Scottish Nationalists warn against Royal Mail pricing freedom

Scotland’s governing political party has called on the UK postal regulator to rethink plans to allow Royal Mail more powers to set its own postal rates. The Scottish Nationalist Party’s postal affairs spokesman Mike Weir said the move could mean prices for sending parcels to remote areas will soar.

His comments came a few days ahead of the end of a consultation by regulators Ofgem on the future of the universal service obligation in Britain.

Weir said that giving Royal Mail full commercial freedom to determine contracts with large companies and other postal providers as to what they will charge for the final delivery of items could lead to higher prices in rural and remote areas.

He said he had raised the matter in a meeting with Ofgem.

“Everyone understands that it is more expensive to deliver items to rural and remote areas, but up to now we have always had a one price anywhere policy which ensured that we did not have the situation that has developed in the parcels market where some companies will not deliver to the Highlands and Islands of Scotland,” said Weir, who represents the Angus constituency in the UK Parliament.

“Under the Ofcom proposals Royal Mail will be able to negotiate a contact directly with other companies but it does appear that it is the intention of Ofcom that such contracts should be cost reflective, which means that we could reach a situation where different prices were being quoted for different areas.”

Weir said Ofgem was of the belief that if Royal Mail raises prices too high, its customers would simply turn to the internet for communications, therefore it will keep prices low.

But Weir warned that people in remote areas do not have access to fast internet connections, and could therefore find no alternative to high postage rates.

“These are very serious issues which Ofcom do not appear to have taken on board with their proposals. The Postal service remains vital to all areas of Scotland and they must look at them again before it is far too late,” he said.