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British postal system

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British postal system

Royal Mail plc
Public limited company
Traded as Template:Lse
Industry Postal services, courier
Fate Privatised
Founded 1516
Headquarters

London, United Kingdom

100 Victoria Embankment, London, EC4Y 0HQ
Area served United Kingdom / Worldwide
Key people Donald Brydon, Chairman
Moya Greene, Chief Executive
Services Letter post, parcel service, EMS, delivery, freight forwarding, third-party logistics
Revenue £9.146 billion (2013)
Net income £403 million (2013)
Owner(s) HM Government (38%)
Employees 150,000 (2013)
Divisions Royal Mail
Parcelforce Worldwide
Subsidiaries General Logistics Systems
Website

Royal Mail plc is a postal service company in the United Kingdom of Great Britain and Northern Ireland. Royal Mail was originally established in 1516. The company's subsidiary, Royal Mail Group Limited, operates the brands Royal Mail (letters) and Parcelforce Worldwide (parcels). General Logistics Systems, an international logistics company, is a wholly owned subsidiary of Royal Mail Group.

The company is responsible for universal mail collection and delivery in the UK. Letters are deposited in a pillar or wall box, taken to a post office, or collected in bulk from businesses. Deliveries are made at least once every day except Sundays and Bank Holidays at uniform charges for all British destinations. First Class deliveries are generally made the next business day throughout the nation.[1]

For most of its history, Royal Mail has been a public service, operating as a government department or public corporation. However, following the Postal Services Act 2011,[2][3] a majority of the shares in Royal Mail were floated on the London Stock Exchange on 15 October 2013. The UK Government continues to hold a 38% stake in Royal Mail[4] through Postal Services Holding Company plc,[5] a public limited company in which the Secretary of State for Business, Innovation and Skills owns 50,004 ordinary shares plus 1 special share, and the Treasury Solicitor holds 1 ordinary share.[6] The same holding company is also the parent of Post Office Ltd, which was separated from Royal Mail on 1 April 2012 and remains state-owned.

In response to Royal Mail's privatisation, the Communication Workers Union (CWU) plans to implement a rolling programme of strikes that may commence on 23 October 2013.[7][8][9][10]

History

The Royal Mail can trace its history back to 1516, when Henry VIII established a "Master of the Posts", a post which in 1710 was renamed as "Postmaster General".[11]

Upon his accession to the throne of England at the Union of the Crowns in 1603, James VI and I moved his court to London. One of his first acts from London was to establish the royal postal service between London and Edinburgh, in an attempt to retain control over the Scottish Privy Council.[12]

The Royal Mail service was first made available to the public by Charles I on 31 July 1635, with postage being paid by the recipient. The monopoly was farmed out to Thomas Witherings.[13]

In the 1640s Parliament removed the monopoly from Witherings and during the Civil War and First Commonwealth the parliamentary postal service was run at great profit for himself by Edmund Prideaux (a prominent parliamentarian and lawyer who rose to be attorney-general).[14] To keep his monopoly in those troubled times Prideaux improved efficiency and used both legal impediments and illegal methods.[14][15]

In 1653 Parliament set aside all previous grants for postal services, and contracts were let for the inland and foreign mails to John Manley.[14] Manley was given a monopoly on the postal service, which was effectively enforced by Protector Oliver Cromwell's government, and thanks to the improvements necessitated by the war Manley ran a much improved Post Office service. In July 1655 the Post Office was put under the direct government control of John Thurloe, a Secretary of State, and best known to history as Cromwell's spymaster general. Previous English governments had tried to prevent conspirators communicating, Thurloe preferred to deliver their post having surreptitiously read it. As the Protectorate claimed to govern all of Great Britain and Ireland under one unified government, on 9 June 1657 the Second Protectorate Parliament (which included Scottish and Irish MPs) passed the "Act for settling the Postage in England, Scotland and Ireland" that created one monopoly Post Office for the whole territory of the Commonwealth.[15][16] The first Postmaster General was appointed in 1661, and a seal was first fixed to the mail.[17]

At the restoration of the monarchy, in 1660, all the ordinances and acts passed by parliaments during the Civil War and the Interregnum passed into oblivion, so the General Post Office (GPO) was officially established by Charles II in 1660.[18]

Between 1719 and 1763, Ralph Allen, Postmaster at Bath, signed a series of contracts with the post office to develop and expand Britain's postal network. He organised mail coaches which were provided by both Wilson & Company of London and Williams & Company of Bath. The early Royal Mail Coaches were similar to ordinary family coaches but with Post Office livery.[19]

The first Mail coach ran in 1784, operating between Bristol and London. Delivery staff received uniforms for the first time in 1793, and the Post Office Investigation Branch was established; it is the world's oldest recognised criminal investigations authority. The first mail train ran in 1830, on the Liverpool and Manchester Railway. The Post Office's Money order system was introduced in 1838.[20]

Uniform penny postage

Main article: Uniform Penny Post

In December 1839 the first substantial reform started when postage rates were revised by the short-lived Uniform Fourpenny Post.[21] Greater changes took place when the Uniform Penny Post was introduced on 10 January 1840 whereby a single rate for delivery anywhere in Great Britain and Ireland was pre-paid by the sender.[22] A few months later, to certify that postage had been paid on a letter, the sender could affix the first adhesive postage stamp, the Penny Black that was available for use from 6 May the same year.[23] Other innovations were the introduction of pre-paid William Mulready designed postal stationery letter sheets and envelopes.[24]

As Britain was the first country to issue prepaid postage stamps,[23] British stamps are the only stamps that do not bear the name of the country of issue on them.[25]

By the late 19th century, there were between six and twelve mail deliveries per day in London, permitting correspondents to exchange multiple letters within a single day.[26]

The first trial of the London Pneumatic Despatch Company was made in 1863, sending mail by underground rail between postal depots. The Post Office began its telegraph service in 1870.[27]

Pillar boxes

Main article: Pillar box

The first Post Office pillar box was erected in 1852 in Jersey. Pillar boxes were introduced in mainland Britain the following year.[28] British pillar boxes traditionally carry the Latin initials of the reigning monarch at the time of their installation, for example: VR for Victoria Regina or GR for Georgius Rex. Such branding is not used in Scotland due to dispute over the current monarch's title. Some Scottish nationalists argue that Queen Elizabeth II should have simply been Queen Elizabeth as there had been no previous Queen Elizabeth of the United Kingdom of Great Britain and Northern Ireland, only of the 'extinct' after 1707 Kingdom of England (and Wales). That dispute included vandalism and attacks on pillar and post boxes introduced in Scotland that displayed EIIR. To avoid the dispute, pillar boxes in Scotland were either marked 'Post Office' or use the Scots Crown.[29]

A national telephone service was opened by the Post Office in 1912. In 1919, the first international airmail service was developed by Royal Engineers (Postal Section) and Royal Air Force. The London Post Office Railway was opened in 1927.[30]

In 1941 a Airgraph service was introduced between UK and Egypt. The service was later extended to: Canada (1941), East Africa (1941), Burma (1942), India (1942), South Africa (1942), Australia (1943), New Zealand (1943) Ceylon (1944) and Italy (1944).[31]

Change to statutory corporation

Under the Post Office Act 1969 the General Post Office was changed from a government department to a statutory corporation, known simply as the Post Office. The office of Postmaster General was abolished and replaced with the positions of Chairman and Chief Executive in the new company.[32]

The two-class postal system was introduced in 1968, using first class and second class services. The Post Office opened the National Giro Bank that year.[33]

In 1971, postal services in Great Britain were suspended for two months between January and March as the result of a national postal strike over a pay claim.[34] Postcodes were extended across Great Britain and Northern Ireland between 1959 and 1974.[35]

Postal workers held their first national strike for 17 years in 1988 after walking out over bonuses being paid to recruit new workers in London and the South East. Royal Mail established Romec (Royal Mail Engineering & Construction) in 1989 to deliver facilities maintenance services to its business. Romec is 51% owned by Royal Mail and 49% by Haden Business Management Ltd in a joint venture.[36]

British Telecom was separated from the GPO in 1980 and demerged as an independent business in 1981. Girobank was sold to Alliance & Leicester in 1990 and Royal Mail Parcels was rebranded as Parcelforce. The remaining business continued under public ownership as privatisation of this was deemed to be too unpopular. However in the 1990s President of the Board of Trade Michael Heseltine began investigating a possible sale and eventually a Green Paper on Postal Reform was published in May 1994, outlining various options for privatisation. The ideas though, proved controversial and were dropped from the 1994 Queen's Speech after a number of Conservative MPs warned Heseltine they would not vote for the legislation.[37]

Modernisation

After a change of government in 1997, the Labour administration decided to keep the Post Office state-owned but with more commercial freedom. This led to the Postal Services Act 2000, where the Post Office became a public limited company renamed Consignia plc in 2001.[38] The new name was intended to show that the company did more than deliver mail, however, the change was very unpopular with both the public and employees. The Communication Workers Union boycotted the name, and the following year, it was announced that the company would be renamed Royal Mail Group plc.[39]

As part of the 2000 Act the government set up a postal regulator, the Postal Services Commission, known as Postcomm, which offered licences to private companies to deliver mail. In 2001, the Consumer Council for Postal Services, known as Postwatch, was created for consumers to express any concerns they may have with the postal service in Britain.[40]

In 2004, the second daily delivery was scrapped in an effort to reduce costs and improve efficiency, meaning a later single delivery would be made.[41] That year, the travelling post office "mail trains" were also axed.[42] They were resumed on some lines the following year.[43]


On 1 January 2006, the Royal Mail lost its 350-year monopoly and the British postal market became fully open to competition.[44] Competitors were allowed to collect and sort mail, and pass it to Royal Mail for delivery, a service known as Downstream access. Royal Mail introduced Pricing in Proportion (PiP) for first and second class inland mail, whereby prices are affected by the size as well as weight of items. It also introduced an online postage service, allowing customers to pay for postage online.[45]

In 2007 the Royal Mail Group plc became Royal Mail Group Ltd in a slight change of legal status. Royal Mail ended Sunday collections from pillar boxes that year.[46]

On 1 October 2008, Postwatch was merged into the new consumer watchdog Consumer Focus.[47]

In 2008, due to a continuing fall in mail volumes the government commissioned an independent review of the postal services sector by Richard Hooper CBE, the former deputy chairman of

In September 2009 the Communication Workers Union opened a national ballot for industrial action.[49]

After the departure of Adam Crozier to ITV plc on 27 May 2010, Royal Mail appointed Canadian Moya Greene as Chief Executive,[50] the first woman to hold the post.[51]

Privatisation

Following the 2010 general election the new Business Secretary in the Coalition government, Vince Cable, asked Richard Hooper CBE to update his report. Based on the Hooper Review Update the government passed the Postal Services Act 2011. The Act allows for up to 90% of Royal Mail to be privatised, with at least 10% of shares to be held by Royal Mail employees.[52]

On 6 December 2010, the hitherto free services were removed from the Inland Letter Post Scheme and became available under contract: Callers Service, Forwarding, Petitions to the Sovereign and to Parliament, Poste Restante, Private Post Box, Private Roadside Letterbox.[53]

As part of the 2011 Act, Postcomm was merged into the communications regulator Ofcom on 1 October 2011, with Ofcom introducing a new simplified set of regulations for postal services on 27 March 2012.[54] The Government took over the historic assets and liabilities of the Royal Mail pension scheme on 1 April 2012, and Post Office Ltd was reorganised to become a subsidiary of Royal Mail Holdings rather than the letter delivery business.[55] The management of Post Office Ltd was vested in a nine-member board of directors on 2 April.[56] The Act also contains the option for Post Office Ltd to become a mutual organisation in the future.[2]

In July 2013, business secretary Vince Cable announced Royal Mail was to be floated on the London Stock Exchange and confirmed that postal staff would be entitled to free shares. Cable explained his position before the House of Commons:

The government's decision on the sale is practical, it is logical, it is a commercial decision designed to put Royal Mail's future on a long-term sustainable business. It is consistent with developments elsewhere in Europe where privatised operators in Austria, Germany and Belgium produce profit margins far higher than the Royal Mail but have continued to provide high-quality and expanding services.[8]

In response, the CWU that represents close to 100,000 Royal Mail employees will work in opposition to the privatisation process. Royal Mail's chief executive Moya Greene publicly supported Cable, stating that the sale will provide staff with "a meaningful stake in the company", while the public will be able to "invest in a great British institution".[8] On 12 September 2013, a six-week plan for the sale of at least half of the service was released to the public and a CWU spokesperson stated that 96 per cent of Royal Mail staff opposed the sell-off. A postal staff ballot in relation to a nationwide strike action is expected to take place in late September 2013.[9]

Applications for members of the public to buy shares opened on 27 September 2013,[57] ahead of the company's listing on the London Stock Exchange on 15 October 2013. The government was expected to retain between a 37.8% and 49.9% holding in the company.[58] A report on 10 October 2013 revealed that around 700,000 applications for shares had been received by the UK government, more than seven times the amount that is available to the public. Business Secretary Vince Cable stated: "The aim is to place the shares with long-term investors, we are absolutely confident that will happen." At the time of the report, Royal Mail staff continued to ballot regarding potential strike action.[59]

Conditional trading in shares began on 11 October 2013, ahead of the full listing on 15 October 2013. Share prices rose by 38%, sparking accusations that the company had been undervalued.[60] The CWU confirmed on 13 October 2013 that strike action will occur in response to the privatisation of Royal Mail and may commence on 23 October 2013. A union source stated: "It is likely to be an all-out strike first, then rolling strikes in the run up to Christmas", while the CWU has dismissed the offer of an 8.6% rise over three years as "misleading and unacceptable".[10] Prior to the announcement of the strike ballot results on the afternoon of 16 October 2013, employees were offered £300 to cross the picket line if a nationwide postal strike occurs.[61]

Services


Universal service

Royal Mail is required by law to maintain the Universal service, whereby items can be sent to any location within the United Kingdom for a fixed price, not affected by distance. The Postal Services Act 2011 guaranteed that Royal Mail would continue to provide the Universal service until at least 2021.[62]

Special Delivery

Royal Mail Special Delivery is an expedited mail service that guarantees delivery by 1 pm or 9 am the next day for an increased cost. In the event that the item does not arrive one there is a money back guarantee. It insures goods between the value of £50 for 9 am or £500 for 1 pm to £2,500 (for either service).[63]

Business services

The Royal Mail runs, alongside its stamped mail services, another sector of post called business mail. The large majority of Royal Mail's business mail service is for PPI or franked mail, where the sender prints their own 'stamp'. For PPI mail this involves either a simple rubber stamp and an ink pad, or a printed label. For franked mail, a dedicated franking machine is used.[64]

Bulk business mail attracts reduced prices if the sender prints an RM4SCC barcode, or prints the address in a specified position on the envelope using a font readable by optical character recognition (OCR) equipment.[65]

Prohibited goods

Royal Mail will not carry a number of items which it says could be dangerous for its staff or vehicles. Additionally, a list of 'restricted' items can be posted subject to conditions. Prohibited goods include alcoholic, corrosive or flammable liquids or solids, gases, controlled drugs, indecent or offensive materials, and human and animal remains.[66]

In 2004 Royal Mail applied to the then postal regulator Postcomm to ban the carriage of sporting firearms, saying they caused disruption to the network, that a ban would assist police with firearms control, and that ease of access meant the letters network was a target of criminals. Postcomm issued a consultation on the proposed changes in December 2004, to which 62 people and organisations responded.[67]

In June 2005 Postcomm decided to refuse the application on the grounds that Royal Mail had not provided sufficient evidence that carrying firearms caused undue disruption or that a ban would reduce the number of illegal weapons. It also said a ban would cause unnecessary hardship to individuals and businesses.[68]

In August 2012 Royal Mail again attempted to prohibit the carriage of all firearms, air rifles and air pistols from 30 November 2012. It cited Section 14(1) of the 1998 Firearms (Amendment) Act, which requires carriers of firearms to "take reasonable precautions" for their safe custody and argued that to comply would involve disproportionate cost. A Royal Mail public consultation document on the changes said: "We expect the impact on customers to be minimal".[69]

The proposals provoked a large negative response following a campaign led by the British Association for Shooting and Conservation and backed by numerous shooting-related websites and organisations. A total of 1,458 people gave their views in emails and letters sent to Royal Mail. An online petition opposing the proposals was signed by 2,236 people, 1,742 of whom added comments. In the face of such opposition, Royal Mail dropped the proposals in December 2012.[70]

Staffing

As of 2013, Royal Mail employs around 150,000 permanent postal workers.[71] An additional 18,000 casual workers are employed during November and December to assist with the additional Christmas post.[72]

In 2011, Royal Mail established a in-house agency, Angard Staffing Solutions, to recruit temporary workers. Royal Mail was accused of trying to circumvent the Agency Workers Regulations, but denied this, saying they only wanted to reduce recruitment costs.[73] In January 2012 it was reported that Angard had failed to pay a number of workers for several weeks.[74]

Royal Mail's industrial disputes include a seven-week strike in 1971 after a dispute over pay and another strike in 1988 due to bonuses being paid to new staff recruited in London and the South East.[75]

Royal Mail suffered national wildcat strikes over pay and conditions in 2003.[76] In Autumn 2007, disputes over modernisation began to escalate into industrial action.[77] In mid October the CWU and Royal Mail agreed a resolution to the dispute.[78]

In December 2008, workers at mail centres affected by proposals to rationalise the number of mail centres (particularly in North West England) again voted for strike action, potentially affecting Christmas deliveries.[79] The action was postponed less than 24 hours before staff were due to walk out.[80]

Localised strikes took place across the UK from June 2009 and grew in frequency throughout the summer. A ballot on national industrial action[81] over Royal Mail's failure to reach a national agreement covering protection of jobs, pay, terms and conditions and the cessation of managerial executive action was passed in October,[82] causing a number of two and three-day strikes.

Regulation

The Royal Mail is regulated by Ofcom, while consumer interests are represented by Consumer Futures. The relationship between the two bodies' predecessors (Postcomm and Postwatch) was not always good, and in 2005, Postwatch took Postcomm to judicial review over its decision regarding rebates to late-paying customers.[83]

The British Government's shareholding in the company is managed by the Shareholder Executive.[84]

Royal Mail has, in some quarters, a poor reputation for losing mail despite their claims that more than 99.93% of mail arrives safely and in 2006 was fined £11.7 million due to the amount of mail lost, stolen or damaged.[85] In the first three months of 2011, around 120,000 letters were lost.[86]

In July 2012 Ofcom consulted on a scheme proposed by Royal Mail to alter its delivery obligations to allow larger postal items to be left with neighbours rather than returning them to a Royal Mail office to await collection. The scheme was presented as offering consumers greater choice for receiving mail when not at home and was said to follow Royal Mail research from a 'delivery to neighbour' trial across 6 areas of the UK that showed widespread consumer satisfaction.[87] In a statement dated 27 September 2012, Ofcom announced it would approve the scheme after noting that more goods were being purchased over the internet and that Royal Mail's competitors were permitted to leave undelivered items with neighbours.[88] People who do not wish to have parcels left with neighbours, or to receive those of others, can opt out by displaying a free opt-out sticker near their letterbox. Royal Mail remains liable for undeliverable items until they are received by the addressee.[89]

Ofcom suggested in October 2012 that the first and second class post systems could be replaced by a single class. The new class would be set at a higher price than the current second class, but would be delivered in a shorter time-frame.[90]

Fleet

Royal Mail is famous for its custom load-carrying bicycles (with the rack and basket built into the frame), made by Pashley Cycles since 1971. Since 2000, old delivery bicycles have been shipped to Africa by the charity Re~Cycle; over 8,000 had been donated by 2004.[91] In 2009, Royal Mail announced it was beginning to phase out bicycle deliveries, to be replaced with more push-trolleys and vans. A spokesman said that they would continue to use bicycles on some rural routes, and that there was no plan to phase out bicycles completely.[92]

In addition to running a large number of road vehicles, Royal Mail uses trains, a ship and some aircraft, with an air hub at East Midlands Airport. Titan Airways operates a single Boeing 737-3Y0 for dedicated Royal Mail flights.[93]

The RMS St. Helena is a cargo and passenger ship that serves the British overseas territory of Saint Helena. It sails between Cape Town, Saint Helena and Ascension Island.[94] It is the last dedicated Royal Mail Ship in service.[95]

Royal Mail operated the London Post Office Railway, a network of driverless trains running on a private underground track, from 1927 until it closed it in 2003.[96]

See also

References

Notes
Sources
  • A brief history of the Post Office – A GPO public relations publication 1965

External links

  • Corporate website

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