Government to rule out Royal Mail privatisation

Following an independent study by Richard Hooper, the Government is to rule out privatising the Royal Mail.

An interim report in May stated that "the status quo is not tenable" and that "radical"changes would be necessary.

The final report has now been delivered to the Business Department and it will be published in due course, but the Press Association is already citing "a source close to Lord Mandelson" as ruling out privatisation.

PA quotes the source as saying:

"Our concern is to save the Royal Mail and secure its future, not privatise it. We have a manifesto commitment to a publicly owned Royal Mail and we will not be setting that aside."

Any Conservative reaction will be posted as it emerges.

Jonathan Isaby

Comments

[Adam-]

Tories need to privatize it immediately and open the entire sector to genuine competition - from post box to last mile.

With any luck it'll collapse under the weight of the pensions liabilities, thus absolving the taxpayer of this white elephant once and for all.

[jamie]

I'd like to agree Adam but I can't imagine the Party's rural MPs (i.e. almost all of them at present) feeling comfortable justifying thousands more Post Office-less villages. Some services receive public subsidy for a reason.

[David_at_Home]

The Royal Mail has been a “Nationalised Industry” since the time of Charles II and long may it remain so for it is one of the institutions which holds this nation together. Furthermore, it is now facing totally unfair competition (forced upon us by Brussels) which is cherry picking the profitable routes without any obligation to deliver to the rural areas, Hebrides etc.

[Malcolm Dunn]

I hope the majority view in the Conservative party is not that of Adam above. Any privatization of the Royal Mail should require by law that all services be maintained to every part of the UK. If that means massive losses for shareholders..... tough.
Many of the most vulnerable people in our society rely on this service and whatever ideology one follows it is important as David at home recognises that this is one of the institutions which holds this nation together.

[Adam in London]

I would have thought that the middle of recession and credit crunch was the worst possible time to privatise anything, let alone Royal Mail.

[Post Office Lover]

Royal Mail is part of our heritage and should never be privatised. Surely part of Conservatism is to conserve?

[comstock]

Bloomin heck Malcolm, we are agreeing again- we'd best be careful. :D

[YMT]

Adams comments I find are reckless with a lack empathy for many people, especially those in the countrywide, many of whom are Conservative voters who's communities rely on the Post office. Hoping that the Post Office, a service that provides a immensely valuable services to many rural areas, should "collapse under the weight of the pensions liabilities" is frankly repugnant.

Being a Conservative doesn't mean the endless pursuit of total privatisation of everything and anything, as although the application of a free market environment to the vast majority of industries provides the consumer with hugely improved choice of products, services and efficient, amongst many other benefits, in some cases it also means those industries that provide and essential service to people living in remote communities or vulnerable people, are not profitable find their lifelines cut inflicting intense hardship. Quality of life for communities and people should be a large part of the next Conservative Government if we are to promote a drive of repairing the breakdown community and society.

[Jonathan Sheppard]

Having worked for Royal Mail some time ago in their Publuc Affairs department it may be helpful to point out a few things.

The argument that you cant privatise Royal Mail as it would lead to the closure of post offices is easily solved. Privatise just the Royal Mail bit as opposed to Post Office Ltd (which operates the physical post offices) Of course any commercial operator would never want to offer a universal service at a uniform tariff.

Then of course those who say the Post Office has always benen in public hands always forget that the vast majority of post offices are privately owned businesses. When I worked there there were 500 state owned post offices out of 19,000 to give you an idea of the scale of private ownership.

[JohnfromCamberley]

Adam (the one who posted the first message). You are expressing the kind of view that turned the Conservatives into the "nasty" party. It is a great pleasure to see that your opinions are unique to yourself.

The Royal Mail part-privatisation (authors Hewitt and Brown) was one of the biggest, but maybe least recognised, bungles of the current government. From the start, the reorganised company was hampered by huge virtual loans from the Treasury, and the interest borne on them, that distort fundamentally any appreciation of its operating finances.

We need to have an open-minded policy in relation to RM, quite possibly allowing the prospect of re-nationalisation. We also need to have a good look at what the real EU requirement is over commercial competition - does it really need to be quite so comprehensive as the government has allowed?

Whatever critics say, Royal Mail is a vital service across the whole country. I have heard it described by some as the only visible payback on their income tax! The impact of the current round of Post Office closures is bad enough, especially in rural areas, but in fact anywhere away from right in the town centres. Closure of Royal Mail would be a disaster and is not really to be contemplated.

As a suggestion, we need to be looking at Public Sector-related tasks that can be brought into (maybe back into) the aegis of the Post Office network. One such is TV Licensing. By increasing the RM's turnover, we can potentially safeguard its future without necessarily proposing vastly expensive subsidies.

[TomTom]

Privatise just the Royal Mail bit

Then you can't call it Royal Mail any onger - maybe "BritMail" until Deutsche Post takes it over or KPN....but it cannot be Royal Mail in the private sector and VAT will need to go on stamps when it ceases to be a Crown business

[SuperBlue]

It definitely isn't the right time to privatise anything, really. Hower, I have seen it suggested that it would lead to the closure of Post Offices.

Have I missed something or are thousands of Post Offices closing already?

[Disgruntled]

I would just like to point out that there is full end to end competition but the rivals choose not to operate it becaus of the costs involved which is why they deliver their mail to RM for delivery (it's not even final mile because all they do is deliver the mail to the mail centre for RM to sort, then deliver to the individual delivery offices and then onto delivery) and all for 13p.

[Adam in London]

Indeed. The 'competition' consists of essentially a big subsidr from Royal Mail to her private sector rivals, because she has to carry out a universal service and they do not.

[The Circumstantial Times]

Sweden has a privatised postal sector and is one of the largest countries in Europe, with some of the most rural areas.