The Last Post

No, don't get excited, I am not giving up this blog. This is about the Post Office. And I am afraid it will probably turn into a bit of a rant.

People often complain about Royal Mail. Usually the sort of predictable stuff, whipped up by tabloid journalists who complain that the post doesn't get delivered in Notting Hill until lunchtime, and lamenting the great days of the Penny Post when they could have sent a postcard to their Auntie in Tulse Hill to say that they were coming round for tea, and it would be delivered before they got there. Etc, etc.

And so, off the back of this sort of thinking, a few years ago, in some misbegotten corridor of government, was born the idea of "privatising Royal Mail".

Now, I will nail my colours to the mast here, and declare some more fundamental policies of The Bolshy Party. I believe very strongly that there are certain parts of our society that belong to us all and should be owned by, and operated for the benefit of, all British people.

These are Hospitals, Schools, Courts, Prisons, The Emergency Services, Public Transport and the Postal System. There may be others. I am in mid-rant right now.

Of course, if you are going to set up a "competitive" market in an area where there has previously been a state-owned monopoly, you would of course make sure that the process was scrupulously fair and that all concerned had a level playing field, yes?

Well, er no. Because someone must have realised, pretty early on, that if Royal Mail's competitors were to truly compete for the work, then they too would have to wind time back to 1848, invent the Penny Black, and the Railway network, and build a load of sorting offices etc etc. Oh no, that will never do. So the first indignity heaped on the Royal Mail was that they were forced to accept the idea of their "competitors" using Royal Mail staff and infrastructure for the so-called "Last Mile" delivery.

And the postal services regulator was also given the power (misguidedly again in my opinion) of stopping Royal Mail increasing its prices, so Royal Mail was forced to adopt a "price minus" model of charging these people, instead of a cost plus model. In other words, the regulator said to Royal Mail - you can't add a mark up on to what it costs and then charge your competitors that, instead you have to give them a discount off the fixed price.

So, not only was Royal Mail forced to accept unfair competition, and accommodate that competition (even to the extent of having to widen the gates of its local delivery offices to accommodate the vans owned by the competition) but it was prevented from increasing its prices to maintain its own margins.

Now, Royal Mail has not been entirely blameless in its own demise. Its management have made some dumb decisions (Elton John fronting an ad campaign, anyone?) but you have to feel sorry for them, ultimately they have been handed the shitty end of the stick. The government was of course happy to keep taking money out of Royal Mail, money that could have been invested in better sorting machinery for instance, all the time this was happening. In fact successive governments of differing hues have starved Royal Mail of investment.

So much so that in August 2006, Royal Mail took the decision to move to a system of pricing called "Pricing in Proportion" which rigged the pricing structure to price penalise "large letters" and "packets" in fact, anything that the Royal Mail could not machine-sort. Anything larger than extended C5 size. Of course, all Royal Mail's competitors followed suit. So the overall result of this particular segment of Royal Mail privatisation is already a worse service to the general public at large.

So, since January 2006, Royal Mail has been steadily losing custom in the areas of bulk mail to companies like TNT, UK Mail and DHL, while Royal Mail has still been forced to shoulder the "universal delivery obligation." In other words, with the task of delivering a letter to the remote Highlands of Scotland for 36p. Royal Mail are not stupid, and have already been making exploratory approaches to the regulator about "zonal" pricing - ie pricing more for that delivery to the Highlands than for a delivery to a town centre office, for instance. This hasn't yet come in, but if it does, this will be another way in which Royal Mail privatisation will inconvenience the public it is supposed to serve.

Then there is the question of VAT. Postage in the UK is currently VAT-exempt. But of course, once Royal Mail's monopoly is gone for good, and we have to "harmonise" with other EU countries, this may not remain the case. (As a short aside, why do we always end up harmonising with other EU countries, rather than vice versa?).

So, now we have a situation where Royal Mail has been losing money, and now needs "outside help" in the form of investors from abroad. And we can all guess who those are, can't we? TNT, UK Mail, Deutsche Post, et al.

So, let's sum up, shall we:

it's a self fulfilling prophecy. First you open the bulk mailing market to "competition" - though if it was real competition, the likes of TNT would have to wind the clock back to 1848 and invent the Penny Black and Railways and stuff, then you watch Royal Mail's revenue from bulk mailing fall while you insist (via a regulator) that they can't put their prices up AND they must still deliver to the back of beyond for 36p and you also continue to cream off cash from their pension fund (if you are the government that is)

Then, when, surprise surprise, they get financially weaker, well, the only option is to sell them off to one of their "rivals" People in the property world have been using the same principles of "benign neglect" to get rid of old troublesome and unwanted listed buildings by letting them deteriorate to the point of no return for years, now it's going to happen to the post office, courtesy of Mandleson.

Yet we can seemingly find bottomless buckets of squillions of pounds to keep the banking system in the luxury to which it has become accustomed, but we can't have a publicly owned and publicly funded socially useful postal system operated and owned for the good of all British people, no siree. The EU wouldn't like it, or something. Well, if they don't like it, they can bloody well invade, or at least they can try for nowt. I am just about ready for them today.

I hear as I am typing this that a junior government minister has resigned over the issue. Good for him, let's hope it's the first of many.

In other news of course this week we have had the wonderful Mr Madoff, who made off with all the money, and someone has discovered a black hole in the pensions calculations dating back to the 1970s which has gone undetected for three years. Oh, and the Financial Services Authority is inciting people to ring them up and tell them if they suspect financial shenanigans. Pardon me, but I sort of thought that was their job.

The more I look at the bunch of boobies who are in charge of the financial system, the more I think it should be official Bolshy Party Policy to liquidate the Hedge Funds and give all the money to hedgehogs.