"39p to send letter in new post regime" say Communications Managers Association
The Communication Managers Association (CMA) section of Amicus, the union for 15,000 managers and professionals in Consignia, today (Monday) says that Postcomm’s competition proposals will be disastrous for Britain’s postal services.
In its response to the Postcomm proposals, the CMA fears that the introduction of competition and levying of VAT on postal services could lead to an increase in first class stamp price to 39p. The CMA also fears that the continuation of the universal service that currently exists with uniform pricing will be shattered by the proposals. Peter Skyte, Amicus National Secretary CMA said “We are not opposed to the introduction of competition in postal services, but the proposals by Postcomm as currently envisaged represent a half-baked dog’s breakfast based on back of envelope calculations untried and untested anywhere else in the world.
The CMA is not opposed to the introduction of competition within the UK’s postal services, but the CMA are concerned that, Postcomm has underestimated key points of its proposals. These include, Postcomm’s estimate of first phase access to the market are far too low. The CMA calculate that the market will be opened up by over 50% by volume and 40% by revenue as opposed to the 40% and 30% which are in Postcomms proposals.
Also with the possibility of VAT being levied on price and taking Sweden’s experience into account the CMA have calculated that first Class Stamp prices could rocket to as much as 39p per letter as opposed to the 27p that is currently charged.
Roger Lyons General Secretary Amicus said: “Competition in the postal services is a delicate balancing act that if implemented we want to see carried through taking the views of all interested parties into account. The current Postcomm proposals are seriously flawed, we fear that rocketing prices and poorer services in less profitable markets will be the legacy of these proposals.
EUR€I want to see Postcomm taking a step back from its proposals in order to prevent the chaos and failure of other privatisation’s also inflicting Consignia’s ability to compete in the future.EUR€
Notes to Editors:
Key points in the CMA Response to Postcomm’s Proposals for Promoting Effective Competition in UK Postal Services include:
– Competition, gradual, measured and controlled must ensure benefits to all users – small and large, rural and urban, private consumer and business customer and should be by way of phased reduction in weight and price limits as in the European Directive not market led licensing, by product, customer group or area and by third party access to the public universal postal network
– Postcomm has misinterpreted its statutory duty and put at risk the universal service at a geographically uniform price in the way it is introducing competition
– Inaccurate assumptions by Postcomm will lead to far greater opening of the market than envisaged in the first phase. We calculate that over 50% of the market by volume and 40% by revenue will be opened up by the proposals rather than the 40% and 30% as calculated by the regulator.
– There will be a shift in pricing from big business to private residential consumer and small business users (‘rebalancing the tariff’) due to the primacy of the large business user
– Stamp prices will increase through rebalancing of the tariff and possible levying of VAT. If similar to Sweden this could lead to a 39p first class stamp in the UK (currently 27p)
– Proposals for third parties to send bulk mail for final delivery by Consignia (‘consolidation’) will lead to complex and expensive contractual arrangements between companies with compensation for service failures, raising the likelihood of buck passing similar to the rail industry taking place as parties try to offload responsibility
– Export of profit overseas by companies such as Deutsche Post and TPG (Dutch Post Office) entering the UK market with reduced opportunities for Consig
