Post Office Should Be Privatized
As the dispute between the Communication Workers' Union and Royal Mail continues, the future of the Post Office has never looked so bleak.
The government is committed to opening up Royal Mail to open competition in line with EU law and the Conservatives have announced that they will privatise the Post Office if they win next year's general election.
So, is privatisation now inevitable? Would it solve the ever growing list of problems facing Royal Mail or is the Post Office, a long established and cherished British institution too big to fail?
You can also add to the debate by leaving a comment at the end of the page.
The Post Office is inefficient
The Royal Mail, in its current form, is a failing organisation, which doesn't match the standards set by its European equivalents
The survival of the Post Office is more in the interest of private companies than the general public
Nowadays, only 14 per cent of letters are personal correspondence - the rest is mail sent by businesses, much of it junk. So the Royal Mail is no longer primarily a service run for the public - it's a company used by private businesses and subsidised by the taxpayer. The ideological argument for keeping the Royal Mail state-run is therefore a false one.
While only a small proportion of mail is personal correspondence the service that Royal Mail provides cannot be seen as merely a wasteful, taxpayer-subsidised, business-orientated enterprise. The universal service which guarentees delivery to every address in the UK across six days a week, some 36 million delivery points, sets it apart from potential competitors and means that serving public interest is still a primary function of the company. Though investment and revenue are serious concerns and Royal Mail is ever more reliant on commercial business partners for financial security, this is a problem which will burden whoever takes over.
Already the Post Office is made to compete for business such as TV Licencing and welfare payments like it would in the private sector. However it is shackled by the fact that it can't rearrange its business structure or raise money privately due to Government ownership. It has been given the downside of the private sector without the benefits and the time has now come to set it free.
The Royal Mail is an essential pillar of public life
The Royal Mail is a national institution with a history dating back to 1516, and still the only affordable way by which people can send letters. Even Margaret Thatcher resisted privatising it. It would be wrong to sell off part of our heritage.
If the government can save the banks, why not the Post Office?
A government that has allocated billions to effectively nationalising a great chunk of the banking system should be able to find a fraction of that sum to keep hold of the Royal Mail.
The decision to nationalise the banks was a reactive measure aimed at facilitating short-term financial security over long-term security interests. As such it is a move that will inevitably be unravelled once medium-term prosperity and faith is restored to the economy and should not be considered as a model upon which to base decisions on other institutions.
Though the money involved is of course a small percentage of that used to stabilise banking, the principle of the government over-writing a failing and under-performing structure within the framework of the country is a dangerous precedent and one which should be avoided.
competition between post offices would be unfair to the public
The problem with privitisation is that private companies will always seek to make profit. As businesses do use the post services the most, these will be the most profitable areas to work in. Therefore, private companies will operate in those highly populated city areas. This is where they will make the most profit. However, this would leave rural populations at a loss. No private company would wish to operate in such areas as they would yield so little profit and could even generate a loss. Therefore these rural areas would be even more disconnected from the rest of the country as they would not have a postal service. We need to keep the Post Office as a public institution in order to give rural people the same level of postal services as the rest of the population.
The competition battle is already being lost. Companies who use the post as part of their business model are already choosing other providers. For example Amazon uses other delivery agents more extensively than before. The "cherry picking" of profitable clients has already begun. Rural areas can still be protected in a privatised system by legislating for this to happen in the way that utilities are regulated. As for individual Post Offices competing against each other, the network has be cut back so extensively in the last 10 years that there is a big distance between each outlet.
What do you think?