01 August 1999

A STUDY INTO THE FUTURE of the Post Office forms the basis of a detailed proposal by the Communications Workers’ Union, which it claims will achieve greater commercial freedom for the PO whilst ensuring it remains in public ownership. The study, by independent think-tank London Ecnomics, recommends the transformation of the PO into an independent publicly-owned corporation (IPOC). Such a structure, argues the CWU, would provide the commercial freedom sought by PO manage-ment, as well as the ability to raise private finance. However, private-sector funding raises the thorniest issue in the proposal: the likelihood that lenders would assume an implied government guarantee against bad debt, thereby conferring on an independent PO an unfair advantage over its competitors [and a concomitant breach of EU law]. To avoid this pitfall, the report urges that the state should not intervene if the Post Office de-faults on its debts. Instead, the government should stand aloof, allowing the PO to go bankrupt like any other business. In such an event, recommends the study, postal services should continue under new management - an option rejected by Royal Mail insiders as ‘far from feasible’. However, CWU general secretary Derek Hodgson is upbeat about the scheme, believing it to be ‘a very similar beast’ to plans already afoot in White-hall: ‘Trade secretary Peter Mandelson has already asked for a copy of the report, and I am sure he will give it the consideration it merits when he is making final decisions on the future of our industry’, enthuses Hodgson. Says a PO spokesman: ‘If the IPOC model is to work, it must have a number of key features. These include allowing the Post Office access to the borrowing it needs to compete at the same level as the foreign postal predators. Avoiding or fudging this issue will not give the Post Office the freedoms it needs.’ [The pejorative, ‘foreign postal predators’, is a bit rich coming from a mail monopoly that is happily invading the backyards of its overseas competitors. Sauce for the goose ... etc!]