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ROYAL MAIL TO GO OUT TO TENDER?

News, 01 March 2000

A SYSTEM OF NICHE service licensing is set to replace the mandatory monopoly of the Royal Mail for delivery of letters under £1 in postage or 350 grams in weight. The far reaching proposal is contained in the Postal Services Bill, published last month by trade secretary Stephen Byers.

A SYSTEM OF NICHE service licensing is set to replace the mandatory monopoly of the Royal Mail for delivery of letters under £1 in postage or 350 grams in weight. The far reaching proposal is contained in the Postal Services Bill, published last month by trade secretary Stephen Byers.The clause means that the Royal Mail could encounter domestic competition for its letter business for the first time in its history, compelling it to tender against commercial rivals for specialist and regional licenses. Previously, these have been granted to commercial carriers only under exceptional circumstances - stop-pages through industrial action, for example.

The new bill also provides for the appointment of a postal regulatory team, responsible for the control of postal services. It is anticipated that the regulator will favour greater flexibility, although the Communica-tions Workers Union appears curiously sanguine at the prospect: "The postal regulator will have more scope but a full scale relaxation will not take place", asserts a union official confidently.

But arguably the bill’s most piquant provision is the prospect of the RM paying a hefty fine - even losing its licence in extreme circumstances - for persistent late delivery of mail and doordrops. Says the DTI: "Royal Mail has a duty to deliver [first class] letters before 9.30am - which it is not achieving."

After six years of tortuous negotiations, a narrow majority of Communications Workers Union members voted to accept the Royal Mail’s Better Way Forward pay proposals. In return for more flexible working practices, postal staff pay has been increased by a princely 2% to £6.07 per hour.

Pressure from FEDMA and other direct marketing lobbyists has finally compelled the European Commis-sion to put forward legislative proposals to open up the European postal sector to increased competition.