Future of the Post Office under debate

A consultative paper launched by the postal workers' union calls for changes to the Post Office which will allow it freedom from excessive regulation without privatisation. The paper has largely been met with approval from management, which is keen to regain the organisation's position as number one in Europe.

In February, the Communication Workers' Union (CWU) launched a consultative paper aimed at influencing the pre-election commitments of both the Conservative Party and Labour Party. The union, which is firmly against privatisation of the Post Office, has called for legislation to turn it into an independent corporation, with the level of dividends pegged at 40% of post-tax profits. The union feels that its proposals will have equal appeal to all political parties because of the weight of public opinion opposing privatisation.

Post Office management responded by saying that there was a lot of common ground between the union and itself on many points raised in the document, and that it was "pleased that the CWU recognised that the Post Office needs to change if it is to continue to be a successful company".

The scale of the Post Office's operations is enormous:

  • the Royal Mail handles over 18 billion items of mail a year;
  • Parcelforce deals with 140 million parcels in a year;
  • Post Office Counters makes 2.3 billion transactions a year;
  • the Post Office as a whole has an annual turnover of GBP 6.2 billion; and
  • the Post Office as a whole employs some 191,000 staff

The Post Office is one of the public sector success stories but, according to reports in The Times newspaper its success is under attack on two fronts: firstly, from new technology as people turn to other forms of communication; and secondly from overseas competitors. The Post Office was once seen as the best postal service in Europe, but has now been overtaken by networks in the Netherlands and Ireland. Management blames government rules for restricting its abilities to compete and believes that it needs greater commercial freedom to regain its number one position.

While it would seem that both management and the union see the future of the Post Office in terms of freedom from excessive regulation, this may be where their agreement ends. Management has made it clear that it is not in agreement with the union's proposal to restructure the Post Office board to include worker directors, claiming that this had been tried before and did not work.

The two major political parties differ on their approach to the success of the Post Office. For Labour, the continued success of the Post Office while still under state control, would be seen as an ideological victory, while the Conservatives would, more likely than not, be looking to privatise the Post Office as a means of it regaining its former position.

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