Postal changes will hit rural communities, warns UK Royal Mail boss

Rural communities across Scotland will suffer if proposed changes to postal services go ahead, the chief executive of the Royal Mail warned yesterday.

Adam Crozier also said job cuts at the Royal Mail are inevitable as the organisation strives for greater efficiency.

But he insisted there are no plans to close any more post offices north of the border.

Mr Crozier was speaking as the Royal Mail unveiled findings of a study highlighting its impact on Scotland’s economy.

His comments will re-ignite concerns that proposed changes to UK mail delivery services will lead to an inferior service for the Highlands and Islands.

Postal services regulator Postcomm is seeking to cap any rise in the charge for stamps at 4p for first class and 2p for second class by 2010. It also wants to introduce measures that could cost the Royal Mail £280million in refunds if it misses performance targets. Mr Crozier said the proposals, aimed at securing the so-called universal service that allows the Royal Mail to deliver to the UK’s 27million addresses for the same stamp price, would damage the organisation’s ability to invest for the future.

“Postcomm’s proposals as they stand are unacceptable,” he added. “That’s why we need a constructive dialogue with the regulator. We are striving for a solution that will allow Royal Mail to invest in modernising the business and in our people, while allowing us to compete fairly and successfully in the market place.”

Royal Mail is one of the biggest job and wealth generators in Scotland, and central to the future success of the economy, said Mr Crozier.

He added: “Even more important, however, are the services the company provides to businesses and individuals across the country, forging vital links for the many remote and rural communities. Without Royal Mail Group the future for these communities would be less secure.”

Mr Crozier, the former chief executive of the English Football Association, said job losses at Royal Mail were likely to come through voluntary redundancy and “natural wastage”. He added: “In Scotland at the moment there are no more plans to close any more post offices.”

Royal Mail Group – which includes the Royal Mail, the Post Office and Parcelforce Worldwide – said its Scottish operations generated £404.5million a year for the country’s economy, creating and sustaining 22,390 jobs.

The figures were revealed in an independent economic impact study, which also found the Royal Mail’s services and post office branch network saved businesses and individuals in Scotland’s rural economy at least £251.3million each year.

“Together this brings the financial impact the company makes on the Scottish economy to at least £655.8million a year,” said a Royal Mail Group spokesman.

Mr Crozier added: “What this study demonstrates is the value of the contribution Royal Mail Group makes to the Scottish economy in general and to rural communities in particular.

“If Postcomm takes forward its proposals as they stand it would absolutely lead to the inexorable decline of our business.”