Government has starved Royal Mail of investment

Commenting last week on the independent review of the postal service, which finds that liberalisation of the market has produced no significant benefits for either households or small businesses, followed by the revelation that Royal Mail’s profits have fallen by almost a third, Liberal Democrat Shadow Business Secretary, Sarah Teather said:

“The Government really should have seen this coming. Asking the Royal Mail to compete on the open market, without first making sure it had the resources to do so, was always bound to compromise the company.

“They have allowed this great British business to fall apart at the seams. Royal Mail can be turned around, but only if it is given the freedom to innovate and attract new customers.

“Successive Conservative and Labour Governments have starved Royal Mail of investment. Royal Mail urgently needs a cash injection to allow it to modernise and compete with the private sector. Selling 49% of the Royal Mail shares would allow major investment without breaking the public purse.

“Liberalisation appears to have had little impact on choice for the consumer and small businesses. Investment in the Royal Mail would allow it to innovate and compete properly, without one hand tied behind its back.”