Wednesday, 16 October 2013

Royal Mail: the nightmare continues despite privatisation

Chancellor George Osborne
Royal Mail has just been privatized and privatization was announced as the magical solution that would put an end to Royal Mail's troubles. We have just read that there is a planned industrial action before the end of the year.

Did people think that Royal Mail's problems were going to disappear merely by selling it? So now they have sold it and now any problems are going to be dealt with by a private board of directors.

If they don't manage to put Royal Mail back on track and if the value of shares in the open market suddenly collapses, Royal Mail will be effectively lost forever in a jungle of smaller private companies and might end up following Woolworths into non existence.

In some areas, the whole idea of privatization is a complete shambles. The railways example is one of the most wasteful uses of public monies. They knew from the start that railway companies could not survive without public monies and for decades they have been maintained with an enormous amount of public subsidies while so called shareholders are literally milking the British exchequer and imposing ever higher travelling fares.

The government announced that it was going to cap yearly fare increases but this little consolation when you think about the amount of money British taxpayers are giving to private shareholders, money that is taken away from other public services.

I will not get involved in the debate of public versus private. What I want to say is that every case must be judged on its merits. The privatization of Royal Mail increasingly looks not as a real solution but as a way of putting a problem on somebody else's shoulders.

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