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

Tuesday, 6 May 2008

Them bloody post offices

There's a new report out about the disaster that has been the opening up of post services to competition.

It is of course the EU that has demanded both that the sector be opened up to competition and that the Royal Mail can no longer be subsidised to the same extent. Now I approve of competition and dislike subsidy but it should be a matter for the UK to decide rather than being handed down in edict from the lofty heights of corruption that exist in the EU.

Quite apart from antiquated working practices, an over strong and stupid union and a massive pension deficit there is one simple reason why the liberalisation would never work as proposed; you cannot have a system where one player has a universal service obligation and the others don't and expect it to work. Its like setting up a Las Vegas fight night and the stabbing one of the competitors in the eye just before they step in the ring.

The Royal Mail needs to be free to charge more for deliveries in the middle of nowhere to reflect their higher costs. If people want to save their local post office through subsidy then let that subsidy be locally collected and paid.

I do fear that even if the above were permitted, the unions will still bring down the Royal Mail and the union member's jobs will go with it. A hard line union in a company stuck in the breech between the public and private sectors will cause immense damage and there is no subsidy in shining armour that is going to save them this time.


John B said...

Yer link's busted.

"you cannot have a system where one player has a universal service obligation and the others don't and expect it to work"

That'll be why BT has gone bankrupt, then?

John B said...

Also, note that the EU has naff-all to do with it - it entirely accepts that governments can subsidise postal networks as much as they like in whatever way they like.

Falco said...

I should have been more precise:

you cannot have a system where one polayer has a universal service obligation that it can only provide at significant cost to itself... etc. etc.

Re the EU stuff, arse, must check things more carefully. I read up and get back to you.