Post Office pleads to be freed from 'straitjacket': Relax restrictions or privatise, urges chief executive

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The Independent Online
MORE than 30,000 Post Office jobs are at risk unless the Government takes immediate action to release the business from the 'public service straitjacket', its chief executive, Bill Cockburn, warned yesterday.

He estimated that 20 per cent of revenue could be lost, with the closure of 5,000 offices over the next few years - a quarter of the network. Mr Cockburn urged ministers to allow greater commercial freedom, either by relaxing the rules governing its operation and ownership or through privatisation.

The Post Office believes that the decision will have to be taken in the next few weeks if legislation is to be drawn up in time for the next parliamentary session. The Government has been reviewing the future of the service for 21 months but has yet to publish the results.

Mr Cockburn yesterday revealed a deterioration in the first-class mail service, which he argued was a result of insufficient investment. For the first time in five years the percentage of first-class letters reaching their destination the next working day has declined. The figure has edged down from 91.9 per cent in 1992/93 to 91.2 per cent in 1993/94.

At Post Office headquarters in the City, Mr Cockburn insisted he was not crying wolf. He said there had been a downturn in traditional mail and a big increase in pre-sorted bulk post, which was particularly vulnerable to foreign competitors such as the Dutch post office, due to be privatised in the next two months.

The corporation would have to compete with other forms of communication and with foreign companies 'with both hands tied behind our backs', Mr Cockburn said. Under present regulations the corporation is not allowed to compete for postal business abroad. 'That state of affairs is simply crazy. The status quo is not an option,' he said.

It was highly dangerous to believe the Post Office could maintain its financial position under the present circumstances. The counters business was dominated by the transaction of government services and therefore vulnerable to changes in government policy.

Mr Cockburn said a possible compromise might be the BP option, in which the Government retained a substantial shareholding but the rest of the equity was privately owned and the Post Office was allowed commercial freedom.

A spokesman for the Department of Trade and Industry said ministers were considering a report on the business and assessing the options, but there was no date yet for a final decision.

The Government has come under pressure from Conservative backbenchers representing rural areas, who fear privatisation would mean the closure of small village offices.