Britain To Privatize Royal Mail

Credit: Roger Blackwell/wikimediaCredit: Roger Blackwell/wikimediaThe U.K. has unveiled plans for the privatization of the 378 year old postal service, Royal Mail. Thanks to digital communications the number of letters being sent has plummeted but the parcel delivery part of the industry has increased dramatically.

From the BBC:

Business Secretary Vince Cable said employees would be given 10% of shares as part of a stock market flotation. He described it as "the biggest employee share scheme for nearly 30 years". Unions have reacted angrily to the plans and have threatened to ballot for strike action. The Communication Workers Union (CWU) said the sale of Royal Mail was "unwanted by public, customers and the workers". The government has opted to float the company on the London Stock Exchange rather than sell it to a private buyer. Members of the public will be able to buy shares, alongside larger institutional investors.

The shares to be offered to the 150,000 Royal Mail staff, will have an estimated value of £2000. The sale of Royal Mail will be the biggest sell off of a state owned industry in the U.K. since the privatization of British rail in the early 1990’s. The U.K. follows countries such as Germany and Holland, which have privatized their mail services. Royal Mail has undergone significant reform and last year turned a profit of £403 million. However conservative member of parliament Michael Fallon argues that "Royal Mail is now profitable but the challenge is to maintain this – we should not forget that its core UK letters and parcel business has suffered losses in five of the past 12 years. Overall, losses were around £1 billion, and more than 50,000 jobs went during that period. And although Royal Mail’s performance has improved, its profit margin lags well behind international competitors."

The Communication Workers Union which represents two thirds of Royal Mail staff has threatened strike action over terms and conditions. The arguments both for and against the sale are reminiscent of the debates around Margaret Thatchers privatization program of the 1980s. Unions are, unsurprisingly, warning of greedy foreign investors and rocketing prices. Free market  advocates such as the Institute of Economic Affairs have praised the sale, arguing that private sector discipline will increase the quality of the service and that those living in rural areas should no longer have their mail costs heavily subsidised by those in urban areas. 

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  • ||

    Anarchy in the UK!

  • Pro Libertate||

    But how can this possibly work? What's next, Somalia?

  • ||

    I don't know what I want, but I know how to get it.

  • Tonio||

    +1 Sex Pistols

  • Jordan||

    So, does the Royal Mail bombard its customers with spam like USPS? I'd like to know how it became profitable.

  • rts||

    Yes, yes it does.

  • ||

    It's about six times worse than the USPS. My four months in England were a nightmare partly because I spent two hours every week burning all the junk mail. I shit you not.

  • Jordan||

    I see. I think I'm more surprised by the fact that fire hasn't been made illegal there, for "elf and safety".

  • ||

    I did it in the back yard, which wasn't paved, so I think it WAS illegal. Not that I gave a shit. People seemed to be decent enough not to call the cops.

  • PapayaSF||

    Junk mail is a profit center for post offices. It all comes neatly arranged and bundled and can be handled with a great deal of automation. In contrast, a bunch of hand-addressed letters is a lot more trouble.

  • Fist of Etiquette||

    When are they going to nationalize the Daily Mail?

  • Auric Demonocles||

    They should privatize their alt-mail.

  • Tim||

    Think outside the box.

  • Sevo||

    ..."said the sale of Royal Mail was "unwanted by public, customers and the workers"."

    Uh, the taxpayers get a seat at the table.

  • Tonio||

    Well, the public is pretty much synonymous with the taxpayers. It's the results that matter.

  • Pro Libertate||

    Well, some are more taxpayer than others. Just sayin'.

  • Doctor Whom||

    Someone once told me that no civilized country would privatize its postal service. I responded that I guessed he didn't consider Germany or the Netherlands to be civilized. Now I can add the UK.

  • Jordan||

    To be fair, based on their laws with respect to speech and self-defense, I wouldn't consider the UK to be civilized.

  • Zeb||

    Or perhaps they are excessively civilized. In the ass.

  • ||

    Speech, self-defense, medicine, transportation infrastructure, construction regulations, land regulations, sales regulations, law enforcement, political processes, etc. And that's just the tip of the iceberg.

    Clueless Americans who are pissy about their admittedly worsening state of affairs really should pull their heads out of their asses and realize just how bad other places are.

  • Pro Libertate||

    See, clueless Americans have. And, in general, have concluded that we need to be at least as bad as those other places.

  • ||

    We're all racing to Maximum Despotism. Let's see who gets there first.

  • Gozer the Gozerian||

    You never reach Peak Retard Maximum Despotism. It's asymptotic.

  • UnCivilServant||

    To be fair, Germany and the Netherlands are not civilized countries. They're totalitarian bureaucracies.

  • Tonio||

    [sniffs] What's that smell? Did Tony or PB or one of the other proggie trolls just soil themselves?

  • tarran||

    I heard a great fart, as if a million Krugman's flatulated in terror before curling up in the fetal position, shaking.

  • Warrren||

    Well, obviously, if private companies delivered the mail it would cost $50 a letter and service would only be available on alternate Mondays.

  • Raven Nation||

    In a kind of loose way, this could be true. I always get pissed with people who say: "who else could send a letter from Maine to Hawaii for only x cents?" Well, of course, no one can. All those long distance letters are being subsidized by other services, etc.

    So, if you privatized the USPS a letter mailed from, say, Coldfoot AK to Guymon, OK is going to cost a hell of a lot more than it does now where "hell of a lot more" = "the actual cost of delivery between those two towns."

  • MOFO.||

    Not necessarily. There are lots of scenarios where a private company subsidies a portion of its business to support a more profitable portion.

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