Competition rules exposed for post

[TrueBlueTerrier]

http://www.cwu.org/news/archive/competi ... -post.html" onclick="window.open(this.href);return false;

Responding to postal regulator Ofcom's reports published today (Wednesday) the CWU welcomes retention of the Universal Service Obligation (USO) standards, but is disappointed that no action will be taken regarding end-to-end competition. The union is particularly worried about arguments for cutting pay and conditions of postal staff which have been exposed in contributions about efficiency and competition.

Billy Hayes, CWU general secretary, said: "Today's reports show a mixed picture of postal regulation. On the one hand the regulator says that the universal service is valued, that the level is meeting users' needs and that it should be maintained at current levels. That is of course very welcome. Then in another report it refuses to act to protect the USO from the threat of end-to-end competition.

"The rules of competition are being exposed in Ofcom's report. The case for low wages and a race to the bottom have surfaced in black and white in submissions to this consultation. It's a shocking and deeply worrying development which exposes exactly what these people mean by competition - they mean poverty pay and a race to the bottom on terms and conditions which would inevitably hit quality of service for customers. That's the sort of competition this union will always oppose."

CWU's response to each report is summarised below.

Dave Ward, CWU deputy general secretary, said: "Ofcom has put a positive marker down on the universal service and postal workers will be pleased to learn that current arrangements are not under threat. We would urge Ofcom to remain vigilant against pressures to downgrade the USO.

"The question of end-to-end competition has moved on today. We always knew that private companies wanted to compete on the basis of low pay and low service standards, and submissions to this consultation have confirmed just that. Our concern is that unfair competition on this basis would be devastating for those working in the sector and for all who use and rely on postal services. This is why we are taking action to protect the universal service and will be pressing ahead with plans for a boycott of private down-stream access mail unless the regulator takes action to protect the service for all users."

CWU on User Needs report:

Ofcom's recommendation that no change should be made to the Universal Service criteria - ie that it remains a six day a week service with a one-price-goes anywhere arrangement - is very welcome.
It shows that the service remains necessary and that there's a positive future for postal services.
It is recognition that there is no appetite for downgrading services from customers.

CWU on End to End competition guidelines report:

We're disappointed that Ofcom is still not recommending any intervention in the end-to-end market.

Ofcom has powers to intervene so but is not using them.

Exposure of arguments to erode pay, terms and conditions of Royal Mail workers is deeply concerning and demonstrates what is meant by competition.

CWU on Rural Post Boxes report:

Protecting access to postal services - including access to post boxes - is a priority for CWU.

We are looking into this more closely and want to be sure that no reduction in access or service will result from these measures.

Information on downgrading pay of postal workers is mentioned in section 4.37 on page 18 of the report here: http://stakeholders.ofcom.org.uk/binari ... tement.pdf" onclick="window.open(this.href);return false;

[barrowc]

Here's what the relevant paragraph said:

4.37

Some stakeholders also made comments in relation to labour. Specifically, TNT Post argued that wages and other employment conditions are within Royal Mail’s control and, as such, it did not accept the presumption that Royal Mail’s costs are relatively fixed. It believed Royal Mail’s current business model would represent an inappropriate baseline if it was not forward looking and it should be based on alternative employment models, more akin to those of its competitors. TNT Post considered that Royal Mail will only deliver the most efficient and flexible cost structure when it is exposed to competition. On the contrary, the CWU expressed
concerns about competition based on the erosion of terms and conditions. Consumer Focus believed that Ofcom’s analysis should consider the issue of labour cost restraint at Royal Mail, perhaps through a benchmarking of labour costs between operators and across relevant comparators

[barrowc]

Here's the extract from TNT's response to the consultation - http://stakeholders.ofcom.org.uk/binari ... es/TNT.pdf (PDF file):

In principle we do not accept the presumption that Royal Mail’s costs are relatively fixed. The majority of cost is labour and so is, inherently, a variable cost. Royal Mail needs to be exposed to competition both operationally and on employment terms in order to produce the most efficient and flexible cost structure. The current business model would represent an inappropriate baseline if it does not look forward and assume implementation of other employment models, more akin to those of its competitors. A changed Royal Mail business model could lead to another number staff and could lead to leaner (i.e. cheaper) labour costs and
conditions.

I presume by "another number staff", they perhaps intended to say "a different number of staff"?

[UnhappyGremlin]

Not necessarily different staff. It would mean attempting to get us/CWU to agree to a considerable pay cut, of at least £100 per week for FT staff, as well as removal of all shift/duty/supplement payments. i.e. to get us to work for only a greatly reduced basic pay, in line with minimum wage, which would be about £250 pre tax per week.

So yeah, different staff. Definitely not me.