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Mail competition is 'no benefit' | Mail competition is 'no benefit' |
(20 minutes later) | |
The liberalisation of the UK postal service has produced "no significant benefits" for both households and small businesses, a report has said. | The liberalisation of the UK postal service has produced "no significant benefits" for both households and small businesses, a report has said. |
That is the initial finding of an independent review of the UK postal sector commissioned by the government. | That is the initial finding of an independent review of the UK postal sector commissioned by the government. |
It warned there was now a threat to the Royal Mail's financial stability. | It warned there was now a threat to the Royal Mail's financial stability. |
The Royal Mail's 350-year monopoly ended at the start of 2006, when other licensed operators were given the right to collect and deliver mail. | The Royal Mail's 350-year monopoly ended at the start of 2006, when other licensed operators were given the right to collect and deliver mail. |
'Untenable' | 'Untenable' |
The independent panel warned that the "substantial threat" to the Royal Mail's financial security threatened the universal service - the collection and delivery to all UK addresses. | The independent panel warned that the "substantial threat" to the Royal Mail's financial security threatened the universal service - the collection and delivery to all UK addresses. |
Maintaining the universal service is at the heart of this review - ensuring collection from pillar boxes and post offices and delivery to all addresses The report panel | Maintaining the universal service is at the heart of this review - ensuring collection from pillar boxes and post offices and delivery to all addresses The report panel |
As a result, the independent panel - which will produce its full report in the summer - said the continuing "status quo is not tenable". | As a result, the independent panel - which will produce its full report in the summer - said the continuing "status quo is not tenable". |
"The policies needed to establish a sustainable future will be the focus of our report later this year," they said. | "The policies needed to establish a sustainable future will be the focus of our report later this year," they said. |
While the initial report said homes and small firms had not gained from the increased competition, it said large companies had "seen clear benefits from liberalisation - choice, lower prices and more assurance about the quality of the mail service". | While the initial report said homes and small firms had not gained from the increased competition, it said large companies had "seen clear benefits from liberalisation - choice, lower prices and more assurance about the quality of the mail service". |
It says these large firms have benefited from the big growth in competition in the bulk mail sector - postal firms that collect, sort and transport bulk mail before handing it over to the Royal Mail for the final delivery. | It says these large firms have benefited from the big growth in competition in the bulk mail sector - postal firms that collect, sort and transport bulk mail before handing it over to the Royal Mail for the final delivery. |
Yet at the same time, the report found that the Royal Mail still had "virtually no competition" in the delivery of addressed letters over the "final mile" to letterboxes. | Yet at the same time, the report found that the Royal Mail still had "virtually no competition" in the delivery of addressed letters over the "final mile" to letterboxes. |
"Maintaining the universal service is at the heart of this review - ensuring collection from pillar boxes and post offices and delivery to all addresses," said the report. | "Maintaining the universal service is at the heart of this review - ensuring collection from pillar boxes and post offices and delivery to all addresses," said the report. |
The independent review panel was appointed by the Department for Business, Enterprise and Regulatory Reform. | The independent review panel was appointed by the Department for Business, Enterprise and Regulatory Reform. |
Last year Royal Mail announced a programme of changes to pay and working practices which it said were essential to modernise the service and enable it to compete more effectively. | |
However this led to a strike by Royal Mail staff and a bitter dispute which, although now resolved, is estimated to have cost Royal Mail more than £200m. |