Azara Blog: UK postal service delivery monopoly broken

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Date published: 2006/01/01

The BBC says:

A new era in UK postal deliveries has come into effect with the end of the Royal Mail's 350-year monopoly.

For the first time since the reign of Charles II, rival firms are able to collect, sort and deliver mail.

Yet, households are unlikely to see any change for quite some time, as the 14 new providers are likely to stick to the lucrative business mail sector.

The Royal Mail will be the only firm that has to provide a service for every address in the UK.

The main postal union, the Communication Workers Union (CWU), has opposed the opening up of the mail market, saying it risks the future of the universal mail provision.

It points to the fact that the Royal Mail currently uses the profitable business delivery sector - in which it is now going to inevitably lose market share - to subsidise the loss-making domestic postal service.

State-owned Royal Mail currently loses 5 pence for every first-class letter delivered and 8p for every second-class letter.

Yet postal regulator Postcomm says competition in the UK market will give customers choice and create a more efficient and reliable service.

Watchdog Postwatch has also backed the change.

For once a trade union is not speaking total rubbish. This move indeed threatens universal mail provision (i.e. mail at the same price for everyone). But that is no doubt what the economists who promoted this change want. (Perhaps the same geniuses who promoted the competition and hence screw-up of directory enquiries.) So the Tory New Labour government is destroying a postal service which is now reasonably good and reasonably cheap. In future we can pretty much guarantee it will be reasonably bad and reasonably expensive.

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