The Year They Privatised Christmas

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Like modern day Father Christmases delivering presents to your door

I started working for the Royal Mail sometime after the turn of the Millennium.

It was a job I had always wanted. Healthy, out in the fresh air, involving at least four hours a day of intense exercise, and a degree of autonomy, with no managers looking over my shoulder – at least while I was out on my round – it was the perfect job. Still is in many ways.

The basics of the job haven’t changed. I still walk from one address to the next sticking letters through letter boxes. What can possibly go wrong?

Well a lot actually. They can destroy the industry by undermining the pension, introducing a form of fake competition, and then privatising it.

The pension was undermined between 1990 and 2003 when the company took a pensions holiday, failing to pay its share into the pension pot. They could not possibly have done this without the agreement of the government. This left an £8bn pension deficit, later rising to £10bn, which the government used as a way to begin the privatisation narrative. Look, the Royal Mail is failing, they said: we need to privatise it. It nationalised the liability – taking the pension deficit in-house – while beginning the process of selling off the assets on the cheap to its mates in the private sector.

Competition was introduced in the wake of the third EU Postal Services Directive of 2008, which required all postal markets to be opened up to other companies.

I say ‘fake competition’ because how can you introduce real competition into what is, in its essence, a natural monopoly?

The Royal Mail – or Post Office as it was more commonly known – had only ever been in the public sector during its entire 500 year history. It had created the whole distribution network – the systems, the methods, the procedures – as a seamless unity. Indeed, there’s a good argument to say that the Royal Mail is responsible for the creation of our modern-day nation. It brought together the different parts of the country by giving everyone an address and a post code, accessible to all for the price of a single stamp.

How can there be real competition when one company, and one company alone, is required, under the Universal Service Obligation (USO) to deliver to every address, no matter how remote, in the whole of the United Kingdom: not only from Land’s End to John o’Groats, but from the Scilly Isles to the Outer Hebrides, from the Isle of Wight to the Isle of Man?

It’s easy to make a profit delivering from city to city, from London to Manchester to Glasgow, or from district to district inside the same city: much harder if you take in all the towns and villages as well; almost impossible if you include every isolated cottage, croft or farmstead in between. Only the Royal Mail is obliged to deliver to all of these.

The way they engineered the competition was through a process called ‘downstream access’. Previous privatisations gave access to the industry network – the electricity grid, the water pipes or the gas pipes – to all the rival companies on an equal basis.

In the case of the postal industry the equivalent of this was us: the postal workers on our rounds.

So the Royal Mail’s rivals were allowed to bid for the bulk mail and city-to-city contracts of all the main services – the banks, the utilities, the NHS, Amazon, eBay and all the rest – and then expect us to deliver it for them.

In other words, in this industry, me and my labour – my living, breathing, heart-pumping, energetic body – is viewed as the equivalent of the tangles of copper wires or the networks of underground pipes that serve as the infrastructure in other parts of the economy.

Even then the other companies would have been unable to make a mark. The Royal Mail was too big and too well-established. It could have crushed the other companies underfoot. So the government introduced a principle called ‘headroom’. When the Royal Mail charged the other companies for its downstream access services, it was obliged to leave financial space for them to make a profit.

So there was never a ‘free market’. It was a highly regulated market from the outset: that is, the Royal Mail was regulated in order to allow the other companies the freedom to compete with each other.

And then there was privatisation, which took place in October 2013, as I’m sure you all remember.

Part of the justification for this was that people’s habits were changing. People didn’t send letters any more: they sent emails and texts instead.

If you listen to the Royal Mail, they will tell you that there has been a 40% drop in mail volumes in the last ten years. This might be true, although there does seem to be a marked increase in advertising mail at the same time. But the one thing they failed to mention was the increase in packets. The same technology that has effaced the ancient and noble art of letter-writing – never something the majority of the population engaged in anyway – has also, at the same time, allowed us to buy our goods online.

This has been by far the greatest shift in the industry since the onset of the digital revolution: the sheer number of packets we carry, a much more profitable enterprise.

I can’t believe the government hadn’t predicted this when they decided to sell off the Royal Mail, or that experts in the industry weren’t already aware of it.

In other words, it’s been one giant-sized con from beginning to end.

The other element that comes into this has been the separation of the Post Office from the Royal Mail.

The Post Office has always made a loss. The Royal Mail has always made a profit. By retaining the Post Office in public hands, while selling off the Royal Mail, they’ve ensured ever increasing profits for the private sector, and ever increasing burdens for the public.

There’s been extraordinary pressure on Post Office Ltd, the government owned company that runs the counters that sell you your stamps, to cut costs and make efficiency savings. What this has meant is that post offices are being franchised out into supermarkets, where the staff are paid at retail trade rates under minimum hours contracts, rather than the well-paid and secure jobs that skilled post office workers used to command. The Post Office is no more than a minor adjunct of the retail industry these days.

Most post offices are also grossly understaffed, which has meant massive queues this Christmas… and for all Christmases to come, unless the industry is brought back together again.

I’ve called this piece ‘The Year They Privatised Christmas’. That’s because the Royal Mail was always an integral part of the Christmas story.

Still is. We deliver all your Christmas cards and most of your parcels. All holiday rights are cancelled for the season, and most postal workers – at least in the past – were willing to go into serious levels of overtime to get the job done. Our MP always comes down to the office to congratulate us on our work. We are like modern day Father Christmases in our red vans, wrapped up against the cold in our red fleeces, delivering presents to your door.

By privatising the Royal Mail the government has effectively privatised Christmas.

It has turned me into a mere utility: an overground delivery system without a will of my own.

The management may not be looking directly over my shoulder, but they make me carry a PDA – a ‘postal delivery assistant’: effectively a tracking device – which tells them where I am and where and am heading every minute of the day.

They make me work harder and faster for the same basic wage. They are constantly ratcheting up the pace and the work load, to make sure I do more work in the same number of hours. They have degraded me and degraded my job in order to squeeze out more profits for their shareholders.

So you won’t be surprised to hear that most of the good will is gone. Postal workers are less and less likely to go into overtime. We are less and less likely to want to do management any favours.

That’s why we voted so overwhelmingly to strike in October – 89.1 per cent in favour on a turnout of 73.7 per cent – not only to secure our pensions and our jobs, but also to secure the future of the Royal Mail – and Christmas! – for all.

http://www.intimeforxmas.com/

http://www.morningstaronline.co.uk/article/year-they-privatised-christmas

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Royal Mail managers – bureaucrats not businessmen

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Annual leave

I had an interesting conversation the other day with the manager who allocates the annual leave. They’ve just brought in a new system. You have to specify the date in one box, and then the day in another box, two boxes for each day, on one half of the sheet; and then do the whole thing again on the second half of the sheet, which they return to you if your request is denied. Meanwhile they allocate dates for you which you haven’t requested, which you then have to ask to be removed: again two boxes for each day, on two halves of the same sheet. The whole sheet is a maze of boxes and dates and days which you have to negotiate your way through. If you fail to fill it in correctly your request will be denied.

In the old days you just asked for the days you wanted and, if certain days were over subscribed, you would have a conversation about it. Sitting in the office with the Line Manager talking about your annual leave was one of the pleasures of the job for both parties.

So I complained about the fact that my last lot of requests hadn’t been given and that I was still being landed with a holiday in February which I didn’t ask for and didn’t want.

The manager was being particularly obstreperous about it. It was obvious that he enjoyed the power he had over me. He said, “we’re not here to please you. This is a business now. It’s the interests of the business that come first.”

The joke here is that neither this manager, nor the management of the Royal Mail as a whole, are businessmen. They are bureaucrats. Very few, if any, of them have ever had any experience outside the Royal Mail. They learnt their trade in a 500 year old state owned industry, not in the cut and thrust of the business world. The basic requirement since privatisation, to cut costs in order to increase profits, is the perfect excuse for them to become even more belligerently awkward than they already were.

War of attrition

Recently there’s been a war of attrition going on in our office. I imagine that it has been repeated in offices up and down the country. We are allowed 40 minutes break in total. We have to take 20 minutes indoors early on in the shift but, according to our national agreement, we are allowed the take the second 20 minutes at the end of the shift, which in the past meant we would go home early. Then management started making people stay in the office for this last 20 minutes which meant that people who had previously had time to pick up their kids from school were no longer able to do so.

How this is in the interests of the business is anyone’s guess.

This is on top of negotiations currently taking place with the CWU over changes to our pension plan, with the union threatening to take a ballot on industrial action if the current defined-benefit pension scheme is closed, as the company proposes, next year.

There are also proposed changes to our working practices, with rumours flying around about what this will mean. There’s talk of a six hour delivery span, of longer and shorter days, of longer hours in the Winter and shorter hours in the Summer, of working in teams and of having our dedicated rounds taken away from us: a whole raft of possible changes which will make the job unrecognisable from what it was.

Most posties took the job because they liked the early hours: but the hours are getting later and later, and the new proposals want to put them back even more.

Most posties took the job because they like working on their own, but new delivery methods sees us working in pairs, and the new proposals want to bring in even larger teams in order to cover sick leave, annual leave and rest days without overtime.

The job is arduous as it is, involving four to four and a half hours of intense activity, walking and carrying weight. A six hour delivery span will be impossible for all but the youngest and most fit members of staff.

And now they want to take our pensions away from us as well.

Is it any wonder that relationships between management and the work force are at an all time low?

Responsibility

As for how all these changes will affect you, the public, I’ll just give one illustration.

In fact, for all the fact that postal work is a menial job, it does involve a high degree of responsibility. We get very close to our customers: intimate even. We know when you are at home and when you are away. We know when marriages are breaking down or when the kids are leaving home. We handle your credit cards and your bank statements. We deliver your birthday and Christmas cards, which can contain cash or gift vouchers. Occasionally thieves will pass through the office, opening your mail in the hope of finding goodies; but they invariably get caught, because customers soon begin to notice their mail is being tampered with, and at the moment it’s easy to locate by whom.

Larger teams will make this increasingly difficult. The lack of a dedicated round will remove the trust from the relationship between posties and their customers. It’s already true on some rounds that you don’t know from day to day who will be walking up your garden path and looking in through your front window: if these changes take place then this will become true of all rounds.

The future is looking increasingly bleak in the postal industry.

The privatised Royal Mail will get a Christmas bonanza – but not us posties

Goodwill among delivery workers is in short supply. After years of being sidelined and ignored, I’m refusing to put in overtime

From the Guardian, Comment is free: Wednesday 18 December 2013 11.10 GMT

A postal worker sorts parcels: ‘no matter how good technology gets, it will never be possible to send a parcel by email’. Photograph: Peter Macdiarmid/Getty Images

Christmas arrived for us posties on Wednesday the 4th of December this year. The start of the week had been quiet, with just a trickle of festive mail, but on the Wednesday there was suddenly an avalanche of post falling on top of us: thousands of cards and hundreds of parcels, as well as all the usual advertising, Christmas catalogues and charity begging letters. It’s been like that ever since.

I must admit I don’t deliver all of it. I sort it, bag it up, and deliver some of it. The rest I pass on to one of my colleagues to deal with. For the first time since I started working for the Royal Mail over 10 years ago, I “cut off” on my round: that is I work my hours and refuse to go into overtime.

In fact, if it wasn’t for the influx of temporary staff, or the army of casual workers on rolling contracts, the Christmas mail would never get delivered. It always used to be a matter of pride to me that I would finish the job, no matter how hard it got. Not any more. There are a number of reasons for this. First, they got rid of our bikes and replaced them with trolleys, meaning that mail delivery now involves four hours or more of relentless walking, a much more tiring activity than cycling.

Second, they moved our delivery office to the nearest city, several miles away. I now have a half-hour commute to get to work in the mornings, a half-hour drive to get to my round, another half-hour to get back to the office and yet another half-hour drive home again. I used to cycle into work and then cycle to my round. I was far more inclined to do overtime when it took place 10 minutes from home. It is much less appealing when it means driving home late, tired and in the dark.

Third, all the goodwill I used to have has gone. I no longer feel any loyalty towards the company I work for. Years of being sidelined and ignored, of a failure to consult over the most fundamental aspects of my working life, has left me feeling estranged. I used to love my work. These days it’s “just a job”: something I do because I have to, not because it gives my life any meaning any more.

I’m not the only one who feels this way. Privatisation has merely intensified the mood. Of course, if you were to believe Vince Cable or his advisers, you’d think that without privatisation the Royal Mail would be finished by now. Figures are down, they used to tell us. People are using email and text these days, they don’t need a postal service any more.

Christmas is a reminder that this was always nonsense. People don’t send Christmas texts instead of cards, and no matter how good the technology gets, it will never be possible to send a parcel by email.

Indeed, this is the distinguishing characteristic of this year’s Christmas mail: the sheer number of parcels we have to deliver. I’ve never seen so many. The great skill of our job these days is in keeping a track of them, in knowing how to incorporate them into the rest of the mail.

The very technology they claimed spelled doom for the postal service allows people to go online at any time of the day or night, buying stuff on eBay and Amazon, most of which gets sent through the post. These could be the boom years for the Royal Mail as the margin of profit on parcels is much greater than it is on letters.

Even before privatisation profits were increasing. Pre-tax profits were £233m for the six months to 29 September, up from £94m a year earlier. This was all within the public sphere, so no one can pretend that privatisation had anything to do with it. In other words, everyone knew that there was a bonanza on its way. The real point of privatisation, it seems, has been to allow the private sector to cash in on it.

http://www.theguardian.com/commentisfree/2013/dec/18/privatised-royal-mail-christmas-posties-delivery-overtime

For Sale: from the LRB blog

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Something that hasn’t been mentioned much in the post-privatisation analysis is the amount of money the Royal Mail stands to make out of its immense property holdings. One building alone in the company’s portfolio of disused offices in London – the mail centre in Nine Elms Lane – has been valued at half a billion pounds. That’s one-sixth of what the government sold the whole company for.

The office was closed in 2012, more than a year before the sell-off. And it’s not the only one. Dozens of delivery offices up and down the country, including mine, were closed in the run up to privatisation. Several of them remain unsold.

Could the offices have been kept empty on purpose? Royal Mail bosses now stand to make a lot of money out of the company they once used merely to manage.

– See more at: http://www.lrb.co.uk/blog/2013/12/17/roy-mayall/for-sale/#sthash.wrtLm9Fi.dpuf

Royal Mail’s latest ad: the hypocrisy of capitalism in one minute

“We love parcels…”

Royal Mail’s management don’t regard you as customers but recipients, simply a way to deliver returns to their investors.

From the Guardian, Comment is free.

The first TV advert from the Royal Mail since privatisation was shown over the weekend, during the X Factor, and Downton Abbey.

The advert features the Royal Mail Choir, singing their version of the Beatles’ All You Need Is Love, while postmen and women deliver parcels to their appreciative customers.

Here’s a summary of the whole advert, in one paragraph:

There’s a Sikh postie walking along a corridor; a little girl placing stamps upon a parcel; a pen drawing hearts in red ink upon a sheet of paper; a man paying for his parcel delivery on-line using a tablet computer; a shot within a parcel depot featuring parcels running on a conveyor belt with lasers reading the addresses; delivery to a café (the café owner opens his arms as if he’s about to embrace the postie) followed by a series of other deliveries in quick succession: to a stately home, to a garage complete with garage-band, to a little girl’s birthday party; a Muslim postie walking passed a training centre with the words “For Hire” painted on the wall; delivery to a factory; a black female postie smiling (the only woman postal worker in the advert); delivery to an upmarket London townhouse; two rain soaked posties; another Royal Mail parcel depot featuring brand new, sparkling-clean Royal Mail lorries; a Royal Mail lorry driving passed a remote rural village; a little girl opening up a letter box in anticipation of a delivery (an intense light bursts from the letter box like a mystical sign); that Sikh postie again, in a massive block of flats (an Indian woman answers the door wearing rubber gloves); another postie dwarfed by another huge, semi-circular block of flats, followed by the slogan, “We deliver one billion parcels a year”; a shot of a postal worker raising his arms in apparent blessing of the contents of a Royal Mail van (he’s like Jesus blessing the loaves and the fishes) ending with the words, “We love parcels.”

Everyone is smiling.

All of that to the words of All You Need Is Love:

Love, love, love
Love, love, love
Love, love, love

There’s nothing you can do that can’t be done
Nothing you can sing that can’t be sung
Nothing you can say but you can learn how to play the game
It’s easy

All you need is love
All you need is love
All you need is love, love
Love is all you need.

And there you have it: the hypocrisy of advanced capitalism in precisely one minute.

The Royal Mail delivers none of that. It doesn’t deliver love. It doesn’t deliver diversity. It doesn’t deliver a welcoming smile. It doesn’t deliver to stately homes, to garages or to birthday parties. It doesn’t deliver hope and anticipation. It doesn’t deliver mail to remote communities. It doesn’t deliver friendliness in the rain. It doesn’t even deliver parcels. We do all of that: the men and women of all backgrounds and ethnicities who work for the Royal Mail. That’s our job.

Now that it is privatised, the Royal Mail’s job is simply to deliver returns to its investors.

For a long time now the Royal Mail has been divided, between management and postal workers, between those who see it as a business, and those who see it as a service. The people who commissioned that advert are the former rather than the latter. It’s not a service to them, it’s a way of making money.

We were told this many years ago: “Granny Smith doesn’t matter any more.”

Granny Smith” is the postal worker’s affectionate nickname for you, the customer. Or rather, for the people that we regard as our customers, the people we meet on the doorstep everyday. But the Royal Mail management doesn’t regard you as their customers. They don’t meet you but once in a lifetime. You are merely the recipients of the mail. Their customers are the people who send the mail in large quantities: the utility companies, the banks, the advertisers, the bulk deliverers, the people who churn letters out by the tonne using advanced computer systems, the mail-shot companies using lists they’ve purchased from other advertisers, the conveyors of junk mail and other unwanted material, the people who fill up your halls and your bins with garbage, the landfill merchants. Those are the Royal Mail’s customers, not you. The people they make the money off.

See: that’s the hypocrisy of that advert. They know that postal workers are held in high regard by the public. They know that most of us will go out of our way to look after our customers, that we will do our best even in adverse circumstances, that we will give that cheery smile in the rain. That was always the case in the past, though it’s getting rarer and rarer as time goes by.

In the old days, we loved our job. It was great getting out and about, on the streets of our towns, delivering the service we knew you wanted. The work was energetic but satisfying. It brought us face to face with our neighbours. And we had a little time to spare back then. There were enough of us doing the job to get the work done and still have enough time left over to lead lives of our own.

Fifteen years ago, the average delivery span was two and a half hours. That’s two and a half hours of high-octane energy expenditure: a workout by any other name. It kept us fit, it kept us happy, it kept the endorphins flowing to our brains. It kept us smiling.

We would get up early to greet the dawn and have the mail on your doorstep by breakfast.

That’s not the case any more.

Ten years ago the delivery spans were increased to three and a half hours.

These days the average delivery span is four to four and a half hours. After two and a half hours of intense work the endorphins cease flowing and the pain starts to kick in. We walk till we ache. We no longer have time for our customers and we’re so dog-tired at the end of the day that we don’t even have time for ourselves. We eat, we sleep, we work, that’s all. There’s no energy left for anything else.

This is called “productivity”. Less posties doing more work, at a faster rate. In the past decade the company has lost 50,000 jobs, with more job losses promised now that it has been privatised.

Less jobs means more work for me. More hours on my feet. More weight in my trolley. More gates, more doorsteps, more letter boxes. More endless miles of trudging drudgery on the streets of my town.

The choice of the X Factor and Downton Abbey to air the advert was very telling.

The X Factor represents the illusion of capitalism, that we may find a way out of its servitude one day: that some of us, at least, through good luck or talent, will be given the keys to escape. Downton Abbey represents the reality: a servant class serving a privileged elite.

As a public service our service was to you, the public. As a privatised monopoly our service will be to the shareholders from now on.

http://www.theguardian.com/commentisfree/2013/nov/04/royal-mail-ad-management-customers

Magical Thinking

From the LRB blog.

One of my neighbours came over to say hello the day the Royal Mail was privatised.

‘I expect you’re looking forward to getting your hands on all that money you’ve just made,’ he said. The shares allocated to me as a member of staff had gone up by almost 40 per cent in a day. The government had brought forward the date of the IPO in order to beat a strike ballot by the Communication Workers’ Union. Most of us, like most people, were against the privatisation. It felt like my neighbour was congratulating me on taking a bribe.

I lost my temper, and told him what I really thought about the privatisation. I pointed out the contradictions: that the state has spent billions of pounds of public money to subsidise the bargain basement sell-off; that the pension fund was nationalised to sweeten the deal; that the loss-making Post Office was decoupled from its more successful partner and retained in public hands; that pricing restrictions were lifted in anticipation of privatisation, allowing the company to increase its profits.

None of this has got anything to do with the free market. This is direct government intervention to create a rigged market. If the price restrictions had been lifted ten years ago, the entire argument for privatisation would have disappeared overnight.

My neighbour said that governments shouldn’t be involved in the business of running companies. He said that privatisation would allow the company access to future investment. He said that previous privatisations had been a great success, and cited British Telecom and British Airways as examples. He said that taxpayers were fed up with subsidising the Royal Mail.

The argument went on for a while. Every time I was about to get in my car he’d say something that I had to contradict. I finally lost patience and drove away when he talked about the investors who were going to help the company become a big success: ‘They are wealth creators. They build the factories so that we can have jobs.’

You hear that phrase ‘wealth creators’ a lot. It is a commonly used justification for the privatisation agenda, the idea that these individuals generate wealth by their investment. They are the ‘wealth creators’, and we are the beneficiaries of that wealth. It’s a form of magical thinking, like the pharaohs believing that their rituals were responsible for the flooding of the Nile, a post hoc fallacy: because they have invested in the company and increased their wealth, their investment somehow ‘created’ the wealth. The actual wealth creation, the work that my colleagues and I do, in this version of reality, is an accidental by-product of the process, a privilege I am allowed by the goodwill of these magically endowed individuals.

Moya Greene, the chief executive of Royal Mail, has already told us to expect job losses. Very soon I expect to be begging for the privilege of working longer hours for less money.

– See more at: http://www.lrb.co.uk/blog/2013/10/24/roy-mayall/magical-thinking/#sthash.c9opEVX8.dpuf

It’s one law for the banks, another for the rest of us

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Locust

Vince Cable’s efforts to keep the Royal Mail in the hands of “blue chip investors” and away from “spivs and speculators” was delivered a blow this week when it emerged that the Children’s Investment Fund has taken a 5.8 per cent stake in the company following its privatisation earlier in the month.

The fund was founded by Chris Hohn, described as a “locust” by German politicians, and damned by the former CEO of Deutsche Börse, Werner Seifert, for his part in scuppering a previous business deal.

The London-based hedge fund has bought 58.2m shares or 5.8pc of Royal Mail. Under stock exchange rules, TCI had to declare its stake when it reached 5pc of the company. The threshold was reached on Friday.

Mr Cable has often criticised hedge funds for being short term investors and has repeatedly insisted that Royal Mail would be sold only to “long-term, blue chip” institutional investors.

Meanwhile Chancellor of the Exchequer George Osborne has responded to criticism that the government had sold off the Royal Mail too cheaply.

At a Thomson Reuters Newsmaker event on Tuesday, he told his audience that initial public offers are routinely offered at a discount and the government had followed advice from its bankers on details of the sale.

“On all fronts it has been a great success,” he said.

Bargain basement

And in the House of Lords, Labour peer Lord Sugar, star of TVs The Apprentice, questioned the expertise of the banks which had been advising the government on the sale.

He demanded: “Why did these so called experts sell the stock at such low levels and get it totally wrong to such an extent that the stock rose by 33 per cent the day afterwards and since then 54% on the issue price?

“Bearing in mind other reputable banks had come on record giving a valuation of £5 billion, why were these banks ignored and what will you be doing by way of an inquiry in finding out who the lucky institutions were that underwrote this bargain basement sale?”

Government spokesman Lord Popat said the key objective had been to “secure value for money for the taxpayer”.

Pressed by Labour’s Lord Donoughue on the level of fees paid to the banks, Lord Popat said: “The underwriting banks will share a maximum fee of 1.2 per cent of the IPO receipts or £16.9 million. This maximum includes a potential discretionary fee of £4.2 million. The actual fee will be finalised shortly. Lazards will receive £1.5 million as the Government’s independent adviser.”

For those of you without a calculator, it means that three banks, UBS, Lazards and Goldman Sachs, share £18.4 million between them.

Markets

Of course, the usual reasoning behind the sale of the company, is that it would allow the Royal Mail access to the financial markets; but, you have to ask, what would have stopped the Royal Mail accessing the markets as a publicly owned company? The answer, it seems, is “very little.”

According to a letter in the Guardian prior to the Royal Mail’s flotation it “is purely the Treasury’s insistence on keeping to the UK’s unique borrowing rules, which are not followed by any other country.” The government-owned French energy company EDF, and the German transport company Arriva, have no such limitations, and operate freely in the UK. The Royal Mail was already classified by the Office of National Statistics as a public corporation and could have enjoyed the same freedoms as state-owned companies elsewhere in Europe. All that was needed was for the Treasury to adopt the same rules as other countries have had for decades.

The writer, John Perry, adds: “It continually surprises me that opponents of Royal Mail privatisation have not pursued this argument, especially as it addresses one of the government’s main arguments in favour of selling it off. Given that the government have already made a similar rule change in favour of the publicly rescued banks, there is a clear precedent for such a change in favour of Royal Mail.” This would  have rendered privatisation unnecessary, he says.

In other words, it’s one law for the banks, and another for the Royal Mail.

Shafted: the great Royal Mail rip-off

Chuka Umunna: “Royal Mail is being sold off on the cheap”

The price of Royal Mail shares has increased by almost 50%, from 330p to over 500p.

Thousands of investors have made huge profits just days after their initial investment.

Almost 700,000 small investors purchased £750 worth of shares and have witnessed an instantaneous increase in their value.

The government are under scrutiny for having undervalued the price of the Royal Mail.

It is the taxpayer who is set to pay the price for the government’s mistake as investors, large and small, are set to continue to benefit.

In the past few days the Royal Mail’s market value has soared to over £5 billion representing a £1.7 billion increase.

Chuka Umunna, Labour’s shadow business secretary, said: “Royal Mail is being sold off on the cheap with taxpayers being short-changed to the tune of hundreds of millions of pounds. Yet out of touch ministers have ploughed on regardless and claimed this is a ‘triumph’. Increasingly this privatisation is looking like a botched job from an out-of-touch government that puts the wrong people first.”

The Secretary of State for Business Vince Cable has responded by branding the share price increase as “froth” and has encouraged people to focus on the long term implications of the sale.

However, Stockbrokers Peel Hunt responded by saying: “This is not ‘froth’; it’s real people buying, selling, averaging down.”

It is thought over 100 million shares were purchased in the first hour of trading and an estimated 700,000 people were given 227 shares worth £750.

The unusually high demand has lead some commentators to question why so many people are investing in them and whether the government did in fact completely undervalue the business.

Cable has asked people to think about the long term future of the Royal Mail, and has indicated that he has attempted to keep the company in the right hands.

Almost 40,000 people who tried to acquire more than £10,000 worth of shares were denied any form of sale.

It is also thought that government denied a number of city investors and hedge funds in a bid to keep the business out of their hands, although 70% of the shares did, in fact, go to large investors.

Cable said that demand across the country was so large that the government was able to stop shares being sold to “spivs and speculators” and instead could focus on sales to “responsible long-term institutional investors”.

Meanwhile, the National Audit Office will launch an inquiry into the allegations that the business was undervalued.

– See more at: http://www.moneyexpert.com/news/shafted-taxpayers-suffer-royal-mail-shares-soar/800582360

Royal Mail privatisation will hurt rural communities, says vicar

The Rev John Owen, vicar of Froxfield, Privett and Steep, with Royal Mail postman John Luker at the post box opposite Froxfield Church

Originally published here.

A vicar of three Hampshire villages fears the privatisation of Royal Mail will hurt rural communities.

The Reverend John Owen is vicar of the villages of Froxfield, Steep and Privett, near Petersfield.

He praised his local postman, John Luker, who has collected and delivered letters in the villages between Petersfield and Alton for 32 years.

“John knows the local roads like the back of his hand. He doesn’t use a SatNav, never gets lost, and knows a good many of the 800 inhabitants of Froxfield and Privett by name,” said Mr Owen.

“If something is amiss, John is likely to notice it on his delivery round and will raise the alarm.

“We wonder how economically viable his job will be when the flotation of the Royal Mail takes place.”

Mr Owen said villagers were sceptical about official assurances of a continued daily collection and delivery in the hamlets. Most predict a weekly collection, which will mean villagers have to drive to larger towns nearby to post urgent items.

“John Luker represents that bit of community capital and cohesion which does so much for the well-being of the rural community,” said Mr Owen.

“He’s not unlike the landlord of the local pub and the people who have been running the village shop for years. They help to bind the community together.”

The vicar said rural communities would be poorer, emptier and less attractive as a place to live without the postal service.

“As Christians, we are aware that life can’t be quantified in a balance sheet,” he said.

“Our church members will be challenging this thinking and finding new ways to serve their rural communities – churches hosting post offices is just one way they are already helping.

“But my plea would be for us to hold back from privatisation of the Royal Mail until these issues have been thought through properly.”

Mr Luker added: “I have 283 calls to do, and drive about 36 miles a day from our office in Petersfield. I know any private firm wouldn’t have the same kind of local knowledge that I have. I love these villages and I know about 90 per cent of the people who live here, by sight or by their Christian names. It will be hard to replace that.”

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