Selling off the Royal Mail - who would actually benefit?

Photo credit:   Not enough megapixels

May 9, 2013 // By: Lindsay Mackie

Attempts by this Government and the last to privatize the Royal Mail have been beset with difficulties, from worries about whether one buyer existed to buy the whole 500 year old public institution to clear evidence that Royal Mail has actually increased its efficiency and generated profits while remaining publicly owned.

However, cometh the man cometh the hour. Michael Fallon, the Minister for Business, has now taken on the task, and according to the Daily Telegraph the 10 percent of equity which Royal Mail is bound to sell to staff will make industrial protest very difficult. The sum each employee might gain through selling the shares could be £1,500.

A dreadful inertia is the first response to this, by anyone who has closely followed the long war on this most ancient, integral and useful public service.

There are the usual Ministerial promises that privatization will improve the service. There are even hints that services will be cheaper. Cash raised by privatization is necessary (though in truth, if the Government wanted to, Royal Mail could access private capital without a sell-off).

Not a word about the larceny of the executive class and the financial world in all other public sell offs. Wearily the observer sees that SSE (formerly a Scottish publicly owned water company) was fined £10 million this year for systematic misselling.

Three of Britain's biggest water companies paid little or no tax on their profits last year while generously rewarding their executives and investors. Thames Water and Anglian Water paid no corporation tax on the profits made from their utility businesses while Yorkshire Water kept its payments to the Revenue in the low millions.

Centrica - parent company of British Gas, as was once ours – is making profits of £600 million a year, a rise of 11 percent. The bonuses and executive pay for bosses of these companies are eye watering.

The sale of Royal Mail is - it cannot be said often enough - nothing to do with improved service (already very good), nothing to do with improving staff conditions (they will deteriorate fast) nothing to do with responding to the public need for better communications (there will be no innovation to benefit we the people).

It will have everything to do with profiting the banks, who are currently touting their services to the Government to administer the sell off (UBS and Lazards). It will have everything to do with selling off the honey pot of properties owned by Royal Mail in key sites in city and town centres all over the UK. It will have everything to do with handing huge sums to private equity companies (already being mentioned by sources as potential buyers).

If Royal Mail workers sell their shares – and at the wages paid to postmen and women, drivers and sorting office staff the money would be tremendously welcome - they will be used as a validation of this smash and grab raid by the Government and the financial world on an asset which is ours.

And finally, to add insult to injury, the proceeds of the workers and Royal Mail staff will be dwarfed by the financial rewards which will enjoyed by the corporate and individual raiders tasked with carving up this great institution.

Issues

Banking & Finance, Public Service Reform

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