The Postal Services Act 2000: competition is coming

Abstract

In The Postal Service: Competition or Monopoly (IEA, 1970), I argued that the Post Office's monopoly of the letter should be removed. Thirty years later, an Act has been passed setting up a regulatory body with powers to do just that. PostComm will need to ensure the continuation of the universal postal service. To avoid market distortions, the Post Office will need to keep separate accounts for its services and to eliminate its historical internal cross-subsidies. All operators, including the Post Office, with licences to provide postal services may be required to take account of the needs of the disabled, and other disadvantaged groups. The counters network may be subsidised by the DTI. It now remains to be seen whether PostComm has the will and the muscle to open up the postal market to effective competition.