mail privatisation chaos


The Post Office may be back in the black financially, going from a £197 million loss in 2003 to a £220 million profit in March 2004, but the service is in turmoil and faces further chaos. For over 20 years until 2000, effectively the Royal Mail was the golden goose for successive governments. Always in profit, providing an effective, secure, twice daily delivery and collection service, let alone hundreds of millions of £s into the Treasury coffers. Since 2000, when the government moved towards implementing the EU directive to privatise the post, the system has started to collapse.

The Royal Mail has failed all service delivery performance targets. In 2002-2003, the Royal Mail was fined £7.5 million by the Regulator for poor and inadequate service. The service has now slipped further. It is expected that further fines will be announced later in the year, with an expected sum of £80 million being paid in compensation to business customers. In delivery, collection and sorting, 30,000 jobs are being cut, over 1100 post offices closed, the parcel service effectively hived off.

Staff morale has collapsed while the six Royal Mail executives shared over £2.8 million in salaries and bonus payments. The Royal Mail's proposal to change the basis of payment of post and packages from weight to size is a sleight of hand intended to undermine competition already gathering from competitor EU countries. The shift in accounting, from loss to profit, was only really achieved by the increase in the cost of the first class stamp.

This false financial bloom has to be set against a collapsed system. The orchestration behind the scenes to ensure that the Royal Mail fails is really about making its new competitors look attractive. Remember the stalking horse Mercury and its battle with BT? Or the anarchy in the rail network now painfully limping back to a unified single rail network? Or the competition in electricity, gas, water and even telephone directory enquiries?

From all the deliberate chaos, state monopoly is destroyed and private monopoly emerges. This is the real goal of the government in implementing instructions from the European Union.