How does a great institution die? People went bankrupt in the same two stages as Hemingway believed: gradually, then suddenly. Decades may pass during which a vital service or venerable organization suffers deep cuts, flawed reforms, and erosion that is as slow and less noticeable as that of the coastline. Then one day – quickie! It is broken forever.
That’s what’s happening right now with one of our oldest and most important services. An institution that binds the country together and helps define it every day and almost invisibly.
I’m not talking about the NHS, the BBC or state schools. These segments of society are making much more dramatic attacks on our lives. The hospital that delivers your baby, the black screen that brings you Del Boy and Rodney, the teacher who convinces you of your ABCs: it’s no wonder that any big change sparks loud debate. Not so the front door cover bursting with shiny cards at Christmas, those magazines and guilty eBay purchases, the sad news from family on the other side of the world. It’s not the system that designed the postcode you’re currently in, or the 115,000 cheerful red boxes that mark the territory of the UK.
The history of Royal Mail dates back to the VIII century more than 500 years ago. It dates back to the reign of Henry VIII. For most of our lives it has promised to deliver a first-class letter from your nearest letterbox in Hove to the front door of your destination in Aberdeen the next day, and it has delivered. It’s public sector magic that’s certainly less dramatic than life-saving surgery, but relies on extensive infrastructure and a great workforce ethic. WH Auden knew this and marveled at the night train carrying “Letters to the rich, letters to the poor/The corner shop, the girl next door.” Even Margaret Thatcher understood this, which is why that stubborn privatizer disdained all those people who encouraged her to abandon our postal service in the 1980s.
But Royal Mail has been in a very serious and deep decline for years, and most of this decline is hidden from public view. It now stands on the verge of complete extinction. And how this story got here is one that tells with terrifying aptness the microcosm of so many aspects of British life being devalued and degraded; Even when those at the top are committing murder.
Last week Ofcom suggested the postal service could reduce its legal obligation to deliver letters six days a week to just three days. Although the regulator claims its “priority is to look after you”, the real beneficiaries of the offer will be Royal Mail management and shareholders, who could save £650 million. But there was little anger. Instead, when you listened to phone calls or read the newspapers, what came back was a long expression of resignation. You’ve surely heard this from the Guardian’s own letters page: “Delivery three days a week? If only! Where we live, in north-west London, you’re lucky if you can post one day a week… I still haven’t received the once-edible birthday gift sent on January 9.”
“Here in Portsmouth we already operate a three-days-a-week (or less) delivery schedule… My retired parents, who live in a more rural part of Norfolk, can’t get more than one delivery a week. They started going to the local office every few days to collect their mail. Even then, letters disappear for weeks.”
These readers are onto something. Our postal service has been phased out for so long that the public can no longer rely on it. Royal Mail has met its key statutory targets for daily delivery, special delivery and first-class delivery not just once or twice but every year since 2017. Be very sudden.
There is enough blame in this story to circulate among at least three Westminster parties. While the internet and email were rapidly becoming widespread, Tony Blair’s New Labor had no idea what to do with our post offices or mail delivery. David Cameron wanted to sell off what was left of our national assets, including our forests. There were also such useless idiots among the Liberal Democrats that Vince Cable promised that the “overall objective” of privatization would be the preservation of daily letter delivery. The sale of Royal Mail nearly 10 years ago failed badly: it was sold too cheaply, as the National Audit Office and others noted, and the financiers involved in the deal filled their boots. Lead consultants included Lazard, who received a £1.5 million fee for his poor advice. Its independent sister company, Lazard Asset Management, bought millions of shares when trading began and sold them within 48 hours, making an £8 million profit. Lazard stated that there was no conflict of interest. It leaves a very bad taste in the taxpayer’s mouth.
Then came the familiar story of workers being laid off and senior managers drafted in from businesses that had nothing to do with the post. The last CEO, Simon Thompson, was formerly a marketer at Honda. The head of operations was from Honda. The head of HR worked in the soft drinks industry, while his representative in industrial relations came from easyJet. Thompson left last year after being sacked by the chairman of a select committee for being “uninformed” and presiding over mass industrial action. Naturally, he must be paid compensation of up to £700,000. The new boss is Royal Mail’s fourth boss in four years and has a total annual package of £1.5 million. The average postal worker earns around £33,000.
A friend of mine has been a taxidermist for about 40 years. When he joined he was considered a good, stable job with a smart uniform, local status and a degree of autonomy on tour. Last year, lawmakers found that postal workers are now monitored by digital monitoring devices that alert managers when they are taking too long just to use the restroom. At the same time, they were reportedly told to keep letter delivery at the bottom of the priority list, below more profitable packages.
Relating to: Royal Mail has been heading towards collapse for years. Can’t even deliver my Christmas present anymore | Polly Toynbee
Since Thatcher, the Conservatives have justified privatization as the provision of essential investment. Good story, if true, which is not true of Royal Mail. According to analysis carried out for me by the Common Wealth think tank, investments in Royal Mail over the last decade have been dwarfed by the amount paid to shareholders. (Full disclosure: I’m on Common Wealth’s volunteer advisory panel.) Nearly £2bn has been given to shareholders since 2013, equivalent to 60% of the company’s after-tax profits. Chris Hayes of Common Wealth says: “Since privatisation, the quality of service has noticeably deteriorated as Royal Mail has slowly funneled cash to shareholders. It was never essential to the viability of Royal Mail before privatisation, and they have been jeopardizing it ever since,” shareholders say.
However, Royal Mail still has an extensive infrastructure, a knowledgeable workforce and a level of trust that other couriers would kill for. It can be used to deliver NHS prescriptions or used in conjunction with a banking service. Instead, the entire gig economy is being turned into Amazon Subprime, the least effective and most expensive of the delivery industry.
How does a great institution die? Just as a country is driven to arrogant failure: by false promises from its politicians, mismanagement by corporate leaders, a lazy regulator, and moneymen making as much money as they can before rushing for the exit.