Free Private Island: Why Britian Now Belongs to Someone Else by James Meek Page A

not six, not five, but seven days a week.
    But it is too soon to speak of a new golden age of mail, and the parcels business is subject to ferocious competition. In theNetherlands, PostNL recently announced it would go down to five-day deliveries, scrapping its Monday service. The US Postal Service wants to stop Saturday deliveries. Most New Zealanders will soon be getting mail three days a week. Much more likely that there was something else that excited investors. Some have suggested the unneeded land and buildings owned by Royal Mail are more valuable than the government’s sell-off advisers said they were, offering shareholders a future windfall. Then there was the government’s generosity in putting Royal Mail in the private sector, but leaving its massive unfunded pension liabilities – £8 billion – with the Treasury; and the postal regulator Ofcom’s largesse, allowing Royal Mail, just before privatisation, to raise first class stamp prices by 30 per cent. There was the recent outbreak of peace with the union, which had been expected to be more militant; and, of course, the prospect of commercial loans pouring in to fund new equipment.
    And then there was something else. One of the analyses accusing the government of selling Royal Mail cheap came from a brokerage firm, Canaccord Genuity. If the company could just cut 3 per cent of its workforce and increase sales by 3 per cent, it said, it might be worth £10 billion by 2015, triple what the government sold it for. Tucked away in its investment note was an intriguing coda. ‘But the real interest is, what if the company could reduce people costs?’ it said. In other words, what if Royal Mail could slash its wage bill, not merely by making much deeper cuts in staff than 3 per cent, but by actually cutting the pay of those who remained, and worsening their conditions? Then the shareholders would really clean up.
    Just a few days before privatisation, PostNL’s British subsidiary TNT Post announced that it was recruiting a thousand staff in and around Manchester to set up a new delivery service. Building on a similar operation it had already set up in west London, most of the new employees would be postmen and postwomen, delivering mail on orange bicycles. In future, TNT added, it wanted to expand its postal service to employ 20,000.George Osborne took time to laud TNT. ‘Today’s news is great for Manchester, and offers real opportunities for young people looking for work and the long term unemployed in this area,’ he said. ‘It is a vote of confidence in Britain.’ The
Manchester Evening News
was even more enthusiastic. ‘Postal firm delivers jobs joy,’ its headline said.
    The enthusiasm was misplaced – or fake, in Osborne’s case. If the total amount of physical mail being despatched is falling, as almost everyone agrees it is, and automation requires fewer postal workers, as almost everyone agrees it does, there can be no question of TNT Post ‘creating jobs’. All the Dutch company can do is take jobs away from other postal workers. And to do that, it is doing something it is no longer able to do in its home country.
    In 2011, when I visited the Netherlands, there was little sign of Royal Mail’s competitors looking to recruit private postmen in Britain to challenge the state’s de facto monopoly on ‘final mile’ deliveries, which suggested that – although they wouldn’t admit it – the private companies were getting a bargain from using the state postman’s shoe leather. ‘The general public is not ready to have anybody else delivering to their door. Actually providing a service where Royal Mail ends up delivering it is perfect,’ Royal Mail’s rival Buswell purred. ‘I’m a real fan of Royal Mail and I don’t believe anybody else should walk the streets and make deliveries.’
    Nonetheless, it was always Royal Mail’s fear that the burden of carrying out the USO, having to offer all but the very remotest communities the same