Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.
FR Leavis famously said of some transgressing text that he “would not condone it by reading it”.
If you disagree with the Hooper report (pdf) into the future of postal services, with its unpopular and lordly conclusion that the only hope for Royal Mail is a sell off, you may feel the same. But it needs reading for two reasons.
First, it is the sole justification being used by the government for the proposed privatisation of Royal Mail. The Hooper report will be quoted ad nauseam in coming weeks by government ministers trying to force MPs to vote for this dreadful sell-off. Hooper is thus achieving an unlikely status as the last word on Royal Mail, and is being set up as wholly objective besides.
Second, its arguments seem quickly to have made their way into the body politic – that’s us. Hooper goes as follows:
- Fewer and fewer of us write letters any more. That market is going the way of the horse and cart so Royal Mail is going to lose more and more money.
- Royal Mail is losing loads of money anyway.
- Royal Mail is way less efficient that smart European companies that have modernised (aka made job cuts) and it has far too many staff and mail centres. Hooper says Royal Mail is 40% less efficient than its European counterparts.
- The pension deficit is huge and is going to cripple Royal Mail.
- Management of Royal Mail is so awful that it can’t be trusted to take it into the future.
- Labour relations are terrible.
- The only solution is to sell off a big chunk to a private company because they know best how to be efficient, make money and save institutions for the future. (Hooper suffers a bit from not mentioning the current economic crisis at all)
But all of these conclusions can be easily challenged. Some of them are plain wrong.
This week Adam Crozier, group chief executive of Royal Mail, gave evidence to the BERR select committee looking at the future of the Post Office.
He pointed out:
Although letters are obviously decreasing in volume in every country, parcels (via internet ordering) are shooting up. 75% of postal profits are now from parcels. In fact next year Royal Mail will double its profits on this financial year – in which all four of its sectors made a profit.
On the 40% less efficient argument, Crozier told the committee that every state-owned postal service was less “efficient” than the new operators. He didn’t spell it out but it’s clear why – new operators pick their markets, they don’t deliver everywhere, they can mechanise more easily. They often pay low wages.
So Hooper did not compare like with like. And even if you compare like with unlike Royal Mail actually looks good. It costs Royal Mail less to deliver, per item, than TNT and Deutsche Post, and the customers pay very much less.
The Royal Mail pension deficit is huge. (Royal Mail has employed millions of people over the years). But the government is taking it over and thereby freeing up £280m a year of Royal Mail charges. Why hand that to a private operator?
And on management efficiencies and union relations – well, Royal Mail has shed 50,000 jobs in the past six years and they will cut £1.5bn out of the service in the next five years. With union agreement. “Our people have been through a hell of a lot in the past few years.” Crozier told the committee.
The management has reached all its service agreements. It has shed jobs. It is modernising. The unions agree with these targets and have produced their own modernising ideas. Royal Mail is efficient and 85% of its users are well satisfied with it.
What on earth is the government thinking? And why is it using the flawed Hooper report as its justification?