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It's time for a genuine free market in the postal sector

14 Nov 2018, 14:10

https://iea.org.uk/its-time-for-a-genui ... al-sector/

How has the Royal Mail fared since its privatisation in 2013?

As with previous partial privatisations, the government moved a quasi-monopoly industry into the private sector – yet key elements of the former system remain in place.

Royal Mail maintains requirements to collect and deliver throughout the UK six days a week – and the company is regulated to ensure it does so. Competitors wishing to provide an alternative letter delivery service must apply for a licence. Regulators also have powers to control prices and access to the Royal Mail network.

In the years that have followed, letter volumes have fallen dramatically, continuing a trend underway prior to privatisation. Since 2005-06, volumes in this market have dropped by more than 25 per cent, thanks to growing email use, initiatives like online bill payment and new regulations like GDPR. We are already at a point where very few residential addresses receive mail every day of the week.

Royal Mail has, for the most part, been able to replace lost letter business with additional uptake in the burgeoning parcels market. Here, unlike traditional post, consumers benefit from open, fierce competition between delivery firms.

However, still largely led by a senior management team used to operating in the public sector, Royal Mail has been slow to adapt to new realities. Earlier this year, the service lost an important Amazon contract when the logistics giant opted to set up its own home delivery service rather than depend on Royal Mail. Amazon also provides several key services Royal Mail does not, like Sunday post and automatic redelivery if the customer is out.

Royal Mail executives have stated they want the service to move towards being a parcels company that also delivers letters.

Now would be an opportune time to let them do that – but ideally in a free market, which allows competitors and new entrants to flourish as well.

How could we create a genuine free market in post and parcels? Having worked in the sector for over 25 years, I would recommend the following measures:

First, the government should immediately reduce Royal Mail’s Universal Service Obligation from six days to five, with a phased reduction over a period of time leading to its eventual abolition. Premium services like special delivery could then be made available seven days a week. The seven-day premium delivery service would give posters the new option of next day delivery for any important items. This would mirror steps taken by the Dutch Postal Operator as a result of similar falls in letter volumes.

There should also be complete freedom for any potential competitors who want to enter the home letter delivery field without having to get permission from the state regulator. By forcing Royal Mail to compete on a level playing field, this would drive up quality, bring down costs and increase consumer choice.

Secondly, Royal Mail should have the freedom to fix its own prices for all products – including first and second-class mail. Combined with the above measures, this would help create a competitive pricing environment. All available evidence suggests this would keep prices down, and could lead to a more simplified pricing setup, for example, by introducing one category of standard letter delivery.

Thirdly, individuals and companies posting items in bulk should be able to access the Royal Mail network at individual delivery offices, instead of being restricted to just 38 mail centres, as is currently the case. Such measures hamper trade and there seems very little justification for them beyond the regulators’ misguided desire to protect Royal Mail. Access to delivery offices would allow business customers to present their mailings via the Royal Mail network at the ‘final mile’, i.e. at the location where it is to be delivered.

The above steps would reduce and eventually eliminate the role of the regulator from postal services, saving the hard-pressed taxpayer money.

Free markets are good news for consumers, as we have already seen in the competitive parcel market, which has forced Royal Mail to adapt. Sadly, they have yet to do the same in letters.

There has never been a better time to start really modernising the UK postal sector along free market lines. Such an approach would be infinitely preferable to the current state of play – namely, a private monopoly shielded by a state regulator.

It’s time for a genuine free market in the postal sector

14 Nov 2018, 17:01

What a load of shite.

It's time for a genuine free market in the postal sector

14 Nov 2018, 20:15

RM is not shielded by the regulator - more like hampered and disrupted with a liberal sprinkling of unjustified fines. The DSA and supposed fair competition rules have taken RM postal charges to the heights they are at now which had pushed us into being the most expensive service. As shown by Whistl attempts at own letter delivery even when delivering every second day they could not make it viable.

It's time for a genuine free market in the postal sector

14 Nov 2018, 23:46

If the USO is taken away the job losses in RM will be close to 50%. Each house will get a delivery every second day so that means the average postie has covers a delivery every other day making it more financialy attractive as their would be more letters for each walk over 2 days instead of every day like present. But then that throws the parcels into the slow lane as people don't even want to wait nearly 24 hrs for delivery never mind 48hrs. Maybe that's why the DOs are creating LAT duties to ensure that parcels would still go first class and all letters going standard class as there's only 10p difference between first and second class letters. It doesn't make sense anymore for a two tier system. The postcode displaced by the letters being delivered , every other day, could be redeployed to the new LAT duties and into mail centres by getting rid of anguard casuals. The rest who wanted could takeEVR. Let's face it, there is no other company out their who has the offices, network, vehicles and staff to be able to step in and do the job RM does on a daily basis. It would be cost prohibitive. RM will come back into public ownership when letters fall to minor levels in the next 15 years of so and when the city and shareholders have sucked out every penny that they could get their fat arses on. Pigs to the trough come to mind. :evil/mad :evil/mad :evil/mad :evil/mad

It's time for a genuine free market in the postal sector

15 Nov 2018, 06:59

It is not known what the IEA actually is, or on whose behalf it speaks, or how it is funded. It is rated by the accountability group Transparify as "highly opaque".

It has supported legislation banning charities receiving public funds from lobbying the government (this does not affect IEA itself; as a registered educational charity it is exempt from many taxes, but its funding is private). Charity Commission rules state that "an organisation will not be charitable if its purposes are political". In July 2018 the Charity Commission announced that it was to investigate whether the IEA had broken its rules.

Since Britain voted to leave the European Union (Brexit) by March 2019, the IEA has lobbied consistently for a hard Brexit without customs and regulatory alignment, etc.; a report it published in July 2018 proposed using Brexit to remove rules protecting agency workers, to deregulate finance, annul the rules on hazardous chemicals and weaken food labelling laws.

The IEA supports privatising the National Health Service : campaigns against controls on junk food; attacks trades unions; and defends zero-hour contracts, unpaid internships and tax havens. Its staff frequently appear on BBC television promoting these positions.

Its director Mark Littlewood said "We want to totally reframe the debate about the proper role of the state and civil society in our country … Our true mission is to change the climate of opinion.

All this after its founder read "The Road To Serfdom" which warned of the dangers of central planning or in shorthand too much government control and interference. Which is ironic seeing as their aims would make serfs of us all.

It's time for a genuine free market in the postal sector

15 Nov 2018, 20:40

The IEA is a right wing anti-tax lobbying organisation. So it's all bollocks!

It's time for a genuine free market in the postal sector

16 Nov 2018, 17:19

IEA - treated by the media as if it is a genuinely independent think tank, but it consistently refuses to open itself up to scrutiny. Could be being funded by any or all of the despotic governments throughout the world. Consistently promotes free market economics and competition in every walk of life, and is very close to right wing political organisations in this country.

It's time for a genuine free market in the postal sector

16 Nov 2018, 18:16

The IEA is one of a number of shady organisations that operate out of a building in Tufton Street in Westminster. It's a long read, but more can be found out about the IEA and those other outfits by reading this article: http://www.brexitshambles.com/brexit-sc ... on-street/, for those that are interested.

It's time for a genuine free market in the postal sector

17 Nov 2018, 17:51

The IEA should be renamed SOGSATS

The Society of Granny Sellers and Turd Skinners

They are an exact fit for Oscar Wilde's definition of a cynic

Someone who knows the price of everything but the value of nothing

It's time for a genuine free market in the postal sector

17 Nov 2018, 18:21

goneaway wrote:The IEA is one of a number of shady organisations that operate out of a building in Tufton Street in Westminster. It's a long read, but more can be found out about the IEA and those other outfits by reading this article: http://www.brexitshambles.com/brexit-sc ... on-street/, for those that are interested.



Any website with a header of "Brexitshambles" doesn't sound impartial.
In fact, it's probably even more partisan that the IEA, which at least spouts crap about a whole range of issues.

It's time for a genuine free market in the postal sector

21 Nov 2018, 21:04

Tman wrote:Any website with a header of "Brexitshambles" doesn't sound impartial.


True transparency, though, unlike the IEA :wink:

It's time for a genuine free market in the postal sector

22 Nov 2018, 18:16

Personally I'd welcome PROPER free market capitalism in this country rather than the coporatocracy/oligarchy that we currently live under, which is basically a form of socialism... for the banks, the multinational corporations and the wealthy elite.

It's time for a genuine free market in the postal sector

22 Nov 2018, 19:34

wacko74 wrote:Personally I'd welcome PROPER free market capitalism in this country rather than the coporatocracy/oligarchy that we currently live under, which is basically a form of socialism... for the banks, the multinational corporations and the wealthy elite.


Which means you would be paid peanuts like most of the other companies delivering parcels/post. No sickness pay or holiday cover of pension because you would be self employed. No union representatives to help you. Capitalism is the lowest bid gets the job and to help with standards. How a working class person can come away with that is mind blowing. I understand what you mean by the banking bit, but true capitalism is, I'M ALLRIGHT JACK, F..K YOU. :evil/mad :evil/mad :evil/mad :evil/mad :evil/mad :evil/mad :evil/mad

It's time for a genuine free market in the postal sector

23 Nov 2018, 05:51

Navalron wrote:
wacko74 wrote:Personally I'd welcome PROPER free market capitalism in this country rather than the coporatocracy/oligarchy that we currently live under, which is basically a form of socialism... for the banks, the multinational corporations and the wealthy elite.


Which means you would be paid peanuts like most of the other companies delivering parcels/post. No sickness pay or holiday cover of pension because you would be self employed. No union representatives to help you. Capitalism is the lowest bid gets the job and to help with standards. How a working class person can come away with that is mind blowing. I understand what you mean by the banking bit, but true capitalism is, I'M ALLRIGHT JACK, F..K YOU. :evil/mad :evil/mad :evil/mad :evil/mad :evil/mad :evil/mad :evil/mad



I disagree.

What you've described is the corporatocracy that we currently live under and NOT true free market capitalism.

The poor pay and T&C's that most of our competitors get away with are a direct result of the ''corporate socialism'' that I've already highlighted... under true free market capitalism those companies who only exist by paying peanuts and relying on ''in work benefits'' to subsidise that low pay wouldn't survive.

The only businesses that would survive under a true free market capitalism model would be those that can stand on their own 2 feet, make a healthy profit and treat their employees well, paying a living wage without relying on subsidies from the state.

True free market capitalism, like true socialism, has never really existed in any country... they're both just an idealistic utopia that could never work due to the greed and corruption that is human nature.

It's time for a genuine free market in the postal sector

23 Nov 2018, 12:58

Yes mate, now that you've explained a little bit more I tend to agree more with you. I have always said that it's a disgrace that workers have to rely on handouts from government because their wages are piss poor or not enough hours, so that the employer just pays class 2 employer national insurance contributions and the worker can't afford pension contributions therefore opts out therefore saving the employer even more money as they don't have to pay any employers pension contributions. EXACTLY the way RM are going down just now. Wankers. :thumbdown

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