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Privatisation of Royal Mail

Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
http://www.bbc.co.uk/news/business-11258649
Royal Mail is to be privatised, government confirms

The government is to go ahead with a sale of Royal Mail, says Vince Cable.

The business secretary acted after an independent report said the postal service's outlook had worsened. A new independent firm will be formed to run sorting and delivery operations.

Outside investors will hold the most shares, and the rest will be offered to Royal Mail staff. Pension liabilities will be taken on by the government.

But the CWU trade union said the plan would devastate the postal service.

There has not yet been a final decision on exactly how the majority of Royal Mail will be privatised.

It could be sold to a private company or companies, or involve a public share offering.

Officials want to keep options open so their hands are not tied if market conditions change after the bill goes through Parliament.

"These are matters we need to resolve further down the line," Mr Cable said.

"But we need to get on with the legislation, which is urgently needed, because the financial position is deteriorating.

"Royal Mail is facing a combination of potentially lethal challenges - falling mail volumes, low investment, not enough efficiency and a dire pension position."

The government also confirmed that the separate Post Office network would remain in state ownership.

The review of Royal Mail by Richard Hooper says that the universal postal service can be maintained only by an injection of private sector money and expertise.

Royal Mail welcomed the report.

"Royal Mail needs a way of getting access to capital, a resolution of the legacy pension deficit and a strikingly different regulatory approach which allows us to compete fairly in an increasingly tough and shrinking market," said a spokesman.

But the CWU's general secretary, Billy Hayes, said privatisation would lead to higher prices for customers and job losses for staff.

"It's the failed politics of history which brought disruption to Britain's utilities and railways and astronomical prices for consumers," he said.

"Dangerously in this case, we fear the government may also be plotting to seize the pension assets."

Mr Hooper's report says industrial relations have improved at the Royal Mail in the past two years and some modernisation of sorting and delivery services has taken place.

But he argues that only the private sector can provide the money necessary to continue the modernisation process, at a time when the government is strapped for cash and the Royal Mail cannot generate enough extra cash itself.

And he envisages that this will involve closing half of the current 64 big "mail centres" that distribute letters and packets to local sorting offices.

A key feature of the latest recommendations, like those first published in December 2008, is that the Royal Mail's pension scheme, which currently has a deficit of £8bn, should be taken over by the government to relieve the company of making huge extra contributions.

The pension problem is mentioned more than 40 times in Mr Hooper's latest 50-page report.

"The introduction of private sector capital is by itself far from sufficient to secure the future of the universal postal service," Mr Hooper said.

"Its future depends just as much on resolving the closely connected issues of the pension deficit and the need to transform postal regulation."

Last year, the Labour government abandoned its plans, inspired by Mr Hooper's first report, to find a private sector partner for the Royal Mail via a partial sale.

Mr Hooper, a former deputy chairman of the communications regulator Ofcom, said that in 20 months since that report, the Royal Mail's position had become worse.

The decline in the number of letters being sent has accelerated and will not be offset by more parcels being sent, for instance, to internet shoppers, he argued.

"Without serious action, Royal Mail will not survive in its current form," he said.

He demanded urgent changes to preserve the universal service under which letters are delivered for the same charge regardless of their destination in the UK, six days a week.

A new feature of his proposals, supported by the coalition government, is that staff should be given a stake in the company if it is sold or privatised.

"It is important that any future employee ownership scheme should be taken forward with the aim of achieving the culture change that is needed within Royal Mail," he said.

"Employee shares could be a powerful force in supporting the company's modernisation and future success."

As a member of the CWU, I've been hearing about this for a long time now. I agree with the Union's 'Keep the Post Public' campaign.

I can't see how the Royal Mail could possibly survive as a private company, lesser known provide the current flat rate services on a commercial basis.

I'll see if I can get any scans of the Union newspaper up tomorrow, here is a link in the meantime..
http://www.cwu.org/keep-the-post-public.html
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Comments

  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Not sure if I can muster up any 'care' over this. Nope, I tried - I don't care.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Inefficient, poor practices that are now assumed to be "rights" and relatively militant unions. It was always going to end like this.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I didn't click the links, explain why I should care?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Because you won't be getting any post from now on.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    MoK wrote: »
    Inefficient, poor practices that are now assumed to be "rights" and relatively militant unions. It was always going to end like this.

    I think in the main the average postie earns a pretty low wage for what outside of the few weeks of summer we have must be a pretty shitty thankless job. The "perks" they have go back many many years and have worked in as much as they keep a fairly low paid workforce happy.
    Working men need a strong union behind them otherwise their pay and conditions would be Victorian.

    History shows us that privatisation simply does not work, it leads to higher costs for the consumer and a much worse service.

    Look at how high gas and electric bills have been lately, if the goverment was directly responsible for them they would be much lower as those bills would be a vote loser.
    The same is true of the trains you now pay a small fortune to stand in cramped filthy carriages for a couple of hours with someone gazing down your top and someone else poking you with an umbrella, again this only happens because the important thing now is profit for the shareholders.

    The same will happen with the post office stamps will double in price the time it takes to deliver a letter will probaly triple and most of the country will be on a surcharge to get a next day delivery.

    Lets do all we can to delay this until Ed and his band of brothers take control.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    My two penneth: I always find it puzzling when you hear that the RM is losing business to other companies. In my limited experience of mail couriers Royal Mail has always been far and above the best. I've had nothing but beef with HDN, and have stopped using Amazon since they adopted them as their main courier. The others I've come across have always had collection centres fooking miles away.

    Though it appears RM can't manage a pension fund for toffee.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Louisek wrote: »
    I think in the main the average postie earns a pretty low wage for what outside of the few weeks of summer we have must be a pretty shitty thankless job. The "perks" they have go back many many years and have worked in as much as they keep a fairly low paid workforce happy.
    Working men need a strong union behind them otherwise their pay and conditions would be Victorian.

    History shows us that privatisation simply does not work, it leads to higher costs for the consumer and a much worse service.

    Look at how high gas and electric bills have been lately, if the goverment was directly responsible for them they would be much lower as those bills would be a vote loser.
    The same is true of the trains you now pay a small fortune to stand in cramped filthy carriages for a couple of hours with someone gazing down your top and someone else poking you with an umbrella, again this only happens because the important thing now is profit for the shareholders.

    The same will happen with the post office stamps will double in price the time it takes to deliver a letter will probaly triple and most of the country will be on a surcharge to get a next day delivery.

    Lets do all we can to delay this until Ed and his band of brothers take control.

    I have no doubt what the impact of privatisation will be, I'm in complete agreement with you on that.

    But the RM and their workers have put themselves in this position where they have little defence against their practices. My Bro works there, has done for years, and there's so much there that is grossly inefficient or just a simple waste. Yet the Unions do their best to prevent anything changing.

    Sometimes I wonder if the Unions realise the long term implications to their stances. Sure their member will retain things like subsidised meals and generous overtime but the business is basically fucked. Email, electronic transfers and Parcel companies haven't helped, of course, but the Unions needs to take a long hard look at themselves.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Pretty happy with this. During the RM's numerous strikes in the past I've been severely inconvenienced (to put it mildly) and I'm pissed off with the way THEY decide (oh, and it's always a tough decision to strike isn't it? it's always "we didn't take this course of action lightly" etc) to down tools and take it out on the people who can do NOTHING (ie us) to change their situation.

    Above all this, I'm now used to my mail going missing, arriving damaged, "we apologise for any inconvenience caused"-style bullshit when you complain so if getting in a new company (or companies) to take over then go for it lads, just as long as you don't decide to hold innocent joe public to ransom when you can't have an extra 5 minute tea break.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'd say privatise, history shows its much better for both the business and the consumer, but frankly its too late.

    Who'd buy it - as a business model it's dying, we're never going to see the return of the letter and they're are much more efficient parcel services out there (where you're able to collect parcels at a decent time) - all Royal Mail will be is a deliverer of mass junk mail.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Because you won't be getting any post from now on.

    Good, stop the bills from arriving.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Pretty happy with this. During the RM's numerous strikes in the past I've been severely inconvenienced (to put it mildly) and I'm pissed off with the way THEY decide (oh, and it's always a tough decision to strike isn't it? it's always "we didn't take this course of action lightly" etc) to down tools and take it out on the people who can do NOTHING (ie us) to change their situation.

    "Solidarity" is a word you might want to remember when the robbing bastard tories start having a go at your industry.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'd say privatise, history shows its much better for both the business and the consumer,

    I would love to see some evidence of that
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Louisek wrote: »
    "Solidarity" is a word you might want to remember when the robbing bastard tories start having a go at your industry.

    It's hard to have sympathy when individuals who play an essential role in many people's lives obstruct and cause hassle, inconvenience and trouble to said people whenever they feel the need, especially when said people have no way of changing the status quo.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    The only real power the working man has is the ability to withdrw his labour, if you take away that right you half way to a dictatorship.

    Wether we all agree with the posties point of view or not is besides the point we should respect their right to strike.

    One other thing privitisation does is to weaken unions.

    All that will happen anyway is foreign companys cherry picking until we are left with no usable postal service at all.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I think it's up to consumers whether the posties have a job or how they work, not them or the unions. The industry is there to provide a service not jobs. This is the twenty first century fuck the Royal Fail.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    RFAIL.jpg
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Louisek wrote: »
    The only real power the working man has is the ability to withdrw his labour, if you take away that right you half way to a dictatorship.

    Wether we all agree with the posties point of view or not is besides the point we should respect their right to strike.

    One other thing privitisation does is to weaken unions.

    All that will happen anyway is foreign companys cherry picking until we are left with no usable postal service at all.

    I have no problem with industrial action when it is aimed directly at those that have the power to change things. In my personal life I cannot stand being dragged in to other peoples' arguments when it has nothing to do with me. This is reflected in my view of the unions.

    I don't think anyone is saying they don't have good cause to be unhappy. But dragging joe public in to it then expecting <r Public's support...are they for real?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I have no problem with industrial action when it is aimed directly at those that have the power to change things. In my personal life I cannot stand being dragged in to other peoples' arguments when it has nothing to do with me. This is reflected in my view of the unions.

    You have no problem with industrial action as long as it doesn't inconvenience you personally.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    You have no problem with industrial action as long as it doesn't inconvenience you personally.

    Got it in one.

    If their issue was down to some the public were doing and had control over then yeah, I'd understand them taking action that affects us.

    If I want a pay rise or improved working conditions do I go and brick up the doorway of my local nursery?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Louisek wrote: »
    I would love to see some evidence of that

    One could say that the person who intially put forward the claim
    History shows us that privatisation simply does not work, it leads to higher costs for the consumer and a much worse service
    .

    http://vbulletin.thesite.org/showpost.php?p=2350598&postcount=6

    to which I was responding should perhaps be posting with their evidence before asking for others to provide.

    However, as my evidence for example
    Considerable improvements in the quality of customer service
    combined with sharp reductions in the prices charged to consumers (both of
    which will be detailed in Volume 4 of this series); record levels of profitability
    (resulting in net government receipts averaging £8 billion per year as
    demonstrated in Volume 2 of the Series); and an improved track record in
    terms of both labour and customer safety (as seen in Volme 1 of the Series).
    Collectively, these facts indicate that the post–privatisation performance in
    these industries is considerably more efficient than it was when the same
    companies were in state hands.

    http://www.cps.org.uk/cps_catalog/CPS_assets/173_ProductPreviewFile.pdf

    and

    Variable % firms improved performance
    Profitability 67.6%
    Efficiency 81.5%
    Investment 60.6%
    Output 80.3%

    (Journal of Economic Literature)
    from here
    http://www.nao.org.uk/nao/intosai/wgap/14thmeeting/papers/Impacts.ppt
    p13

    Case Study – Wider Social Impacts

    The Privatisation of the water and sewerage in Argentina impacted not only the service coverage, but also the quality of life of the population. Infant mortality, a direct, tangible welfare indicator fell by 5 to 7 percent in areas that privatised their water services. In some of the poorest areas surveyed, the authors estimate that the child mortality rate dropped 24 percent after privatisation.

    Audit Implications – Employment levels

    Analytical Procedures conducted soon after Privatisation will generally show falls in employment levels due to restructuring. In the long term however, employment levels may stabilise and growth may see them increase beyond historic levels. For example, employment in the Peruvian telecommunications sector rose from 13,000 jobs in 1993 to 34,000 jobs in 1998 after initial restructuring.

    Some detail on the movement in employment levels of privatised British industries is given on the following pages and in Annex 1.

    Also from

    http://www.nao.org.uk/nao/intosai/wgap/14thmeeting/papers/Impacts.ppt

    p14
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Got it in one.

    Can you explain how a employees of a public service can take action without it affecting the public?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    No overtime, work-to-rule etc.

    By striking the work still needs to be done and they won't get any extra for it. Almost a 'win' situation for the employer really.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    No overtime, work-to-rule etc.

    By striking the work still needs to be done and they won't get any extra for it. Almost a 'win' situation for the employer really.

    Do you think that people just sit on their hands during overtime then, or that working outside "the rules" isn't part of getting the job done?

    By not doing overtime you are less likely to get the delivery you know...
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I'd say privatise, history shows its much better for both the business and the consumer

    That's a pretty universal claim, one which I think you would have (and are having) trouble justifying.

    Those two papers are pretty thin evidence - one is a general paper on privatisation from a Conservative Think-Tank (CPS), founded by Margaret Thatcher, that has the stated goal of being the 'Champion of a small state' - the other is a very interesting, though somewhat tenuously linked study of utilities privatisation in Argentina...

    The former is a commentary on academic work in the area, which points to some interesting general trends (which I don't have a problem with) but is no where near backing your claim, particularly given that 'performance' is measured entirely on 'productivity' so your 'better for the consumer' argument is not proven at all, but merely assumed. Also the number of sources of peer reviewed literature for a remit of this size is very small.
    from the CPS report

    ...NERA refers to the difficulties of identifying causal links for the
    observed changes in productivity performance and the fact that ‘the extent of
    post privatisation performance available to each set of researchers has been
    very limited’,

    ...and yet the authors appear to have already made up their minds that it justifies their clearly stated goals and ideologies.

    The later paper is, again, interesting but I fail to see much of an application to the discussion at hand, nor support for the universal claim about privatisation.

    Institutions - public or private - are run efficiently and skillfully, or they aren't - I don't think there's any economic wand to wave.

    I could pull out a number of similarly specific examples of how privatisation doesn't work for the consumer or service user, and in many cases discourages competition, leads to monopolies, drives down indicators of wellbeing, trashes communities and is implicated in wider social problems.

    What I wouldn't do is then claim that privatisation never works, because that would be wrong.

    My own view on the topic that we need to move beyond simply talking about public or private and get to the detail of how precisely things should run, in whose interests, and do so in a more consensual manner.

    I should add that I'm not too taken with the TUC's stance either to be honest - there's an interesting piece on Radio 4 on Monday about working class Conservatives who were and are trade unionists.

    It is interesting because alot of the people talking in teh preview echo what I believe unions are there for - to secure fair, equitable terms for workers and to ensure that their interests and wellbeing is looked after. The markets will not do this for them.

    Therefore, I think unions are vital to securing equitable terms for workers, but I think ideologies are once again leading them down an unskillful, confrontational path that will ultimately not be in their members' interests...
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    MoK wrote: »
    By not doing overtime you are less likely to get the delivery you know...

    As opposed to....?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    As opposed to....?

    Well.... er.... deliveries are happening today. Stop overtime or going on strike aren't different. They will affect those deliveries. Therefore they will have an effect on you.

    Little point in striking if it doesn't have an effect. Your argument is weak.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    MoK wrote: »
    Well.... er.... deliveries are happening today. Stop overtime or going on strike aren't different. They will affect those deliveries. Therefore they will have an effect on you.

    Little point in striking if it doesn't have an effect. Your argument is weak.

    I think it's pretty straightforward. I object to being pulled in to an argument which is not mine and one neither I or anyone else who gets affected by it can change.

    I also object at being asked to support these muppets when their actions have caused me significant inconvenience in the past.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    You can change it though.

    The strike is being suggested in response to Govt policy. We elect the Govt. We can also elect a different one, we can also lobby to undermine the coalition working together on this.

    Fine if you don't want to support them for other reasons, but if your lack of support is because it will "inconvenience" you then you kinda miss the point.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    MoK wrote: »
    You can change it though.

    The strike is being suggested in response to Govt policy. We elect the Govt. We can also elect a different one, we can also lobby to undermine the coalition working together on this.

    Fine if you don't want to support them for other reasons, but if your lack of support is because it will "inconvenience" you then you kinda miss the point.


    I think you're missing my point.

    It's not my argument.

    If I wasn't happy with my working conditions should I park my car across your drive thereby blocking you in, especially if you required constant disabled access? Hell no, and it would an even bigger laugh for me to expect you to support me.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    I think you're missing my point.

    It's not my argument.

    No, not missing your point, just trying to explain to you that it's an irrelevant point to be making. All strikes impact on the business, usually by affecting the customers. It's how they work.

    They annoy you, you shop elsewhere/complain, their bosses get fed up with that and negotiate.

    Really please, I'd love you to find me an example of a strike which doesn't impact on customers/public.
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