Wednesday, 25 February 2009

What postal service do you want?

The national fall-out from implementing an EU directive on postal competition, combined with decades of government mismanagement and underinvestment dating from when Postmaster General ceased to be a ministerial title brings into sharp relief two widely contrasting visions of our postal service.

First is the Euro vision of a pan-European postal service with homogenous postal rates and a single set of stamps for the whole continent that reinforces the integration of Europe. Moving and delivering the post to be carried out by a variety of commercial firms awarded short term contracts in order to realise the benefits of competition. Homogenous service standards which will not be high. In this model the branding of a European Universal Postal Service is the key objective; the handling of mail is secondary.

Secondly is the vision of a postal service as a key component of national infrastructure that fosters national cohesion and reinforces national identity, in which the security of the mail is uppermost and the probity of those tasked with handling and delivering it beyond question, to the extent that they are Crown servants and the mail is protected by strong laws.

There are, it must be admitted, good arguments for both models. The Euro model offers economic efficiency, and when the bulk of mail is business mail rather than personal letters, and for which time-to-deliver is less critical and security less important. The Royal Mail model offers greater security not only for financial instruments such as cheque books, bank cards and the like but at a time when identity theft poses huge risks for individuals, offers greater guarantees over sensitive personal information entrusted to the post. But at a cost. Permanent postmen are also valuable members of local communities, part of our social glue, and have saved countless lives by just noticing something wrong or out of the ordinary about a home on their beat, or 'walk'.

You won't be surprised that for me the advantages of a monopoly Royal Mail service with a strong national identity, permanent staff who are Crown servants and our own stamps with the Sovereign's head on them outweigh the economic efficiencies of the alternative. The additional cost is a price worth paying. That the idea is anathema to the Euro-cultists also makes it hugely attractive. Yes, working practices need changing and government investment is desperately required, but the Royal Mail is one of the few really good things about this nation that we have left. I will join the fight to save it.

17 comments:

Blue Eyes said...

I really struggle to see how a good post service can be operated in a free-market way. There are some institutions which worked brilliantly when there was a sense of pride. The Mail was very good even a few short years ago but has pretty much collapsed recently.

The management are currently laying off pavement staff and simultaneously building a riverside palace for themselves. You do the math.

Budgie said...

The Post Office by definition must be universal, and a simple transparent pricing structure is the most efficient way to charge for it. Hence the PO is a national service first and a business second.

There are lots of other ways to cut government expenditure (or improve our trading position): sell off the BBC (it could easily be a subscription service); leave the EU; scrap ID cards/database; scrap the NHS spine; military to buy British made equipment unless it can be shown that a particular piece of kit is essential; etc.

Nick von Mises said...

Just sell the lot. Let the pension fund flounder. Let the taxpayer off the hook. There is no moral argument to steal from future generations to pay this gilded class.

If letters need to be sent by people willing and able to pay the carriage then it'll sort itself out.

Way too much special pleading going on here under the ruse of "essential public service"

JPT said...

I work for Royal Mail and what I want is a public service that doesn't lose pots of money.
It's what we've got at the moment actually.

Bill Quango MP said...

BE makes an excellent point. The majority of postmen will become part time within 3 years. This leaves the problems of recruitment, retention, training and motivation.
P/T heavy companies require exceptional training, systems, reporting lines and very professional managers in place.
Not sure RM aware exactly how much of a change moving to short time hours is. For a deadline business that is used to just throwing some bodies to get a job done, it will come as an unpleasant shock when there aren't any bodies to throw.

Trevor said...

Trouble is that all the profitable work has left the RM - the courier companies do it cheaper.

Whats left is much more personal post often to out of the way, expensive to deliver to, locations.

So what subsidising it would mean is that the subsidy would actually be going to feed the huge pension fund deficit. Worse still it would be a case of spending more and more money to subsidise the pensions and wage bill while earning less and less from delivering the service.

The ends will get further and further apart.

Bringing in TNT will at least give the organisation a chance to stay in business.

Pity is they didn't do it years ago, they would have got a better price and not had the huge black hole of a pension scheme.

Rugfish said...

The Directive says: -

"The importance of postal services both for the economic prosperity and social well-being and cohesion of the EU make this a priority area for Community action".

"To ensure that the needs of users, the interests of employees and the general importance of the postal sector for the economic, cultural and social development and cohesion of the Community (including the special difficulties encountered by remote regions) are taken into account when regulating the sector".


Unfortunately, it doesn't say "We'll give it to a bunch of wankers to implement"


They went wrong as soon as they went beyond the point of failing to consider the social well-being and the general importance of the postal sector for the cultural, social development and cohesion of the community and employees.

i.e. They are fucking it and us up.

The government instead, goes and closes 20% of Britain's post offices and forces old ladies to have to catch buses to find a post office and destroy one of the very few friendly, 'socially cohesive' places she used to visit.

And they smash up the very essence of national organisations which give these and other things, and call it 'privatisation'.

They act against the employees in complete contrast to what they wrote above when they take away their pensions, fire them and re-hire them as agency workers, and in so doing divide them from their former pals in their former socially cohesive places where they once used to work.

If they actually wanted to consider these things then they would consider asking people what they feel about it and consider doing what the people want them to do. Instead they ignore us because they're a bunch of wankers.

Blank Xavier said...

JPT wrote:
> I work for Royal Mail and what I
> want is a public service that
> doesn't lose pots of money.
> It's what we've got at the
> moment actually.

What about the 5,900 million pound pension deficit? if a business can't pay its bills - and pension fund payments are a bill like any other - then it's loosing money.

Royal Mail appears to have to lost in business about 5,900 million pounds so far, no?

RM apparently make about 0.9 million pounds in profit per day, so that's about 320 million pounds a year.

RM itself may or may not have more assets than liabilities, I don't know.

Either way, it's cash flow isn't going to deal with a bill which is equal to about 20 years operating profit.

So who pays for it? unless you privatize, taxpayer pays.

Makes those stamps you bought a LOT more expensive than you thought.

Blank Xavier said...

Blue Eyes wrote:
> I really struggle to see how a
> good post service can be
> operated in a free-market way.

What, like in Holland? TNT run the post here. It's better than the UK - posting stuff in particular is FAR less painful, because it's heavily computerized and all the labesl are printed out for you. They have MUCH better post offices - which don't play adverts and are not full of cheap crap the PO is trying to sell on the side.

Blank Xavier said...

Budgie wrote:

> The Post Office by definition
> must be universal,

Why?

Why not have say specialist couriers who only offer a service in London, and you use them when you're in London and having something delievered to someone else in London?

Do you mean instead that *everyone* MUST have a postal service?

Again, why? if I want to live in the Outer Island of Nowhere, why is a privately owned company which deals in transporting letters somehow, magically, *obligated* to provide a service to me?

If I choose to live there, it's *my* choice and *my* responsibility.

> and a simple transparent pricing
> structure is the most efficient
> way to charge for it.

I may be wrong, but I think it is unlikely you know so much about he postal industry that you can truly make such a prouncement.

> sell off the BBC (it could
> easily be a subscription
> service);

Amen to that.

> scrap ID cards/database;

Hopefully the Torys will do it, assuming and praying they get Labour out.

> scrap the NHS spine;

Scrap the NHS! there are many ways to provide universal healthcare; the NHS is only one of them, and it's a *particularly* bad way of doing it.

> military to buy British made
> equipment unless it can be shown
> that a particular piece of kit
> is essential; etc.

No. When it comes to men fighting and putting their lives on the line, they can buy what they damn well please - and they will buy the kit which gives them the best possible chance of surviving.

Blank Xavier said...

Trevor wrote:
> Trouble is that all the
> profitable
> work has left the RM - the
> courier companies do it cheaper.

Yup. Which tells you how cost-efficient the PO is. Why are we hanging onto an expensive, inefficient service?

> Whats left is much more personal
> post often to out of the way,
> expensive to deliver to,
> locations.

Which means that we - you and I - are paying the bill so that other people can choose to live in nice, out of the way places.

Nice of us, no?

Blank Xavier said...

Rugfish wrote:
> They went wrong as soon as they
> went beyond the point of failing
> to consider the social
> well-being
> and the general importance of
> the postal sector for the
> cultural,
> social development and cohesion
> of the community and employees.

If a service has a value, *people will pay for it because they want it*.

I notice plenty of little villages have their own community center, paid for by subscription and membership dues.

They pay for that, because they feel it's worth having - and they really do feel it, because *they pay the money*.

It's an effective and lovely way to keep a community together.

Now, what you say is true - a postman contributes to this. But how efficiently? is he worth the money? is in fact his contribution even *needed*, when places have other methods like a community center?

If people want it, they will *pay for it*.

If the Government does it, it doesn't matter a damn if people want it or not - they WILL pay for it.

Blank Xavier said...

I wrote:
> Do you mean instead that
> *everyone* MUST have a postal
> service?

> Again, why? if I want to live in
> the Outer Island of Nowhere, why
> is a privately owned company
> which deals in transporting
> letters somehow, magically,
> *obligated* to provide a service
> to me?

Another thought about this.

If I buy a house on the Outer Island of Nowhere, you know what people might ask me? "how do you get food up there?"

Answer would be that we have it shipped up, or we drive down and buy it and drive back up.

Do any of us have an expectation that Tesco are *obliged by law* to open a store up so *everyone* has a supermarket service?

Of course not. So what brings on this attitude with regard to a postal service? why don't we expect people simply to drive down to the nearest post office (however far it might be) and collect their post when they need it?

We appear not to be internally consistent in our beliefs. I suspect we have an unthought, almost romantic attachment to the Post Office - like it's special in some way.

It is not. It offers a service. There are millions of possible services. This is just one. If people want a service, they pay for it - no one else.

*You pay for what you use*.

Other people do not pay for you.

If these people choose to live in the middle of nowhere, they do so freely, of their own will, knowing all that it implies.

There is no obligation upon anyone else to pay for their choice - in food supplies, or postal services.

it's either banned or compulsory said...

I prefer the second model but it is gone and broken with parcels only doing well because of Amazon.

The European model scares me because the 19thC pan-German postal union created by Bismark, followed up with a customs union ( Zollverein ), was designed as a prequell to Willhelmine Germany which led ultimately to the Third Reich.

Rugfish said...

I prefer the profitable Royal Mail to be in national ownership where it belongs. If it needs 'sorting' then it should be sorted. ( By us ).

It is a false belief and a dangerous belief to foster, that if a foreigner buys it, then somehow it will miraculously improve ( or become more efficient like the old days in Nazi Germany ).

If you want to pay for the service, then you will pay for the service, and if you live in the Outer Hebrides and want some poor sode to traipse up to your door every day with a postcard from aunt Betty, then you must be mad. However this is no excuse for wanting to rid me of my friendly postman who delivers daily as chirpy as can be and is part of our community, unlike the freaking hermit who lives in the outer Hebrides and thinks we need to smash our country up because he wants slaves in attendance instead of postmen and women.

Privatisation?
It's fucked !

We are the only sad bastards doing it. Get real.

Capitalism ( take your eyes out and run ) ? That's fucked too in case you didn't notice.

There's another brand now and it isn't what the guy in outer Hebrides wants, so he can get on his bike.

Blank Xavier said...

Rugfish wrote:
> I prefer the profitable Royal
> Mail to be in national ownership
> where it belongs.

It's not profitable. It makes about 320 million a year in profit, but that figure excludes pension costs. When they are figured in, RM appears to be loosing money hand over fist.

The only way RM will be profitable is to charge a *lot* more - either directly by higher prices, or indirectly, by tax subsidy. In the former, doesn't that directly attack this idea of a universal service which appears to be common? it's all very well delivering post everywhere but it costs so much no one uses it, it's a sham service. But if that cost is actually met by tax, then that's *exactly* as bad, just the costs are distributed differently - people are no longer paying for what they use, they're getting other people to pay for what they use. That's *absolutely* wrong.

Competition *will* lower prices, because that's what it *does*. C.f. budget airlines.

More to the point, what difference does it make if it *is* profitable? does it somehow become acceptable to grant monopolies on service to companies simply because they are profitable?

Tesco is profitable. Should we grant it a monopoly on food retailing?

If you think not, but you think we *should* for Royal Mail, explain why.

> If it needs 'sorting' then it
> should be sorted. ( By us ).

What makes you think we *can* sort it? (I assume by this you mean make it economically viable). Any State owned industry is political football, any price increases or changes in structure a massive public debate. No WONDER State owned industries are almost invariably economical failures.

But more to the point, what justification is there here for the loss of *FREEDOM*.

On what basis do you justify forcing me to use one particular company for a given service?

What if I don't *want* to use this company? WHY do you FORCE me to do so?

And don't even think about saying "for the greater good"!

It's a completely fake argument. Removing freedom of choice from EVERYONE is NOT a greater good. It's a massive loss of freedom and choice and a granting of power to the State, which then goes off and makes decisions *in its best interest*, because "it's best for us".

You know as well as I do what politicians are like - new post office just happens to get opened in the right place before an election, friends in the company get a bit of a nod and wink and promotion and help out in return, etc, etc, etc.

> It is a false belief and a
> dangerous belief to foster, that
> if a foreigner buys it, then
> somehow it will miraculously
> improve

I concur. Having a single company provide a service is never efficient. It doesn't matter who owns that company.

> ( or become more
> efficient like the old days in
> Nazi Germany ).

The hell? what HAS this got to do with Germany? we're talking about the post service. If you want to worry about Nazi Germany, think about the national database and the ID card scheme.

> If you want to pay for the
> service, then you will pay for
> the service,

You are arguing then that tax should not fund the RM, but that postal charges should. I would say charges probably have to triple, if the RM is to handle it's pension deficit.

This is a lot. Makes it about one pound to send a normal letter.

But note under your model, we are *all* now screwed, because we HAVE to pay this - for RM have a State granted monopoly. They can charge what the like - there IS no one else offering this service. We HAVE to pay.

This to me indicates the failure of monopoly. If there were other service providers, they would offer a cheaper service and we would then use them. The RM would go out of business - and quite right too, because it's a badly run, loss-making company. *IT IS DESTROYING WEALTH*. It makes us all poorer, by reducing the amount of wealth in the country, which means there has to be more tax than there would otherwise be.

> and if you live in
> the Outer Hebrides and want some
> poor sode to traipse up to your
> door every day with a postcard
> from aunt Betty, then you must
> be mad.

The hell? who are you to say what other people should or shouldn't do? don't you believe in freedom?

> However this is no excuse for
> wanting to rid me of my friendly
> postman

No one is *forcing* you to lose him. If you want that service you are free to pay for it. If enough people want that service, there will be enough money for it that it will exist.

However, if just YOU that wants that service, OTHER people are NOT going to pay for it FOR YOU.

I suspect you will find in practise that although people *like* a postman, it's not *actually* worth money to them. They would rather have a cheaper service.

And that's freedom. That's what freedom IS. They get to have what they truly want - because they get to choose to pay for it, or not pay for it.

If RM is given a State monopoly, then we get postmen, *which perhaps people don't actually want*. That's UNFREE.

> Capitalism ( take your eyes out
> and run ) ? That's fucked too in
> case you didn't notice.

Capitalism means *private properly rights* - and that's all. Nothing more, nothing less.

The problems we have now originally stem from American interferences in their property market, starting from about 1930.

> There's another brand now and it
> isn't what the guy in outer
> Hebrides wants, so he can get on
> his bike.

Then I don't think much of this "brand", because it appears to force other people to live their lives according to how *it* wants. There's a word for that.

Rugfish said...

It's a relatively simple concept to understand I think. Royal Mail makes a 'profit'. Thus it is viable and is competitive and providing good value and service.

I might add, it's had half of it's other echelons such as the Post Office hived off and still makes a profit, despite this.

However it is competing against many other private companies which reduces its capability to make an even bigger profit in order to meet its pension commitments.

With me so far?

So, other private companies are able to compete because they have lower wage costs and no pensions to pay. They still make a profit but they pay it to fat shareholders who now think they can buy up more of our Royal Mail be 'making it more efficient', by not paying levels of income as at Royal Mail, not paying pensions, hiring temps and agency workers and making even more profit whilst the nation ( us people ) get POORER.

You expand this exercise across all utilities, telecoms, water, and public transport etc, and you now have massive companies aiming for bigger profits on the backs of low paid workers with no pensions and having to hire immigrant low paid slaves because "we" won't take or are not offered jobs. Thus killing our very heart as a nation.

Additionally, these corporations are bigger than countries and break the authority of political leadership simply because they can. THEY determine where their market is. THEY decide who lives in poverty or riches and they decide the fate of government trade policies and their economics.

You might want to look up the warning issued to the EU about this 2 days ago here:-

http://rugfish.blogspot.com/2009/02/eu-warned-of-corporate-control-and.html#links


They already know the situation is having massive social impacts and they already know it has to be rectified.

Not for the guy in the Outer Hebrides who won't be involved in the revolutionary battles on our streets but sat at home watching it on telly if it isn't remedied. ( As they are now seeking to do ).

As I said, the type of capitalism you are espousing DIED. It has miserably failed us and is DEAD. Only by reviving the "social aspects" to avoid the social implications of not doing so, can it be reborn. And until then I would consider it in stasis. ( Inactive, clapped out, Kerput, DEAD until someone revives it and likely to become worse before it gets better ) - WITH society in mind.