No change to free post to armed forces on operations

13th April 2013

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In 2011, Parliament passed the Postal Services Act 2011, setting a framework for private investment in Royal Mail. It is possible that a sale will take place in the next year or so. Some people have asked what implications this will have for the free postal service to armed forces undergoing operations.

This service will not be affected by any sale of Royal Mail. Royal Mail is very proud to deliver a free of charge service to our armed forces undertaking operations. Free post to the armed forces does not depend on Royal Mail remaining in public ownership. The Ministry of Defence fully reimburses Royal Mail for provision of these services. It is a Government decision, not a decision for Royal Mail - whether it is under public or private ownership.

Royal Mail has an opportunity to grow. We can also combine the best of the public and private sectors. Whilst we all now send fewer letters, the growth in online retailing has meant an increase in the number of parcels being sent. We are in a strong position to meet this demand. It already has the largest UK delivery network and we are one of the most trusted companies in the UK. But we need to make significant investment to stay ahead of the competition. The Government’s financial position means that this investment must come from the private sector.

Private investment will allow Royal Mail to grow our parcels business, which in turn will help us to continue to deliver the Universal Postal Service. The Postal Services Act 2011 sets out very clearly the minimum requirements of the Universal Service, which would continue to apply after any sale. These include a uniform, affordable tariff for postal services across the UK – including rural and remote areas - as well as six day a week collection and delivery. Royal Mail is also obliged to meet the highest quality of service standards of any major European country. Again, these will continue to apply to Royal Mail were it to be sold.

The finances of Royal Mail have been transformed in recent years. We were loss making – now we make a good profit. That matters. It enables us to continue to provide a high quality postal service. There is a brighter future for Royal Mail and we are ready to deliver it.