Royal Mail sell off announcement imminent

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For 497 years, Since Henry VIII established a “Master of the Posts” in 1516, the Royal Mail have delivered mail across the UK. Now it looks likely that the Government will flog the Royal Mail with an announcement to kick start the sell off process aiming for a £3 billion stock market flotation.

It’s been argued that Royal Mail costs too much to run and needs a massive injection of cash, but the loss making years are in the past. Modernisation and preparations for privatisation have seen Royal Mail become profitable with £152 million in the year to March 2012 which more than doubled to £440 million in 2013. Sure these are paltry profits for a company the size of Royal Mail, but it’s a change from the previous losses.

Business Secretary Vince Cable is of the opinion that privatisation is the only option for Royal Mail, but is that really the case with the transformation well under way? It could equally be argued that it’s a £3 billion fillip for the next Budget but a net loss for the country long term.

The CWU Union certainly isn’t in favour of privatisation warning that services will decline and inevitably cherry picking will take place for the most profitable services. Billy Hayes, CWU General Secretary is already warning that a strike is inevitable and that they’ll fight tooth and nail to stop Royal Mail being sold.

Strikes aren’t the solution however – strikes will merely damage Royal Mail and the country as a whole. That’s not to say that we at Tamebay don’t agree with the CWU that Royal Mail is an essential service that everyone in the country uses. We’d much rather see continued transformation of the Royal Mail and support for ecommerce.

Whilst the cost of a stamp may be highly regulated, the cost of parcels isn’t and under private ownership the only thing that’s certain is prices will rise and the new owners start cashing in as much profit as they can screw out of the company. In the mean time all we have to look forward to is strikes.

7 Responses

  1. I personally think Mr Cable has his head stuck firmly up his rear!

    By the time RM have finished striking it will have cost the UK economy more than £3bn, I don’t particularly agree with the attitude of the unions on this but the message will never get through to the politicians regardless so prepare for pain on a massive scale as they throw the mother of all hissy fits!

  2. Selling off the Utilities has given us some of the highest energy and water prices in the EU. Lack of investment means we have little or no capacity for both, the foreign owners only seeking profits, and a weak goverment desperate for the money, failed t o put in place safeguards. For sure, the Royal Mail sell-off will generate 3 billion, against a national debt of over a trillion its peanuts, and it will be a giveaway again, for the investors. It can only hit UK online business badly, the only area of the economy doing well.

  3. Royal mail small packet and parcel prices are unregulated and cannot be described as cheap even now. The recorded price of a 2.2 kg parcel signed for, and even a 2kg parcel signed for are basically the same as a carrier and dearer than hermes and other carriers. People use the service mostly as they have a daily collection and its easier to do so.

    Privatisation will make royal mail uncompetitive, quite frankly and services for armed forces etc will only suffer.

  4. Let’s start a rumour that eBay are going to buy Royal Mail.

    Well they might buy it if the Government would agree to their silly delivery time.

  5. It looks like the sale is very likely to happen now, which is a shame for the industry. More than likely prices will increase further and services will be reduced.

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