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Natural Monopoly

Ramses II

The usual excuse that is reeled out every time anyone brings up the idea of privatisation is the huge £10 billion pension deficit which the company has run up in the last 20 years or so. But no private sector company will take this on. So in order to create an incentive to the private sector, the government will have to agree to fund it. Whether the Royal Mail is in the public sector or the private sector, the pensions deficit will remain a public liability.

From the LRB blog.

Read the rest of the article here.

  1. September 24, 2010 at 4:50 pm

    For the last ten years since moving on from Royal mail I have watched it mis-managed into the disasterous state it now is in. From Global leader to third world shame of a service. It has borrowed to invest heavily into letter sorting machines -an area of the market in fierce decline. It has shut callers offices and split parcels from packets ( what an arbitary distinction and added a third to their delivery costs) and done nothing significant to restructure it’s operations to take advantage of the growth in this sector ( a couple of trolleys with wheels for PMN!!honest). It took a long company pension break and then used the pensions deficet to manipulate the annual accounts to tell what ever story it wanted at the time whilst ensuring an obscene pay packet for the top manager. It has turned its own people into the enemy for it to take on and cheated it’s service standards by the manipulation of its “indipendant” measurement scheme. It makes me want to cry and scream in equal measure.
    I was twenty years with Royal mail at middle to senior level and left due to terminal frustration at it’s inabilty to tackle the issues .For the last ten I’ve been with other companies in this sector internationally and in the UK. It is a growing and exciting industry part of a rapidly expanding world communication business. It should be good news not bad! The latest Royal Mail “trick” is to penalise packet posters and force them through pricing into letter box size items ( pricing in proportion ) . Forcing customers into their current operation is easier than changing it!This encourages customers to give the shrinking letter items to Royal Mail and packets to the competition. Royal Mail say “this reflects our costs base” . I say change your costs base ask your customers what they want and invest in the growing products not the old world letter market it’s not difficult! and by the way blaming the union for everything is the last refuge of poor management.

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