Tuesday 24 February 2009

Royal Mail in a spin

A lot of spinning being done over the part privatisation of Royal Mail.

Firstly the government rushed to publish a letter on the state of the companies pension scheme without it apparently, having been seen by some of the trustees.
“There is a political dimension to this letter. There is a meeting of the trustees next week which is now going to be very interesting." said an anonymous trustee.

Secondly, there is only one shareholder at Royal Mail. Alistair Darling is his name. For the scare stories of the government, claiming that pensions just won't be paid, would mean that the UK would have to be bankrupt.
{OK Ok I know.. but officially bankrupt I mean..IMF bankrupt.}
How could a government not pay the pensions of some of its own employees, while continuing to pay teachers, doctors and MP's ? It is politically inconceivable that any government would allow the scheme to go bust, so no one believes the threat for a minute.

Thirdly a main plank of the privatisation argument is its the only way to save the universal service. Well the current postal model is what has undermined the USO.. and anyway would its loss be so bad. Pay for distance i.e. the real cost of postage..What's wrong with that?
Also there is a great desire to cling to a Saturday delivery. If, as RM say, letter post is falling,why the need for a Saturday service at all? It would be a massive, massive saving to RM not to have to work and staff weekends.

Fourthly privatised companies in Europe are much more efficient says Peter Mandelson. Undeniably true. But they also charge considerably more. The real cost of the UK 36p 1st class is around 44p. Thats the break even. £1 + £2 mail won't be unusual.

Regardless of whether the privatisation of the mail is *ahem* the right thing to do, it seems an unbelievably bad political strategy.

More than 145 Labour MPs have signed a Commons motion opposing the proposals. The CWU is also very hostile to the plans. the Tories have welcomed them and will give full backing, and votes, to the proposal.

What kind of strategy is this?
At a time when banks are being given billions every day, and bailouts for companies in the red is the new black, a few billion to clear the deficit would go almost unnoticed. Dressed up as "British jobs for ..." or "Keeping employees in work is our main aim during this.. etc."

To pick a fight with your core voters {public sector posties}, your backbench MPs, former and current cabinet ministers{Peter Hain is absolubtely against and BBC reporting a split in the cabinet and Daily Mail running the story too} is bizarre.

Harriet Harman, one of the PM's frontrunner replacements, apparently involved in the row, so Gordon is giving her more room to position to oust him.
Upsetting the CWU, a £1 million+ backer, who may just decide to give the money to the Lib Dems, further angering the rest of the Union bank rollers, splitting the public on an issue, privatising a company that is Labour to its core? When its likely that the Tories would do it for you after 2010, driving voters towards, rather than away from Labour.

At a time when the polls are showing a collapse in support and a party clinging to just its core heartlands with just 28-30% rating, having to beg the opposition to bail you out of a vote, that your own supporters are against. The outcome will almost certainly be strikes. Timed to coincide with the June euro / local elections no doubt. Postal votes..forget them. DHL can't deliver the voting forms as Royal Mail deliver the final mile.

What kind of political strategy is this?
Is TNT or DHL giving a bung {er..I think you mean donation. cu.} to the party?
Have the printing presses jammed and there really is no more cash?
Is Mr Brown having an Iraq moment where its become a leadership decision and can't be altered?

There must be another reason. It can't just be because Peter Mandelson really does like getting mail on a Saturday, can it?


Anonymous said...

My dear wife assumes that huge parts of government policy since 1997 are most readily understood in terms of bungs. Gambling? Pub hours? How many others?

Anonymous said...

As various other bloggers have said:this mess is down to the scum of the EU. Bottler has no choice other than to follow a policy that, as you rightly point out, is suicidal madness.

banned said...

Like Mr Ecks says, Mandy is just obeying his European masters ( who he cannot blame since that may result in the loss of his generous EU pension ).

Any company whose core business, letters, is going down by 8% per annum has to be let go.
e-mail and texting have done for letters in the same way that canals, railways and cars did for the horse and cart.
Like others I have fond memories of Royal Mail/Post Office even though it mocks it customers much of the time, as when it abandoned first class deliveries to households but started charging more for the remaining late delivery.

Royal Mail/Post Office R.I.P.

Mitch said...

I think mandelson likes male any day of the week.
perhaps this was his plan,let gordon paint himself into a corner then bye bye.

Anonymous said...

Have a care, gentlemen, have a care. We know where you all live.

The country will be in good hands, whatever may befall the Prime Minister.

M said...

I'd have thought many of the private mail companies wouldn't be too fussed about shaking things up, given that RM effectively subsidises parts of their operations by contracting some of the more expensive parts of their delivery operations at below market rates.

Houdini said...

It is no kind of political strategy, it is deliberate and reaches back to 1997.

This Government began the dismantling and destruction of Royal Mail as soon as they reached power. They took the profit made, on average 500mil annually, and gave it to the treasury. This profit was usually ploughed back in as investment. Royal Mail was profitable and went from two deliveries a day and a Sunday collection to one a day and no Sunday, lost 60k workers, scrapped the mail train, closed thousands of offices and a whole host of other measures, but now lose money? It's not possible without a deliberate running down of the service and company, and that is what Labour has done.

Letter post has never been particularly profitable and was only a core service so the arguments over email and other electronic media destroying the Mail does not hold water.

Labour could not after the 80's privatise anything except by stealth and they now have a track record of destroying to privatise. They have deliberately destroyed the Royal Mail in order to avoid being accused of privatising it. That's why they make excuses and scare monger over this issue. Besides and let's be honest, who destroyed the Royal Mail pension scheme anyway?

They have destroyed Royal Mail for ideological reasons and are trying to be shown not to have.

Bill Quango MP said...

Dearieme- wouldn't surprise me.

Mr Ecks and IEBorC:
The thing about the EU theory is it doesn't apply here. Privatising the RM is a symptom of having ALREADY decided to open our mail up to competition in 2007 {2 years ahead of the requirement to do so.}
The other EU members have decided NOT to do it until 2011 and even then they are putting in place measures to prevent competition.

By going early and ensuring FREE access to all we have bankrupted our state monopoly. The opposite of the success we had with Telecom

Mitch, are you suggesting GB is being set up? Shame.

Peter Mandelson. We thought you would be along. Welcome. Is it to take the £22 billion pension fund onto the governments books in time for the delayed budget? Only you know the real reason for this sell off. let us know. We won't tell anyone, really..

MJW. I believe that TNT wants to own the routes..selling the final mile on to others. HMG will subsidise the USO, the pricing model will move to a proper business one, other mail firms will be charged more for use which will be passed along to customers.

There are big profits to be made over the next 10 years. Letter post is falling but parcel delivery is up 45% in two years and growing despite the recession.

Anonymous said...

If you want your peerage, Quango, you'll think carefully before 'posting' again. (My little joke).

Elby the Beserk said...

It's an EU directive.

No choice in the matter

Bill Quango MP said...

Right. The usual government trick of eating a golden goose. Need a new type 45 destroyer..take the money from Girobank. Then, when an industry or sector has been run down, declare it a loss making disaster zone and blame the company for not modernising.
The Germans pumped shed loads of cash into their state mail monopoly, ready to let it go private at the peak of health, rather than on the death bed.
Unions do have a lot to shoulder a lot of the blame though. Some of the working practices, until very recently, would have made a British Leyland fitter envious.

Peter Mandelson. Duly noted. Time for some posts on how useless Vince Cable is ?.
{Lord Quango of Westminster still on?}

Bill Quango MP said...

Elby. From that article..
"Commissioner McCreevy had originally insisted that 2009 be the final deadline for all member states to open up. He was supported by .. ‘group of front-runners’, including Sweden, Finland and the UK – which are already fully liberalised.

The EU has insisted on mails liberation, but we complied fully, even above the requirements to do so, years ago.

We don't need to privatise. I wonder why we are doing it. Especially with all the political negatives it brings.

Demetrius said...

Yet again, the government fails to ask the basic question, just what communications and delivery systems do we want? Before the Royal Mail existed the mail deliveries weres rough, patchy, and very expensive. Just like most of the Courier services now. There is always going to be a need for reliable surface delivery in every community in the land. Whether the government likes it or not this will be a public utility and in the name of community and citizenship has to be fully available to everyone, rich, poor, online or offline. If there are problems with the Royal Mail, then sort them out. Privatisation is the easy quick option and done only for short term cash. It does nothing for the ordinary people.

Anonymous said...

If DHL get the business, then this is merely a re-nationalisation but on a pan-European scale. So I wonder if DHL/DeutschePost has been chosen by the EU to be the method of creating the EU National monopoly postal carrier?

One can already see that the French State (in the form of EDF) is slowly renationalising the UK electricity industry, and that Deutsche Bahn is renationalising the UK rail transport industry (it already has EWS, now renamed DB Schenker, Chiltern, and London Overground Operations).

This whole exercise is just an EU tactic. Smash it up, and then offer a solution to the smashing up done under their orders. In the old days, running a protection racket was illegal. It just becomes legal when the government is running it!

Anonymous said...

Mr. Ecks said it first.

Hie thee over to eureferendum and check out the Elephant In The Room.

Same goes for separating track and train operating companies; putting CalMac out to tender; fortnightly waste collections; and much more.

What I don't understand, is why the MSM keeps this secret? Just ignorance I suppose.

Bill Quango MP said...

Anon.. don't confuse the story.
EU mails liberalisation has already occurred in the UK.UK followed the Euro directive on mail deregulation years ago. Thats why Royal Mail has hemorrhaged money from 2007,with increased unfair competition at a time of falling volumes.

Privatisation has nothing to do with the EU directive. that is purely a UK government decision.

Elby the Beserk said...

Bill Q

Why? Because they can? And that would seem to be the reason behind much of what this bunch of prime shysters has done.

Bill Quango MP said...

Elby. Nail , thwack, head.
Your "because they can " is as good as any i've seen.
It could be a poll tax thing for Peter. .Look how the first debate was rushed through the Lords today when the opposition was understandably off balance.

Houdini said...

We don't need to privatise. I wonder why we are doing it. Especially with all the political negatives it brings...

There could be a number of reasons Bill, none of which is palatable to Labour, and I think that is the key, that this is undoubtedly a political endeavour and crime, not one of expedience or good for the country.

Firstly, we might speculate that with Labour being bankrupt, they need the backhanders, which is likely. Secondly, the idealogical reasons. Thirdly, the possibility of making new friends in TNT or whichever company takes over. Finally, but not limited to, hiding the crass incompetence of their actions by taking all the profits made annually in 1997 and effectively destroying it.

The negative political ramifications may be less harmful than if they admitted their incompetence or idealogical destruction.

What other reasons can there be? It is certainly not a commercial one.

Anonymous said...

Hasn't the Dirty Digger still got something to do with TNT

Anonymous said...

They should have ignored Gauss and followed Goethe. Then a leader among them could be called "the Goethe man". Boom, boom.

Anonymous said...

Peter Mandelson is the UNELECTED leader of the new stassi machine

guthrie said...

This might be a silly question, but how do I find out how much money the treasury has made from the Royal Mail since 1997? I see people saying that the treasury steals the profits, and I can quite believe it, but I would like some evidence to be used for convincing undecided people what a bunch of morons the treasury and labour are.
The internet doesn't seem to be much help.

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