Universal postal service could be dropped by privatised RM

[Stormproof]

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Universal postal service could be dropped by privatised Royal Mail if it becomes too costly
Royal Mail could be allowed to drop its guarantee to deliver post anywhere in the UK six days a week if it becomes too costly, the Government has admitted.


By Christopher Hope, Whitehall Editor
Published: 7:00AM BST 30 Oct 2010
Royal Mail
The "universal service obligation" ensures that the post is delivered to every home in the UK, for one price, six days a week Photo: ALAMY

The “universal service obligation” ensures that the post is delivered to every home in the UK, for one price, six days a week.

However, under the Government’s plans to privatise Royal Mail published this week, this guarantee can be reviewed and scaled back if the cost of meeting it becomes too great.


Critics suggested this could mean the creation of a two-tier postal service, with rural deliveries made only three times a week to save money.

Royal Mail has lost hundreds of millions over the past three years meeting the universal guarantee, because of a sharp decline in the number of letters and parcels.

Analysis of clauses in the Postal Services Bill show that the regulator will have a new duty to decide whether the universal guarantee places an “unfair” burden on Royal Mail.

If this is the case, it can carry out a review of the terms of the universal obligation, including the guarantee to deliver six days a week, anywhere in the UK.

The Bill also says Ofcom can “from time to time review” the extent to which the terms of the universal service provision “reflect the reasonable needs of the users of postal services provided in the United Kingdom”.

Any changes to the frequency of deliveries would have to be approved by the Business Secretary and MPs.

Other measures to guarantee the universal service would be asking other postal operators to pay for it, and establishing a special administrator to protect it if Royal Mail entered “insolvency proceedings”.

The changes were brought in to provide additional safeguards to protect the universal postal service, amid concerns that new European Union laws could lead to it being eroded.

Earlier this week Business secretary Vince Cable told MPs in the Commons: “This Bill will maintain the universal postal service at its current level.

“That means six days a week delivery and collection at uniform, affordable prices. I would like to reassure the House that have no intention of downgrading this service.”

However, Billy Hayes, general secretary of the Communciation Workers Union which is campaigning against the plans, said: “Vince Cable’s claim that universal postal services will be ‘gold plated’ is complete rubbish.

“His legislation allows the universal service to be split up, pared back and sets the framework for a two-tier system where rural Britain becomes a second class citizen.”

A Department for Business spokesman said: “This clause is a failsafe - a last possible resort. The action we are taking in the Postal Services Bill is to prevent this sort of scenario ever arising in the future.

“It is still subject to the important safeguards we have put in place - no changes could be proposed without Ofcom undertaking a review of consumer needs.

“Any change to reduce the service requirements would be subject to a vote in Parliament; and the same price, same service everywhere principle would have to remain whatever happened.”

[DirtyHarry]

There is only one way to look at this logically.
Nobody, but nobody, is going to buy Royal Mail if it means they will be continually losing money hand over fist.
The USO, no matter what Cable, or anyone else says, will be doomed the very second the sale is concluded.
The private sector is all about maximising profit, and there is no profit to maximise in providing a service under the current terms of the USO.

Vince Cable is either a bare-faced liar, or a typical British businessman, with all the lack of any business acumen that the majority of British businessmen possess these days.

As with our utilities, household names like Cadbury, the Royal Mail will end up in foreign hands, not because as Cable says, "we're not a nationalistic government," to be fair we haven't had a "nationalistic" government in Britain for Donkey's years, and by God does it show, but because when it all comes down to the nitty-gritty, British businessmen are absolutely hopeless at running a major business, I dunno why that is, but there you have it.

[borders]

the truth is coming out and like many on here have said , the public and the workers terms and conditions are going to pay for this .

[Broxi51]

Good article. Just remains to be seen if Hayes can bring more attention to the demise of the USO under a privatised RM

[Wessex]

the truth is coming out and like many on here have said , the public and the workers terms and conditions are going to pay for this .

The truth appears to be finally emerging but will we get our say ? At last ,after how many years the penny is beginning to drop for our so-called financial journalists or is it because Royal Mail propaganda dept has told them some of the truth.My concern is how well will Billy Hayes put the message across bearing in mind the CWU have seemingly missed the importance of DSA in past campaigns.

[Wessex]

Help, I have just re-read the article we have no need to worry about anything , it was a worst case scenario for the purposes of the Bill .It could never actually happen because ..."no changes could be proposed without Ofcom undertaking a review of consumer needs.Oh well nothing to worry about then grrr..

[ziko]

Analysis of clauses in the Postal Services Bill show that the regulator will have a new duty to decide whether the universal guarantee places an “unfair” burden on Royal Mail.

Beautiful! An ''unfair burden on royal mail, What of Down Stream Access ? DSA is a fair burden then ? Come on for f***s sake!!!!!!!!!!!!!!!!!!!!

[Wessex]

Analysis of clauses in the Postal Services Bill show that the regulator will have a new duty to decide whether the universal guarantee places an “unfair” burden on Royal Mail.

Beautiful! An ''unfair burden on royal mail, What of Down Stream Access ? DSA is a fair burden then ? Come on for f***s sake!!!!!!!!!!!!!!!!!!!!

No wonder the regulator is going to be hidden away within Ofcom, because under postcon they have fouled up Royally and might just be found out, re leech mail, if our dimwit MP's ,TV experts and journalists spot the deliberate mistake.

[Wessex]

Analysis of clauses in the Postal Services Bill show that the regulator will have a new duty to decide whether the universal guarantee places an “unfair” burden on Royal Mail.

Beautiful! An ''unfair burden on royal mail, What of Down Stream Access ? DSA is a fair burden then ? Come on for f***s sake!!!!!!!!!!!!!!!!!!!!

No wonder the regulator is going to be hidden away within Ofcom, because under postcon they have fouled up Royally and might just be found out, re leech mail, if our dimwit MP's ,TV experts and journalists spot the deliberate mistake.

It could be argued that measures put in place were used with the deliberate aim of a rapid privatisation ,which hasnt happened.Privatisation hasn't happened but the regulation has remained in place eating inexorably into public RM's ability to maintain the USO

[walksyo]

Analysis of clauses in the Postal Services Bill show that the regulator will have a new duty to decide whether the universal guarantee places an “unfair” burden on Royal Mail.

Beautiful! An ''unfair burden on royal mail, What of Down Stream Access ? DSA is a fair burden then ? Come on for f***s sake!!!!!!!!!!!!!!!!!!!!

No wonder the regulator is going to be hidden away within Ofcom, because under postcon they have fouled up Royally and might just be found out, re leech mail, if our dimwit MP's ,TV experts and journalists spot the deliberate mistake.

talking of DSA i read today the the DSA has increased by 20%....
How can mail volumes be falling if there now stating a 20% increase in this unfair service we "have" to provide...nice 1 postcom!!

[Wessex]

Analysis of clauses in the Postal Services Bill show that the regulator will have a new duty to decide whether the universal guarantee places an “unfair” burden on Royal Mail.

Beautiful! An ''unfair burden on royal mail, What of Down Stream Access ? DSA is a fair burden then ? Come on for f***s sake!!!!!!!!!!!!!!!!!!!!

No wonder the regulator is going to be hidden away within Ofcom, because under postcon they have fouled up Royally and might just be found out, re leech mail, if our dimwit MP's ,TV experts and journalists spot the deliberate mistake.

talking of DSA i read today the the DSA has increased by 20%....
How can mail volumes be falling if there now stating a 20% increase in this unfair service we "have" to provide...nice 1 postcom!!

I must confess to wondering how sustainable the business would be .I had noticed an increase as a ratio of dsa to ours over the past few months.RM estimate 2 out of every 3 will be dsa and it will reach 9 billion items per annum by the end of this year !!!so you are right there is no decline in the leech mail sector.Bear in mind that we lose 2.5p on each item and you can work out how much we lose on this.I think you should also factor in our lost profit potential which if I am not mistaken would equate to half a billion that could be going to the public purse every year or to the real pay rise that I should have had or reducing the pension deficit etc etc

[BELIAL]

the truth is coming out and like many on here have said , the public and the workers terms and conditions are going to pay for this .

The truth appears to be finally emerging but will we get our say ? At last ,after how many years the penny is beginning to drop for our so-called financial journalists .

No you won't get a say; financial "journalists" won't get a say; the CWU won't get a say. For the fat cat mafia millionaires all these things are irrelevant . New technology renders a workforce redundant, new technology means you can obliterate an opponent without the need for a standing army. 99% of you are now surplus to requirements and what's more ,resources are finite and the present rate of consumption is unsustainable. Why should we waste valuable materials on feckless unproductive profligate undeserving inferiors? You know its coming

[Wessex]

the truth is coming out and like many on here have said , the public and the workers terms and conditions are going to pay for this .

The truth appears to be finally emerging but will we get our say ? At last ,after how many years the penny is beginning to drop for our so-called financial journalists .

No you won't get a say; financial "journalists" won't get a say; the CWU won't get a say. For the fat cat mafia millionaires all these things are irrelevant . New technology renders a workforce redundant, new technology means you can obliterate an opponent without the need for a standing army. 99% of you are now surplus to requirements and what's more ,resources are finite and the present rate of consumption is unsustainable. Why should we waste valuable materials on feckless unproductive profligate undeserving inferiors? You know its coming

Looks like we're on the eve of destruction .

[BELIAL]

Barry McGuire told me so Always preferred "Come Away Melinda"