Recently, NW1 postcode residents like me were sent a letter by Royal Mail explaining in a roundabout way that our delivery service was going to be reduced and become less reliable. This message does not bode well for the future considering it’s a Central London postal district where we have plenty of business mail just less than a year after the privatisation of the Royal Mail.
Since the botched privatisation of the Royal Mail by Vincent Cable, the postal service has become more expensive and service levels in London have dropped, through no fault of postal workers I hasten to add.
Postage costs were increased before privatisation to no doubt make the sell off a more attractive proposition in the run-up to its IPO. There was a further increase of a few pence on both first and second class mail in February of this year, so that in recent time we have had 20 per cent increase in price. The prospect of future price rises also exists, as the service has the power to increase prices as much as it likes.
As for quality of the delivery service, the reality is that we are seeing a growing number of service providers like TNT who are being criticised for poor service, including reports of large amounts of mail dumped in Central London neighbourhoods like Bloomsbury were TNT bicycles loaded with confidential letters were left unattended. We have also had similar cases in W9 & W10 delivery services with TNT again the culprit where the local MP Karen Buck has suggested they need to “get a grip” on things.
Poor service by others places even more pressure on the Royal Mail with much of the dumped or mis-delivered mail placed in Royal Mail post boxes for correct delivery. The absence of standards for TNT and other competitors is undermining the overall quality of postal services and having a knock-on effect on universal postal services.
The universal “one price goes anywhere” postal service is an important one and is made possible by the Royal Mail using its revenues from urban areas to cover the higher cost of delivery in rural areas. The growth of direct delivery competition, particularly in urban centres like Central London threatens the fundamental principles of cross subsidy at risk, threatening the viability of universal postal services and thereby impacting on cities just as much as rural communities. The loss of the universal service obligation would be disastrous for these communities. The quality of the service in Central London is also being affected, as the direct deliveries cherry pick the best bits of the Royal Mail like the business traffic and delivery service levels drop.
We should not forget the impact also on employment standards with TNT employing people on zero hour contracts and below living wages and expecting to employ up to 20,000 in 2018 from its present 1,000 base. This model of employment is replacing decent jobs with precarious employment on inadequate pay, putting a burden on public finances via benefit support and reduced income tax revenue. Such reductions in terms and conditions are damaging not only to the people it employs but also the quality of postal services, making it even more difficult for the Royal Mail to deliver its performance targets.
One final word on the Royal Mail privatisation. At the time of its sale, some 70 per cent of a poll in the Sunday Times was against its privatisation. The service has been in public ownership since the reign of Charles I and became a cherished national institution, suggesting many were happy with the service and its values. However, last week the BIS Committee at the House of Commons reported that Vince Cable’s botched sale of the Royal Mail cost the tax payer £1 billion. Now OFCOM have a statutory duty to protect the universal postal service over and above any competition considerations but so far have shown an unwillingness to step in. If OFCOM are not minded to protect the principle of a universal postal service than maybe we should consider its return to public ownership? The government still has a 30 per cent stake in Royal Mail, something to build on for full public ownership.
This blog was published in a Forum piece for West End Extra in the week of 25th of July 2014.