Deliver us from the Post Office monopoly: Keith Joseph, who privatised Britain's telephones, argues for introducing competition at the letterbox

Share
Related Topics
IT WAS artful of the Union of Communication Workers to commission Mori to confirm what it hoped: 68 per cent of people questioned are opposed to privatising the Post Office. So am I.

If it had asked more subtle and more accurate questions - such as 'Would you like to see the price of posting a letter cut to 10p?' or 'Do you think it should be a criminal offence to compete with the Royal Mail?' - I am confident the answers would have been more subversive of UCW's instinct to do nothing.

The Post Office management is motivated by different thoughts. They are akin to those of executives in British Gas at the time it was privatised with its monopoly intact. A statutory prohibition on alternative suppliers is a scandal. It can survive only because the Royal Mail enjoys a residual affection in our hearts.

Ministers will wobble and whips will quail at the Mori figures, but the creative political opportunity is to allow competition in letters, just as we did in telephones.

I was told that privatising our telephone service would be impossible, for reasons that now seem risible. The sheer size of BT's assets would give the stock market indigestion. It would be fruitless to denationalise, as a succeeding Labour government would take it over again. Remote communities would be left without phones, as capitalists are noted for their heartlessness.

We held firm to the simple principle that competition has to be better than monopoly. Now I pay tribute to the huge improvement in performance by BT's employees. I cannot judge the electronic wizardry, but in the range of services, price and courtesy, this is barely recognisable as the grumpy, lumbering creature that lay before me in 1979.

The key ingredient in this liberalisation was not the reconstitution of BT as a company with critical shareholders. It was the authorisation of competition. The arrival of Mercury, and now other rivals, brought daylight where there had been technical rhubarb. The old Post Office - telephones were deemed to be postal - had said, for example, that itemised bills were not possible, or too expensive, or unwanted. Mercury proved the opposite.

I fear Michael Heseltine has been advised into a corner over the state's residual monopoly in delivering letters. Fretting about the wisdom of privatising it as a monopoly is an error. Competition ought to be permitted. The fax is already a sort of competition, though not in price.

He will also have been advised that any reform of the antique letter monopoly will need valuable legislative time. My hunch is that the Secretary of State already has the discretionary powers to liberate the letter. At the moment, anyone is free to compete with the Royal Mail, provided they do not charge less than pounds 1. Not surprisingly, no market emerges to compete with the state at five times the price. The Secretary of State could alter the price threshold to, say, 5p.

To recommend this simple reform is not to insult the postal authorities. They seem to have enhanced their efficiency and trading profits. Now they want to be privatised - but with a monopoly, precisely the error committed with British Gas. The parcels market was opened up and the Royal Mail's courier service has flourished without any privileges. People on Bodmin Moor or in Strathnairn still receive deliveries. The same would be true if we had rivalry in letter delivery.

The Department of Trade and Industry searches for a second single competitor. Companies such as TNT are cited as possible Mercury-like challengers to the nationalised giant, but a second carrier with nationwide depots and staff is not the answer.

Direct marketing, unkindly called junk mail, is becoming ever more refined. It represents as large an expenditure as broadcasting and newspaper advertising. In a free postal market, I predict, direct marketing would flourish further, and the advertising industry might evolve a structure of agencies that traded letters between certain communities.

The notion that remote corners of the nation would go unserviced seems foolish. Perhaps Fair Isle or Uist or a cottage near the top of Snowdon would not receive daily deliveries. The nation's milk and newsapers get to almost every doorstep in the kingdom without us needing a royal milk service or a royal newsagent. Mail may be a different kind of service, but my point remains true: Mr Heseltine need only release the magic of competition for us to learn what potential there is.

A 5p post would be a huge boon for our commerce. Larger postal users, such as the banks or insurance companies, would enjoy huge savings. Their silence on the matter is not proof that no reform is needed. No business group ever lobbied to liberate telephones.

If Mr Heseltine feels that I may be omitting an aspect of the story, he could allow a local experiment. The anomaly that Hull's telephones were never part of the Post Office's network was a useful debating point for me. If, say, the Isle of Wight or Anglesey were to reduce the letter threshold to my favoured 5p, we could see what emerged.

Since I had the good fortune to guide telephones into the marketplace, a new force has loomed into politics. The European Commission wants to obliterate postal competition and merge the 12, soon 16, state postal agencies into a single European carrier. The prospect of this tyrannosaur seems to add urgency to breaking the state's ancient monopoly.

Lord Joseph was Secretary of State for Trade and Industry from 1978 to 1981.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Ashdown Group: Senior VMware Platform Engineer - VMware / SAN / Tier3 DC

£45000 - £55000 per annum + benefits: Ashdown Group: Senior VMware Platform En...

Recruitment Genius: Purchasing Assistant

£10000 - £16000 per annum: Recruitment Genius: A distributor of specialist ele...

Recruitment Genius: Sales Ledger Assistant

£17000 - £19000 per annum: Recruitment Genius: A distributor of specialist ele...

Ashdown Group: Automated Tester / Test Analyst - .Net / SQL - Cheshire

£32000 per annum + pension, healthcare & 23 days holiday: Ashdown Group: A gro...

Day In a Page

Read Next
US President Barack Obama and Chinese President Xi Jinping have a drink after agreeing a deal on carbon emissions  

Beijing must face down the perils of being big and powerful – or boom may turn to bust

Peter Popham
Mark Zuckerberg, CEO of Facebook  

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Simon Kelner
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable
Living with Alzheimer's: What is it really like to be diagnosed with early-onset dementia?

What is it like to live with Alzheimer's?

Depicting early-onset Alzheimer's, the film 'Still Alice' had a profound effect on Joy Watson, who lives with the illness. She tells Kate Hilpern how she's coped with the diagnosis
The Internet of Things: Meet the British salesman who gave real-world items a virtual life

Setting in motion the Internet of Things

British salesman Kevin Ashton gave real-world items a virtual life
Election 2015: Latest polling reveals Tories and Labour on course to win the same number of seats - with the SNP holding the balance of power

Election 2015: A dead heat between Mr Bean and Dick Dastardly!

Lord Ashcroft reveals latest polling – and which character voters associate with each leader
Audiences queue up for 'true stories told live' as cult competition The Moth goes global

Cult competition The Moth goes global

The non-profit 'slam storytelling' competition was founded in 1997 by the novelist George Dawes Green and has seen Malcolm Gladwell, Salman Rushdie and Molly Ringwald all take their turn at the mic
Pakistani women come out fighting: A hard-hitting play focuses on female Muslim boxers

Pakistani women come out fighting

Hard-hitting new play 'No Guts, No Heart, No Glory' focuses on female Muslim boxers
Leonora Carrington transcended her stolid background to become an avant garde star

Surreal deal: Leonora Carrington

The artist transcended her stolid background to become an avant garde star
LGBT History Month: Pupils discuss topics from Sappho to same-sex marriage

Education: LGBT History Month

Pupils have been discussing topics from Sappho to same-sex marriage
11 best gel eyeliners

Go bold this season: 11 best gel eyeliners

Use an ink pot eyeliner to go bold on the eyes with this season's feline flicked winged liner
Cricket World Cup 2015: Tournament runs riot to make the event more hit than miss...

Cricket World Cup runs riot to make the event more hit than miss...

The tournament has reached its halfway mark and scores of 300 and amazing catches abound. One thing never changes, though – everyone loves beating England
Katarina Johnson-Thompson: Heptathlete ready to jump at first major title

Katarina Johnson-Thompson: Ready to jump at first major title

After her 2014 was ruined by injury, 21-year-old Briton is leading pentathlete going into this week’s European Indoors. Now she intends to turn form into gold
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot