Generally the idea of privatising a public service is to save us money, not cost us, though in the brave new world of the coagulation this is exactly what privatising the Post Office is going to do.
Royal Mail sell-off could cost taxpayer over £10 billion
Up to £1.7 billion of public money will be injected into Royal Mail as part of the Government’s plans to privatise the national postal service, ministers said.
Adding in the cost of taking over its £8.4 billion pension deficit, it means that the bill to the taxpayer of selling off Royal Mail could be more than £10 billion.
The news came as plans to privatise Royal Mail were formally agreed by Parliament. The sale could happen as early as next year.
Ed Davy, the postal services minister, confirmed a report in The Daily Telegraph last month that an extra bail-out is needed of Royal Mail. Mr Davy told MPs yesterday said the extra cash was vital to ensure that “the universal service” was protected.
He added: “To do this, Royal Mail needs to be on a sustainable commercial footing. The company currently has around £1.7 billion of debt facilities with the Government.
“We intend to restructure the company’s balance sheet in due course. In order to put Royal Mail on that sustainable commercial footing, we will need to reduce significantly that level of debt.”
Granted the Post office provides a valuable service in many ways, though not as much as it used too in the days of the Child benefit Giro but really if the government want it off their hands, it should be sold as is, debts and all otherwise this just looks suspiciously like someone in the government feathering the nest of a buyer complete with a non executive directorship thrown in at a later date no doubt. Of course I might be a little paranoid there, but if it waddles like a duck etc…
I have no issues these days with the Post Office being privatised so long as it maintains or even improves the existing services, though I suspect the first thing to go might be the 1st class one price fits all, though anyone trying to post a slightly oversized envelope with a birthday card in would tell you it’s gone anyway.
Normally I’d say in an ideal world that competition would keep the price down in the delivery business and it does to an extent if you’re in a large conurbation or even near one. But it would also mean someone in John o Groats is going to pay through the nose for a delivery which while fair enough is hardly a good example of a universal system.
In this case though if we are to have a universal system it either has to be run by the state (in a manner of speaking) with all the problems that entails, or the state has to subsidise it. Without looking at the figures, £10 billion which includes the pensions pot seems a high price to pay for handing it over for someone else to run at a profit, particularly when the government admits it will only cost £1.7 billion to put right.
Personally I don’t trust that this sell off is in the public’s interest over all. But no-ones asking me or any of us, which is why after thinking about it, I’m now in favour of referism. Sooner we take over the control of spending the quicker we can start to put things right.