How the EU ruined Royal Mail

[TrueBlueTerrier]

http://www.telegraph.co.uk/comment/9622 ... -high.html" onclick="window.open(this.href);return false;

A nespaper diatribe headlined “Stopping first-class post would prove we’ve become a second-class nation” rightly identified the key part played in the degradation of our postal service by the decision in 2006 to sell off to private firms the most lucrative part of its operation: the bulk mailing of business post. It was this that turned its previous profit into a hefty loss.

What the article did not mention – although this was clearly set out by the Hooper report in 2008 – was that this decision was forced on the government by three EU postal services directives. This official report suggested that one way to meet the resulting crisis might be to scrap the “universal postal service” which, since 1840, had guaranteed swift “same price” delivery to every part of the UK.
When I was born in Eastbourne, East Sussex, at 6.30 in the morning of October 7, 1937, my father immediately sent off a birth announcement to The Times, which arrived in London at noon, to be published next day.

In 1968, when the “two-tier post” was introduced, my father was intrigued to discover from our local Dorset postman that, if he posted a letter with the new first-class stamp (5d, or 2p in today’s money), the letter would still be taken three miles to the nearest town and almost certainly delivered next day. A second-class letter, however, would be taken to the same town, then on to Dorchester 16 miles away, where 24 hours later it would be returned to our local town for onward delivery as if it were first-class. We agreed that this was possibly the first time in history when a system had been deliberately designed to reverse the direction of “progress” by being more inefficient.

My father could not, however, have anticipated the arrival of the EU and those postal directives which forced the Royal Mail to sell off the most profitable part of its business to private firms, which now rely on the Post Office to deliver their bulk mail at half the price. Nor could he have foreseen that in 2012, in a desperate bid to stay afloat, the Royal Mail would be charging 60p for a first-class letter, the equivalent of 12 shillings in old money – or 96 times what he paid in 1937 to have the news of my birth delivered from Sussex to London in less than six hours.

Our rulers in Brussels puffed up like bullfrogs when the EU won a Nobel Prize for its contribution to “peace and democracy”. But they might recall that the peace prize was won in 2007 by Al Gore and Rajendra Pachauri’s Intergovernmental Panel on Climate Change (IPCC), for their splendid work in alerting the world to the threat from man-made global warming. Since then, of course, Gore and the IPCC have become so discredited that in many eyes they are little more than objects of ridicule. The EU, as it sinks further into its worst-ever crisis, is not far behind.

[fishtank]

A nespaper diatribe headlined “Stopping first-class post would prove we’ve become a second-class nation” rightly identified the key part played in the degradation of our postal service by the decision in 2006 to sell off to private firms the most lucrative part of its operation: the bulk mailing of business post. It was this that turned its previous profit into a hefty loss.

Although full deregulation did not occur until 2006 the first licenses for DSA were actually issued 3 years earlier in 2003 and the decision "to sell off to private firms the most lucrative part of its operation: the bulk mailing of business post" was officially made in 2002 although i suspect it was actually made a long time before that.

"Europe" never asked for nor demanded this early intervention,"Europe" never forced Royal Mail to agree to such a ridiculous and debilitating pricing structure and "Europe" certainly didn't starve Royal Mail of investment for 20 years while pocketing the profits,primarily generated by a pension contribution holiday and we all know how that panned out.

The responsibility for those catastrophic decisions lies squarely in London,not Brussels at the offices of Royal Mail HQ and just along the river at the place where Guy Fawkes screwed up so badly.

[pinstripe]

Well said Fishtank, although I must admit that I'm confused.

I thought we ruined RM, or was that according to a different right wing rag?

Notice the similarity though. It's either the blame of Europe or the working classes, never the fault of those who make the decisions and reap the rewards and read the Telegraph/Mail/Times.

[hans solo]

has all the other eu countries been deregulated yet ie france italy spain
if not why is our governmt not pursuing this matter and why is royal mail not competing in other countries example
undercut tnt et all in their own countries then sort the mail here and dump it on then as dsa
if the shoe fits
that is proper competition
why does this not happen and if britain is not allowed to sort and dump other countries wtf are they doing it here

[somerset]

Please feel free to correct me if i am wrong ? But i seem to remember that it was a certain Mr Crozier , who started it in the UK ?

[POSTMAN]

Yep,the problem was PostCon just laughed at the little scrote...

Adam Crozier chief executive of Royal Mail, said: "We're ready. We recognise that the Regulator is getting on with his job, and welcome faster competition as long as it comes without unfair restrictions on Royal Mail.

"What we now want to see is a successful transition to full competition. For customers, that means proper safeguards to avoid a damaging free-for-all and to ensure that all mail is secure, and that it is clear who has collected and delivered it and who is responsible for sorting out problems.

He added that Royal Mail wanted to be able to compete fully and fairly from the start and that it was determined to earn business in the new market so that it can continue to finance the one-price-goes-anywhere universal service.

"This remains at the heart of what we do. We can only do this if the handcuffs come off," he said.

[fishtank]

Remember Leighton's "Death By A Thousand Cuts" statement?
He may have been prize tosser but he was right.

Consignia, Britain’ newly rebranded Post Office, could lose around thirty per cent of its Royal Mail business to privately-owned rivals within the next two years.

The government’s move to open up the UK postal market to competition was lambasted by Consignia’s acting chairman, the former supermarketeer Allan Leighton, who described it as “death by a thousand cuts”.

The proposals, he warned, could undermine the Royal Mail’s commitment to provide the so-called ‘universal service’ [fixed-cost delivery nationwide]. “Our current financial position is already unsustainable,” claimed Leighton. “We are losing more than £1million a day and need to reduce our cost base by at least £1.2 billion.”

The proposed liberalisation of the postal market – partly at the behest of the European Commission and partly the result of relentless lobbying by the direct marketing industry – goes much further than the EC requirements. It will be conducted under the baton of the newly appointed mail regulator Postcom.

Private distributors may apply for licences to handle bulk mail from business customers from April 1, and Postcom expects full competition in this sphere to be achieved by the end of March 2004. It effectively presents on a silver salver the private sector with around £2 billion annually of the Royal Mail’s most profitable business segment – city centre to city centre deliveries, much of it direct mail.

There were predictable howls from the Communication Workers Union [whose members’ antics are in part responsible for the proposals]: “According to the government, the regulator’s first priority is to protect the universal service. Postcom is blatantly ignoring this instruction. It is ignoring the law of the land in favour of the law of the jungle,” complained the union’s general secretary Billy Hayes.

Postcomm chairman Graham Corbett defended the moves: “This is hardly Armageddon. We don’t assume that all of the market will go in the first phase.” He was supported by Peter Carr, chairman of consumer body Postwatch, who opined: “ Doing nothing was not an option – the regulator has devised a way forward that should safeguard the future of the universal service.”

News source: The Times (London), 31 January 2002

[pinstripe]

"There were predictable howls from the Communication Workers Union [whose members’ antics are in part responsible for the proposals]"

Is this the time when we say, "I told you so".

The thing is, we might have told them, but they already knew.