Royal Mail privatisation to go ahead

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Post Office Letter Boxes, EC1A 1AA .London Chief Office 1994

Business Secretary Vince Cable has announced that the government is to go ahead with the privatisation of Royal Mail. He said: “Royal Mail is facing a combination of potentially lethal challenges – falling mail volumes, low investment, not enough efficiency and a dire pension position.”

The exact form of the sell-off has not yet been finalised: RM could be sold directly to a private company or group of companies, or there could be an 80s-style public share offering. Royal Mail workers could also be offered a share of the privatised company.

Mr Cable said: “These are matters we need to resolve further down the line. But we need to get on with the legislation, which is urgently needed, because the financial position is deteriorating.”

The Communication Workers’ Union, meanwhile, has called the plans “politically motivated”. In a statement, CWU General Secretary Billy Hayes said:

Privatisation would be devastating for Royal Mail and the whole country’s postal services. … This could damage the service for all customers including millions of small business and potentially harm the UK economy. Privatisation will also mean separation of Royal Mail and the post office network, putting the very existence of many more post offices that play such a key role in Britain’s communities at risk.

Creative Commons License photo credit: sludgegulper

33 Responses

  1. About time too…Can’t wait to see how it’s going to work etc…Might be initially painful but all for the best.

  2. YES, without question. As much cash as I had I would invest. These sort of offerings are very rare these days.

  3. I doubt that the government has a Thatcher type privatisation in mind here.

    They are looking for management as well as money.

  4. Hmmmm,

    Lets get this right Royal Mail may be privatised or may stay as it is.

    They have to find a buyer or buyers first, TNT have said they are not intrested, it will need to be a massive company or a group of massive companies to pull it off….

    In the current climate not likly going to happen….

    Imangine someone like DHL take it on and its goes tits up….no more DHL…massive risk

  5. something needs to be done Royal mail seem to think they are a law to themselves,they seem write the rules as it suits them ,to squirm and wriggle out of anything ,if they have this attitude with their workforce no the wonder they have unrest,
    2p on the letter rate and a change of management would do it

  6. 2p and a change of management is the least that will happen anyhow
    so why not try that first and keep the Royal mail in public control

  7. I have never understood why Royal mail is so cheap ( for little things)
    double the price of first class and they could afford to pay the posties properly and get some decent management in.

    I mean come on…41p

    and before everyone screams “no one will use it”…try finding anyone with the same service for less than 4 times the price.

    they have a monopoly on the last mile, they really should be taking advantage of it.

  8. Indirectly Royal Mail is subsidizing many business in a growth area of the economy. Would it not be best for the government ensure that Royal Mail continue to offer an excellent service at this time.

    I can imagine that whoever takes over Royal Mail will still receive large amounts of government funding. The UK tax payer will be left with huge liability (like pensions) but none of the profitability (to pay).

    If things come unstuck down the line UK taxpayers can always bail out the new company and pay the giant golden hand shakes for the failed directors.

  9. would suit DPD they run german mail, would be kind of ironic….. would love to be a fly on the wall of Nick Griffins office when that news broke.

  10. The only way forward would be for a public-private offering of shares (as thatcher did with BT’ etc) as I cannot see any of the ‘larger’ courier Co taking on such a larger organization.

    I doubt any of them has the experience anyway.
    Yes I know, the larger courier Co’s are all very effective (until something goes wrong) but RM is just so very big & as said before NO ONE offers letter post @ 41p (or account @ 36p), so how much will it end up as??.

    RM could be run as a PLC, but who takes on the Pension problems, us no doubt, as tax payers, because NO Co out there will look at it if that’s not the case.

    As for strikes, well suppose so, but as this is just starting to happen, hopefully we will get passed ‘this’ Xmas without the usual truma from RM….lets just hope.

    Would I buy shares?, yes probably, as RM is profitable now anyway, as long as it does not turn out like another Channel tunnel adventure for shareholders.

  11. Another thing

    We send our Post (PPI) very late on most weekdays (quite often @ 6.30pm).
    We don’t have to book in advance, just print & send.

    Most of it is there the next morning & I have to say, that generally RM has improved. Yes, a few thing still go astray (assuming it’s not the buyer trying it on) but that has got better.

  12. Privatisation means it will all be about profits. Service will go out the window like 99% of all large companies (Just think about how many shickingly bad large companies are already about where you can’t get any service). Delivery times and services for small businesses will deteriorate. Prices will definately increase without any doubt as we are currently the cheapest postal service in Europe.

    Why anyone thinks privatisation would be a good thing is beyond me. If you realstically think about it from a customer point of view, R.Mail are actually an excellent company without outstanding service. Perfect service doesn’t exist but I don’t think you’ll get better serivce than what R.Mail currently offer.

    So if you want a poorer overall service at a higher cost, then privatisation is the way to go.

  13. Also, if TNT or DHL buy in to it then we are definately screwed as they are huge companies, but won’t offer any decent customer service. Price will be higher aswell. Just ask yourself why there isn’t any competitors already set up against Royal Mail?

    Answer…. because no company that is in business to make profit and concern themselves will share value will delivery a letter for 40p or DVD for 90p. to any UK address. There’s no profit in it so you can be sure these sorts ofprices will disappear forever.

  14. RM needs to go, it is broken and corrupt beyond repair. The argument of better the devil you know is not really a good one.

  15. I cant believe ive only just seen this news. I must have had my head in the clouds.

    Ineresting. Could be good. Could be a nightmare.

    Maybe one day it will be a profitabe business…

  16. Its not the Royalmail thats at fault, its the union that stops modernisation taking place. If workers get laid off due to modernisation, the workers who are laid off can’t pay the union, the union looses money. Can any of you afford to pay staff you don’t need? The unions salution is to stop change resulting in the Royalmail loosing money and becoming uncompetative. This puts the company and the whole work forces jobs at risk as the competition can do it better, but keeps the union fees coming in in the short term. The unions killed British industry because they failed to modernise unlike their foreign competition who do the same thing cheaper and better. All the advice on Tamebay is basically about doing things cheaper, better and more affectively and the Communications Workers Union stops the Royalmail doing this to their business. I’m not anti union as I was a former member as a bus driver, I’m againest the out of date tits who run them.

  17. I am horrified that anybody could even contemplate selling off Royal Mail. I live and work in deepest rural Cornwall. I am also the Parish Councillor for my Village. The Royal Mail Van that delivers my mail comes from Newquay some 11 miles away. Between Newquay and my Village is miles of green fields and few people. The scheme will not be just to ditch the Highlands and Islands but all the bits that are not profitable and that means the Rural Areas. We need RM to stay in Public Hands and for the Employees and Management to stop fighting and destroying the business and instead to work together to give us a good service across the country. Certainly those of us in Rural Areas are desperate for RM to succeed.

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