CWU has submitted evidence to the second round of the government-commissioned review into competition in the postal market focussing on the future of the universal service.

Billy Hayes, CWU general secretary, said: “This is the most crucial stage for the review team and strikes at the heart of what is fundamentally wrong with the current competitive set-up of the UK postal market. We welcome the team’s initial findings which endorse all the key arguments put forward by the CWU about the impact of competition to date.

“CWU is concerned that unfair competition rules and the draconian pricing and access regime brought in by Postcomm are undermining Royal Mail’s ability to deliver the universal service, by allowing competitors to cherry-pick profitable bulk mail contracts. Since no other rival competitor is in a position to offer a service which could sustain an alternative universal service, we believe the review must recommend additional support for the current provider, Royal Mail.

”Postcomm has proved itself incompetent by bringing about a reduction in service provision and undermining the universal service through the way it implemented competition. It is now again acting beyond its remit by examining the ownership of Royal Mail. We expect the review team to stick to its brief and leave the ownership issue to government, which has pledged to keep Royal Mail in the public sector.”

The CWU’s submission calls for:

• Recognition that future provision of any universal service is dependent on delivering a healthy and profitable Royal Mail;
• A reopening of the current price control;
• Ending Royal Mail’s effective subsidy of the competition on access;
• Introducing a price control mechanism that ensures the real cost of maintaining the universal service (and the fixed infrastructure that supports it) is met by all those who use it;
• Ruling out the separation of Royal Mail as it would be costly, damaging, time-consuming and would undermine the operational efficiency of the business;
• Dismiss the suggestions of Postcomm, which has proved itself incompetent through introducing poorly formed and timed competition which has worsened the service provision, stifled product and service innovation and created a financial crisis for the biggest mail carrier.