The Royal Mail served the nation for over 500 years; however a Government fire sale not only privatised this prize asset but also short changed the public. Last week, the National Audit Office (NAO) delivered a damning report showing that the Government’s rush to privatise the Royal Mail cost the taxpayer £1.4 billion. Continue reading
Tagged with Royal Mail
Royal Mail: deliberately underpriced to give profiteers a maximum return
The truth is now slowly emerging about the Osborne/Cable disastrously mishandled Royal Mail sale. No less a bank than JP Morgan, arguably (until its recent fall from grace) the world’s top investment banker, told ministers before the flotation that the company should be valued at £10bn, three times the price finally settled on by the government.
That would mean that, at a time of extreme pressure to reduce the deficit, the government blew as much as £7bn which could have provided badly needed relief for taxpayers. The share price already reached today, a fortnight after the float, values Royal Mail at over £5bn, nearly £2bn more than the government originally priced its IPO. Continue reading
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Hedge fund control of Co-op Bank & Royal Mail should never be allowed to happen
On Tuesday two US hedge funds took control of the Co-operative Bank and in effect ended its 170-year history as Britain’s largest mutual. Yesterday an aggressive hedge fund, deceptively entitled The Children’s Investment (TCI) Fund, acquired the largest stake behind the government in the Royal Mail. It is led by a man known for his anti-state streak in dismantling public provision which gained him and his fund the title of ‘locusts’ in Germany.
The obvious and immediate question to be asked is, whilst these are the normal machinations of unrestrained market capitalism, do these enforced takeovers serve the public interest or simply their own interests in extracting the largest possible short-term gains, irrespective of the consequences for the wider community? If the latter, as is obviously the case, then the non-bank financial sector of which hedge funds and private equity are prime examples, require radical reform. Continue reading
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As Tories privatise the post, Labour must expose where the market has failed
The imminent privatisation of Royal Mail once again draws attention to the deficiencies and failures of private markets. It is going to cost the country £12bn as the deficit on the Royal Mail pension fund is dumped on taxpayers. The underpricing of the sale will also cost the country at least a further £1bn, the price of stamps is likely to soar in the next three to five years, the universal obligation to deliver post at the same price to anywhere in the country is unlikely to survive (despite government claims to the contrary) more than another five years.
And the new private owners are likely to cut jobs, pay and terms and conditions in order to force up profits. Where is the public good in all of that? Nor is this Tory ideological fanaticism confined to the Royal Mail. It applies to all the other public services they’ve meddled with in the past. Continue reading
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How Labour could still save the Royal Mail from privatisation
It was all quite a shock. On Friday, as the government announced that potential shareholders in the privatised Royal Mail were already lined up, campaigners were pre-occupied with the ballot for an anti-sell off postal workers strike. A strike that will now come after the post has been privatised, if the government has its way.
But there is one last chance to save the post from a privatisation the public do not want. Step forward, Ed Miliband.
In Brighton last week, Labour conference delegates voted unanimously to bring Royal Mail back into public ownership should Labour win the next election. Hurried press briefings that this would not bind the leadership were followed by shadow business secretary Chuka Ummuna yesterday clarifying that such a pledge would be “irresponsible”. Continue reading