Aaron Bastani exposes Royal Mail privatisation for the scam it is

"You pay more for a worse service - that's privatisation for you"

Aaron Bastani on Novara Live

Royal Mail has been in the headlines as of late. The privatised postal firm has recently announced that first class stamps are set to increase by 14 per cent and that it is seeking to end deliveries on Saturdays.

These developments come off the back of a bitter industrial dispute with the Communication Workers Union, and the announcement earlier this year that the company’s CEO Simon Thompson is set to stand down.

With Royal Mail enduring a protracted period of turbulence, many people are asking searching questions about the decision to privatise the company – a decision made by the coalition government a decade ago.

In a new video, Novara Media‘s Aaron Bastani has laid out the absurdity of that privatisation.

Speaking on an episode of Novara Live, Bastani said: “Earlier this year, the Royal Mail increased the price of a first class stamp to £1.10. The context for that was claims industrial action by postal workers had left the group on the brink of insolvency.

“But like most things that emanate from the mouths of Britain’s business class, that was complete garbage.”

He continued by explaining the truth of the situation: “In the three years to 2022, Royal Mail recorded £1.7 billion in profits. Meanwhile, over the last six years management has paid £884 million in dividends and returned £400 million in ‘excess cash’,” later adding, “meanwhile high inflation meant increasing the cost of stamps above inflation but giving workers pay rises well below inflation”.

Alongside highlighting the scale of profits at Royal Mail, Bastani also set out the sky-high executive pay at the firm. He said: “Rico Back was paid millions as CEO while being able to work from home, AKA on the banks of a Swiss lake – and no, I’m not joking!

“And a more recent CEO – Simon Thompson – earned three quarters of a million pounds plus £140,000 in bonuses, despite the company facing an investigation over missed delivery targets. Imagine getting a bonus of £140,000 while being investigated! That would be bizarre in most places, but not in corporate Britain it turns out.”

Alongside the profits, the executive pay and the rising cost of stamps, Bastani explained how the postal service has been underperforming. He told viewers: “The service has been going backwards too. Last year, Royal Mail announced that all deliveries would be completed by 5pm rather than 4pm. Meanwhile, in 2022, one in four letters was delivered late.”

He then went on to succinctly summarise the situation as a devastating failure of privatisation. “So, more expensive stamps and later delivery times, but high profits. High executive pay, but falling worker pay. So far, so bad. The story of Royal Mail offering a microcosm of the failures of privatisation,” Bastani said.

After looking at the plans to end the Universal Service Obligation which guarantees a postal service on Saturdays, Bastani queried where the touted multi-million pound annual saving that would produce would go. He posed the question: “Let’s say the saving of £225 million a year is made – there’s a poorer service, but that’s just the trade off – where do you think that money is going to go? A better service that’s been deteriorating for years? Better paid postal workers who’ve seen their wages hammered, particularly since Covid? Or dividends to shareholders and higher executive pay?”

Bastani’s answer is simple, and draws the lesson of the forty-year long experiment in privatisation of public services. He said: “The experience of privatisation suggests the latter – always! Privatisation means a worse service for higher costs. The consumer loses out. The workers lose out. And often, the taxpayer loses out too.

He then concluded by explaining how the decline of Royal Mail follows the wider pattern of Britain’s privatised public services: “You have to wonder how long the scam of privatisation can go on. We have the most expensive trains in Europe, but apparently we can’t afford to have ticket offices. Meanwhile, the Royal Mail increases the price of a first class stamp to £1.10, yet apparently we can’t afford to have a Saturday post and one in four letters is late. You pay more for a worse service – that’s privatisation for you.”

You can watch the full clip here:

Chris Jarvis is head of strategy and development at Left Foot Forward

Image credit: Novara Media/Twitter screengrab

Comments are closed.