MP calls for action over Royal Mail

An MP has called for more government subsidy to ensure a sustainable future for Royal Mail.

Liberal Democrat Alan Reid pointed to a "very worrying" report which last week said that the firm was "making substantial losses" from its policy of delivering letters anywhere in the country for one price.

The report, commissioned by the government, said that postal liberalisation had put the future of Royal Mail at risk.

And speaking ahead of a Westminster Hall debate on the future of the Royal Mail, the Argyll and Bute MP told ePolitix.com that "something certainly has to be done".

"More money has to be given to Royal Mail to fulfil their universal service obligation," he said.

"At the moment universal service obligation is being cross-subsidised by Royal Mail from other parts of its business but that's definitely an unsustainable situation so money has to be levered in some way.

"I think there are various options which ought to be pursued. One is direct government aid, another would be putting a levy on the large private mail companies that are not fulfilling the universal service obligation.

"Another option would be to lever in private money by selling shares in Royal Mail to the private sector."

Warning that "the present state of affairs is simply not sustainable in the long run", he called for more government subsidy and said ministers had been taking the wrong approach to post office closures.

Wednesday's debate would not "revisit" the present programme of closures, he said, adding that it was important "to accept that the government is going to see that through to its conclusion at the end of the year and that 2,500 post offices will go".