and the Post Office as owned by Government in its entirety. No Government would be able to change this without further primary legislation. The expected universal service (letters collected and delivered anywhere in the UK, six days a week for an affordable price) will also be written into law.

Postcomm is to be abolished and Ofcom will regulate the service.

I have followed Royal Mail issues for many years and have been keen to see the universal service retained. The competition that is currently allowed does impact on Royal Mail costs. I am anxious that all is done to preserve these important jobs in central London and worry less about 30 per cent investment from a private company than a situation where the Royal Mail is not strong enough to compete with existing competitors.