Saturday, 24 August 2013

Holiday Weekend Not a Red Letter Day For Many Consumers

The news today about strikes planned for the Bank Holiday weekend from the Royal Mail causes mixed reaction from the press and the general public. The disputes are linked to possible closures of Crown Post Office services which make up about 3% of the Post Office services and deal with around one fifth of its customers. The Royal Mail cites their 37 million pound loss as the reason they are looking for job reductions of up to one and a half thousand people, along with staff having to accept a three year pay freeze. Union officials speaking on behalf of PO staff say that over 80% are in favour of strike action, which could be long term, leading up until the Christmas period. This is in reaction to the Royal Mail plans to potentially close post offices or to franchise them in partnership with retailing organisations.

The original Royal Male service

With the decline in “snail mail” and the increasing use of electronic messaging, and private courier services for deliveries, it has been a challenging time for the Royal Mail, who came into being as a service established by King Henry VIII in 1516. No doubt with the number of wives he matched and dispatched over the years, the Master of Posts was kept very busy with wedding invitations and condolence cards.

Nowadays this government owned postal service is due to go the way of many of our public amenities and be floated on the London Stock Exchange. The Royal Mail’s chief executive, Moira Green, has endorsed Business Secretary Vince Cable in this decision to sell off the Royal Mail by stating that the public will, in her words, “be able to invest in a great British institution.”

The £1 stamp?

Funnily enough that’s what we have been doing surely over the years as we have paid our taxes to the government? Then there is the possible increase in price of stamps. Under the Postal Services Act 2011, the Royal Mail is the unique service provider of stamps in the UK and has VAT exemption on the sale of these items. This exemption will remain regardless of whether the Royal Mail is in private or public ownership, however there is a good chance that private delivery companies will challenge this ruling. If this is the case and 20% VAT is added to stamps, a first class stamp will cost 72 pence. Those who are lobbying against privatisation are mooting an additional 30% increase if this goes through, leading to a £1 stamp in the next few years.

Rural post offices and posties can be a lifeline for rural communities and for those who are housebound, they also can be a customer service nightmare with missed or late deliveries and counter staff with all the charm and people skills of Basil Fawlty. However, they have been around for a very long time and for the most part do carry out an excellent service. Selling them off like the family silver is not a long term solution although disrupting services to their customers with strike action may also tarnish their reputation. Privatisation or public ownership – post your views on line today.


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