Direct industry backs government plans for Post Office

- The direct marketing industry has largely welcomed this week's announcement by the Trade and Industry Secretary, Peter Mandelson, that the Post Office will not be privatised, but granted greater commercial freedom.

In a statement made to Parliament on Monday, Mandelson outlined a package of reforms for the operation, and added: "We do not rule out making further changes to equip the Post Office for success, such as minority share sale or an exchange of equity with other businesses. In the long term, this also means bringing in legislation to turn the Post Office into a PLC."

A key element of the package is the commitment to installing a "tough, new independent regulator to protect customer interests, regulate prices and enforce fair competition". The direct marketing industry has long been concerned that by allowing greater commercial freedom to the Post Office, it will be allowed to abuse its monopoly to deprive traditional direct mail service providers of business, unless a regulator was put in place immediately.

WWAV Rapp Collins, a long-standing lobbyist of Post Office, has welcomed the recognition for the need of a strong regulator, but expressed concern that the commercial freedom awarded to the business will have at least one year unchecked before such as regulator is put in place. A spokesperson from the agency said: "The Department of Trade and Industry -- which is supposed to police the Post Office -- cannot be an independent, effective regulator."

Other elements that will benefit the direct marketing industry include the potential removal of the Post Office's monopoly on letters with a stamp value of under £1, setting a lower limit of 50 pence.

This article was first published on Campaign