Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.
Rather than swallowing the leaks so helpfully spouted by the government at the weekend about the vast pension deficit at Royal Mail, we should step back and actually look at what Richard Hooper’s review of postal services was asked to do. It was asked to:
- Assess the impact of liberalisation (de-regulation) on the UK postal services market;
- Explore trends in future market development;
- Consider how to maintain the Universal Service Obligation (delivering mail from John O’Groats to Land’s End and everywhere in between).
In its interim review in May this year Hooper said some extremely interesting things. It found that there have been “no significant benefits from liberalisation for smaller businesses and domestic consumers. They believe that Royal Mail’s service offers good value for money as it stands”.
It also found that there was a risk that more extensive competition could make the universal service unsustainable. And it declared that competition had focused on price and there had been less innovation (the mantra of free marketers) across the sector than might have been expected.
It found that the number of letters we write was decreasing annually, but that we are sending a lot more parcels. It found that Royal Mail had been good at cutting costs (£1.5bn) and staff (48,000) in recent years.
Read it properly and the Hooper Review is tells us what almost certainly won’t be leaked – that we have a Royal Mail which does a lot of things pretty well. It is popular with small and medium-size businesses – over 80% of the dynamic small businesses working on the front line of the economy would have to take drastic action if they were left without the Post Office service. Privatisation has benefited some large companies but has damaged Royal Mail and has not led to innovation.
The real problem is that the Hooper review was asked to do the wrong things. What the government should, on our behalf, want to know is how to grow and strengthen this great national service now and for the future. What are the services which the network could provide for the public good? How can it contribute to greater economic stability? How can the network of local post offices be used to contribute to the government’s climate change targets? How can the deficiencies of the current banking system, so woefully exposed by the gathering economic storm, be repaired and made fit for purpose by the financial possibilities of an expanded Post Office bank?
The current crisis must mean that any talk of further privatisation of Royal Mail services is dead. It should mean that the Post Office regulator, Postcomm, which has given barking mad advice about de-merging the Post Office from Royal Mail in the interests of liberalisation which has delivered very few benefits to very few big companies, is shown the door.
The crisis must also mean that we design and build the kind of Royal Mail we need – a national service which allows the local Post Office network to grow, which attracts much more government business, and which is built for the future resilience of all our communities. As the government musters the resources needed to weather the economic storm, it would be sheer madness to run down a major national network, sitting waiting for a major national role.
Now is the time to seize the initiative and restore stability by reimagining a post office network that is fit for the future. We mustn’t be softened up by leaks which may well be intended to prepare us for a weakened Royal Mail rather than the strengthened service we so clearly need.
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16 December, 2008 at 7:31 pm
Roo Reynolds
In case anyone was wondering (it appears in the image title, but nowhere else) that photo of a sheet of 100 1st class stamps was used under license from http://flickr.com/photos/rooreynolds/41826052/
For what it’s worth, when I was using the Post Office a lot a couple of years ago (selling small items on eBay, hence the large sheets of stamps) I found the postal system to be relatively reliable and quite reasonably priced for the service. Post Office counters are a mixed bag, but I was quite surprised to have a near-100% success rate with the parcels I was posting.
21 December, 2008 at 5:41 pm
Steven Mountjoy
As an ex-pat I have lived in New Zealand for the last 20 years and have returned to the UK for Christmas.
I found this post after reading the “Labour faces Royal Mail civil war” article in today’s Observer. In that article there is reference to the idea of setting up a people’s bank in the 12,000 Post Offices spread across the country. Profits from this would then be used to modernise the current postal service.
This is exactly what was done in New Zealand in 2002 by the then Labour Government.
There were of course howls of opposition from many quarters, in particular the private banking sector, who proclaimed that such an idea would never work , be unprofitable and just another drain on scarce governement resources.
Six years later the bank is highly successful and profitable and has over 600,000 customers in a country with a population of a mere 4 miilion. Moreover, during the recent market turmoil, the bank has been the least affected of all the banks as it has no exposure to offshore borrowing and complex financial instruments.
The old KISS principle (Keep It Simple Stupid) definitely seems to have worked for this little bank. It would appear to be a far better and viable solution than the idea of part privatisation that Peter Mandelson seems to be floating. Not only can it generate revenue needed to modernise the current postal service, it will also provide a bank that serves communities and helps keep the other banks honest. Surely all that privatisation is likely to bring is a reduced postal service that maximises the return to private investors.
Take a look at this succesful little bank at http://www.kiwibank.co.nz