Addressing wrong issue at Post Office

Addressing wrong issue at Post Office;Comment;Opinion
From THE TIMES, April 12th, 2001
Patience Wheatcroft

RARELY has the Post Office moved so fast. If only it could make all its deliveries with the speed at which it has issued its new regulator with a request for a price rise.

Consignia, the Post Office’s newly named holding company, claims it wants the extra revenue, which could be about Pounds 280 million over the next 18 months, to pump into investment to improve delivery standards.

Improving deliveries is a laudable goal, considering they have been steadily sliding to below even the internal targets set by the organisation.

But money will not provide the remedy when the majority of problems are caused by terrible industrial relations. Last year 60,000 days were lost through strikes, treble the number of the previous year, giving the Post Office the unenviable claim to half of all the strikes in the UK.

Before Christmas the Post Office made a somewhat desperate attempt to blame its poor delivery on rail problems, although only 20 per cent of mail goes by train. Perhaps a condition of the rise should be that a proportion is donated to Railtrack.

Consignia will find it a tough job to convince the regulator of the need for a price increase. The hasty application was not well-received by the watchdog, who has vowed to bring in competitors to challenge the state-owned plc. The regulator had hoped not to see such a request for about two years, believing a price rise is justifiable only under exceptional circumstances such as a leap in inflation. After all, the purpose of exposing large monopolies to competition and regulation is to bring prices down rather than increase them.

The prospect of a spat over postal pricing cannot be top of the Government’s list either. It had only narrowly averted complete chaos ahead of awarding the operating licence when the regulator had been threatened with judicial review both by the Post Office and by the consumers’ group.

Postwatch, the consumers’ body, is a feisty organisation led by Peter Carr, the former head of Debenhams, who makes no secret of his disdain for the Post Office’s woeful neglect of its retail opportunities.

The Government has recently moved to address this point, appointing Allan Leighton, the chairman of Bhs, to the board. His arrival may raise a few hackles among Consignia colleagues, including chairman Neville Bain. But Post Office managers have had too easy a time from their Government in recent years, partly because the minister responsible, who was a postal worker and a union leader, views them as less awful than their predecessors. More such changes rather than price rises could deliver better services.

(c) Times Newspapers Ltd, 2001

THE TIMES, 12th April 2001