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| Royal Mail's universal postal service at risk, Moya Greene says | Royal Mail's universal postal service at risk, Moya Greene says |
| (35 minutes later) | |
| Royal Mail boss Moya Greene has told MPs that there is a genuine threat to the continuation of the firm's "universal service". | Royal Mail boss Moya Greene has told MPs that there is a genuine threat to the continuation of the firm's "universal service". |
| She accused Royal Mail's competitors of "cherry-picking" the most profitable business. | She accused Royal Mail's competitors of "cherry-picking" the most profitable business. |
| Under the Universal Service Obligation (USO), the Royal Mail is obliged to deliver to all corners of the UK, six days a week, and for the same price. | Under the Universal Service Obligation (USO), the Royal Mail is obliged to deliver to all corners of the UK, six days a week, and for the same price. |
| However, competitors such as Whistl and UK Mail are under no such obligation. | However, competitors such as Whistl and UK Mail are under no such obligation. |
| "If you allow cherry-picking in the urban areas, it syphons off a lot of revenue," Moya Greene told MPs on the Business, Innovation and Skills Committee. | "If you allow cherry-picking in the urban areas, it syphons off a lot of revenue," Moya Greene told MPs on the Business, Innovation and Skills Committee. |
| "It makes the universal service unfinanceable and uneconomic," she said. | "It makes the universal service unfinanceable and uneconomic," she said. |
| 'Fair price' | 'Fair price' |
| However, some of the Royal Mail's competitors denied that they were stealing the profitable part of the business. | However, some of the Royal Mail's competitors denied that they were stealing the profitable part of the business. |
| Guy Buswell, the chief executive of rival UK Mail, said all 15m items they handle a day are delivered by Royal Mail. | Guy Buswell, the chief executive of rival UK Mail, said all 15m items they handle a day are delivered by Royal Mail. |
| "It all ends up in the postman's sack, so effectively there is no cherry-picking whatsoever," he told MPs. | "It all ends up in the postman's sack, so effectively there is no cherry-picking whatsoever," he told MPs. |
| UK Mail collects its own mail, but uses Royal Mail to deliver to individual addresses, paying an access fee for the privilege. | |
| But competitors given a licence can also carry out their own deliveries as well, a process known as end-to-end competition. | But competitors given a licence can also carry out their own deliveries as well, a process known as end-to-end competition. |
| Whistl, formerly known as TNT Post, has been making deliveries in urban areas like London and Manchester since 2012, but relies on Royal Mail to deliver in rural areas, where costs are higher. | Whistl, formerly known as TNT Post, has been making deliveries in urban areas like London and Manchester since 2012, but relies on Royal Mail to deliver in rural areas, where costs are higher. |
| "We pay Royal Mail a fair and reflective price to cover the rural areas, which takes out any opportunity for cherry-picking," said Nick Wells, the chief executive of Whistl. | "We pay Royal Mail a fair and reflective price to cover the rural areas, which takes out any opportunity for cherry-picking," said Nick Wells, the chief executive of Whistl. |
| Review | Review |
| Ms Green told MPs that the USO cost £7.2bn a year to finance, so needed cross-subsidy from profitable urban deliveries. | Ms Green told MPs that the USO cost £7.2bn a year to finance, so needed cross-subsidy from profitable urban deliveries. |
| She said Royal Mail had already seen a "structural" decline of between 4% and 6% in the volume of letters it handles every year. | She said Royal Mail had already seen a "structural" decline of between 4% and 6% in the volume of letters it handles every year. |
| Mr Wells said it was that structural decline - rather than unfair competition - which was hurting Royal Mail. | Mr Wells said it was that structural decline - rather than unfair competition - which was hurting Royal Mail. |
| Ms Greene called for the regulator, Ofcom, to bring forward a review of the USO, which it is planning for next year. | Ms Greene called for the regulator, Ofcom, to bring forward a review of the USO, which it is planning for next year. |
| "We need to accelerate that review," she said. "Don't wait." | "We need to accelerate that review," she said. "Don't wait." |
| The government has guaranteed that the USO will continue at least until 2021. | The government has guaranteed that the USO will continue at least until 2021. |
| What are your views on Royal Mail? Would you be affected by the changes? You can email your experiences to haveyoursay@bbc.co.uk. If you are happy to speak to the BBC journalists, please remember to leave your contact details. | What are your views on Royal Mail? Would you be affected by the changes? You can email your experiences to haveyoursay@bbc.co.uk. If you are happy to speak to the BBC journalists, please remember to leave your contact details. |
| Have your say | Have your say |