Privatising the Royal Mail

 

 It was inevitable that the privatisation of the Royal Mail would come up on Any Questions, with the head of the CWU on the panel.  It is strange that it has become such a divisive issue, as Labour tried to do this towards the end of their period in government. They believed then that the Royal Mail needed to be able to borrow and raise money like normal companies, freed from the tighter controls that operate on public sector businesses.

             The fear of private business in the Royal Mail is particularly odd, as the Post Office itself has thousands of offices or branches which are of course private sector businesses operating under a common public franchise. No-one seems to worry about this arrangement, or demand that they be nationalised. No-one suggests this means they cannot provide a good service.  I have never had an email or letter complaining that the local sub Post Office has failed because it is private, and demanding the state  takes it over.

      Two main worries are voiced about privatisation of the Mail. The first is the private company might put up prices more. That would be difficult, given the huge increases  put through from time to time by the nationalised industry. It would also be impossible without the approval of the regulator, as these prices will be controlled in future.

       In 1997 when Labour took over government the second class stamp cost 20p. It costs a stunning 50p today, an increase of 150%. If it had risen in line with prices generally it would be just 31p. Not much sign of nationalisation helping the customer.

          The second is the false claim that it will mean the end of the comprehensive six day delivery to anywhere in the UK for the same price. This has been written into the law, so it will remain unless some future Parliament wishes to change it. Clearly this government wants to guarantee the service and has done so. It is the nationalised industry that has removed twice a day delivery and does not always give the early morning delivery that business likes.

             I am glad the employees will become shareholders. I expect motivation, quality and efficiency to improve in the private sector. It is good to know in future taxpayers will not have to pay for any losses. There have been many job losses under nationalisation.

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68 Comments

  1. Leslie Singleton
    Posted September 14, 2013 at 5:22 am | Permalink

    The Government should only handle stuff that only it can handle–traditionally internal (the Police) and external (the Military) defence and there is no reason at all for the Government to own the Mails–no more than there was for the Government to own say British Airways. Especially is this true if there is a Regulator and (minimum) necessary agreed legal restraints such as same pricing to anywhere in the country.

    John, what exactly are “the the tighter controls that operate on public sector businesses”. I’m not saying there aren’t any but you could have fooled me I must say.

    Reply Over fund raising – where their capital borrowings are part of the public sector borrowing controls.

    • Leslie Singleton
      Posted September 14, 2013 at 9:11 am | Permalink

      Comment on Reply–Well, Yes, but since when have they been so tight? Had thought rather the opposite.

  2. Acorn
    Posted September 14, 2013 at 6:16 am | Permalink

    The Taxpayer just has to cover the £10 billion black whole that was in the pension fund which has now been “socialised”. JR, do you think we are all muppets out here and don’t understand these political scams?

    Reply The government had to stand behind the fund before privatisation as well, so what’s the difference?

    • Brian Tomkinson
      Posted September 14, 2013 at 8:14 am | Permalink

      Reply to reply,
      The difference, as reported by the BBC (21/03/2012), is that the Treasury took the £28 bn fund and for all pensions earned to date, the scheme will become an unfunded arrangement, paid for out of taxation, like the schemes for teachers, civil servants, NHS staff and the armed forces.

      Reply. It is true the state took over the assets instead of borrowing that extra money. The impact is the same either way. I think we c an agree the state is simply borrowing too much overall.

      • A different Simon
        Posted September 14, 2013 at 2:23 pm | Permalink

        Still no access whatsoever to a viable vocational pension scheme for the masses who don’t work in the state sector .

        I’m not advocating the civil servants be enrolled into the totally failed private sector pension fiasco which cannot ever work .

        How about tasking civil servants with coming up with a vocational pension scheme which will be open to everyone and that they will be enrolled in .

        When it comes to pensions we all need to be in the same boat and it shouldn’t be the private pension schemes which have been such a disaster for everyone .

        John , your refusal to deal with pensions provision for those outside the state sector is very noticable .

        Reply What is your proposal? The government does offer substantial tax relief/ deferral to encourage pensions savings, even after Labour’s tax attack on schemes. Many people do save through a SIPP or through an employer based scheme, often now DC not DB for obvious reasons.

        • ian wragg
          Posted September 14, 2013 at 5:03 pm | Permalink

          Nearly all private pensions are money purchase schemes with typically 3 – 5% paid by the employer if at all.
          State sector pensions are largely 60% final salary and indexed linked. There is no way this can be sustained in the long term. As a banker you already know this.

        • A different Simon
          Posted September 14, 2013 at 7:32 pm | Permalink

          To cure the current problem of disinterest on the part of MP’s and public sector workers in the plight of everyone else scrap their schemes and task civil servants with coming up with a scheme which will be accessible to everyone and which they will have to use themselves .

          Once MP’s and civil servants are in the same boat as everyone else things would improve . Whilst they are not things will not improve .

          Contributions rates need to rise and this can only happen if lifetime interest payments to banks for accommodation fall .

          Implement a land value tax as an attempt to get the rental value of the land to accrue to the country as a whole , discourage land hoarding , house price inflation .

          Better for people to pay the rental value of the land to the community than pay it to the banks .

          For vocational pensions insist that the tax relief is invested in UK infrastructure so the country gets a double return , especially things which are difficult to fund otherwise like nuclear power stations , hospitals (to avoid PFI) . Also rental accommodation and accommodation for the elderly .

          I used to save into a SIPP and before that private pension funds until my health deteriorated and it became clear that pensions were not the right vehicle for me .

          Supposedly 8 out of 10 private sector workers retire with a pension pot of less than £30,000 so whatever successive governments have done and the market has delivered is not working .

      • Leslie Singleton
        Posted September 15, 2013 at 9:39 pm | Permalink

        Comment on Reply–So what about the “tight controls” mentioned above??

    • zorro
      Posted September 14, 2013 at 8:26 am | Permalink

      Reply to reply – I suppose it depends on how much the profit the business would have made in the public sector and if the taxation income on profits is greater or less than that. Is the government committed to just the existing black hole in pensions or any future black hole under the agreement?

      zorro

      Reply Yes, the trend of profits/losses and tax receipts is an important question. By privatising we taxpayers no longer have to pay for the losses – and prior to the last huge price increase the Royal Mail did make losses – and we will collect taxes on the profits they make. The taxpayer only benefitted in cash terms from years of profit in the Royal Mail where the profits generated exceeded the capital requirements of the business. Once privatised the public accounts no longer have to include the spending of the Royal Mail as costs.

  3. lifelogic
    Posted September 14, 2013 at 6:24 am | Permalink

    Clearly this government wants to guarantee the comprehensive six day delivery to anywhere in the UK – but why?

    The end of the comprehensive six day delivery to anywhere in the UK for the same price would be a very good thing. Why on earth should other users in urban areas have to subsidise people in remote parts and islands, they should pay the going rate. If a parcel costs £50 or a post card £10 to deliver to the Outer Hebrides then so be it. Then they can have competition, perhaps collecting their post from the local shop instead or just using email &, electronic birthdays cards etc.

    The only danger is where they have a monopoly and lack of competition. If you force cross subsidy in this silly way then competition will not go into these uneconomic areas but will undercut them in others.

    • zorro
      Posted September 14, 2013 at 8:29 am | Permalink

      I would much rather collect my parcels from a depot, but these parcel companies insist on trying a delivery even when they know that I won’t be home. Whenever I say this, they say it is not possible to have this option without trying a delivery first. It seems such a waste of resources.

      zorro

      • Iain Gill
        Posted September 14, 2013 at 6:21 pm | Permalink

        the post office just delivers a card saying I’m not in, even when I am standing there watching them, indeed often they never bring the package with them just the card

    • Mark
      Posted September 14, 2013 at 8:45 am | Permalink

      Perhaps people in urban areas ought to pay the full cost of their highly subsidised public transport systems, just to make things even.

      • lifelogic
        Posted September 14, 2013 at 7:02 pm | Permalink

        Indeed they should pay the true cost for transport and often do.
        but urban dwellers subsidising rural post service is as daft as asking rural dweller to subsidise the higher cost of London rents or taxpayer to subsidise HS2 or quack energy.

        We need the right price signals so people make the right decisions for their personal circumstances. Perhaps sending an email or text rather than a letter.

    • Leslie Singleton
      Posted September 14, 2013 at 9:18 am | Permalink

      lifelogic–No, it would be horrible to have to worry about what stamp to buy and put on based on distance. You make it sound easy only because you pick the example of a clearly defined island group but by your logic, life or otherwise, we would have to have different rates all over the place which I reckon nobody wants, perhaps even you, if you reconsider.

      • lifelogic
        Posted September 14, 2013 at 7:08 pm | Permalink

        No you would probably end up with just three or four bands 90% of the population would probably be in the urban rate, Northern Scotland and most islands would be higher.

      • lifelogic
        Posted September 14, 2013 at 7:51 pm | Permalink

        By your logic should all air fares and train ticket be the same price (regardless of distance) just so it is simple? Ticket to Australia are the same as London to Paris perhaps?

        • Leslie Singleton
          Posted September 15, 2013 at 9:44 pm | Permalink

          lifelogic–Very profound but despite all the noise stamps for letters are very cheap and personally i do not want to have to keep stocks of different types or if lowest stamp is small to have to worry about how many stamps to put on. You are totally alone on this.

    • lifelogic
      Posted September 14, 2013 at 3:14 pm | Permalink

      I see that potty Danny Alexander thinks workers in the private sector deserve pay rises, to ensure that they “share in the success” of the recovering economy.

      Well perhaps he should set up a business pay his staff more with his own money. Clearly the man has not the slightest understanding or business and competition in the real world. You pay the market rate or you go out of business. The market rate in the UK is where it is due to a bloated incompetent state sector, tax borrow and waste, the EU, over regulation of virtually everything, disfunctional rip off banks, expensive religious energy, a dreadful socialist/LibDem coalition government and almost uncontrolled migration.

      Perhaps he should resign as it is his and the last few government’s policies that are fully responsible for lack of growth in wages.

      In the wealth creating sector that if you pay more than the going rate you cannot sell your product as others simply undercut your prices. Perhaps this basic economics was not covered in Philosophy, Politics and Economics at St Anne’s College, Oxford.

  4. Peter van Leeuwen
    Posted September 14, 2013 at 7:30 am | Permalink

    In the Netherlands it will mean the end of 6 day delivery, but that comes more than 20 years after privatization. According to a government statement: “From 1 January 2014, PostNL may deliver the mail in five instead of six days. For Mourning cards and medical post six days a week delivery will continue to apply.”

    • Richard1
      Posted September 14, 2013 at 9:58 pm | Permalink

      What is the reaction of Dutch people to this – does it really matter or can they make do with more limited physical deliveries of mail given the instant access now available electronically?

  5. APL
    Posted September 14, 2013 at 7:45 am | Permalink

    “It is strange that it has become such a divisive issue, as Labour tried to do this towards the end of their period in government.”

    It is only strange if you refuse to recognize that the Tweedle dum and Tweedle dee parties are really taking their instructions from Brussels.

    Yet the EU ‘ doesn’t play on the doorstep ‘, mostly because those masquerading as democratic parties deliberately conceal the truth.

    For example:

    EU affairs are run through the Foreign and Commonwealth office to give the false impression that it is a foreign entity we deal with, when in fact it is our own government.

  6. oldtimer
    Posted September 14, 2013 at 8:28 am | Permalink

    This is a long overdue move. I have read that state control, from the earliest days under Henry VIII, was intended just for that purpose – control over communications. If press reports are to be believed, that state achieves that more effectively today through GCHQ.

    OT: I hear that a 5p plastic bag tax is to be imposed but the proceeds are to be given to charities – environmental charities according to reports. This measure seems to me to be a most dangerous extension of state control. What is to prevent politicians of any persuasion raising cash this way to direct it towards the pockets of organisations of which they approve – or which happen to be favoured by their wives and girlfriends? Taxes should be used to defray government debt, not to subsidise NGOs or, as the ROCs, private companies. This development is open to corruption and should be opposed.

    • A different Simon
      Posted September 14, 2013 at 2:41 pm | Permalink

      Yep , exactly .

      A means of funding layabouts , fake charities , NGO’s and quangos to look after the boys .

      They’ve demonised carbon dioxide , now plastic bags , whatever next ?

      It’s so purile .

      We can hope that this sop to “environment charities” will be compensation for scrapping the 2008 climate change act .

      What really annoys me about self professed “environmentalists” is the way they seem to claim a monopoly on caring for the environment .

      • lifelogic
        Posted September 14, 2013 at 3:19 pm | Permalink

        Perhaps a bottled water tax next too? As so many are too lazy to fill a bottle from the tax for their children and schools lack fountains. Now we have (yet another) tax on plastic bags.

        Though I must say I quite like getting a decent thick plastic bag rather than the useless flimsy one use if you are lucky ones.

        • lifelogic
          Posted September 14, 2013 at 7:46 pm | Permalink

          tap not tax sorry

        • Leslie Singleton
          Posted September 15, 2013 at 9:48 pm | Permalink

          lifelogic–And not just thick, but big like what they used to be guv

  7. Mike Wilson
    Posted September 14, 2013 at 8:34 am | Permalink

    … the Royal Mail needed to be able to borrow and raise money like normal companies, freed from the tighter controls that operate on public sector businesses.

    Every now and then you read something that makes you splutter a mouthful of tea over your keyboard. That is one such comment.

    Yes, very, very tight controls operate on the public sector. The public sector is only borrowing 120, thousand, million pounds every year. Presumably, none of this can be sent in the direction of the Royal Mail – they have to be privatised so they can borrow like ‘normal companies’.

    I don’t know whether the author was rolling around on the floor laughing as he tried to type this. It is hard to imagine otherwise.

    Reply We are both right. Of course the state sector overall is borrowing far too much far too easily. It is also the case that a nationalised industry can have a good investment project which it is not allowed to borrow to achieve because its borrowing financed cap ex counts as part of total state spending.

    • lifelogic
      Posted September 14, 2013 at 3:21 pm | Permalink

      So they can waste £80Bn of the absurdly daft HS2, but cannot invest in the Royal Mail by EU rules!

  8. Iain Gill
    Posted September 14, 2013 at 8:56 am | Permalink

    I found that radio show funny, in that the left wing panel members had clearly not read your thoughts on this blog, they could have answered differently had they known your thoughts on Network Rail better.

    I also find these shows rather biased in the typical BBC world view way, for instance everywhere I go immigration is high up the agenda amongst people, and they discuss it in lots of different ways. Do I really walk around in a bubble where this only happens to me? I think not… So I conclude that the BBC actively suppresses this topic as it hardly comes up on such shows and when it does they choose individuals unable to put across their point very well.

    We as a country really need to do a lot better at political debate.

    Reply The BBC asks the audiences to supply the questions, but does in the end have to select from the range submitted. They say their choices reflect the trends in the topics their audiences wish to ask about. One of the issues is audience selection, where there is a danger that lobby groups are good at getting themselves represented by encouraging their followers to apply for tickets.

    • lifelogic
      Posted September 14, 2013 at 4:38 pm | Permalink

      Of course the BBC actively suppresses (edit) certain topics:- immigration, anything too anti EU, anything in favour of lowers taxes, less spending on the arts (or the BBC), anything suggesting lower paid and pensions in the state sector and anyone who is scientific or realistic on the global warming religion. When ever does the BBC point out the the government “investing” in something means they have already taken the money of the private sector who would have invested it rather better had they been left with it.

      They also particularly suppress the, Any Answers, programme by cutting off people mid sentence (if they are not on BBC think message) even just not letting people comment on certain issues at all by just addressing only the other topics in the program. The Dimbleby brother were desperately “BBC think” with the settled AGW quack science, pro endless more state waste and benefits and pushing huge benefits of uncontrolled immigration.

      The BBC also clearly like to arrange studios, panels and questioners like flower arranging.
      (describes a politically correct audience plus a caricature conservative ed)
      White males with a good knowledge of science and real economics are never much in evidence for some reason.

    • Iain Gill
      Posted September 14, 2013 at 7:10 pm | Permalink

      Its just impossible to believe that any “trends” would not have immigration high up the list, its just pure BBC fantasy.

  9. Mark
    Posted September 14, 2013 at 9:23 am | Permalink

    The real story with mail is that its nature is changing into delivery for online shopping, rather than the delivery of letters as people come to realise that shopping trips to ever more distant shops are expensive as well as time consuming. Rather than each household driving several miles each way to go shopping, it is better to have a “milk run” delivery with costs shared with others on the route. Currently, the Post Office doesn’t cater well for deliveries of groceries, but in future it might compete. It might also offer a collect from the home service for mail order returns. As the volume of goods delivery increases, it becomes viable to offer more tailored and frequent deliveries. .

    There are other lines of business where regular visits to homes could be cross-sold. It would surely be cheaper to have the postman read utility meters than to install smart meters, or pay for dedicated meter readers. Checking up on the elderly might be another.

  10. margaret brandreth-j
    Posted September 14, 2013 at 9:29 am | Permalink

    It is just so sad that we are destroying everything British. I think we will regret letting the Brits heritage go .It is a good job we have ‘e’ mails and the like these days or else many would really rail against the loss of Postman Pat’s lot. It is just another episode of identity change in the life of GB.

  11. Iain Moore
    Posted September 14, 2013 at 9:49 am | Permalink

    We al know what will happen, the City boys will get a fat fee for privatising it, then get another fat fee for flogging it off to a foreign buyer. Mean time the customer will be fleeced rotten to make it an attractive target to a foreign buyer. Any argument of course that claims the new privatised Royal Mail will be able to access private capital should be seen as a joke, for as we have seen with Electricity and Water, when ever there is any requirement for future development, the customer has their pockets picked to pay for it.

    The price of standard post will be regulated and will therefore rise less quickly than the 150% increase since 1997

    • A different Simon
      Posted September 14, 2013 at 2:47 pm | Permalink

      The last massive rise was clearly to spare the soon to be new foreign owners the task of implementing it .

  12. Atlas
    Posted September 14, 2013 at 10:04 am | Permalink

    I read what you say, John. However the privatized gas and electricity companies had put up their charges massively – partly due to greed and partly due to political manipulation, with the politicians trying to hide their involvement. At least with a state owned organisation somebody in the Commons can be held to account.

    Reply Following privatisation energy prices fell for several years. More recent rises are mainly the result of the surge in world energy prices. Competition is the customers’ greatest friend, keeping businesses more honest.

    • Credible
      Posted September 14, 2013 at 12:50 pm | Permalink

      What competition?

  13. Richard1
    Posted September 14, 2013 at 10:26 am | Permalink

    I spoke to our postman. He was uncertain about privatization but thought it likely a good thing. The union is adamantly against it though. He said the post office needs to modernize. 4 years ago Amazon were on the point of pulling their business due to the union’s antics, which would really have done for it. This privatization is 20 years overdue. It is very revealing that the unions and the political left are against it, stuck as they are in a postwar socialist mindset. They must be ignored, as on so many other things.

  14. Neil Craig
    Posted September 14, 2013 at 10:34 am | Permalink

    Labour changed the policy because, not being in government they can give up their limited commitment to good government and fish in the sea of populism. However this has, on a number of issues, produced a double U-turn as popular feeling moves.

    The real problem is that the state owned broadcast propagandist loads any debate against the principle of economic freedom as demonstrated on Thursday by the presence of a Green, after weeks of no-UKIP, despite the latter having 20 times the public support. The evidence that economic freedom works better than political control is nearly as firm as the law of gravity (occasionally it doesn’t work in the same way an occasional table impedes the fall of apples) and should be the default position in any public debate.

  15. behindthefrogs
    Posted September 14, 2013 at 11:05 am | Permalink

    “I have never had an email or letter complaining that the local sub Post Office has failed because it is private, and demanding the state takes it over.”

    Perhaps you didn’t notice but most of the private local sub Post Offices in your constituency were closed down a few years ago. We can probably expect the same to happen to six day deliveries inthe next ten years. Do we anticipate everyone collecting their mail from a bank of boxes at the end of the street as happens in places like Canada?

    Reply Some did close, and I had several meetings about the closures. The case was based on the very few number of people using the smallest offices, and the withdrawal of much government business from the office thanks to internet and direct banking service instead.

    • Mike Wilson
      Posted September 14, 2013 at 12:43 pm | Permalink

      The case was based on the very few number of people using the smallest offices, and the withdrawal of much government business from the office thanks to internet and direct banking service instead.

      And, when 6 day deliveries to every address are withdrawn, the case will be made that more people are sending emails these days so the PUBLIC SERVICE that the Royal Mail provides will be cut back.

      The Royal Mail is one of the few services that should be run by the government. Prices have been put up, it is making a profit, I and my fellow citizens have very kindly guaranteed the staff pensions – why not just leave it alone.

      Reply It will take an amendment to the law to abolish the 6 day post now. All 3 main parties are currently pledged to support 6 day post.

      • Mike Wilson
        Posted September 14, 2013 at 5:04 pm | Permalink

        Reply to Reply. It will take an amendment to the law to abolish the 6 day post now. All 3 main parties are currently pledged to support 6 day post.

        So what? Do you seriously think that we don’t realise that whoever ends up owning the Royal Mail won’t, at some point fairly soon after privatisation, say ‘we either need to charge £5 for a first class letter or only do deliveries on every other day’.

        And the government of the day will amend the law. And that will be the thin end of the wedge.

  16. lojolondon
    Posted September 14, 2013 at 12:18 pm | Permalink

    John, can I mention that this was an EU initiative, eagerly received by both main parties, and implemented in very few European countries (looks like the Netherlands was another). Privatisation of the bulk mailing facility and express/ business post parts made the letter delivery service financially unsustainable, so it will never be profitable. I therefore anticipate that the postal service, like the rail service, will require regular cash injections from the taxpayer, dishonestly disguised as ‘corrections’ and ‘government quantity guarantees’, etc.

  17. Credible
    Posted September 14, 2013 at 12:49 pm | Permalink

    John,
    You say that “It is strange that it has become such a divisive issue, as Labour tried to do this towards the end of their period in government.”
    Perhaps it is divisive because the majority of the British public don’t want it, irrespective of the views of mainstream political parties. But, hey, why should a little thing like that stand in the way.

  18. uanime5
    Posted September 14, 2013 at 12:55 pm | Permalink

    What safeguards will be implemented to ensure that 6 day delivery is still available? For example how will the Government prevent a private company from only delivering 3 days per week in rural areas but claims that they deliver 6 days per week. Assume that they have some sort of excuse based on their own ineptness, such as claiming that it takes 2 days to sort all the post so they can only deliver 3 days per week.

    Reply There will be enforcement of the law.

    • Mike Wilson
      Posted September 14, 2013 at 5:05 pm | Permalink

      There will be enforcement of the law

      And it will take a simple amendment of that law to change things.

      • Denis Cooper
        Posted September 15, 2013 at 4:09 pm | Permalink

        Correct, and we can more or less guarantee that after a decent interval the law will be quietly amended.

    • Nicholas White
      Posted September 16, 2013 at 10:02 pm | Permalink

      What if the privatised company goes bankrupt? Who will deliver six days a week then?

      Reply The company that takes it over! Unlikely to fo bankrupt when you have such a strong franchise.

  19. Andyvan
    Posted September 14, 2013 at 2:07 pm | Permalink

    Having a regulator for the Post Office is a blatant waste of time and a fraud. Regulators don’t protect the consumer as we’ve seen so many times before in other industries. A far better method of preventing big rises in prices is competition which in a free market always acts to reduce prices in the medium term. If any competitor could provide a similar or better service and undercut the Post Office they would, that’s how the market works, and it does work as proved by Fed Ex, UPS, DHL and all the other couriers that operate a ruthlessly cut throat market that allows me to send parcels for considerably less than our glorious nationalized dinosaur charges. No public sector organization can compete against a private sector company unless massively subsidized by the taxpayer and all regulation does is raise the bar for new competitors to enter the market and reduce prices.

    • Bazman
      Posted September 14, 2013 at 3:46 pm | Permalink

      Not for the same price letter anywhere in the country and this is the crux of the problem. Doris Gwyneth and Morag all can get a letter from their dear son in London for the same price despite living in the back of beyond. Who can also send his girlfriend a letter across London for the same. See how far messing with that one gets the Tories? Might be in legislation, but the quid stamp and the one delivery week is not.

  20. Bazman
    Posted September 14, 2013 at 2:28 pm | Permalink

    We will see how smart it is when we are all looking down the barrel of the one pound stamp, few deliveries and the profits from plundering the company and its employees are finding their way into offshore accounts without tax being paid. Questioning of it being answered in the same way as the rest of them like Google and the BBC did. Another utility billing company fiasco in the making only this time with a strike and lets face it who cares about being sacked as a posty. You could leave and become a posty! Only making much less effort as the wages and conditions are no even more dire and the management can now ram it during the round.

    • Edward2
      Posted September 14, 2013 at 10:34 pm | Permalink

      You are beginning to develop into a cynic Baz.
      Although I understand this might be a controversial opinion I hope others will not be too shocked and perhaps some might even agree with me.

      • Bazman
        Posted September 15, 2013 at 5:34 pm | Permalink

        Professional cynic but my hearts not innit.. Previous experience should tell anyone with an ounce of intelligence what will happen.

  21. Pleb
    Posted September 14, 2013 at 2:53 pm | Permalink

    My entire family now use email and skype. The only things that are delivered are parcels and junk mail. My building planning office has switched to email as has my oil delivery company. Isn’t the personal letter virtually extinct? Why would I want to pay to send a slow to be delivered message when I can send it instantly and virtually free.
    Elections should let us vote online as well. If my bank can be secure so can the elections. More would vote then.

  22. Denis Cooper
    Posted September 14, 2013 at 6:10 pm | Permalink

    Basically the eurofanatic Heseltine has finally got his way.

    When his attempts to get the privatisation of Royal Mail into the Tory manifesto failed – some of his colleagues rightly feared that it would be too unpopular – he resorted to the backdoor method of getting an EU Directive to enable private competitors to cherry-pick the best business and turn Royal Mail from being mildly profitable – with the Treasury taking the lion’s share of those profits, year after year for two decades or more – to being massively loss-making.

    Every time I hear Cameron talk about the need to “complete the single market” I know exactly what he means; more EU control, and the privatisation of anything which is still left to be privatised.

    The NHS will be next.

  23. They Work For Us
    Posted September 14, 2013 at 7:56 pm | Permalink

    Private Mail skimmed off the easy pickings like delivery between major cities and then got the Royal Mail to do the difficult, expensive last bits for them.

    If Royal Mail had been able to decline to deliver items coming from their competitors and say “you took on the delivery, you complete it all the way”. This would have been a level playing field. No commercial organisation is required to help its competitors in this way.

    Bulk deliveries originating from the undercutting Dutch Postal Service should not have been taken on for delivery as if they were “regular items”. There has not been a level playing field here either thanks to the EU and our implementation of EU directives. ? Does much of French and German Bulk Mail come via the Dutch Postal Service? and from private postal companies? – No I didn’t think so. Funny that? We are fools where the EU is concerned.

    • Denis Cooper
      Posted September 15, 2013 at 4:07 pm | Permalink

      And no commercial organisation has the obligation to provide a Universal Service; among all the licensed postal operators in the UK, now about 60, only Royal Mail has that onerous obligation in the terms of its licence.

  24. Ian Bland
    Posted September 14, 2013 at 10:01 pm | Permalink

    Is this really privatisation, though? If the State controls prices, sets what service must be provided, etc, how can we have a meaningful free market? And this is the issue which, it seems, was often forgotten under Thatcherism. Consumers benefit from free markets compared to nationalisation not because of who runs the company (private or public) but due to exposure to market forces including potential destruction by competition. Where any profits go, if there are any, is neither here nor there to the consumer. What matters to the consumer is being able to take their business elsewhere, and that all the businesses in that sector must be on a level playing field without State patronage or hindrance.

    The question of public vs. private is a complex one. Sometimes a community (in this case, the nation) may want a service which is uneconomic in free market terms. For instance, we may want babies to survive at great expense even though their parents would not be able to afford private sector health care in the absence of the NHS. This is the basic justification for public services. In this situation, trying to apply “private sector” systems can be counterproductive, producing a corporatist “private profits, public liabilities” disaster.

    With the banking debacle of recent years, many people are becoming as sceptical of this sort of problem as extremist libertarians like myself, having seen how banks are “private” when making a profit and “public” when they screw up and want massive taxpayer and government support to stay afloat.

    The Royal Mail is a very old institution which from a libertarian perspective is highly suspect, but one is also highly suspicious of the real motivations behind privatising it. It smacks more of oligarchic corporatism than a true free market intention, which as I implied above seems to not even be possible. Unless we are going to get a true free market, it may well be far wiser to leave it as it is.

  25. Richard1
    Posted September 14, 2013 at 10:06 pm | Permalink

    I just listened to the programme. It was extraordinary the extent to which the left got the lion’s share of airtime. On HS2 you got to speak briefly twice, but Ms Eagle 4 times. You were not invited to give the first answer on any question. If someone could be bothered to listen to it stopwatch in hand I am confident the apportionment of airtime would me: 1 – Ms Eagle, 2 – Mr Hayes, 3 . Mr Lamb, 4 – JR. You were also the most interrupted by the chairman. Perhaps Conservatives should tell the BBC they will boycott these programmes until they are balanced.

    Reply I checked this issue as I did feel I got too little airtime especially on the first two questions. Ms Eagle did get considerably more, but Mr Hayes did not.

    • Richard1
      Posted September 15, 2013 at 5:46 pm | Permalink

      It is frustrating to listen to as it is a consistent pattern on this programme. Conservatives, especially if perceived as ‘right wing’, are given less airtime and interrupted more. Leftists such as Ms Eagle are given more airtime and are permitted to interrupt other speakers. There is also an issue with audience selection as you point out above. It is quite clear these audiences are packed with pressure groups, generally of the left. In a recent programme, Owen Paterson and James Delingpole were howled down by global warming zealots. In another programme a large majority favoured remaining in the EU ( a reasonable position but not representative of public opinion according to polls). The BBC are obviously fixing the audience to weight the programmes against the political right.

  26. BernieInPipewell
    Posted September 15, 2013 at 12:17 am | Permalink

    John may I precis your post? The government of the United Kingdom has been ordered by the European Union to privatise the Royal Mail. Therefore the government of the United Kingdom has no other option but to comply.

    Reply Not so

    • Richard1
      Posted September 15, 2013 at 5:48 pm | Permalink

      If so that would be an argument in favour of the EU

  27. Richard
    Posted September 15, 2013 at 5:28 pm | Permalink

    I appreciate that the privatisation of Royal Mail suits the current coalition government in 3 important ways :

    1) The implementation of an EU directive to remove all national institutions.

    2) The benefit for one big multinational business to acquire a profitable monopoly business whilst the taxpayer is left with the unfunded pension liabilities.

    3) The increased government revenue obtainable from the inevitable implementation of VAT on letters.

    However, I believe it will not be in the interest of the UK as a whole because :

    1) A monopoly in the hands of a private company is never in the interests of UK consumers.

    2) The easy-to-make profits from this monopoly may be sent abroad, probably to a tax haven rather than stay in the UK, making the UK poorer.

    3) We may see many UK workers replaced with EU workers from eastern Europe, as is happening/happened with the courier companies.

    This will be shown by future statistics showing both jobs and unemployment increasing (statistics we have already seen before with the previous administration)

  28. peter davies
    Posted September 16, 2013 at 3:34 pm | Permalink

    I believe that labour are highly critical for objecting to this knowing full well that it is yet again another EU directive pushing this rather than a wish by a left wing Business Secretary – on its own this would surely be against everything he stands for.

    Here is the link if I may http://ec.europa.eu/internal_market/post/index_en.htm

  29. Bazman
    Posted September 22, 2013 at 10:45 am | Permalink

    John can’t resist that old Tory favourite of the pensioner living in large house on their own in an expensive part of the country who’s right are above all the millions of people in crowded and below standard accommodation. Unlike them the pensioner has the freedom to downsize and move to another area. The bleating middle classes who can only afford two holidays this year and had to buy top of the range Fords this year instead of their usual BMW’s. Labour are barking up the wrong tree if they think 50k a year is not rich. I’m in those realms myself living in an ex council house on an estate, but this idea that tightening up anyone is bad is destroyed by the Tory idea of the bedroom TAX. and increased use of TAXES to fund it. Which as we have seen due to shame, most including the turncoat leader of the turncoat party Clegg cannot be mentioned, but laughably live in fear of Doris having to get herself a luxury bungalow. This is going to bite the Tories very hard as they well know even their traditional supporters of the small mean minded see this as a step to far. Ram it.

  30. Alex
    Posted September 23, 2013 at 7:35 pm | Permalink

    The comment about stamp price increases is playing games with statistics and draws the wrong conclusion. In fact in 2010 a first class stamp cost 41p and a second class one 32p. In 2012 they had reached 60p and 50p respectively. For decades under public ownership stamp prices increased below the rate of inflation. It is the preparation for privatisation that has sent prices soaring.

    Reply The increase from 1997 to 2010 under a Labour government and nationalised industry was greater than inflation. My book on “Public Enterprise in crisis” charts how nationalised industries prior to privatisation put up prices more than inflation and sacked many people. Nationalisation has a bad record of ripping off customers and sacking employees.

  31. BP De Guzman
    Posted October 10, 2013 at 5:28 am | Permalink

    An industrial loan is used to help a business involved in some form of industrial production. The bangkopangasinan.biz provided through an industrial loan helps meet the costs of the equipment necessary for the business to operate.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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