UK Gov't Outlines Plans To Privatize Royal Mail 220
Ellie K writes "After 500 years, Britain announced plans to fully privatize Royal Mail today. Shares of stock (common equity) will be offered to the public 'in coming weeks', according to Reuters. 10% of shares will be given to current Royal Mail employees, Deal size is estimated at $US 3 to 4.7 billion. Goldman Sachs and UBS were chosen as lead advisers." That doesn't mean you'll be able to buy a piece tomorrow, though; as the BBC's report notes, "The plans have provoked strong opposition from unions. The Communication Workers Union (CWU) is currently balloting members on strike action. Ballot papers are due to go out on 20 September to 125,000 Royal Mail workers. The earliest possible strike date would be 10 October. Plans to privatise the 250-year-old postal service have been on successive governments' agendas since the early 1990s."
fattening the cow (Score:5, Informative)
The RM has already been broken up and sold off in stages, each made worse:
- PO Telephones became British Telecom became British Telecom Plc. in the '80s.
- Post Offices are barely even owned by one company any more, with each outlet acting as an independent contractor.
- Much of the post is processed by private firms which get the profitable work, while RM is stuck with the last mile, and all the unprofitable routes.
- All the above has meant typical public-private partnership inefficiency, such that the price of sending letters has gone up recently way above the rate of inflation - with special increases in the last two years to reflect fattening of the cow for sale.
Just another ideological move by a country slipping down into oblivion. Will make a few people rich, though. I expect China will be interested in a piece of the pie - it's been buying up a few British infrastructure companies recently. They know how to manipulate "capitalism" all the way to the bank.
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And we now have a thriving competitive market for phone packages and internet packages at very affordable prices compared to American, Australia and numerous other countries. There aren't 'routes' when it comes to post, and if we want someone to be able to receive post when they live in the middle of nowhere then we either need to allow companies to charge them a fortune or we need to subsidise it in some way.
Re:fattening the cow (Score:4, Informative)
Compare your thriving market to you much closer neighbors. Way to cherry pick the worst possible folks to compare against.
Re:fattening the cow (Score:5, Interesting)
We have a thriving competitive market in telecoms? Oh, Sir, you crack me up. We have VIrgin Media, Sky and BT, and almost all your "competitors" are actually using re-sold BT services which only exist thanks to a stringent framework of regulation which nevertheless still operates in BT's favour ("regulatory capture"). Fuck, BT are even required to artificially separate the operations of their divisions - BT Openreach, BT Wholesale, and BT retail, so it isn't so obvious how they take advantage of their position as a natural monopoly.
The US is certainly worse - because it's an order of magnitude more spread out than the UK, and its privatisation was even less regulated (so, for example, BT are required to provide a certain level of service, which in a lot of cases e.g. remote Scotland is provided through government sponsorship).
RM had already been broken up into such inefficiency (as above) that it was necessary to drive up prices to make it profitable again. Even the NHS suffers this problem: all your greatly indebted Trusts were involved in New Labour's horrible public-private partnerships. The problem isn't the lack of private sector involvement: it's the existence of subcontracting to the private sector, where none before existed.
The belief that profit produces a better service per se is ideological. It sometimes does - e.g. when there is a free market - but not for essential services, especially not when they form natural monopolies.
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Indeed. The theory runs like this:
Sell off the services and the private sector will run them more efficiently, so the taxpayers pay less - win, win!
The reality:
Sell off services
Private sector creates 'efficiency' by binning workers & reducing conditions thus increasing the welfare bill (externalities and all that)
Private company makes a ton of money
CEO makes millions
The top management make millions
Company requires lots of cash so now they can expand in foreign markets or bribe officials for other contra
Re:fattening the cow (Score:5, Informative)
That pretty much describes it. Every public service that was privatised here in Portugal followed the same route. They used to be public services, now they're huge private monopolies that make gigantic profits, bully customers like they're shit and crush any shred of competition that may arise.
We have the most fanatic neoliberal government of all times. They should hang pictures of Rand, Hayek and Friedman over their desks and salute them when they enter the office every morning, in the (not so unfamiliar) Fascist style.
The supreme irony: They recently privatised what was left of our state electricity company. Guess who bought it? A state-owned Chinese company! So, according to the Supreme Dogma of the Holy Free Market, our state can't have a presence in our economy, but the Chinese state can!
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There's also a method in getting privatisations past the public.
Run propaganda campaign against public service (in the UK is currently the NHS and BBC with papers such as the Daily Mail running hate stories every day)
Put in management with the promise of huge rewards after it is sold off
Management then 'independently' tell the media that their company would be better & more efficient if it is sold
Government fiddles accounts to make sure company shows a huge loss
Government says it can't afford these huge
Re:fattening the cow (Score:5, Insightful)
Dude, do you live in Portugal? That's exactly what they've been doing over here.
As a screaming example, our few transportation companies that are still public: Every time there's strike, there's hate stories in every media about how they should be privatised and all those workers fired, because they are leeches, they make too much money, don't want to work, etc. etc. etc. All those companies are technically bankrupt and the workers are blamed for running the company into the ground with too many benefits, bla, bla, bla.
However the story is pretty different. Our governments in the latest decades, being right-wing or Socialists (which is right transvestite as left), have been holding the transfers of money from ticketing, forcing the companies to make bank loans to keep operations running. After all these years, the companies are spending a lot more in loan interests than wages.
The solution to this? Easy. The government will take over all those companies' debt and privatise them really cheap (because nobody wants an "unprofitable" company full of "lazy" employees). The private groups that buy them will fire half of the staff, treat the remaining staff like cattle, increase tariffs to sky high levels, reduce the service to ridiculous minimums and then demand huge subsidies from the government because they are running such a "ingrate and unprofitable" public service.
Supreme irony, the privatised companies receive money from the state for every passenger they carry and also for the others they've lost due to their shitty service and excruciating tariffs.
So (Score:2)
Murdoch makes a fortune from cable why should I as BT share holder not get some of that
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Oh, and if you think that being called 'BT' means that they might have some extra pull when you have a problem with your line then you must be smoking something.
The privatization of BT/GPO has lead to a situation so tangled and messed up you couldn't really make it up.
Oh, and it also made a small number of people very rich, so mission accomplished there then.
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Your prices are affordable compared to America, but American phone companies and ISPs are also private. Could it be profitability has more to do with management than with private ownership?
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but if they aren't profitable, there needs to be a damn good reason for them to exist. And frankly, for the last 10 years, universal access mail service IS NOT REQUIRED. I have ONLY had to use the mail to send documents to the government, and that is only because I have been in a very unique situation (i.e. I can afford the once a year I do it to pay a private company).
Royal mail, as with all mail services, have to be massively revamped. In 5 years, royal mail is carrying 40% less mail. Given a relativel
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The cost to use the service has increased above inflation, which is why Royal Mail is finally profitable.
Since when are public services supposed to be profitable? They're for universal service.
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My opinion is that the sun will continue burning for another 24 hours.
OH SHIT YOU'RE IN TROUBLE NOW.
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I wont defend that some sell off's have issues as to value for money for the state. But British Telecom is a lot better than it used to be, there used to be waiting lists for telephones, when answer phones where bleeding edge. I do not rate BT as a good firm but at least with competitive framework the industry seems to be ok and a lot better now.
Governments can suck too
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That's explained by the 35 years of technological progress which BT could take advantage of.
And I've seen multiple people have to wait multiple months for a BT install in the last 5 years - or even to fix damage to the pole outside their house.
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Getting a telephone connected in the UK in the days of nationalisation took weeks. At best. When I moved into my new place last year, Virgin Media had somebody around to switch on the phone and broadband the day after I moved in. They could have been there on the day itself, but I pushed them back a day because I knew I'd be too busy with boxes and furniture.
Privatisation and the introduction of competition was the best thing to happen to telecommunications in the UK. BT - as in the privatised successor com
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Privatisation and the introduction of competition was the best thing to happen to telecommunications in the UK. BT - as in the privatised successor company to the old nationalised monopoly - took quite a long time to improve, mainly because it was stuck with most of the old staff and management from the nationalisation days. But even BT is much improved these days.
Yeah privatisation: it's private in that the profits are kept private. The reason that it no longer takes infinite time to get a phone is not be
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That means that most users of the service end up paying way above what they otherwise would to subsidise a small minority who choose to live in the middle of nowhere. If privatisation ends that, then fantastic.
You need to seriously examine the assumptions that lead you to make the declaration that people "choose to live in the middle of nowhere".
You might also want to reconsider what the purpose of government is, if it isn't to provide service and protection to its citizens.
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Well, the second factor is completely irrelevant, and the first can only really be argued for outlying areas, where it was assumed that - being an essential service - subsidy was acceptable. It hasn't suddenly cost that much more to send shit from A to B in the last decade - especially not if you consider that the government doesn't need to charge itself fuel duty (money goes from government to government, posted as an expense in one book and income in another - it's daft!), which is by far the largest prop
Re:fattening the cow (Score:5, Informative)
Oh fuck I don't even know where to begin with the kind of egocentricity which comes down to "one time one service didn't deliver for me therefore DESTROY IT ALL because the alternatives will surely be better".
Followed by a link to a Daily Mail article, which is as a reliable as a link to a BNP article.
Have you actually tried to contract with a truly privatised, subdivided, "free market" style delivery service, like Yodel? They are so fucking awful it's an insult that they're even permitted to operate.
Re:fattening the cow (Score:4, Interesting)
I think it depends where you live. Personally I prefer Yodel over Royal Mail and it wasn't so long ago I was a big fan of Royal Mail.
Only 2 years ago Royal Mail used to deliver me 1st class mail next day all the time, courier deliveries similarly were always next day and if I missed an RM courier delivery it'd be at my local post office just 2 minutes round the corner. All was good in the world.
Then shit started going downhill. Over the last 18 months I've had "guaranteed" next day deliveries take 5 days only to turn up when I was at work and be taken not to my local post office 2 minutes away but all the way to a depot a 30minute drive away that only opens past lunchtime (when I'm at work) once a week for me to pick up. I could wait another few days and have it brought to my local post office if I pay more even though it was their failure to achieve their "guaranteed" delivery. 1st class mail now consistently takes 2 - 3 days and I've had some mail delayed for 3 weeks because they decided it was oversized and I have to pay them £1 more even though none of it was actually oversized and formal complaints about this went completely unacknowledged and ignored. They never attempt next day re-delivery anymore and mail always without fail every single day now comes through the door folded, sometimes almost completely destroyed.
This isn't a one off incident like you're talking about with the GP, this is sustained consistent decline in service over the last 18 months - 2 years and it's simply an unacceptably low quality of service. In the meantime what do I see the CWU folks doing? Campaigning about laws regarding dogs and so forth - perhaps if they really gave a shit about their future they'd focus on making sure their staff could do their jobs properly whether that's because they've been under-resourced in the last 18 months or because company policy changes have caused the decline in service. They can't now bitch and moan expecting public support when they've spent the last months giving that very public an abysmal level of service. It's a two way street.
Compare and contrast to Yodel and well, Yodel always deliver when they say they will, if I'm out they leave my parcel in a safe place or with the neighbour so I don't have to spend my own time and money collecting it (i.e. defying the point of a fucking delivery service) and I'll simply not ever forget the time where they delivered to me on foot in the middle of a -16c snowstorm because their van got stuck a mile out when Royal Mail hadn't even been seen for over a week.
As I say, I suspect these sorts of things are very regional but for me, I'm actually pleased to see something is going to be delivered by Yodel because I know it's actually going to end up at my house when I expect it to end up at my house, whereas if I see RM well, it could end up at some arbitrary location within a radius of about 30 miles for me to collect at some arbitrary point in the future but that's about all I can now expect.
I wont pretend that I think privatisation is magically going to fix anything but you'll have to excuse me if right now I have very little sympathy for the workers, nor do I suspect things can get any worse given that they're already much worse than the service private delivery firms currently give me despite having had more money than a lot of them and a last mile monopoly.
I'm not even some kind of right wing idealist, I'd love nothing more to have Royal Mail back giving me the quality of service it did 5, even 3 years ago but I don't have faith in that happening because the CWU are as much part of the problem as the right wing zealots who want to privatise are. Maybe if they'd spent more time making sure they had the public on side by doing a good job and less time lobbying heavily against dog owners or whatever they wouldn't find themselves in this situation to start with.
I agree Tory privatisation doesn't exactly have a very good track record, but as I say, at this point I could really care less, as the service really can't get much worse where I live so it really makes no odds to people like me.
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They lied about posting stuff which didn't turn up; cards appeared at my door saying `you were out` when I was not out etc.
FEDEX does that too.
You know their promise about how if it's one second late they refund the money? What really happens is that a message appears on their computer that "they called but you were out" then they give you the runaround on the phone until you get tired of calling them.
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FedEx is a company that I will avoid at all costs. I lost about half a day chasing them because they'd reported me to a debt collecting agency over an unpaid delivery. There were only two problems with this: paying for the delivery was not my liability (I hadn't signed anything) and they actually were paid by the people who were supposed to pay (who had a corporate account and a FedEx account number that deliveries could just be charged against). FedEx admitted this to me after the first time they wrote
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UPS sucks for that reason as well - especially if it's intern
Re:fattening the cow (Score:4, Insightful)
FWIW, Have you tried city-link recently? They don't even leave cards when they fail to arrive for 3 days running, and then they expect you to drive 15miles to their nearest office. Great for those who have a car, but for me, walking a few hundred meters to the local post office is far more convenient than a £50 taxi trip.
Re:fattening the cow (Score:4, Insightful)
>the RM has already been broken up and sold off in stages, each made worse:
> PO Telephones became British Telecom became British Telecom Plc. in the '80s.
No. BT were a joke. I'm using a competitor. Cheaper and better.
Royal Mail are useless. I emailed Amazon begging them to use other people to deliver, not Royal Mail. This happened:
http://news.bbc.co.uk/1/hi/business/6768983.stm [bbc.co.uk]
You're not claiming they did that because of you are you?
They lied about posting stuff which didn't turn up; cards appeared at my door saying `you were out` when I was not out etc.
The Royal Mail aren't unique in that respect. Pretty much every delivery firm - or more correctly, their employees - does that sometimes.
Get rid of them, and introduce competition.
If you want competition, surely it would be better not to get rid of them. However, when it comes to delivering a letter, I doubt you can do better than next day (probably) delivery anywhere in the UK for 60p, which is the price of a first class stamp.
I don't need the mail much, but when I do, I want it to turn up on time, not end up lost (stolen, let's be honest)
Do you have evidence for that? Why would anybody want to steal your mail?
http://www.dailymail.co.uk/news/article-188892/Quarter-million-letters-lost-week.html [dailymail.co.uk]
The Daily Mail is the worst newspaper in the UK. The article is a blatantly dishonest spin on the situation. The headline says 280,000 a week lost. The small print says "lost or significantly delayed". The small print says that's 0.07% lost or significantly delayed or one letter in every 1,500. That doesn't seem quite so bad considering that 8 million letters a day are posted without a post code or with the wrong post code.
Darwin Award analogy? (Score:3)
I can't decide if this is a stupid troll or some clever analogy to selling Royal mail. You know, something along the lines of "asking a bank to help hurting yourself by doing something really stupid"
That's wonderful! (Score:5, Funny)
I wonder how much of that money generated by the government, which it doesn't need, as it's obviously not spending more than it gets from taxes, will be distributed to each citizen.
I'm sure a simple division of the three billion dollars among the population would work, but maybe they come up with a distribution strategy that gives more to those who have less.
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The government is spending more than it gets from taxes, has been for years.
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The argument was that people got poor by having children they could not afford, yes?
No, the argument is that poor people got that way by being worthless wankers who can't hold down a job, drink too fucking much, can't stay out of jail or in school, and generally can't get their fucking shit together. The fact that said wankers shouldn't be having kids and thus producing another generation of worthless wankers, is merely the given that the GP is pointing out.
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No, that's your re-interpretation. It's not what OP said at all.
Nice to see that fascism's alive and well in Britain, though. Would you gas them? I'm from an aristocratic family, and I guess that makes me yet better than you - so I get to gas you in turn, OK?
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Would you gas them?
No, but I wouldn't give them money to sit on their lazy asses in the pub all day either.
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Eh, leaving someone to die is as good as killing them.
But please stop reading Daily Mail propaganda. You have no idea what you're talking about, but I worry that you sincerely believe what you say.
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And yet could somehow get everyone else to do as they're told. So inferior!
About as well as any other UK privitisation (Score:5, Insightful)
Things will likely go the same as with every other UK public service that has been privitized: The service will get worse, costs for consumers and end-users will go up, fewer workers will be paid less, but some 'top executives' will be brought in to 'clean things up' and make a mint.
Re:About as well as any other UK privitisation (Score:5, Insightful)
Bingo. Every single UK privatisation since 1979 has been ideological (where the ideology is "I take your stuff and get rich from it"), and not one has improved as a result.
You would think that the private sector could manage to do at least one thing better than the British government, wouldn't you?
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You'd think the British people would have noticed by now.
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You'd think the British people would have noticed by now.
St. Thatcher demands sacrifice and promises her faithful that the pain means it's working.
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Thatcher said she would never privatise the post office.
And Reagan would be derisively referred to as a 'RHINO' if he were to attempt to gain office as a republican today... The acolytes tend to...get out of hand... in their veneration after the venerated has been dead or nonfuctional for a while.
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You'd think the British people would have noticed by now.
Been living here two years and trust me, they have.
Everybody here want's everything re-privatized. Power, gas, the trains, etc. The lies that the politicians told during the money grab (better cheaper service through competition) have of course not panned out. Competition is a farce, there is monopoly and scarcity of choice everywhere, unabashed price fixing and price increases that far outpace infrastructure costs and inflation (i.e. solely to increase profit), all in the absence of regulation and built on
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P. sure that was a typo for "re-nationalised".
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Yeah but anyone with £750 to spare can buy shares and make some short term profit, which overrides all other considerations.
The real fun will begin when they stop universal service.
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I'm fed up of people re-imagining the national bodies as though they were popular and effective before privatisation. Far too many people note that the cost of using the service is high and assume that is private companies gouging them when they are completely ignoring the fact that we were simply pouring huge am
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"Rolls Royce, BP, British Sugar, London Luton and East Midlands airports, ADAS"
All localised companies and not nationwide (monopolistic) services that everyone has to use, why they should ever be state controlled eludes me.
"British Railways"
A nation-wide (monopolistic) service -- railways aren't (and can't really) be run according to market principles, why should anyone be allowed to profit from this?
No idea what it used to be like, but the current railways are beyond a joke. Just go anywhere into central e
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Most of Central Europe has more competition in the railway market than in the UK, not less! Re-instating a nationalized monopoly will just go back to the money-sink BR used to be (where, for exa
Re:About as well as any other UK privitisation (Score:5, Insightful)
Let me start off my reply by restraining my natural urge to tell you to stick your privatization trumpet up your ass sideways.
Then explain to me how Train prices continue to rise, while we are "still pouring huge amounts of money into them as taxpayers" ?
If privatization meant an end to subsidies, and an end to monopolies, and an end to price gouging and fixing.. sure.
None of it has. We just give the profits to private entities.
Re:About as well as any other UK privitisation (Score:5, Interesting)
We just give the profits to private entities.
Nope!
One of our train operators is a subsidiary owned by SNCF, another by DeutcheBahn.
Both of those are public entities, proving very nicely that public entities can run the railways well. We're actually subsidising the French and German public rail networks.
You know because the free market works and private woo woo etc etc.
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If privatization meant an end to subsidies, and an end to monopolies, and an end to price gouging and fixing.. sure. None of it has. We just give the profits to private entities.
Then that's fascism [econlib.org]. Stop railing against privatization if the problem is fascism.
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Apparently, they are a great deal better at recognizing which side the bread is buttered on in the 'privatization' deals than the British government, Does that count?
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OK, so you're ignoring 35 years of technological progress and blaming higher costs of telecoms equipment in the late '70s on government ownership. Superb.
And if you've never had to wait multiple months for a working BT connection in the UK then perhaps you've never moved outside of London. Meanwhile, many Internet services require you to rent their equipment, so the theme there remains (can you think of why it's sometimes a good idea to demand only approved equipment at the consumer end?) - perhaps in thirt
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oh god so annoying, i thought I'd sent my response...
annyway, to vaguely summarise what i said, no, I am fairly old, disagree on BT - pretty much same service immediately before/after privatisation... leyland i can kinda believe: family worked for Datsun in '70s, british industry has always been bollocks with feedback + incremental improvements, but i think that's a feature of the national culture rather than public vsprivate, which is why things have not improved much here, and indeed to treat the problem
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I'm comparing the service offered by BT in the few years after privatisation with that offered by the GPO before. That's actually a feasible comparison to make. It's you that's making the argument that 30 years on, a hypothetical nationalised telco would be better than the private providers - and you're not providing a shread of evidence fo
Re:About as well as any other UK privitisation (Score:5, Insightful)
The private sector only does better under the pressures of fair competition. Otherwise they're more of a leech than the public sector is.
British Telecom? (Score:2)
Every single UK privatisation since 1979 has been ideological...and not one has improved as a result.
I would generally agree with that statement with one exception: telephones. Privatising BT was a huge leap forward and massively modernized the system as well as lowering costs...but only because there was real competition. The rest have been a complete waste of time and money.
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Every single UK privatisation since 1979 has been ideological (where the ideology is "I take your stuff and get rich from it"), and not one has improved as a result.
Actually, to be fair there is one exception: council housing.
But yes, otherwise we agree: all other privatized services were ideologically driven and a failure, including most recently rail service.
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I couldn't disagree more. The Housing Act 1988, buy-to-let mortgages, and council house sell-offs have made property inaccessible and shot up the welfare budget as Local Housing Allowance essentially becomes a subsidy for landlords determined by *private market* rates. What's more, these changes, which didn't really produce a significant effect on the market until recovery from recession in the mid-'90s, both produced the housing boom of the early 2000s and contributed hugely toward the collapse of 2007, ba
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Their private counterparts are the slumlords who can take advantage of a reduced set of tenant rights.
Sorry, but I call BS.
The vast majority of privatized housing is in hands of the previous occupants under the "right to buy" provisions of the legislation.
Norman Ginsburg
The privatization of council housing Critical Social Policy February 2005 25: 115-135, doi:10.1177/0261018305048970
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Eh, perhaps your definition of "counterpart" is different from mine.
The functional equivalents to poorly maintained council housing are the low rent apartments and shared accommodation provided by slumlords, except that you're more likely to be evicted from or have your rent increased in the latter.
The problem isn't that older people in (decent) old council housing got to cash in. It's the fact that there isn't new similar accommodation affordable to newer generations. Make sense?
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British Leyland is no longer costing the government a fortune. British Airways has gone from a loss-making airline to one that provides considerable employment. BP is doing well, as is Rolls-Royce. BT has done ok, though giving exclusive area franchises for cable providers hampered competition and this lack of competitiveness has left them still too powerful.
Phillip.
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Most of the big industry losses of the late '70s were due to worldwide recession and inflation following the oil crisis, and had nothing to do with government ownership. Private firms across the West were suffering similarly. We don't blame all the losses by big private firms since the 2007 collapse on vaguely handwaved "capitalism" either, do we? Instead, we look for the specific causes.
BA is the archetypal illustration of policy driven by ideology: it was made profitable *before* sell-off... then sold off
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The mail is one of those services that's too big to fail. So it's a matter of a sufficiently big private sector group offering a sufficiently large bribe that it will be guaranteed to keep all the profits but be able to socialise all the losses.
Re:About as well as any other UK privitisation (Score:4, Insightful)
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Were you paying any attention at all to the state of the world economy in the mid-late '70s?
What the fuck do you think happens to heavy industry during an oil crisis?
Those losses had nothing to do with government ownership, and everything to do with our stupid decision to ride with America into the Middle East and piss everyone off.
Do we blame "the private sector" as one big label for all the losses it's suffered in the last few years? No, we focus specifically on the causes: banking irresponsibility; plus
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Of course BT and BG make billions in profit! they already own all the infrastructure, but get to keep almost all of the profit, and they're in bed with their regulators.
"leased to their competitors at cost" - the fuck? They do no such thing. I know more about telecoms than gas, particularly in 2005-10, and the pricing e.g. of BT Centrals had been kept absurdly artificially high, which is why you had such high contention ratios on ADSL. To put it bluntly: BT Openreach make a profit, even on paper - and that'
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I suppose it depends how you look at BT.
There are ways in which BT and Ofcom are certainly in bed with each other, such as on issues of RFI - a quick search for documents e.g. on PLT will reveal that Ofcom does little more than echo the vendor (mostly BT!) line.
Then there is the question of prices being regulated upward so that BT do not appear too competitive. This is always a crap method of regulating any ex-monopoly, but it's even more insidious when it applies to wholesale services: to repeat my previou
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Things will likely go the same as with every other UK public service that has been privitized: The service will get worse, costs for consumers and end-users will go up, fewer workers will be paid less, but some 'top executives' will be brought in to 'clean things up' and make a mint.
Privatisation will bring much needed investment to allow Royal Mail to transition away from boring letters and stuff. By scaling back deliveries, they'll use the cost savings to open a chain of fucking gastro-pubs. You remember the "Consignia" debacle? A great example of why so many management consultants need to die.
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A natural monopoly is better than private company (Score:5, Insightful)
This plan is corruption at its most horrible. Activate the usual propaganda merchants to persuade everybody the government has a good plan for how to improve a public monopoly service, sell off the public asset to private entities, let politicians earn massive fees (bribes!!), increase prices charged to the public, cut costs thus boosting profits but decreasing the quality of service to the public, publish tons of fake statistics proving how much better it all is now, etc. We've seen all this nonsense before. The train services in Britain are outrageously expensive (compared to cars, planes, and buses), often late, usually dirty, with an aggressive security force with police powers of arrest. Thirty years ago, the public monopoly train service in Britain, called British Rail, offered a much cheaper, and more reliable train service to the public. Prices of many ordinary train tickets bought at the counter or automated ticket machines for journeys at peak times were less than 20% in real terms of the current equivalent ticket prices charged by the private companies who now greedily charge whatever they like. There is no free market. For most journeys, you simply cannot choose which train company to use. Similarly at whatever level of granularity they choose to convert it into private companies, the home-delivery portion of a postal service is a natural monopoly, especially in the more isolated, rural locations. During the last five or so years the public postal service in Britain has been the victim of a disgraceful government push to deliberately degrade the quality of the service, e.g. by encouraging a 50% increase in postal loss rates, so that when private companies take over, they can easily demonstrate an improvement. Etc etc
Only good if they ACTUALlY privatize it. (Score:2)
US postal service was "sorta" privatized but it isn't really. And it causes issues. For example, the postal service needs to ask congress permission to raise the cost of stamps. That's silly. If they're a business then they should be able to follow that where they will. Including bankruptcy.
If you're not willing to let the organziation die if it fails then it can't be privatized.
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Bankruptcy isn't an option without far-reaching consequences. Many legal processes require the use of the USPS, and it would all have to be changed.
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tl;dr the mail is an essential service and natural monopoly which shouldn't ever be privatised.
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Why is why privatization is in most cases unrealistic.
I would like to privatize it because I think the private sector can do this job just as well or better. BUT... I am not willing to set it loose only to be responsible for putting it back together later when it fails. So it has to be either private or public. Right now its pretending to be both which is just silly. Its a public entity that takes its orders from congress. The private image isn't real.
USPS setup for failure (Score:5, Informative)
In 2006, the US Congress passed the Postal Accountability and Enhancement Act", which mandated $5.5 billion per year to be paid into an account to pre-fund retiree health-care, 75 years into the future.
Since none of USPS's competitors (Fedex, UPS etc) are required to do this, USPS has essentially been setup to fail & then be privatized.
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In 2006, the US Congress passed the Postal Accountability and Enhancement Act", which mandated $5.5 billion per year to be paid into an account to pre-fund retiree health-care, 75 years into the future.
Since none of USPS's competitors (Fedex, UPS etc) are required to do this, USPS has essentially been setup to fail & then be privatized.
That would be this benefits plan?
"MHBP, previously known as Mail Handlers Benefit Plan, offers an outstanding selection of PPO federal health plans that are available to all federal and postal employees and annuitants" http://www.mhbp.com/benefit-plans/index.htm [mhbp.com]
Maybe it's because they are funding for the entire federal government?
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Look, I'd love to privatize it. But no one is willing to cut the umbilical. So I'm not going to pretend like its anything but a federal agency until that time.
When the american people are ready to let hte post office go bankrupt, we are ready to let it go private.
If you are not prepared for it to go bankrupt then you are not ready for it to go private. End of story.
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Since the USPS never had to request money from the government except during election time to pay for the overseas ballots from our military since 1981, I would say fat chance on that.
The US Post office was a shining example of government running something right. The service was more than acceptable, cheap and the employees were paid great and not only that, this "Not-For-Profit" company was actually MAKING more than it was spending until that bastardized law was passed. The business companies couldn't allow
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The Owls... (Score:2)
Will anyone think of the owls.
The beaten spouse says, "It's different this time" (Score:5, Insightful)
Follow the money: from whence comes cash the proponents of this collect? If only I'd been in on a stake in "Railtrack", the company which got to own the tracks the broken-up British Rail trains would run on with no requirement to actually maintain them.
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Aside from a number of loudly touted exceptions, privatization works very well. It's only when the government and other organizations have greedy fingers embedded deep in the service being privatized that it causes issues.
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So aside from the long list of epic failures, privatisation works very well in the one or two companies that aren't a disaster.
By that reckoning the Soviet Union worked very well because they were awesome at rocketry and chess.
stupid (Score:2)
Private company delivering a Public good (Score:5, Interesting)
One of the things I've never understood about these privatization deals is that people think it will save taxpayers tons of money. The simple truth is that some public goods should be provided by non-profit or state-owned companies simply to maintain the level of service.
An example from the US is the Postal Service vs. FedEx, UPS, etc. The private delivery services have squeezed every single nickel out of the process of delivering packages, and one of the ways they do this is cherry-picking the easy services to perform. They also charge a lot of money for this service unless you're a big company with a better contracted rate. Anyone can get a package from New York to Atlanta overnight . It's very different when an organization has a mandate to provide affordable delivery of letters from anywhere to anywhere in the US for the cost of a stamp. I can mail a letter from Key West, Florida to Prudhoe Bay, Alaska for 46 cents - that doesn't even cover the fuel required. FedEx and UPS don't directly deliver to areas of the country where it's not cost-effective to do so. The Postal Service has a Constitutional mandate to do this, so it has to be inefficient by nature. Since I'm not a business, I usually use the USPS to ship stuff just because the walk-up rates are way cheaper than FedEx, and now they even offer cheaper rates if you pre-pay the postage online. The USPS is under pressure to keep these rates low, has a huge workforce to pay, and has a congressional mandate to prepay their retiree medical and pension costs
There's plenty of other examples. Electric and gas utilities have to provide service at a cheap enough rate so almost anyone can afford it. Amtrak in the US has to run very unprofitable long-distance rail service and subsidize it by using the money it makes from its Northeast and California rail services.
The other thing to consider is employment. Especially now, given the fact that suitable jobs for the majority of the population are going away with no replacement work on the horizon, we need to find something for people to do. A privatized postal service will lay off everyone but the bare minimum number of people to keep the lights on, and outsource all the business processes to cheaper countries in the name of cost savings. This is where my "lefty socialist" tendencies kick in - Do we really want a world where 5% of the population are fabulously wealthy, 15% are working in jobs like IT, engineering, and others, and 80% have nothing to do and no prospects? Remember, the seismic shifts in employment last time generated better jobs. Subsistence farming went to organized agriculture, then mechanization of that caused a shift to factory work, then outsourcing of that caused a shift to service and paper-pushing jobs, now outsourcing and obsolescence of that leads to.....hmm....there's nothing for Joe Average to do anymore and a well-protected aristocracy with no incentive to help. That's a recipe for French Revolution 2.0.
I know economic theory isn't on my side, but I think monopolies are more efficient at delivering some types of services than others -- not from a dollar perspective but from a service delivery perspective. It may be more expensive, but think back to how reliable AT&T phone service was back before they were broken up. It was expensive, but it almost never went down. Obviously this doesn't apply to all goods and services, but those that have to be universal and cheap are not good candidates for privatization IMO.
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Not everything should be part of the “free market.” Natural monopolies and essential services for example. What if someone complained that the fire department is “losing money?” He’d be rightly ridiculed. Duh, it’s not supposed to be a profit center, it’s something society has agreed to collectively spend money on. Yet people freely bitch about the Post Office and public schools* “losing money.”
*Public schools in the U.S. sense of the term, it’s
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Yet people freely bitch about the Post Office and public schools* âoelosing money.â
Post Office, yes. There is no reason the Post Office shouldn't be revenue neutral instead of a losing money proposition. They're providing a service for money.
But public schools? I've never heard such a complaint, and it would be ridiculous to make one. Public schools aren't selling a service, they're totally taxpayer funded and there is no expectation that the public schools are going to have in incoming revenue stream.
The real complaint is that the public schools are ineffective with the ever-increasin
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An example from the US is the Postal Service vs. FedEx, UPS, etc. The private delivery services have squeezed every single nickel out of the process of delivering packages, and one of the ways they do this is cherry-picking the easy services to perform.
UPS, FedEx, and DHL will bring packages to my house. If somebody mails me a USPS package, I have a 9 mile drive to get it. And that's only because I've convinced the carrier to drop it at the nearer post office to me that she drives by, so I don't have a 2
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The USPS is not losing billions of dollars.
They're being forced to convert it into government bonds.
(Which helps disguise the budget problems of the government and let Congress spend more)
If not for the extreme burden imposed by the 2006 law (FedEx and UPS aren't putting billions away now to fund the pensions of employees that haven't been born yet), they'd be turning a healthy profit.
UK Government? (Score:3)
As i understand it, the EU issued an edict that all postal services must be privatized, and this is just Parliament doing what the EU told it.
Not Without Precedent (Score:2)
Stupid move (Score:2)
Mail is one of those things that the free market does not handle very well.
- The primary benefit of a good mail system is that it exists at all; it is infrastructure.
- The person who chooses what company/service to use (the sender) is often not the consumer of the service (the recipient).
- There is a huge requirement for cross-subsidy (cities hugely profitable, rural areas loss making).
- Vast economies of scale.
The government argues that the Mail needs investment, but last I checked the state has a far lowe
The Unseen University calls dibs. (Score:4, Funny)
http://en.wikipedia.org/wiki/Going_Postal [wikipedia.org]
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They'll probably change the name; Royal Mail sounds so terribly stuffy. Granted it has almost universal brand recognition in the UK, and is pretty well regarded by the public, but what does that matter to us consultants? Tear it down and build a new sexy Royal Mail. We'll draw venn diagrams for three days, play a few team building exercises, and will come out with a new name. Chlamydia is a pretty cool name for the business - I think it was one of the characters in 300. Can we get more flip charts and crayo
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I took down my mailbox a few years ago. If it's important they will e-mail me.