Why are we privatising the Royal Mail?

[trousers]

I'm comfortable with the fact that we privatised trains, energy, telephones, etc in the 80s because I could see the rationale in removing the burden of cumbersome loss making industries from the taxpayer's shoulders, but I'm struggling to rationalise the selling off of the Royal Mail as its a profit making organisation (isn't it?)

 

I know this'll turn into a coalition bashing thread before long but it should be remembered that it was originally Mssrs Blair and Mandleson that hatched plans to privatise the Royal Mail.

 

Even Thatcher was dead set against the idea...

 

So, why are we doing it? Is it simply short term thinking to generate national debt reduction funds or is there actually a longer term justification for it?

 

We know that a privatised mail services works in other countries (Germany is often cited as a good example) but I'm with Thatcher on this one: Don't sell.

Edited 12 July, 2013 by trousers

[buctootim]

Strikes me as bizarre also, I just don't understand the rationale. Being able to send letters across the globe for less than the price of Mars bar is an amazing thing, more so when you also have dealings with DHL, UPS etc and see not only their much larger charges, but how often these supposedly premium services go wrong.

[Smirking_Saint]

Strikes me as bizarre also, I just don't understand the rationale. Being able to send letters across the globe for less than the price of Mars bar is an amazing thing, more so when you also have dealings with DHL, UPS etc and see not only their much larger charges, but how often these supposedly premium services go wrong.

 

I was in a UPS sorting office the other night, not difficult to realise how things CAN go wrong...

 

As for the Royal mail, I struggle to see it also

Edited 12 July, 2013 by Smirking_Saint

[trousers]

I was in a UPS sorting office the other night, not difficult to realise how things CAN go wrong...

 

As for the Daily mail, I struggle to see it also

 

Mr Freud would be proud of that one...

[View From The Top]

It makes little sense as they've totally restructured and are turning over excellent profits.

 

Surely it would be ideal for a social enterprise?

Edited 12 July, 2013 by View From The Top

[OldNick]

I'm comfortable with the fact that we privatised trains, energy, telephones, etc in the 80s because I could see the rationale in removing the burden of cumbersome loss making industries from the taxpayer's shoulders, but I'm struggling to rationalise the selling off of the Royal Mail as its a profit making organisation (isn't it?)

 

I know this'll turn into a coalition bashing thread before long but it should be remembered that it was originally Mssrs Blair and Mandleson that hatched plans to privatise the Royal Mail.

 

Even Thatcher was dead set against the idea...

 

So, why are we doing it? Is it simply short term thinking to generate national debt reduction funds or is there actually a longer term justification for it?

 

We know that a privatised mail services works in other countries (Germany is often cited as a good example) but I'm with Thatcher on this one: Don't sell.

i think I heard that the nation has to pick up the 33bn pension gap. I assume if we keep RM the pension deficit will be get wider and cost the nation more. If the private company cuts some routes then they get the flak not the Gov. Some of the deliveries are ludicrous, 2 miles to deliver a letter. I suggest the farmowner will get a postbox put at the end of their drive and they use theor time up.

I accept some people should still have theior delivered to the door, but sometimes you need new ideas to cut ancient practices that need addressing (pun )

[Smirking_Saint]

Mr Freud would be proud of that one...

 

How did I manage that ? Lol

 

Good spot trousers

[View From The Top]

i think I heard that the nation has to pick up the 33bn pension gap. I assume if we keep RM the pension deficit will be get wider and cost the nation more. If the private company cuts some routes then they get the flak not the Gov. Some of the deliveries are ludicrous, 2 miles to deliver a letter. I suggest the farmowner will get a postbox put at the end of their drive and they use theor time up.

I accept some people should still have theior delivered to the door, but sometimes you need new ideas to cut ancient practices that need addressing (pun )

 

RM pension is sorted. Now runs at a small surplus. Was part of the restructuring at now means that are running at £450m profit.

[ecuk268]

At least you'll be able to buy shares in something that you already own.

[OldNick]

RM pension is sorted. Now runs at a small surplus. Was part of the restructuring at now means that are running at £450m profit.

That is good.

Personally I am not sure what is the best thing to do, I would also keep Lloyds bank as in time that will make us plenty of revenue, why take a massive loss when it will generate decent revenue back in?

[Barry Sanchez]

Because the tory class hate the state system whether it makes a profit or not.

[trousers]

At least we got into double figures before the first inevitable Tory bashing post

[anothersaintinsouthsea]

There is only one reason to sell RM. £££££££££

[View From The Top]

There is only one reason to sell RM. £££££££££

 

Yep.

[Lord Duckhunter]

RM pension is sorted. Now runs at a small surplus. Was part of the restructuring at now means that are running at £450m profit.

 

So are you trying to say that the RM pension is fully funded for the future, that the tax payer will never have to contribute towards RM pensions ever again?

[View From The Top]

So are you trying to say that the RM pension is fully funded for the future, that the tax payer will never have to contribute towards RM pensions ever again?

 

That's what they say (all parties involved). No way they'd flog it if there was a huge hidden deficit.

[Verbal]

So are you trying to say that the RM pension is fully funded for the future, that the tax payer will never have to contribute towards RM pensions ever again?

 

It's not fully funded. The "profit' is an actuarial one - ie garbage in, garbage out. After years of being deep in the red, the pension scheme suddenly looked healthy just before Vince Cable made the privatisation announcement.

 

The taxpayer will underwrite all future pension payments - as well as having contributed to a just-completed and massive investment programme to modernise the service, especially with sorting-office automation. That investment will be gifted to the new shareholders. The only substantial commitment undertaken by the new owners would be the guarantee of a universal delivery service throughout the UK. This will presumably be enforced and monitored by another new quango rather like Ofgem, which absolutely guarantees that energy customers are not ripped off - ever - by companies like SSE.

 

Shares will presumably be attractive to companies like G4S and Serco, who will no doubt deliver the service by massively overcharging the taxpayer at the drop of a hat.

[aintforever]

Does seem strange. I expect the Tories have mates in the city who will make a fortune from it (meaning they will as well) plus the government get a wedge of cash to make their figures look good in the short term.

[Patrick Bateman]

This is one of those things where I just couldn't give a rat's arse to be honest. They're rubbish now and will probably continue to be rubbish; I probably get one letter every fortnight that's been "lost" and arrives in a plastic bag covered in mud and is torn.

[Tamesaint]

In answer to theOP

 

I went to my local sorting office the other day to collect a parcel. It was shut at lunchtime - the time when people can visit the sorting office to collect parcels. This may have been the way to do things in tthe 70's but nowadays people expect better customer service. The place is run to suit the employees , not the customers - and these days that isn't how the world works. I do think that privatisation will bring the Royal Mail into the 21st century.

 

 

and by the way.... I didn't vote Tory last time and have no intention of voting Tory or for any other right wing party.

[Ex Lion Tamer]

In answer to theOP

 

I went to my local sorting office the other day to collect a parcel. It was shut at lunchtime - the time when people can visit the sorting office to collect parcels. This may have been the way to do things in tthe 70's but nowadays people expect better customer service. The place is run to suit the employees , not the customers - and these days that isn't how the world works. I do think that privatisation will bring the Royal Mail into the 21st century.

 

 

and by the way.... I didn't vote Tory last time and have no intention of voting Tory or for any other right wing party.

 

It's the old debate of public vs private. Yes, public services like RM are badly run, but for all the efficiency of the private sector you will find prices rising and minorities not being supported (i.e. remote locations will find themselves without a postal service because it isn't profitable)

[View From The Top]

In answer to theOP

 

I went to my local sorting office the other day to collect a parcel. It was shut at lunchtime - the time when people can visit the sorting office to collect parcels. This may have been the way to do things in tthe 70's but nowadays people expect better customer service. The place is run to suit the employees , not the customers - and these days that isn't how the world works. I do think that privatisation will bring the Royal Mail into the 21st century.

 

 

and by the way.... I didn't vote Tory last time and have no intention of voting Tory or for any other right wing party.

 

My local sorting office is open from 06.30 - 18.30, except Wednesday when it's open to 20.30. On Saturdays it's open until 14.00. Positively dinosaur.

 

I use couriers when sending parcels, around 500 a year, as it's cheaper but it would be churlish so suggest that RM aren't operating in the C21st.

[ecuk268]

The reason that there's no pension deficit is that the £38bn has been transferred to the taxpayer because no investor in his right mind would invest in a company with those sort of liabilites.

 

It was announced in the the Budget in March 2012 that the liabilities of the scheme, which were around £37.5 billion, would be transferred to a newly established unfunded public pension scheme.

[Batman]

We dont get post in our area on Mondays anymore. Due to savings

Edited 14 July, 2013 by Batman

[Yeovil Saint]

The reason that there's no pension deficit is that the £38bn has been transferred to the taxpayer because no investor in his right mind would invest in a company with those sort of liabilites.

 

It was announced in the the Budget in March 2012 that the liabilities of the scheme, which were around £37.5 billion, would be transferred to a newly established unfunded public pension scheme.

 

That is the correct answer which makes the OP's question even more baffling. This government has split the Royal Mail into two parts, The profit-making mail delivery service and the £38bn loss making legacy pension liabilities and selling for a pittance the profit-making part while hanging onto the loss making part. and it is a pittance, the sell off will only raise £3bn for a company that's currently making £200m profit per year.

 

The privatisations of the 80s did make sense in the sense that we owned companies that were losing money and the government weren't politically able to make the tough decisions to turn around or close the businesses. Thatcher didn't split up British Steel or British Leyland into the good part and bad part, only selling the good part, she sold the whole thing and ensured that we didn't lose any more money. But all the privatisations since have been bad deals for us. Rail privatisation in the 1990s now means we pay far more subsidy to the rail industry than we ever did to British Rail, We could only sell the nuclear industry by not selling the older nuclear power plants and agreeing to be on the hook for waste disposal and that's currently estimated at £100bn. We sold Northern Rock to Virgin by only first splitting off the bad parts into Northern Rock Asset Management. Northern Rock (the "good" bank) was sold for £750m, an estimated £140m less than the land value of its branches, Northern Rock Asset Management (the "bad" bank) remains in public ownership, servicing £50bn of old mortgages but with a strange deal where if it ever goes back into profitability that money gets given to the old Northern Rock shareholders. Why on earth are we agreeing to a deal where if NRAM makes a loss we pay for it, but if it makes a profit we don't see a penny. The NHS privatisations are happening with the same sort of deal as Royal Mail, the profitable parts are going out to tender, the loss making parts including all the pension scheme liabilities will remain with us.

 

We're being robbed by this government, and the last government too, this isn't a party political point, and we're not noticing it. Despite all the cuts this government have made, we're borrowing more money than we ever were before. That missing money is making a lot of rich people even richer.

[bridge too far]

An interesting, if somewhat lengthy, view on the matter in the Observer

 

http://www.guardian.co.uk/commentisfree/2013/jul/14/royal-mail-privatisation-business-investment

 

It postulates that RM could eventually be owned by the Chinese government!

[mack rill]

About f**kin time, the amount of mail that just happens to go missing once it reaches slindon st (pompey main sorting office) There vans have no doors,

[OldNick]

About f**kin time, the amount of mail that just happens to go missing once it reaches slindon st (pompey main sorting office) There vans have no doors,

The vat return seems to never arrive at FP