Royal Mail crisis splits the Labour Party down the middle

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Gordon Brown has had to deal with the backlash in his own party as the issue to sell at least a quarter of Royal Mail to competitors has caused a split right through the centre of the Labour Party.

Dutch postal operator, TNT, have already shown interest in the transaction, yet any move in the future would be subject to a reduction in the Post Office’s £7 billion pension deficit.

However, criticism is being heard from all over the country, as the take-over by TNT could hail in the end of traditional Post Office and will beckon in higher stamp prices. TNT is known throughout the Netherlands for heavy job losses and closing branches in order to keep bringing in the profits as the world continues turning towards e-mail rather than traditional snail mail.

The general secretary of the Communications and Workers Union, Billy Hayes, highlighted what many postal employees were feeling after hearing the news. “What we are seeing here is the nationalisation of the debt and the privatisation of the profits. I find it incredible that at a time when the Government has bailed out the British banks it cannot bail out the postal service. This was meant to be a report about competition but Mandelson has ignored the damage done through irresponsible liberalisation and advocates more involvement by private companies,” he said.

However, Peter Mandelson has tried to quash the claims that the move will bring job losses by claiming the rumours were “alarmist talk”.

“We will fulfil our manifesto commitment to a publicly-owned Royal Mail fully restored to good health, providing customers with an excellent service and its employees with rewarding employment,” he said.

However, he went on to highlight the importance of such a move, saying, “bringing in a partner through a minority stake in the Royal Mail’s postal business will help us deliver that goal. It will bring the Royal Mail fresh investment, new opportunities to grow in Europe and internationally, and to offer new services.”

The Royal Mail is finding the current ‘e-climate’ quite a tough one to survive in and it is failing to keep up with competition such as TNT, DHL and other similar services.

An Analyst at Fortis Bank in Amsterdam, Maarten Bakker, claims that Royal Mail is on a downward slump. “It will be a challenge to turn Royal Mail into a profitable company. TNT has already built up its market share in the U.K. I don’t see why they would want to buy into the incumbent player.”

However, Madelson remained as positive as possible on the subject, claiming that The Royal Mail would soon see better days, but also made it clear that such a bright future could not be realised if The Royal Mail was alone. “I believe that Royal Mail and the postal market can thrive in the future — provided that decisive action is taken now. Without far-reaching change, the opportunities brought by technology will become overwhelming threats,” he said.