A right Royal choice

Stormproof · Post by **Stormproof** » 23 Oct 2008, 22:35

http://www.telegraph.co.uk/finance/comm ... black.html
A right Royal choice to make as the mail service goes into the black
Which Royal would you rather save? The slightly old fashioned one that needs a bit of help coping with the modern world or the upstart tearaway who’s looking like an increasing liability to the public purse? The Royal Mail or the Royal Bank of Scotland?

By Damian Reece
Last Updated: 9:13PM BST 23 Oct 2008

Now that it looks like RBS is going to join the Royal Mail under government control, we should demand that some of the flashier RBS branches in prime high street locations are converted to Post Offices to make up for some of the more unpopular closures forced upon us by Labour.

Yesterday’s results show Royal Mail is making a profit, which is quite remarkable. I know we all have our gripes, but remember this is a government department trying to take on the world’s biggest and most successful companies without access to capital for investment and with a pension deficit ballooning by the day. The email and internet are destroying Royal Mail’s letters business, volumes fell 4pc in the first half of this year and it handles 5m letters a day fewer than two years ago. It also faces growing delivery competition from the private sector, including the likes of Deutsche Post, with rival delivery companies now handling one letter in every three of those they’re allowed to. But the recession will make that delivery business even smaller as business users reduce activity and cut costs, either shrinking operations or just doing more over the web.

The Post Office, back in the black but only after a £150m subsidy, faces losing the Government’s pensions and benefits payments contract which uses its card account. This is useful business for Post Offices but drives lots of people into the branches to buy other items as well. Without it, I reckon another 3,000 Post Offices will close, on top of the 2,500 being axed.

Does any of this matter? It does, if you think the Royal Mail is worth keeping, otherwise it’s time we consider alternatives. I think in recession the Post Office network probably becomes even more important to people. At the very least, the Government will need a cost effective way of making all those extra benefit payments and we’ll definitely need fewer bank branches as the economy slows - think how many are going to be axed anyway through the merger of Lloyds TSB and HBOS.

By agreeing to recapitalise the banks, Gordon Brown set a dangerous precedent, however unavoidable. Why save Sir Fred Goodwin’s RBS with public investment and not Allan Leighton’s Royal Mail? Without extra capital, the Royal Mail faces a decline every bit as grim, if not quite so dramatic and sudden, as RBS. Apart from the investment it needs to meet operational challenges, there’s another grave call needed on public funds. Using the back of an envelope (rather than the calculator on my internet-enabled lap top) I can easily imagine the Royal Mail’s actuarial deficit on its pension fund doubling from £3.5bn to £7bn when it gets revalued at the end of March. It would be a tragedy if the public money used to bail out the tearaway Royal means there’s not enough to save the hard working traditionalist.

Big Daz · Post by **Big Daz** » 24 Oct 2008, 14:03

Sounds like the author has ripped various other bits and peices on the internet and tarted them up as his opinion.

He should be simply updating his readers on facts and making it clear they are facts instead of passing off as his fantastic analysis!

Post by **dvbuk55** » 24 Oct 2008, 15:22

I'm not too concerned about plagiarism because the tone of the article is correct there has been an unhealthy haste to prop up failing banks when our % pay rise and conditions attached to it caused industrial action GB was swift to say the offer was fair and to get back to work. When the weasel bankers felt the squeeze Gordon soon had his hand in his pocket, which I consider to be a political ploy to garner favour at election time - so much for the money we give him and he treats us like crap but big business who does nothing to support the Labour Party have been bailed out.

BELIAL · Post by **BELIAL** » 24 Oct 2008, 20:16

Refresh my memory, Did Gordon rush to bail out all those ordinary people who lost all their xmas savings last year?

Post by **dvbuk55** » 24 Oct 2008, 20:25

BELIAL wrote:Refresh my memory, Did Gordon rush to bail out all those ordinary people who lost all their xmas savings last year?

That's a toughie - let me think - ermmmmmm NO!

k979aaa · Post by **k979aaa** » 24 Oct 2008, 21:46

The govenment will only save something important (banks, utillitys, and hedge fund's? ) it will not prop up a buisness for some postie's to finnish early because they 1 use their car, 2 because they come in early, 3 do not take their meal break, 4 because they can not be arsed to weigh their bags, 5 anything to save royalmail lots of ££££££!. BECAUSE THEY OUR GOVENMENT TO WHICH WE PAY OUR TAXES DON'T GIVE TWO SH*T'S :cfo & :lfo AND A TURD :mfo !.