Later today ministers will announce the final details of plans for the privatisation of Royal Mail.
Later today ministers will announce the final details of plans for the privatisation of Royal Mail.
The government is looking to move quickly on the sale, with shares expected to be floated by the autumn.
There are many things which this government is doing that warrant criticism, but I am convinced that in years to come the sell off of the Royal Mail will be considered one of the most execrable decisions made by the coalition.
Here are five reasons why.
1. Royal Mail is a profitable business. Far better, then, to keep the Royal Mail public and plow the profits back into the service rather than allow them to be siphoned off to shareholders. The company made £440 million last year. The fact that the Tories still want to privatise what is an increasingly successful business smacks of public bad/private good fanaticism.
2. The cost-cutting that will likely follow a sell-off will place a huge question mark over the universal service. This isn’t left-wing propaganda as some on the right will undoubtedly claim. The Bow Group, the oldest conservative think-tank in Britain, has warned that privatisation could see the price of a stamp increase and Post Offices in rural areas close.
3. Privatisation doesn’t solve all problems. It ought to cause alarm that this point even has to be made, but such is the view of public services in the conservative mind.
Privatisation has been disastrous for our railways and has resulted in even higher subsidies for the rail operator than under public ownership. In 2010/11 Network Rail was subsidised by the taxpayer to the tune of £3.96 billion. This compares with an average of £1.4billion over the 10 years leading up to privatisation.
4. Stamp prices could hit £1. The price regulation of stamps has been scrapped to increase the attractiveness of Royal Mail to investors. This brings with it the possibility that stamp prices could hit £1 shortly after privatisation. A private business exists to maximise profits for its shareholders, after all.
Again it’s worth looking at train fares. Since privatisation ten years of above-inflation rail price increases mean that some in the south-east of England now spend 15 per cent of their salary on rail travel.
5. The Royal Mail is part of the fabric of the nation. This probably sounds a bit wet, but institutions do matter. There are certain things which have come to be associated with Britain. The NHS, cricket, red phone boxes and yes, the Royal Mail.
It is hard to overstate the respect the British public has for posties. The sight of a postie on his or her rounds early (or not so early these days) in the morning is a fundamental part of British culture (yes it does exist), and not everything can simply be reduced to its monetary value.
51 Responses to “Five reasons the privatisation of Royal Mail is bad policy”
OldLb
But you’re one of their supporters in favour of their policies.
Hence the desire to have some numbers.
e.g PFI, bonkers – result more and more debt.
However, the same’s true of almost all the other government investments.
e.g Invest in the post office. Result. 10 bn loss and growing (its a debt and they aren’t paying off debts)
It only makes sense, even the living longer etc, if that is substainable.
Give the consequences that flow from a 8,000 bn debt, on taxes of 600 bn, and spending of 722 bn, its all short term. What you are seeing now, with the ‘cuts’ is just the tip of the iceberg. Its going to get to Greek levels and worse.
All because, as you point out, politicians don’t do numbers.
No money, means its fucked. Direct consequences of Labour policies. Direct consequences of the Lib Dems and Tories carrying on spending, and not cutting.
Don’t blame me for pointing it out. Blame those ones who hide the numbers, and those that carry on spending.
The consequences are dire. Labour largely to blame, and the longer it goes on with the deficit being there, then you can also add in the others.
blarg1987
So since you don’t like labour, and I assume lib dem then I assume you voted conservative, considering most of these policies where conservative policies is it not your fault as you voted for conservative policies that new labour carried on bear in mind you voted for them in the first place? And if you say you do not vote then is it not your fault for not preventing this from happening?
Did you write to your local MP in 97? Did you write to the conservative goverment syaing PFI would be bad and do the numbers back then? WHat reply did you get?
P.s. I havenot voted for new labour once in my life and never agreed with PFI.
blarg1987
So come on then come up with the facts, who started PFI? WHo continues to use PFI now? Who is selling off other public secotr assets that have generated a profit for the tax payer like the east coast mainline?
If you say goverment should run things for a profit then that is not the ole of goverment they run a service to benefit the most people they can eith the resources available.
OldLb
I left the UK in 97. Don’t blame me.
Tory? Never voted for them in my life, or Lib Dem either. I have voted Labour and campaigned for them.
However they are screwing the poor. Completely.
New Labour is Labour. They implemented Labour policies.
As for writing to MPs, mine won’t respond. Simon Hughes. The reason is I tweaked that he submitted a fraudulent claim. Two laptops on expenses one month. Same invoice the next month, with his signature saying it was wholly and necessary for his work as an MP. He got caught by the expenses office.
OldLb
So how can you pay the poor’s pensions when you are 8 trillion in debt, rising at 900 bn a year?
New Labour, Old Labour, Lib Dems and Tories, all in on the scam.