Stephen Foley: A first-class idea to reform a second-class service

 

How much?! The price of a second-class stamp could soar by about half, to 55p, under rules proposed by the Royal Mail's nice new regulator, Ofcom. As for a first-class stamp, don't even ask. There will be no limit at all to what the Mail can charge. Shocked headlines proclaimed that we will see the biggest rise in stamp prices in 171 years.

This is the price of dragging the Royal Mail into the 21st century, fulfilling the exacting mandates of this year's Postal Services Act, including the commitment to a six-day delivery, while at the same time fattening itself up for privatisation.

We learnt from the Office for National Statistics yesterday that £1 out of every £10 spent in Britain is now spent online, and the soaring volumes of parcels sent out by the likes of Amazon ought to have provided a big new opportunity for the Mail. It needs to invest in automation and in wooing bulk senders with deals on price, if it is to claw back market share from rivals. And so it is the senders of boring old letters who must pay for that now.

That the Mail should be in such a parlous financial state, after four consecutive years of negative cash flow, is testimony to years of underinvestment, bad management, poor regulation and cowardice when it comes to the need to make the place more efficient, sure, but you cannot ignore the onerous nature of its public-service functions. There is no mystery in the decline in postal volumes: the internet has rendered traditional mail a snail. The Royal Mail is in financial difficulty, first and foremost, because we use it less, and we use it less because we need it less.

Think about it. How much time-sensitive mail do you really get? Is there anything on the mat on a Saturday that cannot wait until Monday? The Postal Services Act enshrines the six-day delivery into law; stamp buyers may come to rue that it does.

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