The British government has announced that a review of market liberalisation in the postal sector to see how it has affected Royal Mail and to consider how to maintain the universal service.
The BBC says that the report has the following 3 objectives:
- Assess impact of market liberalisation
- Look at future market trends
- Consider how to maintain universal service
How much is this going to cost the taxpayer? Bound to run into 6 figures and for what? It’ll either say how wonderful it is and how Federal Europe should be congratulated for making the British government drive Royal Mail to the brink of bankruptcy or it’ll tell us what we already know – that it has been an unmitigated disaster and the only people who have seen any real benefit are the foreign postal companies who have moved in to take advantage of deregulation.
The universal postal service will soon be a distant memory. The Royal Mail no longer has a monopoly on postal services but it is still obliged to deliver any and all mail given to it to any location for a fixed price. Its competitors have no obligations and can choose to target only the most profitable parts of the business. The future is bleak, indeed, for Royal Mail because not only can their competitors have their cake and eat it, but Royal Mail have to pay for all the ingredients and bake the cake for them.
It’s not practical to give Royal Mail its monopoly back now so the only solution is to give state aid to Royal Mail but that would attract the wrath of Federal Europe who only allow important countries like France and Germany to give illegal state aid to their companies. Companies like Deutsche Post which competes directly with Royal Mail in the UK with its Global Mail service and its subsidiary, DHL. There is only one way to maintain the univseral postal service and that is to leave the EU.
There, I’ve done their report for them in about half an hour and it cost the taxpayer nothing.
Technorati Tags: Federal Europe, Royal Mail
I think it is practical to give Royal Mail its monopoly again (either that or goodbye to a postal service) – and leave the EU.
Unfortunately, the postal union, the CWU, is headed by people who have no problem with the EU or liberalisation – and still think it’s a good idea to fund New Labour…
I think the postal sector has been deregulated for too long now. A lot of companies have put in significant investment and to turn it back into a monopoly would scare companies off doing business here. The problem is that the British government wants Royal Mail to run a public service but they turned it into a business and the two aren’t very compatible.
Well, I don’t know about that. From the perspective of those Blairites who are so zealous that they can only be genuine ideologues, there is no incompatibility. But if we regard the British state structurally, it’s clear that the main aim is to help deliver ever-greater profits – so we have contracting out, privatisation, etc, even though there is an inherent added cost to doing so, for both service users and providers.
As you are aware, I’m not too fussed about scaring foreign capitalists from doing business here – nor domestic big business for that matter. In fact, I’d rather welcome the government giving them a fright – we are a tax haven already! To accept the right of capitalists to flit about the globe and to lower standards or to be fearful of having standards is foolish.
A monopoly postal service would be good for consumers, postal workers, and would be beneficial to small and medium sized businesses.
I agree that a monopoly postal service would be the best thing for everyone except their competitors but we are a capitalist society and our economy is based (nominally) on free market capitalism. To effectively put the UK arm of those postal companies out of business would seriously damage the economy – what little trust there is left in this rotten government would be lost. If the British government wants Royal Mail to run a public service they should pay for it.
Thanks Wonko. Good article which expresses my views of the postal service in a much clearer and concise manner than I’d ever be able to.
What a dog’s dinner they’ve made of it.