A dumb idea for the ages: Royal Mail (the British post office) is planning to sell cheap stamps to "disadvantaged" members of society, in an effort to deflect some of the criticism for the massive increases in stamp prices that it plans to impose in April. (I use the word "massive" advisedly: the cost of first-class post is to rise by more than 50%, to 70 pence for a normal-sized letter). To sweeten the pill, however, it will allow people on benefits -- jobseekers, pensioners and such -- to buy their Christmas stamps this year at last year's prices. About 5 million people will qualify, apparently.
It's hard to know where to start on this one, even if you don't want to go along with the Daily Mail (no relation), which is predictably in a righteous fury that benefit cheats might get cheap stamps! (Really! Check it out here). Thing is, with 5 million people eligible for the deal, there can hardly be a single person in the country who won't be able to find someone to buy stamps for them on the cheap. The National Federation of Postmasters has already expressed its doubts about the workability of the deal, maybe because it fears its members will be subjected to threats of violence if they try to refuse cheap stamps even to obvious chancers.
Even if the brains trust at Royal Mail have figured out a way to prevent the most predictable abuses of the scheme, it must surely be concerned that such a large price increase will decimate its Christmas trade. After this past Christmas, there were a few articles in the media about how the numbers of Christmas cards that people are receiving seems to be in steep decline. It's something we've noticed ourselves, and it can't just be because our loyal correspondents are starting to migrate to a better place (and I don't mean Barbados).
The fact is that the mail is in long-term decline. Truth to tell, its fate was probably sealed with the invention of the telephone, but its almost total demise only became unavoidable with the arrival of e-mail. No doubt Royal Mail has done some modelling on this, but there must be a real risk that the accelerated fall in volumes resulting from the price increase will erode much of the revenue increase that the higher stamp prices are designed to achieve.
Royal Mail's problem is that its fixed cost base is enormous, and becoming more and more of a burden as volumes shrink. The steps that could be taken to cut costs tend to provoke massive opposition. Close rural post offices? Can't do that; rips the heart out of villages and deprives the elderly of a social centre. Impose different rates for delivering mail in remote areas? Socially divisive (and would play especially badly in Scotland). Cut back mail deliveries, say by eliminating Saturday rounds or only providing service three days a week? Huge uproar: there are still people who seem to pine for the days when there were 8 deliveries a day in the London area.
If you know that sensible ideas will get short shrift from politicians and the media, you inevitably start to think of trying not-so-sensible ones, and that's the point Royal Mail unfortunately seems to have reached with its Christmas stamp deal. The CEO of Royal Mail, Moya Greene, was previously CEO of Canada Post Corporation, so she knows a bit about running a dysfunctional company in the face of huge political interference. When she moved to the UK in late 2010, she may have been expecting an easier time of things at Royal Mail. Sorry about that, Moya.
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