Royal Mail privatisation

The Coalition might be wise to reconsider reinventing the wheel before they help all those on our universal postal service to fall off

You have to wonder at the emotional frenzy that is sparked by the talk of privatisation and the multitude of responses that it almost always ignites.

News today that the Government is now set to sell-off Royal Mail has encouraged some good debate, but has also reminded us of the earth-sized polarity of thoughts that the idea of private ownership of public-wide services creates, even before considering that neither Government nor private ownership of such businesses may ultimately be the right answer.

In the 80’s, sell offs of Nationally owned ‘businesses’ were commonplace and we are now in the unfortunate position of witnessing and indeed experiencing firsthand what ultimately happens when companies providing public-wide services with a de facto monopoly change hands and end up in the hands of owners or shareholders who have few scruples when it comes to making money.

Utility and Energy Companies alike are effectively awash with cash but go unhindered by Government or Regulators as they continually raise prices through the cash cow which is a virtually guaranteed substantial customer base.

In Royal Mail’s case, there will is of course a slight difference in that there is a variation in the product or services offered, whereas with electricity, gas or water, even a vast array of contracts and customer discount packages would not change the basic product that everyone buys.

Nonetheless, examples such as BT’s reluctance to roll out broadband to very remote areas could perhaps set the clearest example of how unprofitable – and what are in effect subsidised forms of mail delivery, are likely to end up in private hands.

The terms of the sell off may well attempt to dictate the continuation of service to keep everyone happy right now. But anyone who thinks that an outside entity – in this case even government – with no significant shareholder relationship can even attempt to dictate the terms under which a stand-alone, profit-led business will operate alone in an otherwise highly competitive field, will have quite another thing coming once the directors, accountants, project managers and marketers have had their way.

The inherent risk in the privatisation of Royal Mail is that over time, clever pricing strategies and manipulation of the operational or service offering will effectively price-out deliveries to areas where Post Offices are already becoming comparatively scarce.

There is a real chance that resident groups and voluntary organisations will end up attempting to pick up the pieces from yet another Government plan that was ill-conceived and not thought-through and based on little more than what we could argue as being a fag-packet plan. This is completely avoidable and would be fundamentally wrong.

Whether we have a problem with national debt or not, selling off any public assets to balance the books is hardly the mark of innovation, and certainly not the modus operandi of Ministers who either listen carefully to the lessons from history or consider the impacts of their actions upon our tomorrows as they just worry about their today’s.

Like other public-wide services which were sold off before, Royal Mail is an organisation serving every household and business in the Country; responsibly placed in the care of a Government which has been elected to consider and prioritise the needs of all those people and organisations located throughout our Country for a reason.

Perhaps it’s time this Government reconsiders reinventing the wheel before they help all those on our universal postal service to fall off…

Courtesy of Adam Tugwell