UK postal competition adds £229m to economy

LONDON - The introduction of competition to the UK postal sector in the last four years has benefited the economy by an additional £229m and created 3,300 new jobs, according to the findings of a new study.

The independent study, which was carried out by London-based economics consultancy Europe Economics and commissioned by TNT Post, found the UK postal market had added an extra £229m to the economy and created 3,300 new jobs in the last four years.

The study predicted the opening up of the postal market could benefit the economy "considerably more" by 2016, by contributing £405m and an additional 6,600 jobs.

Europe Economics noted that despite there being 18 licensed competitors to Royal Mail in the UK, the company still delivered "the last mile" for 99.8% of all UK mail.

In addition, the study said competition had been "stifled" by Royal Mail's VAT advantage, which had left 40% of UK business mail out of reach of competitors.

Europe Economics warned that the benefits to Royal Mail from the opening up of the postal market could have been greater had it embraced change and modernisation quicker.

David Stubbs, managing consultant at Europe Economics, said: "Royal Mail has been a key beneficiary of competition to date. Prior to the deregulation of the UK postal market, its pace of innovation and reform was slow relative to that in other postal markets.

"Royal Mail is facing up to its future and starting to address the challenges of its customers who are looking at new ways to communicate or advertise their products."

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