Queen of the privatisers Margaret Thatcher thought the better of doing it, then New Labour’s Peter Mandelson tried but failed to do it but now it seems that it’s going to be third time unlucky as the coalition government moves to sell off the Royal Mail … a national asset that belongs to all of us:
Business Secretary Vince Cable told MPs yesterday: “Now the time has come for government to step back from Royal Mail, allow its management to focus wholeheartedly on growing the business and planning for the future. It’s now time for employees to hold a stake in the company and share in its success. This government will give Royal Mail the real commercial freedom it’s needed for a long time.”
Around 150,000 staff will be offered free shares when Royal Mail – one of the world’s oldest postal services – is sold off. It’s expected that the company will be worth snywhere between £2.5 – 4 billion when it is floated on the stock market later this year
Mr Cable said privatisation was necessary to ensure that universal service, which currently guarantees delivery to all parts of the country six days a week, can continue. Th government also says that the sale will give Royal Mail the access to private capital it needs to grow and remain competitive.
Royal Mail is currently refocusing it’s business priorities, targetting parcel delivery to cash in on the rapid growth of internet shopping as the number of posted letters falls due to the explosion of email. This change of emphasis saw Royal Mail more than double its profits last year after years of losses.
Ed Davey, minister for postal affairs, said the proposals ‘safeguard the future of both Royal Mail and the Post Office – two cornerstones of British life’, but there are many who are question whether the sell-off is either desirable or necessary – and industrial action looks likely.
Billy Hayes, general secretary of the Communication Workers Union, said: “The fact of the matter is the British public don’t want to see the Royal Mail privatised. Vince Cable is flogging this company to the very people he denounced at the Liberal party conference – the spivs, the speculators and those who just want to make a fast buck.” He went on: “Royal Mail is thriving in public ownership, increasing its profits, providing good quality services and decent jobs. We want it to remain that way. Privatisation would be a throwback to the tired old politics of the 1980s.”
Dave Ward, CWU’s deputy general secretary, said he expected members to be balloted before the end of September. “We will be balloting for strike action, we’ve already adopted that policy. I expect that policy to be ratified by the conference of the union at the end of July. That’s about our members’ terms and conditions, I want to make that clear. It’s about what we fear will happen with Royal Mail as a private operator – what we want is a legal binding agreement that protects their terms and conditions, their contracts of employment, their pensions, for the foreseeable future.
“I don’t think our members will be bought off by the free share issue,” he added. “I believe our members are too long in the tooth not to know the dangers of privatisation.”
Speaking after the announcement North and Leith Labour MP Mark Lazarowicz said: The Government has nationalised Royal Mail’s liabilities in the form of the pension fund in which there was a large shortfall and is now intent on privatising the profits. It argues that it is necessary to subject Royal Mail to commercial discipline and give it access to private sector capital but Royal Mail’s overall operating profits more than doubled over the last year from £152m in 2011-12 to £403m in 2013-13!
“A privatised Royal Mail might continue to operate the universal service provision of delivering 6 days a week to anywhere in the UK for the same price but for how long if its commercial rivals don’t have to? As with the East Coast Main Line, ideology seems to have won out over common sense – it will be private investors who benefit from its commercial success not the taxpayer or customers.”
