EVERY household is being asked to join Guernsey Post’s increasingly aggressive campaign against the regulator.
It is fighting a draft decision to increase competition in the postal market.
The company will deliver a leaflet to islanders today urging them to ‘act now’.
It tells people how to get in touch with the regulator directly – the only way submissions can be taken into consideration – and even provides a freepost reply card.
All responses have to be with the Office of Utility Regulation by Friday.
The OUR says that the company could make £1.2m. in efficiency savings and that the bulk mail industry would benefit from competition.
Interested postal firms are known to have been in the island to speak to bulk mailers laying the groundwork ahead of any opening up of the market.
But Guernsey Post has warned that islanders will end up paying the price for any changes, saying the six-day universal service would be threatened.
Its chief executive Gordon Steele (pictured) said the cost of publishing the leaflet was justified because it was an issue of public importance.
‘Because the consequences are so significant, this is a relatively small and legitimate expenditure,’ he said.
If a private company wanted to print and post out a similar black and white leaflet with a freepost option to return, estimates suggest it could cost around £17,000 for the 22,000 island households.
The OUR’s central proposal is to reduce the mail over which Guernsey Post has a monopoly, from everything costing up to £1.35 to everything costing up to 65p.
While Guernsey Post is hoping public and political pressure will resolve the fight, it could appeal to the Royal Court as a last resort.
‘When we ask the regulator what he anticipates the impact of all of his draft decision will be on Guernsey Post and its profitability, he says that’s not a matter for him but for the shareholder,’ said Mr Steele.
‘I fully accept the need for regulation, and that competition on a balanced, fair basis is a good thing. But it’s got to be proportionate, it’s got to recognise the small market size of Guernsey.’
OUR: getting the best for the customer – Page 16
Article posted on 16th November, 2009 - 11.30am
22 Article Comments
How dare Guernsey Post waste my stamp money on challenging the OUR’s perfectly legitimate criticism of GPL’s wildly expensive directors’ fees, worldwide travel (including India) over impossible banking dreams and out of control overheads.
Furthermore, the idea that there are “philatelic profits” is ridiculous. Stamps are promisery notes. If it takes a decade for them to arrive on a letter for delivery – no matter, GPL must deliver and without charging current stamp purchasers.
Let us have some explanations from Mr Steele and not demands for blind support.
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Leave the post office alone the island isn’t big enough for another postal service
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Clearly Roy has strong views, however I fear his understanding of the issues may be as unclear as his understanding of what a Stamp is.
A Stamp is merely evidence of payment of a fee for the delivery of a postal item. One pays money for a stamp because one is paying for a service. Once the service has been carried out the only value a stamp has is in the eye of the beholder, ie stamp collectors.
A Promissory note on the other hand is a promise to pay the bearer of the note, on demand the value of the note, for instance a pound note whic has value however many times it changes hands.
The issue with competition in the postal market is that other operators are not bound by the requirements to provide a 6 day postal service and would take the business that does not require running around collecting and delivering mail from all corners of the Island. The general public would not benefit from lower more competitve postal rates because Guernsey Post would still have to provide the 6 day service but without the profitable bulk mail (profitable because of large number of items posted on a constant basis not high prices)therefore leading to a possible reduction in service levels or higher postal rates.
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I completely agree with Roy and I am sick of hearing about save our Guernsey post office.
What’s next don’t let any more supermarkets in Guernsey “save our Checkers” save Cable and Wireless. Competition is good for the island and it’s about time it happened with the postal service.
Someone should do a mail shot for the OUR and see how many people support the OUR but no we can’t do that as it’s a waste of tax payers money but it’s OK for the post office to do it as it has pots of tax payers money available.
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has anyone out there been bothered with late night calls about a survey on the GPO so annoying like they have not got better things to do your ratings are going down if this carries on
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Be careful what you wish for..competition in the the main can be good when applied to some businesses where the competition is on a level playing field, rival supermarkets for instance sell much the same type of goods as the next one but may sell “loss leaders” to entice customers.
The problem in the case of competition in the postal market is that the likely competitors to Guernsey Post will ONLY want to deal with the bulk mailers not the general public, they certainly won’t want to start setting up to collect sort & deliver mail to every door step in the island on a 6 day a week basis & the general public will not benefit from lower postal rates in any way.
So there isn’t a level playing field, unless of course the OUR requires potential competitors to sign up to the same service level agreement Guernsey Post has to fulfil.
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Jimmy calls it well.
As Guernsey is too small for an effective competition in postal services, the losers will be the taxpayer who will be left with a Post Office handling the low revenue, high cost business, and making real losses.
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To Roy and all of the other Guernsey Post beaters. Whilst it is easy to believe that everything is ‘fine’ and get used to the postal service working and the Island profiting from fulfilment etc. How happy will you be when YOUR investments in Guernsey Post are valueless because Jersey Post has marched in and cherry picked all of the most profitable business? Never forget that the Post Office is essentially a States Company.
Jersey Post have already started delivering Ship2Me and bypassed Guernsey Post as their partner in this. Jersey Post are also looking at premises in the Island to set up operations….what for? Well initially maybe to start offering fulfilment, but it won’t be long until they reach their dream of running the Channel Islands Post Office. Our Island is too small to have to follow every suggestion from Europe or even Jersey. The Post Office is a lifeline service – going through tough times as we all write electronically now (In the past this would have been a letter to the editor, with a stamp!)
If you want to surrender control of your national infrastructure then be prepared to live with the consequences
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The OUR are – I believe avidly supported by Roy Bisson – a disaster area. Just consider:- they control telecommunications – we have the most expensive and probably the slowest internet connections in the British Isles, this by the way after CW were GIVEN Guernsey Telecoms by amongst others this same Roy Bisson, the Islands has had to spend hundreds of thousands of pounds paying for legal battles between the regulator and the regulated. We have a “Director General” of the OUR who has had an anti-post office bias since the start — Curran is the one who immediately got rid of “Small parcel rate” as, and I quote “a historical anomaly” whilst the UK and Jersey kept the rate for a few more years, thereby making the cost of international post from Guernsey far more expensive at the start of this regulatory dictatorship. OUR were in favour of closing the vast majority of the sub post offices – suggesting there was no reason why people shouldn’t travel to PO HQ if they wanted to post a packet or a tracked postal item – the list is virtually endless. Added to the sheer arrogance of his attitude and the enormous cost of this nasty little OUR empire that is being built up, it really is time some of our PAID Deputies started to take control of this wretched outfit.
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Mr Towers
A fair appraisal.
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Well said Hugo Towers, Vic Mel, Stephen John and others.
Guernsey is far too small for competition in the PO to work; just look at what’s happened to Royal Mail. How can anyone think it’s a good idea?
We are a population of 60,000 not 60,000,000.
In my opinion the Post Office and its offices are a public service foremost.
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Curran’s contract is due for renewal ( or otherwise) in the new Year.
However did we manage without him ?
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I was and still remain totally apposed to commercialisation of our utilities and trading boards, my predictions of an autocratic, extremely expensive, damaging regulatory body that we never needed has come true. There was never anything in it for the Guernsey people and I said so at the time, except higher charges and reduced services.
Giving this whole Post fiasco some further thought and considering that Public Services are likely to bring forward the commercialisation of the Harbours, Airport and Water which will all be subsequently controlled I suspect by the OUR, The Director General of the OUR, will become the most powerful man in Guernsey and there will nothing that we as elected members of the States can to do about it. If the States agree to PSD’s proposals which I hope they don’t, the Director General will control all our utilities plus the Harbours and Airport. If our Parishioners complain either about the soaring level of charges that I guarantee will result from this folly there will be little we can do to help. The Harbours and Airport will be run by middle men and they will be looking for profit and the only place those profits can come from are from the travelling public and the other users of the facilities, I repeat there will be nothing in it for the owners of these valuable assets and services which are the Guernsey people.
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Jimmy, you are quite wrong. A postage stamp is a valid method of making a payment and is a promise to deliver postal services.
Vic Mei, I am anything but a Guernsey Post beater. I am a frequent user and consider it to be a great service. That is why I am so disappointed in the way its administration has been wasting our money on pointless and expensive attempts to begin banking while allowing core services on mail and package delivery and collection to go to a multitude of new independent businesses.
Thank goodness we have the OUR on our (post users) side making sure our post money is not wasted.
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Hugo T – very good post.
Dave J – frighteningly accurate picture you paint. Maybe next year Curran will be crying about not being allowed to lay a wreath before the LG!?
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Roy,
Whilst regulation of services is not necessarily a bad thing it would seem that the OUR is “regulating” to the point that it is interfering with the viability of those services, which flies in the face of it’s mandate on it’s own website. Guernsey Electricity is a good example, where the OUR fixed prices for 3 years, everyone thought that was great until the company started losing money and when the 3 year fixed term ended we were all hit with a massive hike in electricity costs, how can this sort of “regulation” be good for anyone.
Why is it the OUR can dictate to GPL for instance that it has too many staff, or that it’s overheads are too high, surely that is something for the Company to decide NOT the regulator.
The big issue for Guernsey is regaining control of the regulator, the tail is wagging the dog.
Roy, if you are still confused over the definition of a Stamp may I suggest you look it up on the interweb.
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In addition to my earlier post, everyone can rest assured that unless they happen to own a bulk mail business the regulators proposals if carried through will be of no benefit and will, albeit gradually, erode the current postal services we all enjoy such as a 6 day mail delivery island wide postal boxes and numerous convenient post offices around the island.
As the song goes..You don’t know what you’ve got till it’s gone..
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Jimmy
Personally losing Saturday wouldn’t have any effect on us and unless I’m missing something I can’t imagine much public resistance to that.
Do you know what the savings would be on a 5 day delivery and/or collection service?
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Since the introduction of competition to Royal Mail services to the public and SME’s has declined markedly, prices have risen and nw charges have been introduced.
Home deliveries of mail have gone from early morning to much later in the day, my last home their used to receive it’s mail in the early afternoon.
From a business perspective, mail at my company in the UK arrives around midday, we asked for earlier and were offered this for a fee of £3200 a year. Collection of franked mail, once free now costs £600 per year.
Speed of delivery is now pretty poor too. Once upon a time 1st Class really did arrive the next day. Not any more.
Competitive mail services are not interested in small business or Joe Public – we don’t spend enough. My bank can use them and save 2p on the cost of sending a bank statement but at what cost to the wider service?
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Jimmy
It is precisely the role of the regulator to tell Guernsey Post that its overheads are too high, if indeed they are. The OUR is essentially protecting the interests of consumers on this point – if Guernsey Post’s overheads are too high it follows that its prices are too high. If it lowers overheads to an efficient level it can therefore charge lower prices.
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Doug, thankyou for illustrating the effects of competition in the uk postal market, these are facts that a lot of people here in Guernsey are perhaps not aware of.
Neil, I would think a lot of people would object to losing a Saturday delivery, besides, As long as Guernsey Post is bound by its Service Level Agreement Saturday delivery has to continue whether there are savings to be made or not.
Gecko, don’t hold your breath, Overheads aside,
Guernsey Post can operate the 6 day service it is obliged to do because it has the revenue stream from the bulk mailers and the reserved area, stamp prices are low because of this, take away the reserved area and income stream and Guernsey Post will have to make up the revenue loss somehow. That may be by cutting overheads, job losses or reduced service or higher prices.
Don’t forget that while the regulator can introduce unfair competition (unfair because competitors won’t be bound by the 6 day service level agreement as Guernsey Post is) he can also prevent Guernsey post from reducing its service or raising prices.
I think it is the overall effect on the WHOLE community that is the most important issue, not whether a handfull of bulk mailers can pay a penny an item less by using an alternative service.
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Doug & Jimmy
This article lays it out in detail and I suggest this is exactly what will happen to GP if the predators are allowed to cream off the most lucrative parts of GP’s business
How Brussels closed the Post Offices
Bryan Smalley observes that there have been many false claims by politicians and journalists that Post Office closures were nothing to do with the European Union. Examining the available evidence, Bryan Smalley concludes that it becomes very obvious that the EU was prepared to allow us to subsidise our Post Offices to the tune of 460 million euros in exchange for us closing down 2,500 Post Offices.
The closure of the UK’s post offices is a direct consequence of EU legislation. There have been many false claims by politicians and journalists that Post Office closures were nothing to do with the European Union. This is a wholly false outlook when the facts are properly examined. The real story of post office closures is as follows.
For decades, prior to the late 1990’s, the Royal Mail was an efficient, profitable monopoly providing the finest postal service in the world as well as being an important element in the structure of British life. A monopoly was important because many parts of Britain are remote. It follows that if we are to charge the same postage rates regardless of that part of the country to which mail is to be delivered, there will be some areas which are serviced at a loss whilst others are served at a profit. If postal rates are set wisely to balance out the differences then Royal Mail will make a profit.
It should be emphasised that Post Office Limited is a subsidiary of Royal Mail.
One of the EU’s key objectives is to impose competition throughout the whole of its territory regardless of whether or not a national monopoly is beneficial to the local community.
Detailed rules, which affected the British postal services, appeared in December, 1997 in an EU press dossier ‘Notice from the Commission on the application of the competition rules to the postal sector and on the assessment of certain state measures relating to postal services’.
EU Directive 97/67 /EC issued on 15 December 1997 ‘Privatisation of Postal Services’ began the introduction of an EU-wide postal service and immediately reduced the Royal Mail’s monopoly to mail weighing less than 350 grams.
British Government’s funding of national postal services provider Royal Mail, totalling more than 2.5 billion euro. The investigation followed complaints from Royal Mail’s competitors (particularly TNT and DHL – Deutsche Post) made between August and October 2006. It should be noted that only the UK, Sweden and Finland have fully liberalised postal markets. It is therefore ironic that the Netherlands and Germany are benefiting from our liberalised service whilst not adopting it in their own country.
On 9 March 2007, the EU Competition Commissioner’s newsletter Nr. 10/07 reported that she (Neelie Kroes) had given permission for the UK to provide 460 million euros to Post Office Limited (approx. £345 million at the time). It reads: The European Commission has authorised, under the EC Treaty’s rules on state aid, proposed funding by the UK Government to allow Post Office Limited to continue to provide public services through the network of post offices in the financial year beginning 1 April 2001′. The approval was separate from the investigation referred to in the previous paragraph and concerns only the aid granted to Post Office Limited.
A letter from Brussels to David Miliband, Secretary of State for Foreign and Commonwealth Affairs [Ref. N388/2007], dated 28 November 2007, discusses the relationship between our Postal Services and the EU It leaves no doubt that the EU is in control. It discusses the ‘transformation programme’. Paragraph 11 states: ‘The transformation programme will involve POL [post Office Limited] reducing the size of its post office network by around 2,500 branches.’
On 29 November 2007, the EU announced that it had granted the British Government permission to subsidise the Post Office.
It becomes very obvious that the EU was prepared to allow us to subsidise our Post Offices to the tune of 460 million euros in exchange for us closing down 2,500 Post Offices.
An extract from Hansard dated 07 February 2008 reads:
2
‘Mr. Gordon Prentice: To ask the Secretary of State for Business, Enterprise and Regulatory Reform what obligations arising from (a) the UK’s membership of the European Union and ( b) the UK’s participation in single market legislation govern the provision of subsidy
To the network of Post Office branches; and if he will make a statement.
Mr. McFadden: All state support for undertakings, whether privately or publicly owned, are subject to the rules laid down in Article 87(1) of the EC treaty. Funding of the Post Office network is therefore subject to the state aid rules and can only be given in compliance with these rules.
In November 2007 the Commission approved Government plans for support for Post Office Limited.’
Instead of using the EU term of ‘transformation programme’, the demolition of the Post Office network is being managed under the title ‘Network Change Programme’ which, on its website, explains that the closures are necessary because ‘The Government has recognised that fewer people are using Post Office branches [and] … that the shape and size of the overall network of Post Office branches needs to change’. It fails to state that fewer people are using the post offices because the Government has been slowly and deliberately withdrawing services which the Post Office traditional provided. There is also no mention at all on the web site or in any material issued by the Network Change Programme of the involvement of the EU and the real reason why our Post Offices are to close.
The above is a brief expose of the situation. I have left out some details but have included sufficient to prove the EU’s involvement. It follows that anyone who denies this is totally incompetent. Recipients of this information can judge for themselves.
. .
Bryan Smallry spent his early years in the Royal Navy. After retiring he spent 15 years as a District Counsellor (Conservative) and 12 years as a County Counsellor. He is a founder member of the Magna Carta Society and is an accredited speaker for the: Campaign for an Independent Britain.
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