THE BLOG
23/05/2013 13:46 BST | Updated 23/07/2013 06:12 BST

Royal Mail Privatisation - Do We Want This?

A major privatisation is about to take place. One would think this would give the government something to crow about but strangely the opposite is true. The government plans to flog off the Royal Mail but it is not very keen to talk about it.

That's because one of the country's oldest, successful publicly owned businesses might soon end up in the hands of private equity investors. Their business model is well established: Buy entity, strip costs, maximise value, sell on.

This sale will mark the beginning of a fundamental change in the role of an institution that uniquely provides a daily collection and delivery service to every address in the country.

Some argue that letters are a product of a bygone age, rendered obsolete by electronic communication. While letter volumes are in decline, the services provided by Royal Mail are as vital as they have always been. What enables Royal Mail to deliver from Lands End to John O'Groats for a single, affordable price is the massive growth in parcel and packet delivery, another by-product of e-commerce.

For this privatisation to return the necessary profit to its new owners a radical process of cost savings must take place. This will inevitably mean cutting out loss making (mainly rural) services and raising prices. Save Our Royal Mail has been launched in response to this. Our aim is to ensure that the current levels of service Royal Mail provides are not diminished by a sale, nor are prices sent shooting up.

Desperate to reassure the public that selling off this successful public sector enterprise will be in their interests, the government has used all the powers it has at its disposal to 'protect' what is called the universal service provided by Royal Mail.

But those protections are not enough and will certainly not endure. Despite the promises, it will not be possible to guarantee a privately owned business will want to (or be able to) maintain 6 day a week collection and delivery services throughout the country. With the cost of most stamps now deregulated the only restraint on rocketing prices is the vague 'market forces' argument. One just needs to look at their energy bill to see how the impact of those market forces is working in that regard.

Our campaign is asking Ministers to press 'pause' on this sale. There has been so little debate about the future of postal services and how long term consumer protections can be put in place. At the moment the government seems keen to rush the sale but not so keen to debate the issues in Parliament and elsewhere.

The importance of both Royal Mail and Post Office services in rural communities in particular cannot be overstated. They are part of the fabric of local life. They are glue that binds our communities together. This was instinctively recognised by Margaret Thatcher and that is why she shied away from selling Royal Mail.