Wednesday, 22 August 2018

Royal Mail

Let’s start by being clear that this isn’t a tabloid article or blog about William or Harry. We’re talking letters and parcels.
And, to reinforce that, why not a relevant quiz question next?
Which government minister led the privatisation of the Royal Mail? Was it
  1. Labour’s Peter Mandelson, or
  2. Conservative Michael Fallon, or
  3. Liberal Democrat Vince Cable, or
  4. UKIP’s Nigel Farage?
Still thinking? Let’s make it a little easier.
We can exclude d) Nigel Farage on two grounds. First, he was never a government minister. Secondly, Nigel Farage is never the answer to a serious question.
Give in? Well, it was c) Liberal Democrat Vince Cable…although he was supported by b) Conservative Michael Fallon.
Given the under-valuation of the shares in every previous privatisation (gas, water, electricity, telecoms), when the Royal Mail was privatised in 2013, it was not surprising that applications were made to buy seven, yes 7, times more shares than were available. In fact, the shares rose 38% on the first day of trading and were 58% higher just 6 months later. At one point, they were trading at an 87% premium.
When the all-party Business (BIS) Committee investigated, it concluded, with classic understatement, “…it appears that the taxpayer has missed out on significant value”. To put it another way, we – the taxpayers – could have received an extra £1 billion for the shares if they’d been priced at the value they traded on the first day, and a lot more just a few months’ later.
You’d think Messrs Cable and Fallon would have been embarrassed? No way. They told the Committee “We don’t apologise and we don’t regret it.”
So, why am I writing today about these events of 5 years ago? Well, it’s because they paint an important backcloth for a number of recent issues about the Royal Mail, its executives and its performance.
Let’s start with executive pay. The former chief executive was extremely well-paid but, recently, the Royal Mail board appointed a new chief executive, Rico Back. He was to be welcomed with a golden hello of £6 million and then be paid up to £2.7 million per annum. And, he would remain living in Switzerland whilst commuting occasionally to London.
No wonder, when shareholders got the chance to consider this in July, in one of the biggest revolts in shareholder history, more than 70% opposed it but could not stop it going ahead. So, 34% of shareholders opposed the re-appointment of the chair of the board, Peter Long. [Incidentally, last week, the shareholders at another company, Countrywide, where Mr Long is also the chair of the board, successfully revolted against a £20 million pay package for executives. Mr Long is also board chair at a number of other companies. He doesn’t have a zero hours contract; he seems to have a series of contracts which commit him to working more days every week than there are days.]
Then, last week, the Royal Mail was fined £50 million for breaking competition law. At its simplest, it had been found guilty of unlawfully blocking competitors for parts of its commercial services.
And, this week, it has been revealed that complaints about lost mail and parcels have reached record levels, topping more than 1 million last year. More than 250,000 people lodged formal complaints about lost parcels. There was a 58% increase in reports from customers complaining that they had never received their parcels, despite the Royal Mail saying they had been delivered.
That’s bad enough, but have you noticed what has been happening to the Royal Mail’s performance in delivering our letters.
Well, on the face of it, not much. Royal Mail claims that more than 99% of first-class letters are delivered the following day and more than 98% of second class letters are delivered within three working days. OK, it’s not quite as good as 150 years ago, when you could post a letter in the morning and have it delivered to the other side of town later that day, but it seems acceptable.
But, have you noticed the changes that the Royal Mail has been making to the collection times at post-boxes across the city? Until two years ago, most post-boxes in the city had ‘last collection’ times between 15.30 and 17.30. This was both appropriate and convenient. Businesses knew that as long as letters produced during that day’s work got in to the post-box on time, 99% were expected to be delivered the following day. Most workers were familiar with that call ‘Anything else for the post?” which rang around the office around 5pm each day.
However, the Royal Mail has been changing the ‘last collection’ times to post-boxes across the city and across the country and bringing them forward to 09.00. So now, post generated and posted during the day isn’t collected until the following day. [Unless you are prepared to take the post to the minority of post-boxes which have later collection times.]
This means that, effectively, the Royal Mail has given itself two days to deliver first-class post, and four-days to deliver second-class post, and yet can still claim that it delivers more than 99% on the following day. What a fiddle!
I’m just waiting to see some honest advertising from our privatised Royal Mail: “Prices up. Executive pay up. Lost letters up. Lost parcels up. Service down.” But, I expect I’ll be waiting some time.
Whatever, it is now time for all of us to keep our wits about us. The universal service obligation – in other words, the same price and target delivery times, including a requirement for daily deliveries Monday to Friday, to apply for mail throughout the UK – is only enshrined in law until 2021.
Just watch. There will be enormous pressure and lobbying from a number of companies over the next three years to end the universal service obligation for domestic mail. The sharks are circling.

Monday, 20 August 2018

Have your say about buses

100 years’ ago today, there was a strike on the buses.1
The strike arose out of a demand from women conductors that they should also receive the bonus of five-shillings a week that had recently been awarded to male conductors. Of course, nowadays, no-one – perhaps other than UKIP representatives and supporters who seem to think that equality is some strange form of political correctness – would contemplate discriminating so blatantly as this. However, it is clear that there is still considerable gender discrimination in pay in all employment sectors.
But, how often do you see a bus conductor of any gender nowadays? They are almost as rare as hen’s teeth. In fact, their demise correlates strongly with the demise of local public transport since Margaret Thatcher’s deregulation of the bus services some thirty years ago, since when there has been a 40%+ reduction in the number of passenger journeys in South Yorkshire. Is it any surprise that that correlates strongly with the rise in road congestion, which has added so much to journey times and business costs?
I have long argued that we need to take back local public control over transport services so that buses, trams and trains are run for the benefit of passengers – and in support of local economic, environmental and social regeneration policies – rather than for the profits of the shareholders of transport companies.
In recent weeks, there have been a large number of articles and reports in the local media - including the views of local users, operators and politicians (including myself) - about our local bus services.
Now, the all-party House of Commons Transport Committee has launched an inquiry into people’s experiences of and expectations about bus services throughout the UK. It is important that the voices of Sheffield and South Yorkshire people are heard in this consultation.
The Committee specifically wants to know:
  • What are some of the factors that might be affecting bus use in our local area?
  • How reliable is the bus service in our local area?
  • Does congestion affect bus use in our local area? If so, what measures have bus companies taken to improve this?
  • How dependent are people on bus services in our local area?
You can find out more about the inquiry and how to make your views known at
I invite everyone who is interested in trying to improve our local bus services to contribute. Do it now.