Why not privatize the Royal Mail?

Question

It seems to me that the Royal Mail is in a similar position to British Telecom in the early 1980s - in need of massive investment to modernize its outdated equipment, which is unlikely to be financed by the Government.

Why not privatize it so that it can modernize, become more efficient (and better able to withstand competition) and less prone to official and unofficial strike action (as nearly all strikes in the UK these day occur in the public sector)?

Answer 1

The biggest reason why not is the commitment to one basic element. That is to deliver an item of mail to anywhere in the UK for the same price,irrespective of whether it is round the corner or in the Outer Hebrides.A private business would not be prepared to do this. It would either only want to operate the more profitable parts of the business at a standard postage rate ,or it would charge premium rates to the less profitable areas.The risk is that some areas might not get a postal service at all.Any private company operates to make a profit for it's shareholders and does does not exist to provide social needs to remote communities if it involves loss making services.You have only to look at bus services in rural areas to see what happens when things are privatised.Unless subsidies are paid by the county council many villages would have no bus service whatsoever.No there has to be some things where service is more important than profit and no private company will work under those conditions which means the service must be run as a public thing and subsidised by the government and taxes.

Answer 2

It is at present in safe British hands, unlike B.T. if ever it was sold off the most likely buyers would be a Chinese consortium, with all the security implications and employment insecurity that would result from it. Royal Mail believe it or not are acknowledged as the best in the world. Try sending a letter from America or Canada and see what the difference is, cost and time wise. No future owner would be prepared to improve, if they could, on the present system. They would rip the guts out of it, sell off the assetts for redevelopment and reduce it to a very expensive, third world system. Be satisfied with what we have, while we still have it, it works well enough, it ain't broke so it doesn't need fixing.

Answer 3

Don't worry, when he needs some more money, that's exactly what Gorden will do.

The only problem is, after Rail Track was 'sold' and then 'snatched back', no-one trusts the Government anymore .. this will mean the 'big boys' in the City refuse to part with their cash unless they get a really good price (so they can sell on to Joe Public who will be left holding the baby when it all goes horribly wrong)

NB - whats wrong with expecting people to pay more for letters that have to be delvered further away ?

You think a Taxi (or Bus) Company could operate nationally on a 'one fare fits all' basis ? Even the London Underground operates on a 'Zone' basis ..

Answer 4

It is a plc, but owned by the government. It won't be long until they sell shares to raise some cash, just like they did with all the other public utilities. And hasn't that worked out oh-so well.

Answer 5

I don't think that would be a good idea. Privatisation would just mean the cost of stamps would go up and lots of staff would loose their jobs. This would lead to a worse service, later deliveries etc.

I don't think its a good idea to privatise any of the "required" services that we all rely on (e.g. trains, police, fire service) since private companies will always try to get the maximum profit for minimum effort making things worse for everyone who relies on these services.