The judgement of Solomon
"Royal Mail's letters business is a conundrum. A state-owned organisation operating in a free market. Charged with making profits but obliged to offer a universal service delivering to 27m addresses six days a week. The competition wants to dig deep into its market share and for a year has had the freedom to do so. Top management wants to open up the share capital to the workforce - a proposal that leaves the government facing a judgment that would stretch Solomon."This is the opening paragraph of a one-page feature on Royal Mail in today's "Guardian" newspaper
posted by Anonymous at 10:55 am
2 Comments:
The Government's response is likely to be a proposal to privatise the Royal Mail. This needs to be fully discussed and carefully evaluated. There are some services that need to take more into account than only simple commercial considerations. Public access to a secure mail collection and delivery service is one of these. If that requires state ownership, so be it.
I think the real point is that Royal Mail is currently being put in a very difficult position. It is being told by Government, which is currently the only shareholder, that it must behave like a commercial, profit orientated business. Albeit a business in a (Postcomm) regulated market. It is then told that it has a social role, as well as a Universal Service Obligation. There is a clear contradiction here. The situation is confused. Royal mail is currently suffering from all the disadvantages of no longer being a state owned, statutory monopoly and not getting any of the advantages of being privatised.
In the meantime the consumer is suffering from the disadvantages of privatisation, particular in the form of Post Office Closures and not getting the benefits of consumer choice and competition promoted better service that a market could bring...
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