The SNP’s Business and Enterprise spokesperson Mike Weir has attacked the Tory/Lib Dem coalition’s Post Office sell-off plans after it emerged that no upper limit has been set on how much could be privatised.
The SNP MP criticised proposals that could see overseas firms allowed to buy 90% of the Royal Mail, with 10% going in shares to postal workers.
Mr Weir said:
“We can now see in black and white just how far the Tories and Liberal Democrats are prepared to go, with no upper limit on how much of the business can be sold-off. Even Lord Mandelson offered to insert a legislative guarantee that only 33% could be privatised.
“After following the lead of the previous Labour government and spending months of running-down Royal Mail, Vince Cable is now talking it up in the hope of flogging it off. The wording of any prospectus should be interesting.”
Mr Weir blamed the problems at Royal Mail on a lack of investment by successive Westminster government’s and claimed that the sell off would leave Scotland’s rural areas vulnerable and would threaten many small businesses.
Mr Weir added:
“The truth of the matter is that the present state of the Royal Mail has arisen because successive governments have taken money out of the company rather than investing it back into the system.
“If the company is sold off it is inconceivable that there will not be increased pressure on the Universal Service Obligation. Vince Cable has already indicated that he is prepared to reduce the six day a week service.
“Royal Mail is a vital public service and the maintenance of the universal service obligation is essential for communities and small businesses throughout Scotland. Many small businesses rely on Royal Mail and any threat to it could be disastrous at a time of recession when it is essential to support small local businesses.
“It is clear that Royal Mail requires investment, but that should be public investment for the future and to ensure a universal service.”
Union leaders have also condemned the plans. Billy Hayes, leader of the Communication Workers’ Union called the plans a “fatal step” that would threaten jobs.
Mr Hayes said: “We’re very concerned privatisation will undermine the whole concept of a universal service. In turn, this will bring even more pressure to cut jobs and services,”
Paul Reuter of Unite described the plans as “asset stripping” saying: “If private equity takes an interest in Royal Mail, this will only be for short-term profit through asset-stripping. They are not in business to provide a public service, they are out to make money, pure and simple.”
UK Business Secretary Vince Cable said: “Royal Mail is in a difficult position. There is no hiding the facts; mail volumes falling, a multibillion-pound pension deficit, less efficiency than its competitors and an urgent need for more capital at a time when there are huge constraints on the public purse.”
Mr Cabel confirmed that the UK Government will to take on the £8 billion pension liability. He also revealed that the coalition was considering converting the UK’s post office network into a John Lewis-style mutual.