• Text size      
  • Send this article to a friend
  • Print this article

Coalition delivers blow to Royal Mail

We have known for a long time it was coming, but that does little to lessen the impact of yesterday's announcement on the Royal Mail.

In the face of opposition from most of the public and the vast majority of postal workers, the Coalition Government has announced that the service will be privatised in the coming weeks. It is a decision even Margaret Thatcher refused to take ("I will not privatise the Queen's head," she is said to have remarked) but the danger is that not only does the decision fatally misunderstand the nature of Royal Mail - it is more than a business, it is a service - it represents a fundamental threat to the idea of the universal postal service. Longer-term, privatisation could also be a serious blow to the post office network.

The Coalition Government has tried to offer some reassurance on these concerns. The idea of the universal service is protected by an Act of Parliament, say ministers, although the obvious response is that there is nothing to prevent a future Tory or Coalition government passing another act that would end universal provision.

We have also been told that Royal Mail and the Post Office have signed a 10-year commercial agreement under which the Post Office provides Royal Mail products and services. On the face of it, this protects post offices, but again, what is to stop a future privatised Royal Mail severing the link for commercial reasons and going its own way when the deal runs out? That would have serious consequences for post offices, many of which are already struggling.

And one thing the Coalition Government has not told us is: why make this decision now? The Communication Workers Union is about to ballot postal workers on strike action, so it may be that the Government wants to get the privatisation out of the way before the sight of placards outside postal depots (it has also thrown in the added sweetener of free shares for the workers). However, the suspicion must be that the sale has been ordered for purely financial reasons - in other words, it will raise a hefty contribution (probably around £3bn) towards reducing the deficit.

What such a financially-driven decision ignores is the social, cultural and community aspects of the Royal Mail. It is a valued institution, an icon of British life, and even though it has struggled in recent years with many of the changes brought about by the digital revolution, such as the decline in the number of letters we send, this has been balanced by the growth in the number of packages it handles and it still offers a successful, and increasingly profitable, service. The question the Coalition Government should be asking itself is: how can we best preserve this service?

That question is of particular importance in Scotland, of course. Currently, the Royal Mail will deliver to the centre of a city and to the most remote country cottage for the same price, but such standard charges, which are critical for the health and sustainability of remote businesses and communities, would be at serious risk under a commercially-driven operation.

Vince Cable, the Business Secretary, says privatisation will help protect this one-price-anywhere, six-days-a-week model, but the opposite is more likely, particularly because the priority of the new business will be shareholders rather than customers. Royal Mail does need some serious investment to help it adapt to the changing nature of its business, but it is still a fine and valued service. Privatisation could put all of that at risk.

Contextual targeting label: 
Business

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

181661