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UK Gov't Outlines Plans To Privatize Royal Mail 220

Posted by timothy
from the anarchy-in-the-uk dept.
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."
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UK Gov't Outlines Plans To Privatize Royal Mail

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  • fattening the cow (Score:5, Informative)

    by Joining Yet Again (2992179) on Thursday September 12, 2013 @08:54AM (#44828891)

    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.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      - PO Telephones became British Telecom became British Telecom Plc. in the '80s.

      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.

      All the above has me

      • Re:fattening the cow (Score:4, Informative)

        by h4rr4r (612664) on Thursday September 12, 2013 @09:15AM (#44829091)

        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)

        by Joining Yet Again (2992179) on Thursday September 12, 2013 @09:34AM (#44829291)

        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.

        • Re: (Score:3, Insightful)

          by Anonymous Coward

          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)

            by daem0n1x (748565) on Thursday September 12, 2013 @11:40AM (#44830871)

            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!

            • by Anonymous Coward

              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

              • by daem0n1x (748565) on Thursday September 12, 2013 @01:14PM (#44832009)

                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.

          • by mjwalshe (1680392)
            BT have been experimenting with becoming a content producer since the 90's In a mega regulated telecoms market where else do you expect them to expand into.

            Murdoch makes a fortune from cable why should I as BT share holder not get some of that
        • by mjwalshe (1680392)
          Compared to the USA the UK has a much more deregulated telecoms market
      • "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"

        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?

        "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 eith

        • by gordo3000 (785698)

          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

      • by Pope (17780)

        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.

    • by sjwest (948274)

      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

      • 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.

    • by RogueyWon (735973)

      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

      • 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

      • by TubeSteak (669689)

        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.

    • The price of sending letters has gone up for three reasons one it was under priced before privatization happened, two the cost of the letter needs to have an ROI for the owners, they need to make their money back, thirdly electronic means have reduced the volume meaning that most facilities are way too large, all that overhead has to be covered by a smaller number of letters.
      • 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

  • by Thanshin (1188877) on Thursday September 12, 2013 @08:58AM (#44828919)

    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.

    • by AmiMoJo (196126) *

      The government is spending more than it gets from taxes, has been for years.

  • by Anonymous Coward on Thursday September 12, 2013 @08:59AM (#44828931)

    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.

    • by Joining Yet Again (2992179) on Thursday September 12, 2013 @09:02AM (#44828965)

      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?

      • You'd think the British people would have noticed by now.

        • 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.

        • 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

        • by AmiMoJo (196126) *

          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.

      • Re: (Score:2, Insightful)

        by N1AK (864906)
        Rolls Royce, BP, British Sugar, London Luton and East Midlands airports, ADAS are examples of ones I have used or work with that benefited considerably from the government getting out of the way.

        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
        • Re: (Score:3, Insightful)

          by Anonymous Coward

          "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

          • by gsnedders (928327)

            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.

            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

        • by 3.5 stripes (578410) on Thursday September 12, 2013 @09:58AM (#44829577)

          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.

          • by serviscope_minor (664417) on Thursday September 12, 2013 @12:39PM (#44831561) Journal

            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.

          • 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.

      • "You would think that the private sector could manage to do at least one thing better than the British government, wouldn't you?"

        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?
      • If you really believe that the service provided by BT (and the cost to the end user of that service) is as bad or worse as that provided by the GPO (rationing of connections, waiting lists of months or years for installations, widespread "party" lines, the need to rent one of a small number of approved telephone handsets, botched, costly exchange equipment development in cosy arrangements with uncompetitive UK suppliers and daytime call charges beyond the reach even of those people who could afford phone li
        • 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

          • Er, no. I'm comparing the service provided by BT shortly after privatisation with the service provided by the GPO shortly before privatisation. Those two things can reasonably be compared and I was actually there to experience them at first hand. Believe me, BT, for all its faults, was a breath of fresh air. It's you who's trying to compare the service of today with a hypothetical service that you believe might have existed if BT had not been privatised, and that's a comparison that can only be made in yo
            • 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

      • by Bacon Bits (926911) on Thursday September 12, 2013 @10:31AM (#44829947)

        You would think that the private sector could manage to do at least one thing better than the British government, wouldn't you?

        The private sector only does better under the pressures of fair competition. Otherwise they're more of a leech than the public sector is.

      • 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.

      • by Alomex (148003)

        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.

        • 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

          • by Alomex (148003)

            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

            • 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?

      • by horza (87255)

        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.

        • 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

      • If there was money to be made from it, then the private sector would be coming in droves. The fact that they don't is very telling. Perhaps there isn't any money to be made in delivering mail? Perhaps the populace is unwilling to spend more on their mail to actually make it profitable for the company to deliver? Perhaps it was running at a loss up until now, hidden by taxation. Or perhaps the private sector _wants_ to come in and make a profit, thinks it can make a profit, but there is something holding it
        • 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.

    • 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.

    • I'm guessing you weren't alive when we had state organisations like "The Gas Board" to deal with instead of independent, private businesses. BT, the railways, everything is MUCH BETTER now than it was before. I remember before. This country was like Soviet Russia in the 1970's. At least the queues were as bad if not worse and the service was appalling. These companies used to be run for the benefit and convenience of their employees (the militant trade unions), not their customers.
  • by Anonymous Coward on Thursday September 12, 2013 @09:12AM (#44829055)

    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

  • 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.

    • by Quila (201335)

      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.

      • tl;dr the mail is an essential service and natural monopoly which shouldn't ever be privatised.

      • 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.

    • by Frankie70 (803801) on Thursday September 12, 2013 @09:56AM (#44829551)

      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.

      • by tlambert (566799)

        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?

  • Will anyone think of the owls.

  • by ReallyEvilCanine (991886) on Thursday September 12, 2013 @09:45AM (#44829439) Homepage
    Because privatisation has worked so well in other countries, as it has in other sectors in Britain.

    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.

    • by ArsonSmith (13997)

      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.

      • Re: (Score:3, Funny)

        by Anonymous Coward

        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.

  • If that happens, it'll be cheaper to drive a letter to a location yourself. I don't think there's quite as much competition for mail service over there as there is in the US.
  • by ErichTheRed (39327) on Thursday September 12, 2013 @10:08AM (#44829679)

    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.

    • by _Ludwig (86077)

      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

      • Re: (Score:2, Interesting)

        by Obfuscant (592200)

        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

    • 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

  • by 0123456 (636235) on Thursday September 12, 2013 @11:32AM (#44830775)

    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.

  • In that noted hotbed of free market radicalism, Germany, the Post Office has been a private business since 2000... http://en.wikipedia.org/wiki/Deutsche_Post [wikipedia.org]
  • 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

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