Friday 12thJuly

Well, it must come as no surprise that the government is selling Royal Mail; there ‘ain’t much else left in the cupboard to sell is there.  And as one of the last ‘socialist’ public services left it is no surprise that they have had it in their sights for a while.  By ‘socialist’ I mean that as well as being a great boon to ordinary working people to be able to send and receive letters the over-riding principle of the Royal Mail was that wherever you lived in the United Kingdom you got the same service.  This goes against all market ideas.  It makes commercial sense to offer a cheaper service for letters to be delivered within London, say, than from Lands End to John O’Groats, but we were all treated equally, everyone’s letter given the same consideration.  Obviously if you wanted guaranteed or very fast delivery you paid a bit more, but essentially and despite recent hikes in the price of stamps we were all equal.

And this is another gift to private enterprise, literally hundreds of millions have been spent on modernizing the Royal Mail, and now at long last it is actually profitable and contributing to the exchequer, so what better time to give it away to those with money to buy.

Can we honestly say that any of the privatisations have brought benefits to ordinary people, except that now we are all paying far more for services so that shareholders can receive their dividends.  Half the electricity and gas suppliers are now foreign owned too.  Rail fares increase above inflation every year and there has even been the ridiculous scenario of the government having to step in to relieve those poor operators who couldn’t make a profit. The last privatized coal mine has also been taken back into Government hands, though this received hardly any news coverage.

But even though Royal Mail is making a profit now, who can say for how much longer.  Every day, I receive invoices and statements by e-mail.  You are even penalized now by some suppliers if you require a paper invoice rather than seeing it on-line.  Apart from Birthday and Christmas cards who send letters?  There are still all those deliveries of internet-ordered goods, but with more competition can we really see Royal Mail remaining profitable.

And what will happen if one day the privatized Royal Mail admits it cannot run the business at a profit.  Will the government of the day have to step in to save them as happened with the railways and the coal industry in the 1940’s?  I am sure they will sell-off Royal Mail and after an initial flurry the shares will settle down but I am not sure it is a great investment at all.