Andreas' Blog...Against Royal Mail Privatisation

[TrueBlueTerrier]

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I think the government is making a serious mistake with it's latest plans for the post office. While I'm most certainly sold on the need for new investment the whole privatisation aspect of it seems really quite bizarre.

I'm not utterly opposed to the idea of privatisation, but I do think that the reasoning force behind most privatisations for a good long while has been ideological rather than practical. I'm also not particularly happy with the way that the government botched some recent privatisations (CDC and QuinetiQ in particular). I think that probably does put me in the "hostile" camp.

The big worry though for this privatisation is first that a time when levels of private investment are very low the government is unlikely to get a good deal from a potential buyer due to the difficulty in raising private capital. Second, a part sell off will remove a lot of the future decision making power from the government. The consequence of this is that in future political concerns over the post office (read branch closures).

I'm very worried by the "Privatise or the pension scheme gets it" spin since there does appear to be one very major unexplored avenue in the form of state aid. The Hooper report rules this out but only with a very brief summary suggesting that it has too many strings attached. This is true, since the use of state aid is limited by the EU, however, since some EU leaders are calling into question the level of restrictions on state aid, there is now a stronger case for it.

All in all then, I think the Labour rebels are right to oppose this move. I think it's a case of Mandelson's bloody minded ideological bias along with lobbying by certain vested interests that are driving the current plans, not the wider interest in the long term health of the post office.