Government announces plans for Royal Mail sell-off

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A Nice Pair (Father and Daughter)The Business Secretary, Vince Cable, has announced plans for the sell-off of Royal Mail today. Perhaps of most concern to many TameBay readers: the government has said it will “safeguard the future of the universal postal service at uniform prices and service levels” – in other words, it won’t suddenly cost more to send a packet to the Highlands than it does to London.

Up to 100% of Royal Mail will be sold, though the government has not yet said whether it will be floated on the stock market, or sold off to another postal carrier. Mr Cable has said that he sees no obstacle to RM being sold to an overseas operator such as the Dutch TNT Group or German Deutche Post: “We are not going on a nationalist jihad against foreign companies.”

10% of shares in the privatised Royal Mail will be given to employees. But privatisation plans will not include any consideration of safeguarding jobs, and the government has said it will not intervene if redundancies lead to industrial action against the new owners.

RM and the CWU currently have an agreement that there will be no compulsory redundancies, but any new owner is likely to want to cut costs by trimming back the 160,000-strong workforce. Billy Hayes, the CWU General Secretary, said: “Handing postal services over to the City spivs and gamblers that Vince Cable recently denounced, but is now feeding, will be bad news for everyone.”

The Post Office network is not to be included in privatisation, and the government has said it’s committed to keeping the current 11,500 Post Offices open. The network may be turned into a mutalised company, owned by sub postmasters.

Mr Cable said: “I want to start a conversation about how it is run in the future, but it seems to me that the Post Office is ideally suited to a John Lewis or Co-operative Group style structure – where employees, sub postmasters and communities get a greater say in how the company is run.”

Creative Commons License photo credit: Mike Cattell

11 Responses

  1. Nothing Vince Cable says can be believed, look at his pledge before the election on tuition fees or Cameron on Child Benefit, so I don’t think the ‘universal postal service at uniform prices and service levels’ pledge means much. We’ll just get the line ‘things are worse than we expected so it is not viable’.

  2. Royal mail needs to be brought into the 21st Century ,
    if some had their way, there would still be penny blacks, and delivery by stage coach

  3. Other than the fact that yet again, the Lib Dems have been duped in to announcing more bad news …

    So, the plan is to privatise the Royal Mail because of concerns over the mounting costs of it’s pension plan to the tax payer and yet, the costs of the existing pension plan are to be born by the tax payer, post privatisation?

    What part of this even begins to make sense?

    Says it all in this article ( “The bulk of the assets and liabilities of the Royal Mail’s pension fund – which now has an £8.4bn ($13.3bn) deficit – will be taken on by the government to relieve the business of making huge payments to make good the shortfall.”. i.e. the tax payer will make life easier for the fat cats who take over.

    The RM paid off 800 million of it’s pensions deficit last year and could pay the whole thing off at current profit levels in 6 years. Goodbye Royal Mail! Hello loss making, ideologically driven Tory privatisations!

  4. Why is it that Britain is always happy to sell its industries to other countries. i.e. car manufacturing has all been sold abroad and now royal Mail may go to Germany or Holland.

    You never hear of Britain buying industries from other countries. thats because other countries have the sense to keep industry in their own circle.

    Eventually Britain will end up with nothing and will suddenly find itself as a minority country or even 3rd world country if we are not careful

  5. Privatise it VIA the stock exchange is the only way forward, as, as it is the likes of TNT etc’ would want to take it on for nought.
    At least this way, the Pemsion fund would be someway to self financing!!.

    Uk Plc, ambitions of being the bank for EU (and nought else) only work when the banks do their job properly, which clearly they have not.

  6. I find myself wondering how many of those who have commented so far live in Rural Areas. I Live in deepest darkest Cornwall in a small village. All around I have miles of green fields and few people. If there is one safe bet it will be that in areas like mine the effects of Privatisation will be a much reduced and eventually much more expensive service. There again I did not Vote for either the Tories or Lib-Dems(I voted UKIP). We need our Post Office and as far as I can see with Privatisation we will soon see the back of it and its services.


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