Same old problems – and solutions – for Royal Mail
Peter Hoskin 1:42pm
Two years ago, Richard Hooper wrote a report on Royal Mail which recommended part-privatising the service, among other measures. And today, with the official update to that report, we learn that his views have barely changed at
all. If anything is different between then and now, it's that the need to modernise Royal Mail has become even more urgent. The number of letters they're sending has plummeted by more than
forecast, and their pensions deficit has become even more unsustainable. The rot has quickened – and, yes, it's up to the government to combat it.
For their part, the coalition are using Hooper's update to stress just how crucial privatisation is for Royal Mail. And, predictably, the Communications Workers Union is responding with the same brand of venom which discouraged Peter Mandelson from acting when he was in charge at the Business department. "This report is politically motivated to please the ideology of the coalition," says their general secretary, Billy Hayes, blissfully ignoring the fact that Hooper made the same points under the Brown government. You can expect strikes, or at least the threat of them, to follow.
Privatising Royal Mail will not be a straightforward task – not just because the organised resistance it will face, but because of the deeper, institutional problems raised by Dr Eamonn Butler in a Coffee House post on Wednesday. So it's encouraging that the government is already formulating ways to smooth out the process. Today's Telegraph, for instance, reports that postmen could be offered shares, John Lewis style, as part of any privatisation deal. Let's see how the CWU gets on arguing against that.
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charles hercock
September 10th, 2010 1:56pm Report this commentGive em shares and cross their palms with silver like Labour did with the docs in '48
oldpolitics
September 10th, 2010 2:12pm Report this commentAh, the old "volumes are down" myth. We've done this one.
http://www.lrb.co.uk/v31/n18/roy-mayall/diary
Paul Williams
September 10th, 2010 2:26pm Report this commentOf course it's nothing to do with the EU, oh no, nothing at all.
The Spectator becomes yet another media outlet that refuses to acknowledge the real reasons:
http://ec.europa.eu/internal_market/post/index_en.htm
la la fingers in ears, we can't hear you.
perdix
September 10th, 2010 2:34pm Report this commentOffering shares to the posties is nothing like a John Lewis Partnership.
DavidDP
September 10th, 2010 2:40pm Report this comment"Ah, the old "volumes are down" myth"
I do like the idea the Royal Mail will probably be the only company in existence to pretend it's doing badly. You only have to look at every government body under threat at the moment to see how they are trying to claim they do a good and vital job, but apparently the RM approach is the opposite.
DavidDP
September 10th, 2010 3:36pm Report this commenthttp://ec.europa.eu/internal_market/post/index_en.htm
Ah yes, pushed for and through by the UK. Who says we lack power and influence in the EU?
London Calling
September 10th, 2010 3:41pm Report this commentBritain has already been privatised by the EU…the unions have a battle on their hands and the public are sleepwalking into the oblivion…it doesn’t get any better…
denis cooper
September 10th, 2010 5:58pm Report this commentAlmost always now the post delivered to our house includes one or more letters marked "UK Mail", one of the 48 licenced postal operators other than Royal Mail.
From the most recent Annual Report:
http://www.ukmail.biz/assets/UKMail_RandA_2010.pdf
"P Kane, a director of the company, and members of his close family and certain family trusts, the beneficiaries of which are persons connected with P Kane, control directly and indirectly 45.8% of the issued share capital of the Company. In addition, his brother M Kane controls a further 12.8% of the issued share capital of the Company."
But even though it handled 2,618 million items last year, with final sorting and delivery to houses still done by Royal Mail at about cost - probably below the fully overheaded cost - the net profit for the mail division was only £12.2 million, which works out at less than 0.5p per item.
Chris lancashire
September 10th, 2010 6:23pm Report this commentThe fact that this is a poorly managed, badly equipped business struggling in a declining market lumbered with an unsustainable pension fund isn't down to Brussels.
This business needs serious attention and, unfortunately, it isn't going to come about without a long, protracted strike which will cause damage to its employees principally.
jon dee
September 10th, 2010 6:42pm Report this commentMany CWU members remain trapped and brainwashed by their incompetent union lesdership.Committed to outdated dogma and stubborn militancy, their approach will only drive more workers onto the dole.
Political point scoring benefits no one,and avoiding level-headed and constructive industrial negotiation only compounds this sad commercial tragedy.
Causing further harm to the image and value of the Royal Mail should be avoided at all costs.
Roger Davies
September 11th, 2010 7:51am Report this commentThe market is declining, the overhead costs (new machinery) is increasing, the Public Sector could not manage a pi55 up in a Brewery, so get rid as fast as possible. Hezeltine missed his chance years ago when the business was profitable and the P.O. could have become a global player in the parcel business, today the opportunities have gone and the future is that of a "dead dog" not a rising star" or even a "milk cow". As for the employees, give them shares if you like, but in reality they should be happy if someone is prepared to invest in their future.
denis cooper
September 11th, 2010 10:48am Report this commentRoger Davies - Some parts of the market are declining, others are growing; but as mentioned above even a company like UK Mail, driven by the Kane's profit motive and apparently well run, still has difficulty extracting much profit from the letters business despite being in effect subsidised by Royal Mail for the final sorting and delivery. Personally I see no point in the part or complete privatisation of a business which will still have to bear the burden of providing the universal service, the only one of the 49 licenced postal operators which is required to do that through the terms of its licence. Unless we're prepared to get rid of not only Royal Mail, but also the universal postal service; but if we were prepared to get rid of the universal service then Royal Mail could either drop the more unprofitable parts of its service, or charge more for them, and its position would be greatly improved.
Holly ......
September 11th, 2010 2:41pm Report this commentIs it Royal Mail or the postal workers who are cr@p.
First post in our area is between 12.30-1.50pm.
I do not care if it is the public or private
sector running it...just give put back the first class post in the morning,STOP losing
letters and speed up the process.
Thank you
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