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3383 Post Office Review. Key points and Q&As for Oral PQs and
Press queries
KEY FACTS PILLARS OF THE REVIEW
Delivers post to every address in the Government is committed to the Post Offic
United Kingdom every working day. remaining in the public sector.
Handles over 70 million letters a day. Committed to the universal service
obligation (ie delivery to every address
Only Coca Cola has a more strongly every working day).
recognised brand image.
Committed to uniform tariff structure.
Over 19,000 post offices in UK.
Committed to a nationwide network of post
Almost 60% of villages have a post offices (though cannot guarantee future of
office, only 5% have a bank. any particular office).
28 million visits to a post office every I Aiming to give Post Office the commercial
week (on average half the population of freedoms it needs to be able to compete
the country) effectively in the changing domestic and
international markets, and to provide
improved efficiency, effectiveness and
service standards that the nation needs of it
postal service.
There is no question of privatising the Post
Office. A minority share sale, even if it
were recommended, would not necessarily
be as much as 49% of the shares.
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NOTES FOR SUPPLEMENTARIES
Commercial Freedom
WHAT DOES GREATER It means the freedom for the Post
COMMERCIAL FREEDOM Office to develop its full potential to
MEAN? provide wider and better services to
customers and to meet the challenges
and opportunities presented by the
marketplace where its international
competitors are gaining ground.
WHAT OTHER OPTIONS Open mind about options. The
FOR PARTNERSHIP WITH Government’s concern is with the
THE PRIVATE SECTOR ARE needs of the Post Office for greater
BEING CONSIDERED AS commercial freedom to meet the
WELL AS JOINT challenges of the future.
VENTURES? Other options for partnership with the
private sector include
the possibility of increased scope to
raise external finance,
e direct investment in private sector
companies by the Post Office,
e the creation of a public sector trust,
e an independent publicly owned
corporation;
© ora minority share sale.
Also looking at new products for Post
Office Counters.
DOES THE GOVERNMENT Government welcomes the
INTEND TO ESTABLISH announcement of the joint venture
JOINT VENTURE which is an example of how the public
ARRANGEMENTS SIMILAR and private sectors can work together
TO THOSE ANNOUNCED to the benefit of all involved.
FOR QUADRANT ACROSS
THE POST OFFICE? The joint venture arrangements
announced on 31 March for Quadrant,
the catering arm of the Post Office, are
not a model for future ownership
arrangements for the core businesses.
The joint venture arrangements for
Quadrant do not constitute
privatisation - the Post Office retains a
DOES THE GOVERNMENT
INTEND TO ESTABLISH
JOINT VENTURE
ARRANGEMENTS SIMILAR
TO THOSE ANNOUNCED BY
THE POST OFFICE FOR THE
RELAYONE SERVICE TO
INTERNET USERS
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51% stake.
The Relayone service launched by the
Post Office on 2 April in conjunction
with Microsoft is an example of the
how the Post Office is developing its
services to meet the challenges of an
ever more dynamic market in
partnership with the private sector.
The service extends the
hybrid/electronic mail services which
Royal Mail have been offering for
some time to small business and
private users who have a computer and
Internet access.
The service is structured around a
commercial and marketing agreement
with Microsoft. It is not a joint
venture.
Commercial Freedom
THE COMMERCIAL
FREEDOMS ANNOUNCED
FOR THE POST OFFICE TO
ENTER INTO DOMESTIC
JOINT VENTURES ARE
INADEQUATE?
ARE COMPETITORS
ADEQUATELY PROTECTED
AGAINST THE POST
OFFICE ABUSING ITS
DOMINANT POSITION?
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The commercial freedoms announced
by the Government will enable the
Post Office to pursue new
opportunities in the UK in partnership
with the private sector.
These are interim arrangements. The
next stage of the Review will consider
the options and scope for granting
greater commercial freedom to the
Post Office.
The Post Office is subject to national
and European competition rules. In
addition, the guidelines we have set
for domestic joint ventures are
intended to safeguard against the
possibility of unfair competition.
The guidelines require, inter alia, that
any proposed venture should satisfy
normal commercial criteria, that its
prices should at least fully meet long-
term marginal costs (including a full
contribution to overheads), that it
should treat the element of the price
which represents the charge for access
to the monopoly infrastructure in a
transparent way, and comply with
state aids rules.
Post Office network
IS THE GOVERNMENT
THINKING OF LIFTING THE
BAN ON THE CONVERSION
OF CROWN POST OFFICES
9
THE NUMBER OF POST
OFFICES IN LONG TERM
DECLINE. WHAT DO
GOVERNMENT INTEND TO
DO ABOUT IT AND WHAT
NUMBER DO THEY SEE AS
A MINIMUM TO PROVIDE A
NATION-WIDE NETWORK?
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The Post Office were asked last May
to suspend their Crown post office
conversion programme in view of
widespread public concern about the
policy. The issue will be considered in
the context of the Review.
Neither the Government or the Post
Office can guarantee the future of
individual post offices, the vast
majority of which are privately owned.
But the Government is fully
committed to the maintenance of a
nation-wide network of post offices.
Part of the strength of the Post Office
lies in its ability to reach customers in
all corners of the UK; and as a matter
of priority the Review will seek to
identify ways in which the
Government can help the Post Office
to sustain a nation-wide network, such
as the scope for allowing greater
freedom for post offices to enter into
new product areas.
Horizon Proj
IS THE GOVERNMENT
PLANNING TO CANCEL
THE CONTRACT TO
AUTOMATE POST OFFICES
AND BENEFIT PAYMENTS?
IF SO, WHAT WILL THIS
MEAN FOR THE FUTURE
OF THE NATIONAL
NETWORK OF POST
OFFICES?
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The Government is committed to
providing a secure, convenient and
cost effective means of paying benefits
to customers. That is what the
Payment Card was designed to do and
what we continue to work towards.
The Benefits Agency and Post Office
Counters Limited continue to work
closely with the supplier, ICL
Pathway. We are also monitoring
progress to ensure that the programme
remains on course to deliver the
benefits of a more convenient and
secure method of payment. The
Government is committed to
maintenance of a nation-wide network
of post offices.
Structure
WHAT IS THE POSITION OF
PARCELFORCE
WHAT IS GOVERNMENT’S
VIEW ON TISC’s
REAFFIRMATION OF ITS
VIEWS ON THE
ESTABLISHMENT OF AN
INDEPENDENT PUBLICLY
OWNED CORPORATION?
External Financing
Limit/PSBR
WILL THE GOVERNMENT
RELAX THE EFL TO
ENABLE THE POST OFFICE
TO INVEST IN
DEVELOPING NEW
BUSINESS
OPPORTUNITIES?
WILL THE GOVERNMENT
CONVERT THE POST
OFFICE TO A PLC AND
FREE IT FROM THE PSBR?
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The Trade and Industry Select
Committee explicitly sought an
assurance that Parcelforce will be
considered in the Review. The
Government is happy to give it.
Interesting that TISC has re-affirmed
its previous conclusions. One of the
structural options for consideration in
the next stage of the Review.
The Government is committed to
living within the expenditure totals set
for this financial year by its
predecessors. There is thus no scope
for an immediate relaxation in the
EFLs previously set. We will however
be looking closely at options for the
future financial regime in the context
of the Review.
Plc status does not in itself result in
classification outside the PSBR. The
Post Office will remain in the public
sector and therefore remain within the
PSBR. This does not, however, rule
out greater commercial freedom.
“Deieaticatinn”?
IS THE GOVERNMENT
CONSIDERING
PRIVATISATION?
IS THE GOVERNMENT’S
REAL INTENTION A
MINORITY SHARE SALE
AND IS THAT NOT THE
THIN END OF THE WEDGE
FOR FULL
PRIVATISATION?
DOES A MINORITY SHARE
SALE MEAN A SALE OF 49%
OF THE SHARES?
ARE THE PROPOSALS FOR
LONDON UNDERGROUND A
PRECEDENT?
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No. The terms of reference are
unequivocal: the Post Office will remai
in the public sector and will continue to
provide a universal postal service under
a uniform tariff structure with a nation-
wide network of post offices.
No. The Government has an open
mind about a wide range of public
sector options.
A minority share sale is one of those
options - which also include
e joint ventures,
e increased scope to raise external
finance,
e direct investment in private sector
companies by the Post Office,
e the creation of a public sector trust
and
e an independent publicly owned
corporation.
The review will be considering a range
of options for the Post Office within
the public sector. A minority share
sale is simply one of those options. It
is pointless to speculate on the
outcome of the review. at this stage.
[if pressed further on a 49% sale]
There is no hidden agenda.
The challenges for the Post Office are
quite different from those facing the
London Underground.
The Government’s concern is with the
needs of the Post Office for greater
commercial freedom to meet the
challenges of the future for the benefit
of its customers.
Utilities Revi
WILL THIS REVIEW TAKE
ACCOUNT OF THE
UTILITIES REVIEW?
Consumer Interests
WHAT IS IN ALL THIS FOR
THE CONSUMER?
European liberalisation/EU
Directive
DOES THE EU DIRECTIVE
HAVE MAJOR
IMPLICATIONS FOR THE
POST OFFICE AND IN
PARTICULAR THE
UNIVERSAL SERVICE?
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Yes. The Review will take into
account the wider review of utility
regulation.
Customer needs will be an essential
issue for the Review. The Government
is committed to the maintenance of a
universal postal service at a uniform
tariff and a nation-wide network of
post offices; and to ensuring an
effective voice for consumers within
any new regulatory framework.
The UK postal market is arguably
already one of the most liberal in
Europe.
The Directive was formally adopted
on 18 December 1997 and published
in January 1998. It must be
implemented within one year by
Member States .
It requires no major changes in the
UK. The reserved area will need to
change from £1 to 92p approximately
but there is no threat to the ability of
the Post Office to provide a universal
service.
We await with interest whatever
proposals the European Commission
bring forward at the end of this year
for the next stage of postal
liberalisation.
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E liberalisation/EU
Directi
IS THE BRITISH POST Our Post Office is one of the most
OFFICE FALLING BEHIND efficient and profitable but its lack of
OTHER EUROPEAN POST commercial freedoms is a
OFFICES? disadvantage in a dynamic market. A
number of Member States have taken
legislative steps to equip their own
post offices to face the challenges of
an increasingly competitive market.
Industrial Relations
IMPOSSIBLE FOR POST Industrial relations are clearly
OFFICE TO COMPETE primarily a matter for Post Office
EFFECTIVELY WITH SUCH management and the unions. However,
POOR INDUSTRIAL if we can help to facilitate an
RELATIONS? improvement in the climate we will do
so.
The Review will consider whether the
existing structures militate against a
greater sense of partnership between
management and the workforce.
The Review will consider ways to
improve employee motivation,
including ways of ensuring a greater
sense of ownership of the Post Office
by its employees. For example any
minority share sale would include a
substantial proportion of shares going
to employees.