There is a continuous stream of media coverage about the battle to save post offices but the great elephant in the room, the role of the European Union, is mysteriously never mentioned, writes Jeffrey Titford, UK Independence Party MEP for Eastern Counties.

Did you know that the government has to go to the European Commission, cap in hand, for permission to subsidise the Post Office? Since 2003, the Commission has frozen the subsidy the government can pay to cover the loss-making parts of the service, like small local post offices in urban and rural areas, at £150 million per annum.

On 29th November 2007, the Commission authorised the government’s public funding plans for the Post Office for the period 1st April 2008 to 31st March 2011. It is a total package of £634 million but the amount to cover the loss-making part of the operation remains frozen at £150 million per annum. The rest of the money must be used to fund a loan facility so that cash services at counters can be provided and to cover the cost of the government’s closure programme.

It is clear that the British government is no longer in control and neither is Royal Mail, though both take the flack, when closures are announced. The reality is that because it has frozen the annual £150 million subsidy for so long, the European Commission is responsible for post office closures. With inflation, the subsidy becomes worth less each year, so more post offices have to close.

I have considerable concern about the new proposals from Essex County Council and other local authorities, who are looking at taking over post offices from Royal Mail. Will the EU approve of this arrangement? It constitutes state aid and will presumably be over and above the package agreed with Brussels. We don’t want to spend large amounts of public money on setting up council run post offices, only for the EU to say “naughty, naughty you can’t do that.”

You might also like to know that the European Parliament approved the new EU Postal Directive on 31st January 2008, which means that from 1st January 2011, the market in postal delivery must be fully opened up to competition. There will be no more national monopolies like Royal Mail. Parcel and package deliveries are already open to competition but this new ruling will, for the first time, include letters under 50 grams or 1.75 ounces.

This ‘liberalisation’ of the market is dressed up as being of great benefit to the consumer but it really means that competitors will cherry pick the best parts of the Royal Mail service and it will be left with the unprofitable bits, like rural deliveries. Once the Royal Mail is out of the picture, costs to the consumer will inevitably rise and quality may suffer.

It is time for a reality check in the great Post Office debate. Let’s point the finger in the right direction – Brussels.

Published in the East Anglian Daily Times