Will Royal Mail Be Privatised?

[johnnyp]

Will Royal Mail Be Privatised?
12 December 2007 by Steve Lawson


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Like Royal Mail, Germany's Deutsche Post enjoys at least some reprive from the burden of taxation because it provides a universal service whereby post is collected and delivered in unprofitable or remote areas. However, the subject keeps rearing its head and competitors often single out this difference when making claims of any unfair advantage.

This is the problem that has dogged the opening up the postal market. It still falls to what were often state owned (and still are in most cases) postal operators to provide a universal service whilst rivals settle for the chunks that offer the most return like business mail and/or parcels.

As things stand, only Finland, Sweden and the UK are fully liberalised. The USO is expensive to provide and its protection is largely at the mercy of individual postal regulators. Pressure on the USO has never been greater and 2007 has seen a series of strikes in the UK as postal workers feel the brunt of change filtering down from the EU.

Postal workers have accused Britain of being apathetic when it came to widespread support for their case and in that they may well be right. Postcomm does say it is committed to maintaining the USO, but things do change and customers will almost certainly find that in the longer run they will be paying substantially more for substantially less - by which time it will be all to late.

Whether one sees the targets set by Postcomm as a benchmark or not, they certainly don't in themselves, represent protection for the USO and many critics argue that the goal posts have been jiggled around so much since liberalisation anyway, they have become fairly meaningless.

For postal workers in the UK, the last 12 months still remain the tip of the iceberg. More jobs will go as the government tries to offload its responsibility for providing a postal service (the government still remains the main shareholder) and 'encourages' Royal Mail to reduce costs further.

The strikes this year have centred on a showdown between Royal Mail and the CWU but anyone who sees it as that and nothing more, really does have their eye off the ball. This years row is very much the tail end of a much bigger process. Pressure on Royal Mail to fit into this European postal revolution is enormous, and what for some postal workers is seen as a struggle for working classes, is far more about offloading state-owned postal services altogether and handing the responsibility to business.

In telecoms at least, customers have actually seen prices come down, but this seems highly unlikely with the postal business where (for the moment) there are no alternatives to a universal postal service and somone somewhere has to provide that. The reality is that the cost of providing it will rise sharply if it is to remain.

Royal Mail will continue to change the way it operates and look at new ways to cut costs. Postwatch which is often the public's only real voice in all of this, will, if it hasn't already, prove to be a stumbling block in further change. Already central government are trying to squeeze Postwatch into a larger consumer body and I for one, don't see that as a strengthening of Postwatch's role.

Will Royal Mail be privatised? Certainly. It is unlikely to be forced through parliament though - trade unions and backbenchers have scuppered previous attempts. In the end it will be commercial pressure from all sides will ultimately see Royal Mail broken up and what one year is a fight over terms and conditions for postal workers could easily be a fight to hold on to the service altogether the next. No amount of wildcat strikes will hold back the tide of change - only a political change and I don't see any signs of that either.

[DirtyHarry]

Blimey, cracking Christmas speech, makes me want to put my head in the oven, rather than the turkey on Christmas day.

[norbet colon]

my apologies

[axeman]

the voice of reason and no doubt straight from the arms / mouth of chairman al and his sidekick, a promo speach if ever i heard one

[norbet colon]

It will only happen if we the postal workers allow it to happen and the public are stupid enough, keep reminding them the public what has happend so far to their service and how bad it will get, show them how much extra they pay for a letter to be posted and how long and late that letter is for the sake of Liberalisation of a EURO POSTAL SERVICE and how bad it will get. tell them how much the junk mail they hate cost our competitors to use RM to deliver to post their sh*t, and i aint talking about the normal man on the street but the wealthy and influential people that can see further than a first class stamp some postie somewhere delivers to them they love competition but we RM are being raped by private postal firms who we cant even compete against because of a deal set up by our Goverment so they can line their own pockets. Remind them about Gas Trains Oil Electricity Coal Buses NHS and all the rest of the things Goverment have buggerd up to get their bum out of a sling by selling it off,and it can happen WE JUST NEED TO SAY NO.

a backward organization that wants to turn the clock back to these days . Should Leighton be in the limo ? or is he the one with the cigar?
Is he writing the articles for them ?

[F0zziebear]

Deuschepost has realised that opening up the european postal market will mean huge competition in Germany. TNT have also realised this in Holland. These are the two potential rivals in the UK. So if they push to open up the market they may well lose large chunks of their own market.

I will say again the competition are not making big profits by cherry picking, they are making tiny profits at best.

I will also say again that you should go on all out strike, but this ight financially cripple RM. Whilst you are still delivering 99% of mail you have the cards.

If you raise DSA prices then the competition may well be able to make a commerically viable alternative E2E network.

F0zz

[weetrogg]

It would be very difficult to privatise RM whilst their is a fairly strong union(I dont mean the leadership, i mean rank and file) in place, the reason being a private company could not put up with any serious industrial action because the shareholders would be fuming about the loss of profits!! I do think a major part of the dispute was about breaking the union completely but thanks to the rank and files resolve they failed but no doubt they will be back again soon. Just look at the success the RMT have when it comes to disputes on the underground!!




WE are the union

[dvbuk55]

It would be very difficult to privatise RM whilst their is a fairly strong union(I dont mean the leadership, i mean rank and file) in place, the reason being a private company could not put up with any serious industrial action because the shareholders would be fuming about the loss of profits!! I do think a major part of the dispute was about breaking the union completely but thanks to the rank and files resolve they failed but no doubt they will be back again soon. Just look at the success the RMT have when it comes to disputes on the underground!!




WE are the union

I wouldn't agree that the rank and file are going to stave off privatisation with a leadership that colludes with a Government that would be only too happy to see RM hived off in small packets. The USO will undoubtedly be subject to threat and it wouldn't surprise me if the USO suddenly had a new and more novel interpretation in order to explain why it isn't necessary any longer. In fact I could think of one or two myself. Absolutely bullshit of course but certainly plausible.

[BELIAL]

Deuschepost has realised that opening up the european postal market will mean huge competition in Germany. TNT have also realised this in Holland. These are the two potential rivals in the UK. So if they push to open up the market they may well lose large chunks of their own market.

I will say again the competition are not making big profits by cherry picking, they are making tiny profits at best.

I will also say again that you should go on all out strike, but this ight financially cripple RM. Whilst you are still delivering 99% of mail you have the cards.

If you raise DSA prices then the competition may well be able to make a commerically viable alternative E2E network.

F0zz

You're not kidding

[Macca]

I have been informed that all the time there is a pension deficit or Royal Mail is in the red, then the government cant sell us off.....anyone know if this is true???


:cfo :lfo

[F0zziebear]

True because:

1. No-one would be interested in buying a heavily debt-laden company
2. The company is technically insolvent so wouldn't be allowed by law

[dogfood]

And since when have this present government paid any heed to the law?

Iraq war
Cash for Titles
Party Loans!

[greynut]

It would be very difficult to privatise RM whilst their is a fairly strong union(I dont mean the leadership, i mean rank and file) in place, the reason being a private company could not put up with any serious industrial action because the shareholders would be fuming about the loss of profits!! I do think a major part of the dispute was about breaking the union completely but thanks to the rank and files resolve they failed but no doubt they will be back again soon. Just look at the success the RMT have when it comes to disputes on the underground!!




WE are the union

I think this is a great point. I cannot see any private investor taking on the rank and file. They have seen what we can do when we stand firm. Industrial action might not have got us what we wanted but they would not want to see a dent in THEIR income. Also would you buy a company with a pension deficit the size of Adam Croziers weekly take home pay, about £17 billion I believe? :cfo

[jafferpants]

True because:

1. No-one would be interested in buying a heavily debt-laden company
2. The company is technically insolvent so wouldn't be allowed by law

That says it in a nut shell. It's a strange old world the black hole thats going to lose us the final salary scheme is the very thing that at the moment stops us being privatised. However once rm revamp the scheme that projected deficit may not then be there. Hey presto obsticle gone

[Daniel Dunglas Home]

Heseltine wanted to privatise RM years ago but guess what ? Margret Thatcher the champion of our great home-owning, share-owning nation said Royal Mail was a privatisation too far!
But i make it odds-on if the Tories win the next election and there's an increasing chance that they will RM will be privatised. It didn't matter too much back then when the wages were sh*t and with the stockmarket booming but with manufacturing industry decimated and relatively decent basic pay it matters now.
Any kind of resurgence in Trade Union power is seen as a big threat to the capitalists because this equates with less in their own bulging pockets.
Conclusion: be sensible in your demands and reconcile if and when possible or else the union will be crushed big business collectively is far and away more powerful than we are.