The cost of independence to the postal service

With possible Scottish independence just around the corner, ministers have warned that the postal service will suffer for those in rural areas or become excessively more expensive.
 
LEICESTER, U.K. - Aug. 13, 2014 - PRLog -- Evidence from Consumer Futures (http://www.consumerfutures.org.uk/about-us) found that those areas that are not commercially viable, such as Orkney, Shetlands and the Outer Hebrides have cost the UK government £210 million pounds a year in subsidies to Royal Mail. Consumer futures also highlighted the fact that 50% of the UK addresses exempt from Royal Mail's universal service were in Scotland.

Under its licence and in accordance to the Postal Service Act 2011, Royal Mail are obliged to provide a Universal Service to UK residents, many people still rely on the postal service as a key way of communicating, especially for those that aren't computer literate or who simply prefer a letter through the door.

However certain areas come at an additional cost to the government because of their location; Orkney, Shetlands and the Outer Hebrides are difficult to access so they're considered long-term exceptions. This applies to mainly island addresses and a few parts of the mainland where the only access to post offices and post boxes are by ferry, air or boat.

If an Independent Scotland hoped to run a service similar to the postal service Royal Mail offers today then business secretary Vince Cable believes it "would be ‘significantly costly' and the knock on effect would be an increase in stamp prices or bigger subsidies.

Scottish ministers believe a publicly owned postal service in Scotland wouldn't need to generate vast profits, allowing Scotland to maintain current stamp prices by servicing the needs of Scotland and not shareholders.

More current industry news can be found here - http://www.otmltd.com/docs11/about/latest_news.shtml

Contact
Ryan Sear
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Tags:Royal Mail, Postal Service, Independence
Industry:Business
Location:Leicester - Leicestershire - United Kingdom
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