Halfacre, who also chairs the Postal Trade Association Forum, urged the Coalition to have the courage to tackle the Universal Service, adding: “You are delaying the inevitable.”
He also cited a study from Consumer Focus and Postcomm which shows customers may be prepared to make trade-offs to ensure a sustainable postal service, such as a reduction to five-day deliveries and replacing 1st and 2nd class with a single tariff. Any reduction in the service is likely to be highly sensitive within Westminster as MPs believe it is a no-go area among voters.
Yet Halfacre believes the Coalition must grasp the nettle now. He added: “The Universal Service is not a long-term viable proposition. No-one knows how fast mailing volumes will decline; some people have suggested they will go down by 40 per cent within five years. Whatever the figure, the future is not in paper, we are the dinosaurs.”
He said that as volumes fall, the burden on business mailers will increase, which could in turn speed up the exodus to other, cheaper, media.
Halfacre also urged the committee to ensure Royal Mail focused its modernisation on the parcel service; the one area of the business which is growing. “So far Royal Mail has spent nearly £2bn on modernising letters – an area that is dying – where is the investment in packets and parcels?”
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