The Destruction of Royal Mail

by Mike Ross - PA Business Spokesman - 07:26 on 10 March 2009

Destruction of a National Institution

Once there was a British company with a monopoly position that provided a national service which benefitted the whole country, no matter how remote or how small a community was. This service was exemplary and provided the model upon which other countries based their own services and for many, looked upon with envy.

The service provided communities with an outlet for communications and contact, worldwide; at a price affordable for all. In more rural areas, it made a wider contribution as a centre for social cohesion and offered additional services such as vital day to day provisions. These direct services, which had other indirect benefits, were available twice daily, in the morning and the afternoon. Whilst the full actual cost of delivery was never understood, neither was the true economic value to society as whole.

One day, the major shareholder said, I know! let us open up our market to competition, this will make us sharper and more efficient and as a true test, the shareholder used the new, mostly foreign, competing services in place of the tried, tested and reliable service, albeit increasingly ineffiecient, it had enjoyed for more than 100 years.

After some time, the new players complained that they needed a bigger slice of the cake to provide a more economic service; of course the shareholder had to pay increased prices to achieve this but the long term benefits were worth the price. The new boys complained that service provision to remote and uneconomic areas could not be supported and that these areas must be supported by the main company.

As a result of a lack of investment over many years, in new technology and personnel practises the company appeared less and less efficient when compared to the other new boys that had benefited from their own national support over a long period of time.

After a short time, the company started to report major losses of business, so the major shareholder decided it needed new leadership at the top. In an innovative move it brought in an expert from the retail business (with part time interest) and a full time head from the football industry, with a recent track record of abject failure. With these two at the helm, not hindered by having previous industry experience and understanding, surely everything would be OK, as they would see things with fresh eyes.

Their first actions were to completely ignore the industry history as a national and community service and try to compete openly with the newly players. This of course meant increased cost of services as the company was losing money due largely to the major shareholder using competitive services. Despite losses of valuable and sensitive deliveries between the shareholders own divisions by the new players, they were further encouraged in the misguided belief of increased competition would benefit the company. The effect being to greater contraction of the market, once dominated by the company, which in turn lead to further closures of outlets and reduced services.

As a further blow to the company, the shareholder took away the right of the company to provide services to the elderly and remote communities in a manner it saw fit and  determined by its customers, this resulted in a further deterioration of the business.

However, despite all of these hurdles put in its way by its own shareholder, the company managed to turn in a performance with good operational profits.

Not to be out done, the shareholder stated that this was irrelevant in the bigger picture as the company had to support the pension rights which far outweighed this achievement. Of course, the shareholder failing to state that the dire situation with the pension was as a direct result of other disastrous actions by the same shareholder.

So in a last throw of the (loaded) dice, the shareholder declares that the only way to survive is to sell a large proportion of the company to the competitors, as they will bring in new know how and investment to modernise the company. Obviously not something the retailer and football executive could do. Could it be that those involved would benefit directly from such a move?

Why would a shareholder so systematically destroy its own asset?  Maybe it was only doing the bidding of another power.

Who are the players in this story? If you have not already guessed, the shareholder is the UK Government and the company is the Post Office or Royal Mail if it can still be called that. The other power? the EU of course.

All is not yet lost, there is still time (barely) to stop this travesty and complete lack of business sense. Why is the British Government intent on handing over control of our national utilities and services such as the Royal Mail to the Germans, French, Dutch etc.?

The answer is because they are powerless to stop it.

Join the Popular Alliance and together we will bring about the change necessary to put some common sense back into the management of the UK.

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