How does a great institution die? In the same two phases Hemingway believed in, people went bankrupt: gradually and then suddenly. Entire decades can pass during which a vital service or venerable organization suffers deep cuts, blundering reforms and erosion as slow and stealthy as that of a coastline. Then one day – snap! It breaks, forever.
This is what is happening right now with one of our oldest and most essential services. An institution that binds the country together and helps define it daily and almost invisibly.
I’m not talking about the NHS, the BBC or state schools. Those parts of society make much more dramatic intrusions into our lives. The hospital that delivered your baby, the black screen that brought you Del Boy and Rodney, the teacher who talked you through your ABCs: no wonder every major change sparks loud debate. Not so the flap in your front door through which cheerful cards burst at Christmas, those magazines and guilty eBay purchases, the sad messages from family on the other side of the world. Not the system that created the postcode you’re currently in, nor the 115,000 cheerful red boxes that mark out the territory of Great Britain.
The Royal Mail dates back more than 500 years to the time of Henry VIII. For most of our lives it promised to send a first class letter from the nearest letterbox in Hove to your intended person’s front door in Aberdeen the next day – and it was kept. That’s a piece of public sector magic, certainly less dramatic than life-saving operations, but based on extensive infrastructure and a formidable work ethic. WH Auden knew that and marveled at the night train with “Letters for the Rich, Letters for the Poor / The corner store, the girl next door.” Even Margaret Thatcher understood it, which is why that inveterate privatizer rejected all those people in the 1980s and urged her to get rid of our postal service.
Yet the Royal Mail has been undergoing the most serious and profound decline for years, much of it far out of the public eye. Now it is on the brink of outright extinction. And how it got here is a story that is, in stark terms, a microcosm of how many aspects of British life have been devalued and downgraded – even while those at the top have committed murder.
Last week, Ofcom suggested that the Postal Service could scrap its legal duty to deliver letters six days a week, reducing it to just three days. Although the regulator claims its “priority is to look after you”, the main beneficiaries of the proposal would be Royal Mail’s management and shareholders, who could save £650 million. Yet there was little outrage. On the other hand, when you listened to the phone calls or read the newspapers, a long sigh of resignation came back. You’ve certainly heard it on 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 get mail delivered one day a week… A once-edible birthday present sent on January 9 still hasn’t arrived.”
“Here in Portsmouth we already operate a delivery schedule of three days a week (or less). My retired parents, in a more rural area in Norfolk, don’t get deliveries more than once a week. They drive to the local office every few days to pick up their mail. Even then, letters remain lost for weeks.”
Those readers are on to something. Our postal service has been phased out for so long that the public can no longer rely on it. The Royal Mail has missed its key statutory targets for daily delivery, special delivery and first class delivery not just once or twice – but every year since 2017. For a long time, the percentage has been gradually declining – and what awaits us could be very sudden.
In this story there is plenty of blame between at least three Westminster parties. When the internet and email took off, Tony Blair’s New Labor had no idea what to do with our post offices or mail deliveries. David Cameron simply wanted to sell off everything that was left of our national assets, including our forests. Then there were the not-so-useful idiots among the Liberal Democrats, whose Vince Cable promised that privatization would have as its “overarching goal” the protection of daily letter deliveries. The sale of Royal Mail about a decade ago had failed badly: it was sold far too cheaply, as the National Audit Office and others noted, and the financiers involved in the deal filled their boots. Key advisers included Lazard, who demanded compensation of £1.5 million for his poor advice. Its independent sister company, Lazard Asset Management, bought millions of shares when trading began and sold the lot within 48 hours, making a profit of £8 million. There was no conflict of interest, Lazard emphasized. Just a very bad taste in the taxpayer’s mouth.
Then followed the familiar story of employees being fired and top managers being hired at companies that have nothing to do with postal services. The last CEO, Simon Thompson, was previously a marketing executive at Honda. His chief operating officer was from Honda. His head of HR had worked in the soft drinks sector, while his industrial relations adviser came from easyJet. Thompson left last year after being dismissed as ‘clueless’ by a select committee chairman and leading massive industrial action. Naturally, he is owed a payout of up to £700,000. The new boss is Royal Mail’s fourth in four years and has a total annual package of £1.5 million. The average postman earns around £33,000.
One of my friends has been a postal worker for about 40 years. When he came, it was considered a good, steady job with a smart uniform, some local status and a degree of autonomy in your rounds. Last year, MPs discovered that postal workers are now monitored by digital tracking devices that warn managers when they are taking too long, even if it is just to use the toilet. At the same time, they were reportedly told to treat letter delivery as at the bottom of their priority list, including profitable packages.
Related: Royal Mail has been heading towards collapse for years. Now it can’t even deliver my Christmas present | Polly Toynbee
From Thatcher onwards, the Tories have justified privatization as bringing in vital investment. A good story, if true – which is not the case in the case of the Royal Mail. According to analysis carried out for me by the Common Wealth think tank, whatever investment has been made in Royal Mail over the past decade is dwarfed by the amount returned to shareholders. (Full disclosure: I serve on Common Wealth’s voluntary advisory panel.) Since 2013, around £2 billion has been given to shareholders, equivalent to 60% of after-tax profits. Chris Hayes of Common Wealth said: “Since privatisation, Royal Mail has slowly siphoned off money from shareholders while the quality of service has noticeably deteriorated. Shareholders were never essential to Royal Mail’s viability before privatization and have been jeopardizing it ever since.”
And yet Royal Mail has an extensive infrastructure, knowledgeable staff and a level of trust that other couriers would kill for. It can be used to deliver NHS prescriptions or in conjunction with a banking service. Instead, it is being turned into the least effective and most expensive of all the gig economy delivery sectors: an Amazon Subprime.
How does a great institution die? The same way a country sinks into complacent underperformance: with false promises from its politicians, with poor management from its business leaders, with a lazy regulator – and money men who rake in as much money as they can before rushing for the exit.