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.
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.”