A few thoughts on the proposed privatisation of the Royal Mail
Last week the coalition announced plans to part privatise the Royal Mail. This was sold as the only way to continue to deliver a universal service as the capital investment needed to improve the current operations are too excessive for the public purse. Everyone knows the Royal Mail is the last bastion of restrictive working practices and has been ripe for privatisation for some time, so surely this is all good news?
Rural Universal Service
Possibly not. From a purely Cumbrian viewpoint we still benefit greatly from having local delivery services to the far flung reaches of the county from a team of postal workers who know the area and deliver a courteous and efficient service. We recognise that delivering this service to remote rural areas is not “cost efficient” and “profitable” and so, as with buses and many other rural services will either be cut beyond recognition if privatised, or have to remain state subsidised until such a time that it gets cut anyway. So keeping the “universal” theme will be a struggle whoever takes on the Royal mail unless state subsidies prop up these rural services.
What about the Pension Deficit?
Well there is a £10 billion pension black hole in the Royal Mail. So surely this will put off potential investors? Er no. This liability will remain with the government. So why not simply keep the whole thing with the government too, and make the Royal Mail subject to the same review of Public Sector Pensions. Royal Mail workers as with many others need to realise that the days of gold plated final salary pensions are sadly over.
What about the Working Practices?
As with many other union dominated industries for the Royal Mail to survive it needs to adapt. The current workforce needs to realise this and evolve accordingly otherwise they will simply not have a job in the future. Various attempts have been made to change things in the past, and various chief executives (most laughably Adam Crozier) have been paid large lumps of money to sort it out. All seem to have failed. So surely the solution is not to “outsource the problem” but to solve it once and for all.
What about that capital investment?
Well basically what Vince and the team seem to be saying is “Royal Mail can become a profitable business for anyone willing to make the required investment but we’re not”. So once again the government hands over an asset, watches as private companies and individuals strip it down and make personal fortunes from it, and then wonders in a few years where it all went wrong. Surely we’ve been here before with the utility companies, Railtrack, and others. Surely we’ve learnt from our mistakes?
How about some new thinking?
Here’s a radical idea. Why doesn’t the government sort out the issues with the Royal Mail itself. Invest where necessary, and build a company capable of competing with the overseas competition that will be the likely bidders. If Deutsche Post can do it why not the Royal Mail. Perhaps we may even build a state owned and British global and profitable company. Now wouldn’t that be a nice change…
Just a thought…