Rival post delivery is a welcome first step, but why stop at a duopoly?

Article by John Blundell in The Scotsman

IT IS pleasing that Edinburgh, Glasgow and Manchester are to have a rival postal service to challenge the Royal Mail after so many hundreds of years of a state monopoly.

The reason the government is authorising a gesture of competition is that the monopoly of letters has ceased to be a lucrative source of revenue.

After 500 years of contributing to the Exchequer handsomely, the Post Office's profits have evaporated. It now survives on infusions of money from the rest of us.

TNT is a model of efficiency. Let us hope it delivers Edinburgh's mails quicker than the Royal Mail, and, crucially, more cheaply.

The preservation of this antique monopoly has been getting ever more comical as first telephones, then faxes and now e-mails have rendered letters the slowest way to communicate.

The dismissive term "snail mail" is unkind but apt.

Robert Burns's joke that the only really urgent mail items are cheques and love letters remains witty. One hundred years ago mail boys delivered eight times a day in Edinburgh. Those days have long gone.

Yet I am critical of this over-tentative liberalisation.

If two mail firms are better than one, then three, four or more would be better still. Let us have a full, open and free market in letters and other mail.

Let us scrub away all this culture of regulation and control. It was Elizabeth I who imposed a state monopoly of the mail, as her secret service wanted to monitor what Catholics and Stewart conspirators were up to.

If we really created a free market in postal services we would be on a journey of discovery on a map uncharted. Here are some guesses.

The Royal Mail's stamps portray the Queen, God bless her, and various worthy events. What if there were adverts ? Your copy of The Scotsman reaches you at a fraction of its cost because of our advertisers - God bless them, too.

Advertising is crucial to so many businesses. If stamps became commercial then perhaps letters - I mean the envelopes - could evolve, too, as powerful advertising tools.

All the assumptions crystallised in our experience of the Royal Mail might disappear if we had freedom to trade postal items.

Is doorstep delivery crucial? If the price was diminished and we all picked up our messages at local cafés that might add to the conviviality of life.

Nobody predicted the emergence of internet cafés, where the attraction is not just the keyboards and screens, but the coffee and chat. I am not saying this will occur. I am saying we will all be surprised by events.

We all think of advertising as what we see on television, hear on the radio or spot in every publication. But we forget the largest element in British marketing budgets is termed politely "direct marketing", more commonly known as "junk mail".

We all respond far better to a personalised communication. The direct marketing firms are getting ever more adept and sophisticated. I can imagine they will already be lobbying TNT.

Let us liberate our posties too.

To have a nationwide service that reaches everyone's door is a fabulous opportunity. Why limit them to items of post? How many other things could they deliver?

I doubt it would be milk. The milk delivery has largely gone as we prefer to buy the cheaper milk on offer at supermarkets.

Fresh bread? Other groceries? Tesco delivers boxes of groceries across our cities. Could they combine with the Post Office?

The point of principle is that nobody knows what will emerge. Competition is a "discovery procedure". Life, in a market, is a constant probing and testing, conjecture and refutation.

If we are agreed a monopoly is a disgrace then a duopoly - the present proposal - is barely any better.

Apart from Valentine's Day, the great surge in postal traffic is at Christmas. I have always thought the Boy Scouts and similar affinity groups could be freed to deliver Christmas greetings at a tiny fraction of the Royal Mail's price.

One beneficiary of liberalisation of course would be the Post Office itself.

It has reservoirs of knowledge and expertise that could now be applied. It is lumbered by the quaint obligation to perform a daily delivery to even the most remote locations. I urge this confusing regulation be abandoned.

The regulatory authorities can only envisage a postal service that encompasses everyone in a location.

Perhaps in a free market an elaborate cell structure of far more local entities may emerge. A city-wide or nationwide force is not necessary. Let the matter be served by tiny voluntary groups.

Perhaps charity shops, already Britain's main booksellers, could find a postal niche. That may work. It may not. My point is: we do not need regulators bossing us all around.

The Post Office, as the Royal Mail, is no longer an adjunct of the Royal Household, as Lady Thatcher regarded it. It is simply a public company with a curious heritage of restrictive practices.

Edinburgh's experimentation with TNT is to be applauded. But it is far too tentative and compromised. I predict it will extend itself rapidly.

If Edinburgh has cheaper deliveries, then Haddington will be grumpy at its exclusion. Linlithgow will lobby to get the TNT service. All the EH post codes will ... and will then meet the G post codes coming eastwards.

Once competition is permitted, a genie is out of the bottle where it has been captive since Tudor fears about Papists corked it in 1556.


John Blundell is the director-general of the Institute of Economic Affairs.

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