Postcomm Questions Need for Royal Mail Perks

Royal Mail could lose valuable privileges such as value-added-tax exemption, parking privileges for post vans and faster Customs clearance for overseas mail as a result of a review announced by the postal regulator.

The Postal Services Commission, or Postcomm, the independent regulator, published a document Jan. 12 asking whether Royal Mail's privileges distorted the market or were needed to provide a universal postal service.

The regulator said it lacks authority to alter Royal Mail's rights but that if it considers a change necessary it would “make recommendations to the appropriate government department or authority.” Any changes may require legislation.

Postcomm gave interested parties until April 12 to respond.

The document said that of all the privileges Royal Mail enjoys, Postcomm considers the VAT exemption to be the most contentious. Royal Mail does not charge VAT on postal services, while its private sector rivals have to charge 17.5 percent VAT.

The European Commission raised the question of VAT exemption for postal operators last year, and Frits Bolkestein, internal market commissioner, has said that all operators in the EU should have to pay VAT.

In other news, Royal Mail marketing director Paul Rich said Jan. 12 that he is aligning his team more closely with the company's sales force. The move will reduce the number of marketing roles within Royal Mail by 40 percent to 50 percent. Royal Mail now has 360 marketing positions. The company plans to manage job reductions through voluntary means.

Finally, Postcomm yesterday issued a long-term license to allow Speedmail International Limited, a UK-based independent consolidator and international mail distributor, to provide bulk mail, consolidated mail and tracked business-to-business mail services for Royal Mail.

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