The Post office is at a turning point. The industry’s regulator, Postcomm, has made proposals for the introduction of competition into the industry that will bleed the service to death. The proposals are to open the reserved area of letters to competition by three stages. The first of these involves offering a third of current business to competitors immediately. Two further stages would see the whole of the reserved area abolished by 2006.
The proposals are based on the neo-liberal dogma that competition is the only solution to the development of the industry. The Post Office is a natural monopoly insofar as a single integrated firm provides a service to customers more cheaply and efficiently than competing firms can. The proposals threaten to wreck the industry in order to provide pockets of profitability for private companies.
Of course there are problems with the industry. For three decades successive governments have failed to promote investment in the industry, whilst siphoning off billions of profits to subsidise other government activity. In part this has been because these governments have continued to hope that there will be the opportunity to privatise the Post Office. As recently as July 2001 the government authorised the Post Office to negotiate with TPG, the privatised Dutch post office. The aim was to establish a joint venture leading to a merger. Negotiations finally broke down in March 2002. This was taking place unknown to the public, whilst the regulator was supposedly conducting a public consultation on the introduction of competition into the industry.
The CWU’s policy has been to address the investment crisis whilst keeping the Post Office in the public sector. We believe that public funding can take place both through the stamp tariffs, and through direct government investment. We support a 2 pence increase in stamp prices. Prices have risen below the rate of inflation since 1991. This in good part explains the immediate losses. The industry is continuing to expand faster than the rate of GDP growth. We favour a pricing regime that will allow for the Post Office to address the history of under-investment. Equally the government could allow new borrowing for service expansion. The government could allow management to use the £2 billion government gilt’s for new investments that the Post Office was previously compelled to buy. There needs to be a demonstration by the government that it is prepared to support the real improvements that the Post Office requires.
Of course the union has not confined its response to policy arguments. We have mobilised our members in a campaign to force a retreat from the regulator’s proposals. A national lobby of Parliament was held to back up the record amount of interest that supportive Early Day Motions received. We gained positions opposing Postcomm in the Welsh Assembly, Scottish Parliament, Northern Ireland Assembly, and from the London Mayor and GLA. There is no doubt that there are divisions now in government as Labour MPs and ministers consider the possible impact of failing postal services in the run up to the next General Election.
At present the Post Office offers a universal service at a uniform tariff. This will collapse if private companies are allowed to cherry-pick the industry’s profitable services. There is no reason why this should be allowed to happen. But it takes a fight to secure an alternative. In the CWU we now find ourselves part of an alliance of unions determined to defend the public sector. We have to continue our campaign to defend public services and to keep the Post Office in the public sector. In such initiatives the unions are defending not only the interests of their members but also the interests of the public at large.