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AN ANNOUNCEMENT from Denmark illustrates the danger of allowing the market to dictate service provision.
PostNord’s decision to stop delivering letters after 400 years will be seen as the inevitable consequence of technological change. Instead we should see it as the withdrawal of a public service, an example of what may be down the line for other countries, including ours.
Letters and cards in Denmark will not disappear. Those sending them will have to hire private couriers and pay market rates. Gone is what, in Britain, we term the universal service obligation: the standardisation of prices and delivery speed regardless of where in the country you live or where you are posting to. This aims to ensure equality of access to the service for everyone, a principle at the heart of the concept of public services.
Though PostNord is a state-owned operator the logic is that of a private business. “The downturn [in letter deliveries] continues so clearly that the market for letters is no longer profitable,” chief executive Kim Pedersen says.
PostNord will keep delivering parcels. These remain profitable because there has been no decline in deliveries overall: the rise in online shopping means more packages are being whizzed through the streets than ever before.
So a rationalised system could easily cross-subsidise letters. In Britain it still does, but only because the Communications Workers Union has fought doggedly to prevent separation within Royal Mail of parcel and letter deliveries.
Royal Mail management has sought to hive off parcels so greater profits can be extracted for shareholders from parcel deliveries, while letters sink on their own. The same logic has, since widespread privatisation, wrecked Britain’s bus transport network, with busy urban routes ceasing to cross-subsidise smaller ones which have closed entirely or massively reduced the number of services. The result: increased car dependency, reduced mobility and thus independence especially for millions of older or disabled people, and hollowed-out rural economies affecting everything from tourism to agriculture.
Though they may not be profitable, letters remain a significant means of communication, the 6.7 billion delivered around the UK last year a steep decline on past volumes but still a mountain of mail.
There is a strong social case for their continued cross-subsidisation by parcels, but this militates against the logic of profit maximisation. Royal Mail’s management have, since privatisation, leeched billions out in shareholder payouts, attacked staff terms and conditions, repeatedly raised stamp prices and, recently, reduced the basic service with proposals to end Saturday second-class delivery. Their excuse is declining letter volumes but the experience, of a more expensive and less reliable service, is exactly what privatisation has delivered across the board, from water to rail.
Socialists should also recognise the social and environmental value of a rationalised, nationalised network. The courier free-for-all created by the market reduces volumes for the daily planned delivery of items street by street, multiplying the number of overall journeys as couriers from different firms visit addresses multiple times a day carrying fewer items. Increased traffic has health and pollution impacts.
The PostNord episode should be a wake-up call to the consequences of replacing provision of services for the public good by provision of services where they are profitable. The arguments to be made apply well beyond letter delivery, and highlight the risks of private-sector infiltration of even more vital services, such as the NHS, because of the unbundling of profitable and unprofitable services it entails.
These issues are widely appreciated by a British public which consistently supports public ownership of essential services, but are disregarded by governments in thrall to neoliberal ideology and corporate interests.
We need co-ordinated campaigning for public ownership across trade unions, community campaigns and consumer groups (which generally recognise what a rip-off privatisation is) to force politicians to confront the gulf between their priorities and the public’s.
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