Monopoly is always the same

From Adam Smith onwards we have recognised the dangers of monopoly. They are a lack of competitive pressure which leads to tolerance of inefficient production and poor treatment of consumers who have nowhere else to go. (There are other problems, but these will do.)

Royal Mail is not the monopoly it was, since the regulator has nibbled away at its power in an effort to introduce competition and efficiency. It is still a n effective monopoly as far as private and domestic mail is concerned. The result is fewer and unpredictable collections of mail and unpredictable delivery, in our case varying between 8.30 and 14.30, and annually rising costs. In brief, the service has deteriorated.

This is why the government proposal to privatise part of Royal Mail must go ahead. The latter has been badly managed, fights against competition and for the maintenance of its monopoly. The shibboleth of "one price anywhere in the country", which means the massive cross subsidisation of some collections and deliveries by others, often from poorer to richer people, is invoked and intoned like some religious dogma.

If the one price for all in a monopoly ever made sense, it no longer does, because there are so many competing technologies now - texting, e-mails, telephones and mobiles, etc., and with the imminent demise of cheques there will be a further reason for not using the snail-post. Royal Mail intransigence is slowly defeating itself, and the time is coming when the few important packets such as legal documents will use courier service rather than the post, meaning that the service has died.

In the meantime there is another problem, which is the enormous hole in the Royal Mail pension fund, caused in part by the fact that successive governments permitted Royal Mail to avoid making contributions for many years. Now, to maintain the gold-plated final salary pensions a massive injection is required from taxpayers or customers. This is a politicial hot potato, the communication workers must not be allowed to fend off partial privatisation and simultaneously demand to be bailed out for pensions.

Nationally something like £650 billion of public sector pensions is unfunded. (Some experts put it as much as twice that figure.) Cameron has already indicated that the Tories will insist on equality of public and private sectors, by ending the gold plating in the former. Long gone are the days when wages in the public sector were lower than in the private sector, - they are now significantly higher. There is no justification for the claim by postal workers.

When Labour is in power, their 'natural' supporters and funders - the trade union leaders can extract concessions. So far Brown and company have held out, to their credit. They must not give in.