Peter Mandelson must win his fight to reform Royal Mail

[TrueBlueTerrier]

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Peter Mandelson must win his fight to reform Royal Mail

Last Updated: 12:01am BST 21/10/2008

Lord Mandelson, the Business Secretary, was being a little disingenuous when he claimed that if he had not lost his job as Trade and Industry Secretary a decade ago, the Royal Mail would have been successfully opened up to competition through part privatisation.

In reality, his plans were blocked by Gordon Brown at the Treasury and a wholly unsatisfactory compromise emerged which saw Royal Mail become an independent company, though with the Government as sole shareholder.

That half-way house has done nothing to arrest the company’s subsequent decline, with the result that we now have one of the most inefficient postal services in Europe.

It is welcome, then, that Lord Mandelson has now committed himself to sorting out this “unresolved issue”. He will be pushing at an open door.

An independent review of Royal Mail, commissioned by the Business Department, is about to be published.

Its author, Richard Hooper, said in a speech earlier this month that maintaining the status quo is “untenable” given the changing nature of postal use, particularly in the light of the explosion in digital messaging.

Yet Mr Hooper also stressed the importance of the universal service obligation, which requires that items can be sent and received anywhere in the country for the same affordable price.

This, he rightly asserts, “is part of our social and economic glue”.

Details of his recommendations will appear shortly but the broad shape is clear.

Modernisation, he says, is primarily about changing culture, about being obsessed with the customer, not the provider; it is also about innovation - and opening up new revenue streams to pay for it.

In short, he looks certain to propose the sale of a large part of the Royal Mail to the private sector, to bring in new capital, and just as important, fresh thinking.

With a new chairman to succeed Allan Leighton also currently being head-hunted, the moment for radical reform has surely come.

It will not prove easy. Selling shares in any enterprise is going to be tough for the foreseeable future and the experience of BAA, forced to divest itself of airports after being encouraged to buy them, will deter the fainthearted.

Delivering the universal service obligation will also be costly (though the privatised utilities manage to live with similar requirements).

But the chief obstacle to reform will, as ever, be the Union of Communication Workers whose general secretary, Billy Hayes, warned that Labour has – under the Warwick agreement with the unions – given a “clear commitment” to keep Royal Mail in the public sector.

Lord Mandelson has a fight on his hands – it is one he has to win.

[DGP1]

Union of Communication Workers

How long is it from we have been that? All I've read is Labour spin

[trythat]

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Delivering the universal service obligation will also be costly (though the privatised utilities manage to live with similar requirements).

Apples and Pears come to mind, what kind of universal type service do any of the others provide, plus as in BT or Gas, don't the other suppliers have to pay a properly priced sum for use of pipes and cables?

[rhino49]

http://www.telegraph.co.uk/opinion/main ... dl2101.xml

Delivering the universal service obligation will also be costly (though the privatised utilities manage to live with similar requirements).

Apples and Pears come to mind, what kind of universal type service do any of the others provide, plus as in BT or Gas, don't the other suppliers have to pay a properly priced sum for use of pipes and cables?

Yep - their version of supplying a universal service has people in rural areas living off ridiculously priced bottled gas and no decent internet connections. Oh - and I nearly forgot - getting flooded out regularly, and doing without decent public transport links.