Isle of Man Post Office should be given exclusive rights to deliver parcels under 1kg, a Tynwald scrutiny committee has proposed.

The move could protect Post Office services by bringing in extra revenue and taking business away from delivery firms like Hermes.

A report by Tywald’s economic policy review committee on the Post Office post Covid-19 recommends reform to exclude private firms from delivering packets and parcels under 1kg in weight.

It says that the so-called ’gig/zero-hours economy’ has disrupted the logistics industry.

The Post Office’s income has been badly hit by a fall in letter volumes and due to fierce competition this has not been offset by a growth in packet and parcel volumes.

Covid-19 has accelerated existing trends. Half a million fewer items were posted in April and May 2020 compared to the same period last year.

Letters were more than 20% lower, while packets and parcels were about 35% higher.

Self-employed deliver drivers operating in the unfettered ’gig’ economy have no rights to regular hours or pension provisions, notes the report.

It claims their proliferation also represents a serious risk to the environment - five small packages could be driven up a narrow country lane by five different delivery firms.

Under a 1993 Act, the Post Office has the exclusive right to convey letters.

The scrutiny committee suggests reforming this legislation, giving the Post Office exclusive right to deliver packets and parcels of less than 1kg.

The majority of inbound retail ’one-man delivery’ packets and parcels are less than this weight.

Listing the potential benefits, the report says the move will protect services and the extra revenue will help the Post Office avoid Treasury subvention.

’We suggest that reform is now urgently needed to the Post Office’s exclusive privilege, which we believe should be extended,’ the report says.

The Post Office welcomed the report to this week's Tynwald sitting but denied it could lead to business being taken away from firms like Hermes.

A spokesman said: 'On the contrary, it would mean that if reform was supported, IOMPO would supply services to Hermes as it does for other UK logistics businesses for their final mail delivery on-island, protecting the quality of service for local businesses and people.'

The committee also considered the future of the retail network.

Since October, there have been further branch closures, in Ballasalla and Sulby, and the withdrawal of the kiosk service in St John’s because the shop there is closed.

The Post Office now has 12 self-service kiosks that provide basic postage, rent, fine and utility bill payment services. The committee report notes the sub-post office network’s social role in the community and says their further potential should be ’front and centre in our thinking’.

The working relationship between the Post Office and the sub-postmasters needs to be ’re-set’, it says, and action taken to ’restore trust and confidence all round’.