Your current location:HOME >sport >Taxpayers could be on the hook for a multi 正文
TIME:2024-05-21 14:05:35 Source: Internet compilationEdit:sport
Taxpayers could be on the hook for a multi-million-pound bill to help Royal Mail deliver post.The 50
Taxpayers could be on the hook for a multi-million-pound bill to help Royal Mail deliver post.
The 500-year-old postal service, which this month became a takeover target, has urged the Government to contribute to the cost of distributing letters.
It has long argued for a change to rules saying it must deliver letters UK-wide for the same price six days a week.
Insiders say the Universal Service Obligation (USO), which costs Royal Mail up to £675 million a year, has made its parent company International Distributions Services vulnerable to a takeover, with the board ten days ago rejecting a bid £3.2 billion bid from Daniel Kretinsky.
Last week IDS urged regulator Ofcom to move faster on reform amid reports the Czech billionaire – who co-owns West Ham Utd and has a stake in Sainsbury’s – was working on a fresh offer.
Struggle: Insiders say the Universal Service Obligation has made its parent company International Distributions Services vulnerable to a takeover
Royal Mail argues the system is outdated as letter volumes have fallen from 20 billion two decades ago to 7 billion. They are likely to fall to 4 billion in five years.
Royal Mail, which was privatised in 2013, is hoping to cut second class deliveries to reduce costs. In the meantime, it has asked Ministers to contribute financially until the rules are reformed, though it would not reveal how much taxpayer funding it was seeking.
Ofcom puts the cost of the obligation at £325 million to £675 million a year. Royal Mail reported a loss of £319 million in the first half of its financial year, following losses of £419 million in 2022/23.
‘We call for Government to consider a temporary contribution,’ Royal Mail said. ‘The case is even more imperative if Ofcom delay urgently needed regulatory reform until after a General Election, which as Ofcom acknowledges, could lead to “consumers paying higher prices than necessary”.’
Even then, it warned the USO may become unsustainable again as letter numbers continue to decline. At that point the Government may need to pay subsidies on a permanent basis, it said.
Royal Mail also wants Ofcom to assess the costs of the USO every two years ‘allowing for a fair debate about how these costs are rightly met’. That could make it easier for Royal Mail to cut back services. In plans submitted to Ofcom this month, Royal Mail proposed delivering second class letters every other working day.
First class post would still be delivered Monday to Saturday but would cost more, with parcels still dropped off seven days a week.
Royal Mail would also slow delivery of standard bulk business mail, such as bills and statements, to arrive in three weekdays instead of two, saving up to £300 million but costing up to 1,000 jobs.
The postal service said changes must be approved by April next year lest customers face ‘further and significant price increases’.
The Department for Business said: ‘We have no plan to change the USO and any change to Royal Mail’s operation must take into account the impact on businesses and vulnerable consumers.’
DIY INVESTING PLATFORMS > Compare the best investing platform for youYvette Fielding says her Most Haunted co2024-05-21 14:05
New Elizabeth Smart2024-05-21 13:53
Man United back in another FA Cup final against Man City after narrowly avoiding humiliation2024-05-21 13:35
Owen Miller's two2024-05-21 13:34
Mystery artist who erected signs comparing pothole2024-05-21 13:32
Mutiso Munyao pulls away from 412024-05-21 12:47
Earth Day: How to grocery shop to avoid 'pointless plastic'2024-05-21 12:46
Kyle Hendricks struggles again in 5th start this season for the Chicago Cubs2024-05-21 12:13
Yu Darvish extends scoreless innings streak to 25 in Padres' 92024-05-21 12:08
The Lyrid meteor shower peaks this weekend, but it may be hard to see it2024-05-21 11:31
Revealed: Brit tourist, 19, subjected to sex attack in Majorca 'was gang2024-05-21 13:38
Taylor Swift's new single Fortnight breaks record for Spotify's most streamed song in a single day2024-05-21 13:29
Michigan: Two children killed after car crashes into birthday party2024-05-21 13:15
REVEALED: The New York towns that STILL ban booze nine decades after end of prohibition2024-05-21 12:27
Everybody may love Raymond, but Ray Romano loves Peter Boyle2024-05-21 12:17
Caroline Flack's best2024-05-21 12:06
Another race, another victory for Red Bull's Max Verstappen at Chinese GP2024-05-21 11:43
Horrific moment Orange County man dropkicks tiny puppy down the street2024-05-21 11:35
What's next for Iran after death of its president in crash?2024-05-21 11:34
REVEALED: The New York towns that STILL ban booze nine decades after end of prohibition2024-05-21 11:33