Private Letters

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And again I say, rejoice! The privatisation wheels are turning again
and the British postal system is going the way of all flesh towards

made the State-run monopoly, Consignia, run under its own internal
management and revenues for a short time, the government beheld
the haemorrhaging of cash and is now on the threshold of making
a very sensible decision. Either subsidise the one million pound
a day losses or get out of the postal business altogether. Obvious
choice, to me at least.

Consignia chief executive bemoaned the fact that it is taking 28
pence to deliver a letter with a 27 pence stamp on it. My immediate
reaction was to suggest raising the stamp price to 28 pence but
I didn’t want to upset the privatisation apple cart and one just
knows that the problems in this business run far deeper than the
price of a small piece of adhesive paper.

unions are raging at this "betrayal" and we can expect
the usual counter-productive strike action for these are people
from another age determined to put the producers (themselves) before
the consumers (us).

your Scottish correspondent has his contacts everywhere reporting
back to him on the internal machinations of Statehood. Well, okay,
I have a friend who works in the Post Office as a postman and, despite
his socialist leanings, he readily confesses to the ineptitudes
and inefficiencies of this 365 year old monopoly as he witnesses
it at his local sorting office.

of high staff absenteeism, absconding to the local bar or just consuming
alcohol on the premises are just the tip of the iceberg. Managerial
laziness and union obstinacy all add up to a bloated monopoly that
is ready for the culture shock of competing in the real world.

despite the left of centre Labour Party coming to power in 1997,
the privatisation paradigm continues and that is surely a telling
sign that this is an unstoppable machine. To remind readers of the
process that Margaret Thatcher began when she came to power in 1979,
here is the golden thread of privatisation that has run through
British politics:

  • 1982 –
    Amersham International
  • 1984 –
    Associated British Port Holdings, Enterprise Oil, Jaguar Cars
  • 1985 –
    British Aerospace, Cable & Wireless, Britoil
  • 1986 –
    British Gas
  • 1987 –
    British Petroleum, British Airways, Rolls-Royce, British Airports
  • 1988 –
    British Steel
  • 1989 –
    All 10 regional Water Providers (except Scotland)
  • 1990 –
    All 18 regional Electricity Providers
  • 1993 –
    British Telecommunications
  • 1995 –
    British Coal
  • 1996 –
    Railtrack, British Rail, British Energy

a most pleasant sight for the libertarian eye!

companies were privatised in stages, the final year is given. From
these sell-offs, the Treasury reaped more than 60 billion, which
sounds a lot but would only be a small fraction per annum of the
entire tax revenues of the British government. This may explain
why the burden of taxation has remained largely the same throughout
that historic period (though some of the cash was undoubtedly used
for pre-election, tax-cut sweeteners). Ultimately, the cost of running
these companies was heavily outweighed by the cost of the healthcare
and welfare benefits sectors.

leaves the London Underground and British Nuclear Fuels as the only
major State run companies. Of course, I would also add the contentious
National Health Service but even here we see the dawn rays of privatisation
probing the darkness as recent governments have sought to introduce
private partnership and funding into healthcare.

Consignia survive? Massive redundancies are inevitable and (according
to my friend) that is why so many idle and long-term workers are
staying – large redundancy pay cheques. Survival is less likely
if the government insists that it guarantees universal delivery
to remote regions at fixed prices. This kind of retro-fitted State
interference has given previous privatisations a bad name by insisting
on socialistic price and quality controls totally divorced from
what the consumer is actually prepared to tolerate (see my previous
on rail privatisation). So far, that has proven to be merely an
irritation in the grander scheme of things — no one would dare renationalise
all these companies now.

looking again at the initial reaction, I noted with some amusement
the alarmist logic of the media and unions such as the claim that
it could cost from 2 to 16 to send a letter to remote regions
and that the private companies would cherry pick the lucrative urban
delivery areas and ignore the countryside. They may well do in a
frighteningly realistic sort of way.

I love the countryside, and look forward to my various annual holidays
in the far north of Scotland. But it is with some sorrow and not
a little anger when I hear yet another demand from rural dwellers
for subsidies from city consumers and taxpayers.
The farming industry is heavily subsidised, the government is the
major employer whilst the rest are involved in tourism and whisky
making. How much more do they want? The only thing I think I am
with them on is the opposition to the government’s attempt to ban
fox hunting.

basic moral argument here is whether country-dwellers should live
off the backs of urbanites. Some sections of the countryside seem
to think they have a moral claim on the hard earned cash of city-dwellers
in the same way that the poor and sick have a claim via the Welfare
State. They do not and there is no compelling moral argument why
they should unconditionally share in the urban centres of wealth-creation.

suspect some want the share of the wealth but not the hassle of
grimy, noisy, crowded, criminalized cities. Understandable, some
may say, but indefensible. When things got tough for the Highlanders
and Irish (after Culloden and during the Potato Blight), they didn’t
demand State subsidies; they followed the money and emigrated to
cities of the British Empire or the new verdant lands of America.
These far flung lands are thankful for the skills and good sense
these people brought from afar off.

may ask then what the price is to pay for splendid views of God's
creation, very low crime rates and an altogether more peaceful state
of existence? Evidently, the potential shift to reality-reflecting
delivery charges is not worth it. We are all tempted to be socialists
when it comes to the State offering "free" money to us,
but the old capitalist shoves over when it comes to acquiring money
on the markets.

know that applies to rural capitalists as well because they hike
the price of holiday cottages during the peak demand times of school
holidays — despite the fact that many of the clientele are financially
strained young families. The only consistent thing about human nature
is its inconsistency!

coming back to delivery of letters to remote regions, it is either
State subsidies or the extra cost being passed onto businesses and
urban postal customers. Neither argument is morally sustainable.
It is no more sustainable than demanding that travel from the countryside
to the cities should be subsidised. What then is the free market
solution? By its very nature, no one knows and that is the beauty
of it, some inventor will think of something novel and even simple.
Then some entrepreneur will implement it and market it for the general
good of all.

by way of speculation, the Internet, phone and fax are obvious ways
of delivering information thousands of times faster than snail mail
ever could. Privatised post offices could have a fax machine sitting
there for a small charge instantly delivering various forms of information
to corresponding offices in other areas (well, that is how the old
telegraph system worked). The idea that information must be hand-delivered
via miles of dirt tracks is verging on the prehistoric. Maybe now
is the time to put this old assumption to the test.

there is no need to pay bills or order items by post when we have
direct debit, mail order and Internet shopping. This problem of
remoteness is becoming less and less important as we analyse it
more and more.

market capitalism is all about change, evolution, progress and the
constant search for improvement. A monopoly such as the Post Office
fears such things as the Internet – unless it is wholly subsidised
by taxpayers’ money. Private companies embrace new technology with
a speed that makes State-run industries dizzy.

so what about those items that have to be sent physically such as
Christmas presents? For items purchased by phone or Internet, these
can be gift-wrapped and forwarded to the recipient at a minimal
charge. But what about those who wish to support the local economy
and buy their presents from the nearest town? The question is its
own answer, for if you are in a town, you are likely to be at a
more cost-effective point of posting anyway, so shop, wrap and post
at the same time.

will likely happen is that private rural services will have less
frequent collection and delivery times as the cities — the introduction
of bus travel competition bears that out and I suspect that this
is not an issue except for the most urgent type of letter. The rural
dweller can also be thankful for one type of letter he may receive
less of — junk mail. As for those zillion Christmas cards that clog
up the system every December, I would take them all to a cost-effective
town-mailing centre while I am doing my Christmas shopping. But,
ultimately, the price of a stamp will go up or down depending on
where one lives.

the end of the day, the State will plough the savings into yet more
failing public sector ventures rather than cut taxes. I also have
a horrible feeling those holiday cottage owners will just pass the
extra postage costs onto their city clientele.

the mills of privatisation grind on and the ethic of it burns that
little bit more into the public psyche …

4 ,

Watson [send him
] writes from Edinburgh, Scotland.


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