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."
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?
Re:fattening the cow (Score:3, Insightful)
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.
The cost to use the service has increased above inflation, which is why Royal Mail is finally profitable. That doesn't mean that the cost to tax payers overall has increased because the government funding of the post office has decreased considerably.
If you want to know what's idealogical it is the opposition to any privatisation on the grounds that private industry will automatically make things worse.
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
Re:About as well as any other UK privitisation (Score:2, Insightful)
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 amounts of money into them as taxpayers, via government funding, before.
Re:About as well as any other UK privitisation (Score:3, Insightful)
"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 europe and you'll notice a world of difference.
Similarly the Royal Mail will always have a monopoly over nationwide mail delivery, although that is something that is likely to decrease as more and more of the population switch to having all documents/bills etc. via electronic means (in the timescale of 50-100 years maybe).
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:About as well as any other UK privitisation (Score:4, Insightful)
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.
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, 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.
Re:fattening the cow (Score:3, Insightful)
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 contracts
The shareholders need to be paid loads of cash, too
Result: worse services and once the top management/shareholders have been paid no saving to the taxpayer. But what happens is by then the company is so embedded that it'll cost a fortune to cancel their contracts so councils just keep paying and put the council tax up instead.
Also note BT have just spent around a billion quid to set up a football channel. Think about that - no money for customer service, a billion for tossers kicking a ball around and the assorted presenters & hangers on.
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.
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.