Who regulates the regulators?

Roy Mayall

I’m interested in the way that words change their meaning once they are adopted by bureaucratic institutions. Take deregulation, for instance, as it’s applied to postal services in Britain. It appears to mean an opening of the market to allow competition. But if you look more closely you will see that, in order to achieve this, the Royal Mail’s ability to act in its own interest has been severely curtailed.

Deregulation is the means by which rivals companies can gain access to the Royal Mail network in order to make a profit. It is also sometimes called ‘liberalisation’ and is the result of a number of convoluted EU directives. On the ground the system takes the form of something called ‘downstream access’. Rival companies bid for large city-to-city and bulk mail contracts from private utilities, banks and other corporations, and then, having secured them, use the Royal Mail to deliver. Using the Royal Mail to undermine itself, in fact. What it means for us posties is that we’re being made to deliver our rivals' mail for them, and then told we can't have decent pay and conditions because our rivals are taking our trade away.

In an unregulated market the solution would be simple. All the Royal Mail would have to do would be to refuse to deliver its rivals’ mail. Or it could put up prices so that its rivals could no longer make a profit, driving them out of business. At the very least it could put up prices enough to look after its workers. But it can’t do this, because it exists within a ‘regulatory framework’, designed to give advantages to its rivals. What deregulation in fact means, then, is increased regulation of the Royal Mail in order to allow ‘deregulation’ for the rest of the postal market.

The public watchdog which is supposed to oversee the process is called Postcomm. This is how it describes itself:

Postcomm is the independent regulator for postal services in the UK. It is our job to protect the universal service and make sure that postal operators, including Royal Mail, meet the needs of their customers throughout the UK. We are also responsible for introducing choice to a market that was a closed monopoly for 350 years.

The bold lettering is all their own. But, let’s get this straight, ‘protecting the universal service’, ‘meeting the needs of customers’ and ‘introducing choice’ are completely incompatible aims.

‘Choice’ is a threat to the universal service: a flat contradiction of it in fact, since ‘choice’ involves fragmentation of the market. You can’t have a ‘universal’ service being operated by a number of different companies all with different aims.

As for the word ‘customers’, this applies to several groups also with incompatible needs. The need of the corporations to make a profit is in direct opposition to the need of householders to receive a universal and affordable service; or to have any kind of ‘service’ at all. It’s also in opposition of the need of postal workers to have a decent living wage and good conditions at work.

If Postcomm were really independent then its composition would reflect the makeup of users throughout the UK. Here are some of the characters whose job it is to protect your universal delivery service. All of this information comes from the Postcomm website.

1. The chairman, Nigel Stapleton, is a non executive director of the Reliance Group which provides outsourced security services to Royal Mail. He is also an independent director of KazPost, the Kazakh postal service and Samruk Energy, a Kazakh electricity generating company.

2. The chief executive, Tim Brown, a former marketing director of DHL, joined Royal Mail from KPMG where his work included a review of the future of Royal Mail for the government. His son works at TNT Express.

3. Ulf Dahlsten, on secondment from the European Commission, is a former director general of the Swedish Postal Services and was actively involved in the deregulation of Swedish postal, taxi and telecom services. He was chairman of TNT Express Worldwide as well as a director of Stena Line and of SAS.

4. Stephen Littlechild is described as an ‘international consultant on regulation, competition and privatisation’ and an adviser to governments and the World Bank.

5. Simon Prior-Palmer was an investment banker with Credit Suisse.

6. Tony Cooper is the father of Yvette Cooper, chief secretary to the Treasury, and the father-in-law of Ed Balls, secretary of state for Children, Schools and Families, one of Gordon Brown’s closest allies.

7. Wanda Goldwag is an adviser to Smedvig Capital Limited, a London-based private equity firm, which has a developing relationship with a company in the postal sector.

Where are the representatives of the unions, of postal workers, of public sector workers or the public? The composition of Postcomm makes it clear that the aim is the break-up of the Royal Mail for the benefit of private corporations and has nothing to do with ‘protecting the universal service’. The government, which appoints the commissioners, can’t pretend that it isn’t actively involved in the break-up of the Royal Mail.


  • 23 December 2009 at 4:13am
    the abbot postie says:
    Well done on this article,Roy,however i don't know why i am still feeling gobsmacked after reading it!
    Isn't it amazing how all these people in positions of corporate or political power are either all related, or all know each other.
    Of course we are being set up to be privatised. I vividly recall my area union rep telling me, on the day that Leighton was installed, that he had an agenda to break us up and sell us off.
    Let's recall that this year we were denied a pay rise because of the "state of the business", yet we still managed to make a profit of around £150m for the first 6 months, and this in a "shrinking market".
    I don't know but if i was a cynic i might just think that these figures had been,err..massaged, to make us look an attractive proposition for a takeover.

  • 28 December 2009 at 9:01am
    Roy Mayall says:
    I think that what this shows is that the government are clearly behind the run-down of the Royal Mail. The people on Postcomm are all part of the same special interest group. They clearly have no other purpose but the break up of the Royal Mail. Your union rep was right AP. It clearly goes back a few years.