Business Secretary Vince Cable has accused the boss of Royal Mail of "scaremongering" in claiming the universal post service is under threat.
Chief executive Moya Greene has warned that the high cost of the service, which ensures a same-price delivery for letters anywhere in the UK, six days a week, is not sustainable in the face of competition in high-density, low-cost areas.
ITV News business editor Joel Hills reports:
Business Secretary Vince Cable has criticised Royal Mail bosses for “scaremongering” by indicating universal service may be under threat.
He said he felt it was "wrong" of chief executive Moya Greene to suggest it is.
He said a lot of people “depend” on the Royal Mail and the regular delivery it provides, particularly in remote areas, and he said they should not be made to feel insecure.
I think it’s wrong to scare the public.
The universal service obligation is absolutely clear, it’s protected in law by Parliament, it’s not going to change.
I think a bit of scaremongering is going on and it’s not healthy.
The privatisation of Royal Mail has gone “admirably” but the biggest competition to business was always going to be the ever-growing popularity of email, Vince Cable has said.
The Business Secretary told ITV News that the major objective of privatisation had been to allow Royal Mail to go out and compete and raise money on the open market for investment, which it had – raising £500 million to date.
But, he said, they were always going to have to compete with e-mail, which was replacing much of its traditional custom, on top of having to compete with other mail carriers.
Business secretary Vince Cable has accused Royal Mail bosses of "scaremongering" by claiming the universal service is under threat.
He told ITV News the universal service obligation - which ensures people can send post anywhere in the UK for the same fixed price - is enshrined in law and will not be rescinded.
He said were it to be overturned, both Houses of Parliament would have to vote to do so - which, he added, is not going to happen.
It comes after Royal Mail chief executive Moya Greene warned that increasing competition in high density, low cost areas was threatening the universal service by making delivering to rural and remote areas not economically viable.
Mr Cable said Royal Mail, now it is only 30 per cent owned by the taxpayer, was free to raise capital privately - and said it had already raised £500 million to invest and compete.
He said the government did not want to see companies "whinging" about having to operate in a competitive market.
Business Secretary Vince Cable has accused Royal Mail of "scaremongering" over warnings it may not be able to continue with its universal service.
Mr Cable told ITV News that chief executive Moya Greene's comments amounted to "special pleading" - and said the government did not want companies "whinging" about being in a competitive market.
ITV News Business Editor Joel Hills tweeted:
Vince Cable accuses Royal Mail of "scaremongering" over the threat to the universal service. 30% of the company is still taxpayer owned.
Vince Cable tells @itvnews Royal Mail is operating in a competitive market and "we don't want, frankly, people whinging about it."
"It's wrong to scare the public". Vince Cable says a lot of people depend on the Royal Mail. "They should not be made to feel insecure".
Royal Mail bosses today issued a warning that giving people more choice between delivery services was threatening the future of the universal service, which guarantees that letters can be delivered anywhere in the country for the same price.
Chief executive Moya Greene told a committee of MPs that the high cost of the universal service obligation – around £7.2 billion a year – was in part because of the difficulties of delivering to rural and remote parts of the country.
Delivering to high-density areas such as the inner city was much lower cost and helped to subsidise these deliveries – but by allowing these customers to “cherry pick”between Royal Mail and their competitors the system was unsustainable.
The Royal Mail has halved the expected growth rate of its UK parcels market to 1-2% due to fierce competition which helped send first-half operating profit down 21%.
The group, sold off by the government in October 2013, said operating profit before transformation costs for the six months to September 28th fell to £279m, with higher pension costs and the absence of a VAT refund received a year ago also hitting numbers.
The figure was at the top end of an analyst forecast range of £237-279m.
Pricing pressure pushed UK parcels revenue down 1%, with UK letter revenue up 1%.
Group revenue rose 2% to £4.53bn.
The Royal Mail will celebrate the landing of a spacecraft on a comet with a special postmark on millions of items of mail delivered to addresses nationwide on Friday and Saturday.
It will say: Celebrating the first ever landing on a comet. Congratulations to the European Space Agency.
We're thrilled to be marking the European Space Agency's fantastic achievement with one of our special postmarks.
Our postmark is set to take off and will appear on mail delivered by our postmen and women across the UK.
Consumers could see a savings when sending their Christmas presents this year as the price of sending some parcels is to be cut.
The weight of a small parcel will increase to 2kg and cost of £2.80, this was previously classed as a medium package, costing £8, saving consumers up to £5.20.
The promotion will last from 29th October to 18th January.
Royal Mail said consumers and businesses will be able to put bigger items, or more goods, into a small parcel.