SHARES in the privatised Royal Mail are down 2.5% after Ofcom ruled the universal postal service, which obliges the Royal Mail to deliver across the UK for one price, is not under threat, despite the warning from the Chief Executive of the Royal Mail that it was unaffordable.
Ed Richards, chief executive of Ofcom, said: ‘We have concluded that there is no present risk to the financial sustainability of the universal service.’
Last week, Moya Greene, the Royal Mail’s chief executive, told a committee of MPs that the universal service cost £7.2bn a year to finance, so needed cross-subsidy from profitable urban deliveries.
The government-appointed regulator, Ofcom, said there was no reason to change the rules to force Royal Mail’s cutthroat private rivals to take on part of that expensive obligation.
Royal Mail had complained that its competitors were cherry picking profitable areas, which of course is no surprise since this is what privateers are in business to do.
Under the new postal market, rivals can apply for a licence to collect, sort and deliver bulk mail. Some competitors, including Whistl, pay Royal Mail an access fee for it to deliver to customers.
All that the government is prepared to do is to guarantee that the universal service will continue to 2021. However postal workers know well that this guarantee of the government is just as worthless as the government’s repeated guarantees that the NHS is safe in its hands, when it is being ruthlessly privatised.
The regulator has meanwhile begun its review of the factors affecting the Royal Mail’s ability to deliver the universal service, which it will complete next year. It is no surprise that Ofcom’s current position is that the lack of productivity improvement by Royal Mail workers is the cause of Royal Mail’s problems with the universal delivery.
Ofcom’s solution is more competition, to try to use postal workers’ fears that their jobs are no longer secure to drive productivity up!
Ofcom in fact warned: ‘Continued progress on efficiency is crucial if the universal postal service is to be financially sustainable in the longer term.’
Currently Whistl, formerly known as TNT Post, has been making deliveries in urban areas such as London and Manchester since 2012, but relies on Royal Mail to deliver in rural areas, where costs are
The writing is on the wall for postal workers!
Enter the CWU leaders, the same leaders that despite postal workers voting by a massive majority to fight the privatisation of Royal Mail, capitulated and allowed it in.
Yesterday CWU secretary Dave Ward said: ‘The time is now right to begin the process of taking Ofcom to a judicial review for its complete failure to tackle the threat to the sustainability of the universal service obligation head on. We expect Royal Mail to support our call to defend its postal workers.
‘What Ofcom is really saying is that postal workers pay and conditions need to be cut in the name of efficiency. In criticising Royal Mail’s efficiency, Ofcom is preparing the ground for postal workers’ terms and conditions and pay to be dragged down to the level of its competitors.’
The leaders who let privatisation in and then said that the workers could prosper under it, are now calling for the judiciary to be brought onto the scene to save the Royal Mail and workers’ wages and conditions of service, with a judicial review!
They now admit what they denied when they allowed privatisation, that its target was the terms, wages and jobs of their members and the desire to bring in zero hour contracts.
CWU members must tell their leaders that they can stuff their call for a judicial review and that the best thing that they can do for the membership is to resign.
A special conference of the CWU must be called to sack the current leadership, elect a new leadership and to call indefinite strike action to achieve the renationalisation of the Royal Mail. All trade unions and the TUC must be urged to take sympathy action in a general strike. This is the way to defend the Royal Mail.