Govt starts postal market probe

The Government is launching an inquiry into competition in the UK postal sector and Royal Mail’s obligations under the Universal Service, despite regulator Ofcom refusing to do so.
Royal Mail has been demanding a probe into the expansion of end to end deliveries by Whistl (formerly TNT Post UK) for months, and has even drafted in former government advisor Richard Hooper to back its cause.
Hooper chaired the independent review of the UK postal sector which reported to successive UK governments in 2008 and 2010, that ultimately led to Royal Mail’s sell-off last October.
However, Ofcom has so far resisted the postal operator’s demands, saying: “Current evidence clearly shows that the service is not currently under threat.” But the Business Select Committee has stepped in and has started to gather evidence for its own inquiry.
Adrian Bailey, chair of the committee, said: “We have had a number of representations from Royal Mail, and others, warning that TNT can cherry-pick profitable routes because they don’t have a Universal Service obligation. If it is under serious threat, we will see what we can do to protect it.”
Royal Mail is committed to maintaining the Universal Service until at least 2021, and any change would have to be put to a vote in Parliament. Royal Mail, Whistl, the CWU postal union and regulator Ofcom will be called to give evidence in Parliament. It is not known whether the DMA will also be called in, although given its position as the industry body which represents business mailers it will no doubt want to submit evidence to the consultation.
As far back as 2010, Mail Users Association boss Alan Halfacre told a Government inquiry that it should must bow to the inevitable decline in mail volumes by cutting back the Universal Service or risk a mass exodus of business mailers fed up with footing the bill.

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