SNP predicts disaster if Post Office is privatised

The SNP yesterday claimed Scotland's postal service is heading for disaster if plans for privatisation go ahead.

Launching a new campaign outside Burghead post office, shadow communications minister Kenny MacAskill compared the future scenario in Scotland to the situation in Sweden, where the privatisation of its services in 1996 created a list of catastrophic problems, mainly due to burgeoning costs.

He was joined by Angus Robertson, MP for Moray, who said several postmasters in Moray were concerned.

"Many feel the current proposals are the straw which will break the camel's back and leave many of Moray's communities without a local post office, robbing villages of their hub and taking away one of the cornerstones of rural life," he said.

Managers at Consignia yesterday echoed the concerns, saying the proposals, made by regulator Postcomm, offered no safeguards for the universal service.

Prices in Sweden have increased by 72%, rural deliveries are not made to the door and the number of post offices in the country has halved from 1,900 to 900 between 1990 and 2000.

Mr MacAskill said: "We've seen the future and it's frightening. The Swedish situation is likely to be what will be replicated in Scotland, especially in rural areas like the Highlands, where there is a similar geographical layout.

"The fact of the matter is that since the country deregulated, the cost of a stamp has gone up by 72%, the number of post offices has halved and is down by 1,000, Saturday deliveries have ceased and if you reside in any rural area, then you do not get a guaranteed delivery to your door."

He added: "It should also be said that the Swedish State Post Office is in financial difficulties and is having to be bailed out by the government."

"If we don't say no to privatisation of the Post Office, then we can say goodbye to the Post Office as we know it and we can kiss goodbye to the post office service that we have taken for granted for generations.

"This will undermine the fabric of many a rural community."

Mr Robertson expressed concern over difficulties the elderly and disabled could face.

He said: "The prospect of having to go and collect mail, rather than have it come directly to your door is appalling.

"The impact on elderly or infirm people will be horrendous.

"This Government's preoccupation with privatisation has to stop.

A Consignia spokeswoman said yesterday the organisation would be giving a full response to Postcomm before Friday's application closing date.

She said: "We estimate that Postcomm's proposals could, within five years, reduce our profits by £250million per annum, in addition to the £500million which we are already anticipating will be lost as a result of the European Union plans.

"From April, 2004, it will be possible for anyone posting a single letter to use a rival operator.

"Rivals will be able to refuse to accept 'unprofitable mail' but Consignia will be required to carry it.

"We believe that we have the skills and experience, strong brand and loyal customer base to enable us to compete in the longer term.

"Our main concern is to remain committed to provide an affordable, value-for-money service.

"However, as we have seen in Sweden, to continue to provide a universal postal service in a fully liberalised postal market means increases of more than 70% on postal tariffs."

The spokeswoman said Consignia was not afraid of competition and the company recognised the benefits it could bring to customers.

But she added: "The danger in the Postcomm proposals is that they introduce competition too quickly.

"Postcomm has said that a third of the postal market – bulk mailings of more than 4,000 items – should be open to competition from April, but the regulator has grossly under-estimated the amount of mail posted in bundles of more than 4,000.

"This is 50% of the total market, not the 30% Postcomm claim."

Ending the Royal Mail's letter delivery monopoly could mean that "after Railtrack we could be faced with Mailtrack", an MP warned last night.

Angus SNP MP Mike Weir said that, like the disastrous end of the Tories' rail privatisation, Postcomm's proposal to allow other delivery companies to "cherry pick" the most profitable areas to compete could end up in Royal Mail owner Consignia losing so much money it was unable to carry out its costly universal delivery obligation.

Speaking in a Commons debate, he asked ministers: "Would the Government be prepared to give massive subsidies to a private company to continue the service?"