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European Union countries came under pressure yesterday to follow Britain’s example and open their postal services to full-scale competition by January 2009.

Charlie McCreevy, the Internal Market Commissioner, described his latest proposals as “a final, small step” in a process that began a decade ago for complete liberalisation of the Pounds 60 billion sector. However, he insisted that the requirement to deliver, for the same affordable price, letters to any part of the country and to have at least one mail delivery and collection five days a week would remain. Known as the universal service obligation, this is enshrined in EU legislation.

The move is strongly supported by Britain, which ended the Royal Mail’s 350- year-old monopoly this year, and by Germany, the Netherlands, Finland and Sweden.

They have all lifted restrictions on new postal operators and together represent 60 per cent of the total EU market.

Britain welcomed the initiative, stating that “a fully liberalised European Union postal services market is a benefit to consumers, businesses and industry organisations” and would boost the Continent’s overall competitiveness.

Royal Mail will not be rushing to move into fully competitive European postal markets in 2009, even if protesting member states do drop their opposition to full liberalisation by that date (Christine Buckley writes).

Allan Leighton, the group’s chairman, may keep expansion plans shelved, or at least limited. Being “world class” is not the same as being “world active”, he said as the company retreated from a planned expansion overseas.

However, the UK operator will be glad at the future prospect of a level playing field across Europe. Britain itself has had a fully competitive postal market since the start of this year.

Despite being modest about its international aspirations, it is likely that Royal Mail will try some move in the European market once it opens. The British group already has a parcels division, GLS, which operates across Europe, after being founded in Germany.

It will not want to be left at the sidelines if the postal market develops, as some believe that it will, into one dominated by five or six players.

However, with several member states expected to try to hang on to their protected markets, no radical changes may be delievered in Europe’s postal markets until some while after 2009.

Tony Blair has ruled out providing further subsidies for post offices despite receiving a massive petition from campaigners.
However, the PM has pledged to “consider all options” in response to calls for greater protection for the network. John Peberdy, from Loughborough, the chairman of the National Federation of Sub-postmasters, presented Mr Blair with a petition signed by four million people, including 330,000 from Leicestershire.
Campaigners say the move to pay pensions and benefits directly into bank accounts instead of through the Post Office card account will devastate post offices, especially rural branches. They are calling for the plan to be scrapped.
The Government says the 800 smallest post offices are used by an average of 16 people a week and the rural network is supported by an annual subsidy of GBP150 million.