Back On The Agenda? The Privatization Of Britain’s Postal Services:

In 1963, the Beatles recorded ( for their second album) a song which began with the lyrics: “Wait a minute Mr Postman. Look and see, if you’ve got a letter in your bag for me”. In those days – according to a recent BBC TV Panorama documentary titled “ Can’t Deliver, Won’t Deliver” – the ‘posties’ used to be local heroes. Not, so it seems, any more. Christopher Howse, a “Daily Telegraph” columnist ,has concluded that this is because they “ have lost a sense of duty and a place in the community” as a result of being “ crushed between militant unions and appalling management”.  He considers both collections and deliveries to be “scandalously dwindling” and fears that even the iconic red pillar boxes with their royal monograms from six reigns (introduced in 1852 at the initiative of the novelist Anthony Trollope) could also be phased out. In that respect, at least, the UK appears to be still ahead of most of Europe. A report by economic consultants ‘NERA’ for the European Commission has revealed that there are .48 pillar boxes per square kilometre in this country compared to .47 in the Netherlands, .31 (Czech Republic) .25 (France), .20 (Portugal) and just .08 (Spain). The exceptions are Malta (1.66) and Slovenia (.90).

An Institute of Commercial Management (ICM) survey quoted by ‘Panorama’ indicated that most people in Britain feel that the Royal Mail provides a good service but that 55% of them had received “ While You Were Out” cards even though they were in at the time. The postman simply hadn’t wanted to wait too long at the door. In some cases, after pursuing him down the garden path, they discovered he didn’t have the parcel with him at all, but instead had left it behind in the office. The postal workers’ response to such criticism is that 60,000 jobs (a quarter of the total) have been cut by the Royal Mail in the past seven years. Those employees who remain are expected to do more work in the same amount of time. Although there are 10,000 fewer letters sent each day than before (due the use of  e-mails) there has been an increase in packets and parcels ( ordered by people shopping online) which take longer to sort and are much heavier to carry around. This means that the postmen are delivering 50 less letters each per day but 4-5 more parcels. The Communication Workers Union (CWU) has complained that their members have been instructed to walk faster when doing their rounds – at 4 miles (6.44 kilometres) per hour instead of the previous .2.4mph – in order to reduce costs such as overtime and that this demand is physically unrealistic.

Lord Sawyer , in his ‘Industrial Relations Review’ observed that the relations between the two sides were “unsatisfactory” and that they “don’t trust each other” – hence the postal strikes which took place in the autumn of 2009 which led ( in addition to the bad weather) to Royal Mail achieving “ a performance level of  78.9% for next-day delivery of First Class mail instead of their target of 93%. Royal Mail claim, however, that – despite the disruptions -during the twelve months up to March 2010, 87.9% of First Class arrived the day after posting.  ‘Index Of Postal Freedom’ statistics show that 193,000 currently work for the Royal Mail Group (RMG) and that 87% of all mail in the UK is sent by businesses. Despite making an operating profit of £177 million in  the fiscal year to March 2009 , RMG continues to need a  government subsidy of £302 million per annum in order to fulfil its ‘Universal Service Provider’ obligation to collect and deliver mail at the same price throughout the UK. Although it still holds a 90% share of the British postal market, it faces increasing competition from companies such as TNT, Fedex and Deutsche Post.

The majority of the UK’s post offices operate at a deficit, which was why the Labour Government closed down more than 2,500 – much to the alarm of the Federation of Small Businesses (FSB) which has pointed out that 80% of their 5,300 members “depend on the Post Offices to send their mail and for other business transactions”. Also, that many of them now have to travel further because their local branch has closed , queues are longer and the service more impersonal. Almost half (48%) would prefer Royal Mail to remain in state ownership, but 27% would be prepared to accept part-privatization if this could guarantee the survival of the remaining Post Offices. Meanwhile, organizations such as ‘Consumer Focus Wales’ are concerned that pensioners who have mobility or health problems and are unable to travel to the next village or town will become even more isolated. The local post office, especially in rural areas.has traditionally provided “ a strong link in the community which is now being broken”.

The previous Government attempted to stem the financial losses by adding 2p to the price of First Class (41p) and Second Class (32p) stamps as from 6th April 2010 – an increase of 5%. The proposal by former Business Secretary Lord Mandelson to sell off a 30% stake in the Royal Mail – following the recommendations in the Hooper ‘Modernise or Decline’ report  – was postponed due to opposition from 140 Labour Party MPs. It has now been revived by his successor, the Liberal Democrat Vince Cable, who has declared that the Coalition Government is “ looking at all of the issues and options with a fresh pair of eyes, but  it is clear that an injection of private capital is important”. The Royal Mail’s employees and customers across the UK will be waiting with some apprehension to find out exactly what this will mean in practice.

 

 

Filed under: Society | Posted on June 6th, 2010 by Colin D Gordon

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