PRIVATISATION of the Royal Mail could lead to a reduction of services on offer to the public, a Hampshire MP has warned.

The Government has announced plans to move a majority stake of the service to the London Stock Exchange rather than sell it off.

It means members of the public can buy shares in the service alongside large investors, while 1,470 eligible Royal Mail employees in Southampton will be in line for free shares through an incentive plan.

But John Denham, Labour MP for Southampton Itchen, said the Royal Mail made a profit in the public sector last year and mail services outside the city could be at threat.

He said: “The real danger here is that it will create a reduction of services and facilities on offer to the public because people will be taking profit out of the Royal Mail.

“I agree there are dangers.

Southampton is a major hub for mail services in terms of distribution and sorting.

“It’s difficult to say if they are under threat or we will have a situation in the city where things will stay the same at the moment, but in the surrounding areas where it’s more expensive to deliver, and other services don’t want to go there, maybe the service will deteriorate.

“Handing over the Royal Mail with the Queen’s head on it to a foreign opportunity fund is a step that’s unnecessary. Why break something people have had for hundreds of years in this way?”

Caroline Nokes, Conservative MP for Romsey, said: “The universal service is protected by the Postal Services Act 2011, which can only be changed if voted for by both Houses of Parliament.

“Although competition in this sector can bring benefits to consumers it should not, and will not, be allowed to undermine the provision of the universal service.

“I am particularly conscious in this constituency, given the diverse mix of urban and rural, that a universal service is more challenging to deliver, but it would, in my view, be entirely unacceptable for any one part of the constituency to be treated differently to another.”

The Communication Workers’ Union, which represents Royal Mail workers, said the move to privatise the service was “illogical and impractical”, and the Green Party condemned the proposal as a “disastrous step”.

But Royal Mail delivery director Mike Devanny praised the decision to offer staff free shares in the business.

He said: “Our people are the heart of our business at Royal Mail. I’m very proud that I will be one of the owners of Royal Mail following a successful flotation on the stock exchange, along with my other Southampton colleagues and those elsewhere around the country.”