UK

Royal Mail Sale Is 'Dangerous' And 'Daylight Robbery', Warn Critics

22/08/2013 13:57 BST
Getty
A logo sits on a sign outside Royal Mail Group Ltd.'s postal sorting office in Romford, U.K., on Wednesday, July 10, 2013. The U.K. government will sell a majority stake in Royal Mail Group Ltd., the 360-year-old state postal service, through an initial public offering before the end of March, Business Secretary Vince Cable said. Photographer: Chris Ratcliffe/Bloomberg via Getty Images

Labour has launched a campaign against the Government's controversial plan to privatise the Royal Mail, branding the move "dangerous" as opposition mounts to the sell-off.

Labour MPs will stress that the public and businesses rely on a daily delivery service and will warn that places where it is expensive or complicated to deliver the post every day, like rural areas or blocks of flats, could be "vulnerable" if privatisation goes ahead.

A Labour source said: "We all rely on the Royal Mail - from receiving that parcel we've ordered online to knowing that birthday card we've sent is going to arrive in time - but some of us rely on it in different ways.

"In rural areas the local post office acts as a focal point for communities and there are many pensioners across the country who are reassured by seeing their regular postie every morning. There are also the small businesses that use the Royal Mail for ensuring customers get their goods and services on time, efficiently, reliably and at a reasonable price.

"Which is why the Tory-led Government's plans for privatising Royal Mail are so dangerous. Like so many of this Government's plans, these haven't been thought through properly.

They want to sell off Royal Mail on the cheap in order to plug a financial hole in the British economy caused by George Osborne's failed policies as Chancellor."

The source added: "David Cameron doesn't need to do this. The Royal Mail made a £400 million profit last year but there's a real risk that this money will go to private shareholders instead of being invested back into the service."

Len McCluskey, general secretary of Unite, said: "The Royal Mail sell-off is nothing short of daylight robbery. The Government is doing what even Margaret Thatcher didn't dare do in selling off the Queen's head to pay for George Osborne's economic failure.

"It is a deeply unpopular move and voters will not be fooled. They know that privatisation is bad for business and is likely to lead to rising prices and an end to the universal postal service which so many communities rely on."

Labour's warning about the part-privatisation of Royal Mail comes as a recent survey suggested barely a third of Royal Mail staff fel confident in their management's direction.

The Business department has pledged thousands of pounds on advertising the Royal Mail stock market flotation, set for next year, while post office managers could refuse to stock publicity material for the sale.

A Department for Business spokesman said: "This cynical scaremongering will not succeed in stopping our plans to ensure Royal Mail can thrive and deliver a better service to consumers and business. Regardless of ownership, Royal Mail will still be the UK's designated universal service provider and will continue to provide deliveries to all UK addresses - rural and urban - six days a week, only Parliament can change this.

"Royal Mail is one of Britain's biggest companies but it also needs future access to private capital to be able to continue its modernisation programme and to seize opportunities for growth such as the boom in on-line shopping.

"That is why we are pursuing a sale of Royal Mail shares this financial year. Parliament decided two years ago that this was the right approach; it would be hard to say we have rushed the process.

"The Post Office is not for sale and there will be no programme of closures under this Government. The Post Office is independent of Royal Mail but they are natural partners and that is why a 10-year long term commercial agreement between them for the continued supply of services was signed in 2012."

A Royal Mail spokesman said: "Royal Mail is honoured to provide the universal service to more than 29 million addresses across the UK. The universal service is enshrined in law through the Postal Services Act 2011.

"The six-days-a-week, one-price-goes-anywhere, affordable service can only be changed by both Houses of Parliament. This includes the provision of services to rural areas. This is the case whether Royal Mail is in the public or private sector. Ofcom, the independent regulator, has a primary duty to protect the universal service. It has ruled out any changes to the scope of the universal service."

A Conservative party spokesman said: "Conservatives are taking action so that Britain's six days-a-week, one-price-goes-anywhere service can survive.

"By contrast, Labour had 13 years to put Royal Mail on a sound financial footing, but failed to do so. Now, the same old Labour Party oppose giving Royal Mail access to the private capital it needs, meaning more government debt.

"Clearly, their policy has been bought by trade union bosses. If Ed Miliband is too weak to help Royal Mail get the investment it needs, he's too weak to run the country."