Postal union slams proposal to sell Royal Mail private equity pirates

The Beeb’s economics reporter Robert Peston broke this one. Interestingly there was no mention of the ending of the Royal Mail’s monopoly as a reason for its woes – now posties have to deliver mail sorted by private firms as the private sector can’t compete with the postal service. The BBC article does recall that

Earlier this month, the independent review of the postal sector found in an initial report that liberalisation had produced “no significant benefits” for either households or small businesses.

The independent panel warned that the “substantial threat” to the Royal Mail’s financial security threatened the universal service.

While the report said homes and small firms had not gained from the increased competition, it said large companies had “seen clear benefits from liberalisation – choice, lower prices and more assurance about the quality of the mail service”.

So big business benefits at the expense of workers and small businesspeople.

Who’s pushing for this, then? Well it’s the European Union which called upon the UK govt to end Royal Mail’s monopoly. Which the UK govt. did – two years before the deadline.

As for selling a chunk of Royal Mail to a private equity firm… we know that they’re not in it for the long-haul and their operations have been compromised somewhat by the credit crunch – what happens if they leave Royal Mail in the lurch? A private equity buy-out be bad for taxpayers who would end up paying more in the long-run than any subsidy that may be needed now.

Here’s the view of the Communication Workers Union:

In response to the interest around Postcomm’s submission to the Hooper review calling for Royal Mail to be privatised, CWU condemns another bad move by the regulator.

Billy Hayes, general secretary, said: “This is another bad decision by Postcomm following their many bad decisions which have led to the problems in the industry.

“Postcomm are again overstepping their remit with this report. They have consistently been obsessed with the drive to develop the competition model and calling for privatisation is another step from an organisation that is ignoring their public service obligation.

“All industry experts agree that the postal market needs a strong and healthy Royal Mail. The company needs investment and it needs to use it wisely.

“At the end of the day this is only Postcomm’s opinion, and it is the opinion of the review team and ultimately the government that will count. There is currently no political support for this and privatisation has been regularly opposed by parliament.”

New Zealand takes rail back into public ownership – an example to be followed

From ASLEF:

The news that the New Zealand government is to repurchase its national rail and ferry operations is not only good news for passengers in that country – it is also a clear proof that the same could – and can – be done in this country,’ says ASLEF’s Keith Norman. ‘All it needs it the political will – and for the UK government to begin seeking solutions rather than excuses.’

The New Zealand transport union RMTU is delighted at the news, which was announced earlier this month.

‘Railway workers are celebrating the news of the government’s repurchase of the national rail and ferry operations,’ said its leader Wayne Butson. ‘The RMTU campaigned long and hard to get the Labour-led Government to buy back the rail tracks but we always knew that in order to have the rail industry deliver what this country needs that they couldn’t stop there. We have all been urging the government to go the final step to renationalize the network.’

Wayne says that from the day that the National government sold the industry to a US-led consortium, it’s direction has been ‘all down hill’. He accuses the private owners of ‘extracting the cash, replacing it with debt and doing just enough to keep it going’.

He added, ‘The RMTU is keen to be a part of the rejuvenation of the NZ rail industry so that it can deliver the safe sustainable transport option demanded by global warming and escalating fuel prices, and we call upon the Government to make strong early statements of investment in new locomotives and wagons.

‘We know that there will be those who will condemn the Government buy back as a return to the ‘bad old days’. To them we say, ‘Look at the record of the public industry from 1987 to 1993, which turned it into a profitable enterprise.’ Hopefully this is the closing chapter of the rail saga that goes back to the right-wing political cabal who stripped New Zealand’s assets and sold them to their mates during the 1980s and 1990s.’

Finance Minister Michael Cullen pointed out that, ‘The government’s buy back of the rail system is a long-term investment in our economy.

‘A modern rail system will contribute to a more sustainable transport network. And if we can get more freight off roads and onto rail, we can expect significant savings on road maintenance as well.’

‘It is music to my ears,’ says ASLEF’s Keith Norman. ‘If only the UK government was not deaf to sensible argument on the issue.’