Billy Hayes Blog - ARTICLE FOR CENTRAL GOVERNMENT MAGAZINE

[TrueBlueTerrier]

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The proposal for the Government to privatise Royal Mail is a serious mistake. At the time when governments throughout the world are being forced to bail out private sector firms, it makes no sense to privatise Royal Mail.

The Government claim that only private sector finance and expertise can provide Royal Mail with a future. This is a view which has been expressed innumerable times in recent decades. The credit crunch, and current recession, show that the private sector has no monopoly on capital management or expertise.

Recently the cross-party Business, Enterprise Committee of MPs published a report on the Government’s Postal Service Bill. The report was highly critical and raises serious doubts about how far Government has actually considered its own proposals. The chairman of the committee, Peter Luff MP, said “The committee does not think the Government has yet made its case. We agree that the pensions deficit needs to be removed and the regulatory system needs to be reformed as a matter of urgency. However, it does not follow that a part-sale is also necessary.”

The postal industry is changing. Some categories of mail are declining, other forms of mail are growing. The Communication Workers Union recognises the need to introduce new machinery into Royal Mail. We also recognise the need to introduce new services to make the industry more responsive to customer needs.

Such changes can be carried though in the public sector. The Government has recognised the need to resolve the pensions deficit which is draining capital from the industry.

This deficit is a direct result of successive governments allowing Royal Mail management a holiday from pensions contributions for thirteen years. Postal workers continued to pay their contribution throughout this period.

The additional pension contributions already budgeted for work out at around £280m per year for the next fifteen years. The next valuation of the pension may well mean that there is a much bigger deficit than already budgeted for.

The Government acknowledges its responsibility for resolving the deficit. Once the Government takes this responsibility, Royal Mail would have around a further £3b projected income over the next fifteen years. This is the type of figure that has been floated as coming from the proposed privatisation.

In addition, the regulation of prices has been generally recognised as being unfair to Royal Mail. At present, Royal Mail is subsidising the competition to the tune of around £100m per year. This is because a system of access pricing has been introduced in the UK which no other EU State uses. This system would make a substantial difference to Royal Mail finances once reformed.

The danger is that the Government will make such changes in order to privatise Royal Mail. This will provide a state subsidy for a private competitor. This would be a case of nationalising the debt and privatising the profit.

There are alternatives. Royal Mail can be funded from its own activity as a public service. Despite the growth of internet communications, the postal industry remains a crucial part of the modern communications economy. New services linked to the internet should be made available to the public. These could include same day delivery, home collections, and varied delivery times.

New technology is being deployed in the postal industry. Such technology includes hybrid mail, where customers can send computer data to the provider which can then be printed, enveloped and delivered by Royal Mail. Intelligent mail is a form of mail which allows for bulk postings to be tracked and traced from collection to individual delivery.

The CWU is campaigning against those part of the Postal Services Bill which will privatise Royal Mail. Although the Bill is currently in the House of Lords, there has been widespread opposition amongst MPs. So far 147 Labour MPs have signed Early Day Motion 428 which supports ‘a wholly publicly owned, integrated Royal Mail Group’.

Privatising Royal Mail is unpopular with the public, a recent poll by First Poll showed that 65% opposed privatisation, with only 24% in favour. It is vital that we persuade the Government to think again.

[Big Daz]

Mandy has too much influence and as he does not have a seat to lose at the next GE it emboldens him and entrenches him in his policies.

It is unlikely the government will think again and therefore will continue to take its chances in parliment.

[Big Daz]

Why does Billy forget to mention MP's from other political parties that have also signed the EDM?

Sometimes it seems that there is a tendency airbrush out, other political parties or individuals from other political parties that might support us.

[norbert]

Mandy has too much influence and as he does not have a seat to lose at the next GE it emboldens him and entrenches him in his policies.

It is unlikely the government will think again and therefore will continue to take its chances in parliment.

Deputy Prime Minister in all but name - even if New Labour finds him to be expendable yet again ! , he'll be off to Brussels again

[BELIAL]

I'd say it was a safe bet that the Dark Lord has already extended feelers regarding his position in the next government regardless of its hue, Govt of all the 'talents ' time of national crisis etc.
Observers of a cynical bent might view Gordons minor troubles this week with a little suspicion,with the above in mind

[k979aaa]

Surely you dont mean the man of vision beyond sight has called for an end of boom and bust and has ended the spin cycle of NEW LABOUR by the introduction of the prince of darkness :mfo i think we should call him bounce as his position changes every time he hits an obstacle!.

[stokes11eg]

Surely you dont mean the man of vision beyond sight has called for an end of boom and bust and has ended the spin cycle of NEW LABOUR by the introduction of the prince of darkness :mfo i think we should call him bounce as his position changes every time he hits an obstacle!.

What I do not understand, and maybe someone can help me here? Is the money that may be raised from Private Investment going to be used solely to make up the pension defecit?Or are any companies who buy in going to be liable for this black hole?Still feel that everyone who has paid in should be given the option of having a % of their pension paid to them now--even if it means loosing out. Can anybody guarentee that from here on in, pensions will be secure?

[norbert]

Surely you dont mean the man of vision beyond sight has called for an end of boom and bust and has ended the spin cycle of NEW LABOUR by the introduction of the prince of darkness :mfo i think we should call him bounce as his position changes every time he hits an obstacle!.

What I do not understand, and maybe someone can help me here? Is the money that may be raised from Private Investment going to be used solely to make up the pension defecit?Or are any companies who buy in going to be liable for this black hole?Still feel that everyone who has paid in should be given the option of having a % of their pension paid to them now--even if it means loosing out. Can anybody guarentee that from here on in, pensions will be secure?

the state takes up the debt , the corporate pirates cream the profits off - that's the usual arrangement , the railways work like that , Branson trousered £49 million one year when he took the government to the cleaners with Virgin Trains .

The EEC want private cartels to do that . RM's senior management are all for that , that's why there's all this cost cutting executive action and singling reps out in the name of " competitiveness " & '"efficiency " .