Privatise Parcelforce call from TNT Express Services' boss

30-Nov-2005

The Royal Mail's parcel delivery business - Parcelforce - should be privatised and made to compete on a level playing field says the boss of Britain's leading business-to-business express delivery operator.

Tom Bell, Managing Director of TNT Express Services, claims Parcelforce have an unfair advantage on the rest of the express delivery sector because it is exempt from VAT charges.

Call for privatisation - Tom Bell, Managing Director of TNT Express Services says Parcelforce should be paying VAT like others in the express parcels industry.

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"It's not just companies such as mine which are being discriminated against. The taxpayer is losing out because Parcelforce should be paying VAT and those taxes could be used for the greater good of the country," says Bell.

Bell's assertion that Parcelforce should be made to stand on its own feet, without the luxury of not having to pay the 17.5% VAT imposed on all its rivals, follows similar sentiments expressed by The Institute of Economic Affairs (IEA).

The IEA - a registered educational charity that is independent of all political parties - said there was no case for Parcelforce to remain in Government ownership and that it should be privatised, even if it led to it going out of business.

Bell added: "Parcelforce is subsidised by the Government. They start out 17.5% ahead of any other express delivery company because they don't have to factor the costs of VAT into their pricing policy and that makes them more attractive to potential customers.

"TNT Express Services and others in the express sector are having to operate in a market where volumes are down, margins are thinner and the overall trading climate is tougher than it has been for many years. If Parcelforce was in private ownership they'd have to charge customers VAT. They would have to make money to survive instead of being shielded from the realities of the marketplace.

"Competition is good for everybody - we welcome it. If you're on the same field, operating within the same framework of rules and regulations then the best team wins and everybody respects them. That's how it should be."