Postal Competition – BIS Select Committee Report and Next Steps

To:  All Branches with Postal Members


Dear Colleague

Postal Competition – BIS Select Committee Report and Next Steps

As you may have seen in the media, the BIS Select Committee has today published its report into competition in postal services and the USO. A copy of the report and summary is attached to this LTB.

Although we would have wanted the Committee to go further, there are a number of positive points in the report that are in line with the arguments CWU put forward at the Select Committee hearing.

The Committee has expressed doubts over whether Ofcom would be able to intervene quickly enough to protect the USO and has called for it to provide quarterly updates on the sustainability of the universal service. It has also recognised that there may need to be a change to the Postal Services Act so that Ofcom gives priority to its duty to safeguard the Universal Service.

Importantly, it has also come out strongly against a race-to-the-bottom on employment standards and proposed that Ofcom’s remit should be extended so that it takes wider employment standards into account in regulating the industry. The report includes evidence from Whistl that at the time of the hearing almost half of their staff were on zero hour contracts and that it is paying its employees well below the Living Wage.

While there are some parts of the report that we do not believe are helpful – such as the Committee’s reliance on assertions from Ofcom to downplay the immediacy of the threat to the Universal Service from competition – it has highlighted some of the key concerns we have been raising in our campaign, providing further support for our arguments.

As we have discussed in the Unit Reps briefings that have been held over the past month, the Union now needs to step up and launch a new stage of our campaign against the stance that Ofcom has taken. Given Ofcom has dismissed the need for immediate direct delivery intervention and is proposing to encourage even greater competition with changes to access pricing, in our view it is clear that the Regulator has abandoned its duty to protect the Universal Service.

Furthermore, in criticising agreements CWU has reached with Royal Mail as restricting efficiency, it is also our view that Ofcom is effectively pressuring Royal Mail into a race to the bottom on employment standards. This is fundamentally wrong and something CWU will never accept.

As explained in our Local Representative meetings, the Union will step up our campaign and call for a judicial review of Ofcom’s role and decisions, as well as calling for changes to the Postal Services Act to protect the USO and new workers’ rights to proper employment standards across the sector. We will be discussing with the General Secretary an appropriate launch event for this next phase and details of this will be issued in due course.

Any enquiries on the above should be addressed to the DGS (P) Dept.

Yours sincerely

Dave Ward

Deputy General Secretary (P) 

Click on the link below to view the report


Competition in the postal services sector and the Universal      

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