Libertarian meat eater, right wing in the sense of conservative with a small c.

Tuesday, 11 September 2007

Some people never learn to count

It's been a sad decline for the Royal Mail/Post Office/Silly Made Up Name they had for about 5 minutes and they are now up the legendary creek sans motive device.

Being opened up to competition across the board, including the lucrative bulk mail market, was always going to be a painful process for the RM. They do have the massive advantage of having almost all the market:

"During the 2005-06 accounting year, Royal Mail retained a 97% market share in the regulated addressed letters market."

However they also have two millstones round their necks. The first is the requirement to provide a universal postal service with none of that evil capitalist charging more if the destination is in the middle of nowhere. The second is,
of course, the Communication Workers' Union (CWU) who have decided that will probably be going on strike again. You can have a certain amount of sympathy for them, the prospect of losing your job is not a happy one but they fail to grasp how their situation has changed. While the RM is owned by the Government it is not part of it, it is a business in it's own right and unlike the Civil Service massively underfunded pension schemes are not an option for it.

It is ironic that if the CWU succeed in making the RM give in to their demands then they will sow the seeds of their own destruction. The RM will eventually go bust if they win, that would require either a Government bail out, (followed by the Government being taken to Court by the EU Competition Commissioner), or being sold to a private concern. The first is unlikely and temporary at best, the second will only happen if it is sold without the handicap of universal delivery and only someone with the resources to completely neuter the CWU would take it on.

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