CWU – Postal regulation crippling Royal Mail (UK)

The Communication Workers Union which represents most postal workers at Royal Mail, has responded to Postcomm’s Strategy Review for further changes to the UK postal market.

The CWU, which has been a consistent critic of the liberalisation of the UK postal market, says that deregulation in the UK was too soon and that Postcomm has put the pursuit of competition ahead of safeguarding the USO.

The union said it was also strongly opposed to any ownership separation of Royal Mail’s activities. The CWU did not agree such separation has been successful in other regulated industries and did not see a need for greater accounting transparency and that moves to split Royal Mail should not be at the expense of an efficient and integrated Royal Mail.

It accused Postcomm of misjudging the postal market and that current declining mail volumes were not predicted in the last Price Control, resulting in significantly lower than anticipated profit levels. On downstream access, the CWU said that volumes had grown faster than forecast leaving Royal Mail struggling financially and calling for a reduction in the scope of the USO and an increase in stamp prices. It said that cost-reflective pricing measures had become necessary, resulting in requests for unpopular and divisive pricing structures such as zonal pricing. It called for a wider debate about the kind of postal service customers want before such measures are imposed.

The CWU was highly critical of Postcomm’s proposed erosion of the minimum standards required of new entrants under the licensing framework, saying it would leave customers with insufficient protections in place. The union called on the introduction of a mandatory publication of directly comparable performance data introduced as a licence condition for all postal operators, saying it would address the current unequal treatment of Royal Mail in terms of the monitoring of standards and enable customers to make informed choices in the market.

The Communication Workers Union which represents most postal workers at Royal Mail, has responded to Postcomm’s Strategy Review for further changes to the UK postal market.

The CWU, which has been a consistent critic of the liberalisation of the UK postal market, says that deregulation in the UK was too soon and that Postcomm has put the pursuit of competition ahead of safeguarding the USO.

The union said it was also strongly opposed to any ownership separation of Royal Mail’s activities. The CWU did not agree such separation has been successful in other regulated industries and did not see a need for greater accounting transparency and that moves to split Royal Mail should not be at the expense of an efficient and integrated Royal Mail.

It accused Postcomm of misjudging the postal market and that current declining mail volumes were not predicted in the last Price Control, resulting in significantly lower than anticipated profit levels. On downstream access, the CWU said that volumes had grown faster than forecast leaving Royal Mail struggling financially and calling for a reduction in the scope of the USO and an increase in stamp prices. It said that cost-reflective pricing measures had become necessary, resulting in requests for unpopular and divisive pricing structures such as zonal pricing. It called for a wider debate about the kind of postal service customers want before such measures are imposed.

The CWU was highly critical of Postcomm’s proposed erosion of the minimum standards required of new entrants under the licensing framework, saying it would leave customers with insufficient protections in place. The union called on the introduction of a mandatory publication of directly comparable performance data introduced as a licence condition for all postal operators, saying it would address the current unequal treatment of Royal Mail in terms of the monitoring of standards and enable customers to make informed choices in the market.

“Postcomm’s regulation has left Royal Mail in a worse than anticipated financial state which cannot be remedied by cost-cutting alone. It is essential that Royal Mail is able to generate sufficient revenue to safeguard the USO and make the level of investment it needs going forward. This needs to be addressed through Postcomm’s interim review, the forthcoming price control, and most importantly through a full and proper parliamentary review of the impact of competition to date.” it said.