‘Your job is to protect the USO’ CWU reminds Ofcom

Postal August 17 2018

Our deputy general secretary postal Terry Pullinger has reminded the communications industry regulator that its primary statutory duty is “to protect the UK’s universal postal service, not to damage Royal Mail” in a hard-hitting response to the enormous fine the company has been hit with.

Adding the CWU’s backing to Royal Mail’s appeal against an unprecedented £50 million sanction by Ofcom, Terry described the penalty as “totally wrong and a stunning example of how this regulator panders to unregulated, profit cherry-picking disruptors.”

The fine – the largest ever imposed by Ofcom – was a response to a complaint by the ‘Whistl’ sub-division of Dutch postal company TNT, which briefly tried to undermine Royal Mail’s letter delivery service back in 2013/14.

“It beggars belief that the regulator should dismiss this Great British Institution which is one of the biggest contributors to the public purse, the provider of an excellent public service delivered by a loyal dedicated workforce on decent terms and conditions, in favour of an organisation which cares for nothing but profit,” said Terry.

“TNT’s ‘Whistl’ initiative failed because they employed people on the cheap and failed to deliver a service which was far inferior to that provided by Royal Mail.  They chose to deliver in chosen inner-city areas and only promising to deliver three days per week to minimise their operational cost, and still they could not deliver.

“Royal Mail delivers to every single address in this country six days per week,” our DGSP continued. “People think it’s easy, but actually it’s a hugely sophisticated logistics operation which provides a public postal service which is the envy of the world.

“But the Regulator would seemingly prefer to keep putting at risk the one provider which totally connects the social, industrial and commercial life of this country, without discrimination or favour.”

Terry asked: “When will they recognise that no company that puts profit before service could ever provide the connectivity, service and reach of Royal Mail Group?

“Their actions, if not challenged, will eventually destroy full and equal social connectivity regardless of location across the whole UK.

“Shame on them for this grossly unfair disloyal act, they should start recognising all that is excellent about the USO provider and stop siding with uncaring profiteers.”

In a statement reacting to the fine, Royal Mail immediately confirmed its intention to lodge a formal appeal with the Competition Appeal Tribunal, pointing out that the pricing regime that had been at the centre of the complaint “was never implemented or paid,” and that, therefore, Ofcom’s verdict was “without merit and fundamentally flawed.”

Echoing the CWU’s analysis, the Royal Mail statement explained that that the reason for TNT’s ‘Whistl’ failure was down to “major problems with Whistl’s direct delivery business model.

“Royal Mail does not therefore consider there to be any legal basis for any potential claims for damages by Whistl or any other third parties in connection with Ofcom’s decision, and will defend itself vigorously against any such potential claims,” it continued, and concluded: “No damages claims are payable until the appeals process is exhausted. We are confident that Ofcom’s decision will be overturned.”

Explaining why the CWU fully supports Royal Mail’s appeal against this fine, Terry Pullinger said: “It’s frankly unbelievable that a company like TNT, which set out to drive employment and service standards into the gutter in the interest of profit, should be awarded this verdict by a public body whose statutory duty is to defend our great universal service.

“The CWU has absolutely no hesitation in adding its full support to Royal Mail’s appeal against this perverse verdict and fine.”

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  • Ofcom was set up under the Communications Act 2003, with a brief that initially covered telecommunications and radio and television broadcasting.
  • In 2011, The Postal Services Act added to Ofcom’s remit, when the responsibilities of the Postal Services Commission (Postcomm) were added to its portfolio, and the 2017 Digital Services Act brought internet services under Ofcom’s regulatory eye.
  • The 2011 legislation set out Ofcom’s specific statutory duties in Part 3 of the Act, which is entitled: ‘Regulation of Postal Services’.

Subsection 1 in this Part of the Act states:  ‘OFCOM must carry out their functions in relation to postal services in a way that they consider will secure the provision of a universal postal service.’

And the second Subsection in this Part of the Act states: ‘Accordingly, the power of OFCOM to impose access or other regulatory conditions is subject to the duty imposed by Subsection 1.’

https://www.legislation.gov.uk/ukpga/2011/5/part/3