Pressure group report attacks Royal Mail privatisation

[TrueBlueTerrier]

http://www.guardian.co.uk/politics/blog ... royal-mail" onclick="window.open(this.href);return false;

In politics, winning the argument matters. Often it is impossible to determine exactly who has won the argument, but MPs do look at the evidence and they do change their minds. Which is why Case Not Made (pdf), a report from the leftwing pressure group Compass, could be significant. Lord Mandelson is justifying his plans for the partial privatisation of the Royal Mail entirely on the findings of the 167-page Hooper report published in December. In Case Not Made, Compass tries to show that Hooper was wrong.

In his introduction, Neal Lawson, the chair of Compass, says:

Royal Mail is simply not the failed and failing organisation portrayed in the Hooper report. Furthermore, the European comparators [Richard] Hooper uses, most notably Germany and the Netherlands, are not the shining examples of efficiency he claims. The German system is profitable because it charges its customers more, not because it is more efficient. The Dutch system derives its "efficiency" on the basis of an operation in a small, flat country. Our Royal Mail is not just the lowest priced service in the EU but is also still profitable.

Case Not Made claims that:

• 88% of Royal Mail revenues are from activities that are price-controlled. The equivalent figure for Deutsche Post (DP), its German counterpart, is just 37%

• The UK has 6% more post boxes than Germany (115,000 instead of 109,000), despite having a population that is 25% smaller

• Many European postal services only deliver five days a week, not six

• The Royal Mail delivers 153 items per employee, the same as its Dutch counterpart TNT. DP manages 187 items per employee

• The cost to the Royal Mail of delivery is 27p per item. The equivalent figure for DP is 40p and TNT 43p.

Commenting on Case Not Made, the Labour MP John Grogan said: "This critique of the Hooper report will alarm all Labour MPs. There are clearly no grounds for the part-privatisation of Royal Mail. We need a dynamic alternative but within the public sector."

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Whole report by Compass available at http://www.royalmailchat.co.uk/communit ... 36&t=14702" onclick="window.open(this.href);return false;

[BELIAL]

Ah I get it, you get to be 40% more efficient by charging 40% more. If only we knew that sooner

[ajohnstone]

Lo and behold here is another document that totally disagrees with the government and the and offers a whole variety of other statistics

http://clients.squareeye.com/uploads/co ... OTMADE.pdf

to quote "...the central error in Hooper’s report is that he confuses efficiency with profitability.
It is taken as self evident that Deutsche Post is more efficient that Royal Mail, just because DP is more profitable. In fact, Deutsche Post has an entirely different business model, whereas Royal Mail is overwhelmingly a postal service provider, Deutsche Post is much more diverse. Deutsche Post’s mail division accounts for only 24% of group revenues and 32% of employees and Germany accounts for just 39% of group revenues and 41% of employees.In contrast, Royal Mail generates 73% of revenue from mail, and 83% of employees are involved with the mail service with only 7% employees and 13% revenues outside the UK. The postal prices of both Deutsche Post and Royal Mail are regulated, but 88% of Royal Mail’s income is price controlled, while only 37% of Deutsche Post’s are. And mail services in Germany are considerable more expensive than in the UK. Royal Mail could easily be more profitable, and plug its pensions deficit by increasing its prices to European average levels. ...it should be noted that it is government driven price regulation that reduces Royal Mail profitability, not any weakness in the public service ethos itself.
The Hooper report’s own evidence show Royal Mail to be the cheapest mail service in Europe.

Indeed Royal Mail’s own submission to Hooper showed that it achieved all its efficiency goals in the reporting period ending in 2007, but nevertheless profits were reduced by £807 million due to the price regulator refusing a price increase that Royal Mail believed necessary. Royal Mail provides a more comprehensive service that Deutsche Post. Royal Mail handles about 25 billion items per year compared with 20 billion for Deutsche Post’s domestic network, despite Germany’s population being 25% larger. The UK provides 6% more post boxes (115k vs 109k) than Germany despite a very similar population density, and Germany being a bigger country. The overall cost of the UK domestic postal service as a percentage of GDP compares favourably when compared with the Netherlands and particularly with Germany. It delivers 50% more mail per capita than Germany for 10% less GDP and provides a more extensive collection network. The Netherlands is slightly cheaper than the UK but that is to be expected because its population density and smaller size should make it inherently less costly to servewhere we have the wilds of Wales and the Scottish Highlands and Islands to deliver to .

So Royal Mail handles more post, collects at more places, has lower prices and is profitable

Hooper also claims that there are efficiency saving possible by reducing the number of sorting offices by about 50%. But this is not based upon any sensible assessment of the current efficiency of the existing sorting offices. Germany did reduce its sorting offices from 328 to 83 on privatisation France 100 to 45, but Royal Mail only has 69 ( so far ) Mail Centres, and given the heavier load of post in the UK, this suggests they are already at least as efficient as Deutsche Post

The Hooper report misunderstands a mention in Royal Mail’s 2006/2007 annual report that it is 40% less efficient than its competitors. Hooper thinks this means compared to other European providers with obligations to universal service and legacy infrastructure issues. But Royal Mail was comparing itself to high-tech start up companies within the UK that have started to cherry pick and compete only with the most profitable parts of the postal service, and have no obligation to universal service.
The Federal government in Germany has brought in a minimum wage for all postal workers to protect Deutsche Post from unfair competition and other compnies under-cutting them by paying lower pay
TNT is now bidding for a 30% stake in the Royal Mail, announced quarterly financial results show operating profits down by over one-third.Billy Hayes, points out “These poor financial results give the lie to their touted expertise and undermine their position as a competent network provider and serious candidate to ‘coach’ the Royal Mail,” conclusions

The German system is profitable because it charges its customers more not because it is more efficient. The Dutch systemderives its‘efficiency’on the basis of an operation in a small flat country. Royal Mail is not just the lowest priced service in the EU but is also still profitable.

It is simply not possible to conclude from Hooper report that Royal Mail is either

employing too much labour or paying their labour too much. Items delivered per employee RM 153 at 27p price per item ,DP 187, at 38p per item TNT , 153items per employee at 40p price RM requires £270m a yr to fund the pension For those of a conspiratorial mind , is it not a coicidence that the man pushing for privatization is twice disgraced , non-elected , ex EU commissioner and that the EU is The EU is entering the final stages of a 15-year process to open up its postal services to competition,31 Dec. 2010: Deadline for member states to abolish existing legal monopolies on postal services http://www.euractiv.com/en/transport/po ... cle-161377" onclick="window.open(this.href);return false; where i read that Crozier has stated that Royal Mail’s workforce was now “happier, better paid and more efficient”. - Who does he mean ???

[BELIAL]

Thanks for that, cracking stuff. Certainly exposes a lot of the parasites "half truths". Now if only Billy could remember it all

[shizsco]

should send this to all MPs who have not supported EDM 428 it might change their mind

[borders]

great article , i think we should print some off and give them out at work etc. i also think its a red herring to think Hooper and the Government misunderstands , they understand , its a stitch up job pure and simple . they have set us up to fail, so they can over time fully privatise us and run off with the proceeds , thats what Capitalism does.

[TrueBlueTerrier]

COMPASS DOCUMENT AVAILABLE ON RMC AT http://www.royalmailchat.co.uk/communit ... 36&t=14702" onclick="window.open(this.href);return false;