Royal Mail

Royal Mail being sold off ‘cheap’, says Umunna

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http://www.publicfinance.co.uk/news/2013/10/royal-mail-being-sold-off-cheap-says-umunna/

The government’s plan to privatise the Royal Mail amounts to ‘flogging off a national institution on the cheap’ and could leave taxpayers shortchanged by future asset sales, Labour’s shadow business secretary has warned.

Image of post office van next to postbox

Chuka Umunna said the plan to float the company next week was being conducted in a rush, and called for a full valuation of the firm’s property portfolio should be undertaken to determine the value of any possible land sell offs.

He warned that postal delivery offices in prime development sites could be sold after privatisation, delivering a windfall for private shareholders but no return to the public sector. Steps needed to be taken so that proceeds from any sale could be retuned to taxpayers, he said.

Market analysts have predicted that the sale could value the firm at around £3bn. However, Umunna said two of the company’s London sites – in Nine Elms and Mount Pleasant – alone could be sold for more than £1.5bn.

The share prospectus for the sale of the firm stated these sites had been ‘surplus’, Umunna said and, once privatisation is complete, these and other offices other prime locations could be sold.

He called for ministers to reveal whether an independent valuation of the property portfolio has been undertaken ahead of the sale. They should also set out which of the firm’s sites across Britain have been identified as surplus, and whether any ‘clawback’ mechanisms have been established to allow proceeds to go to the Royal Mail’s pension fund or the Treasury.

It is expected Royal Mail will be listed on the London Stock Exchange on October 11 and will be fully traded the following October 15.

‘David Cameron’s fire sale of Royal Mail is bad for consumers and bad for businesses and there are real fears that taxpayers are going to be considerably short changed,’ Umunna added.
‘Royal Mail has a huge property portfolio in prime development sites in London and across Britain and there is nothing to stop the privatised company making a quick buck by flogging off these assets for development. Ministers need to come clean on which sites are due to be sold and what valuation has taken place.’continues

 

Continue ReadingRoyal Mail being sold off ‘cheap’, says Umunna

Privatisation will threaten Royal Mail’s six-day service, warns campaign group

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[Well of course the service will suffer, postage charges will rise, postmen and women will be sacked – that’s what businesses do to make money. Many Tory and Liberal-Democrat-Tory MPs reassure their constituencies that the opposite is true. They’re lying.

Tony Blair’s NEW Labour tried to privatise Royal Mail. Their argument was that there was a deficit in the pension fund. I never really grasped that very poor argument. Any deficit would have be due To Royal Mail or the government dipping into it as promoted by Gordon Brown. The current government argues that Royal Mail needs investment despite it apparently turning a profit. Why not invest some of that profit? ]

Competition will make it impossible for a privatised service not to cut deliveries in rural areas, says Save Our Royal Mail

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Richard Graham, the MP for Gloucester, argued that privatisation would provide the investment needed to compete against the private sector. “I don’t want to save Royal Mail because I don’t think it’s a panda or a tiger,” he said. “I want to grow Royal Mail. I want to see it become a world- beating company. It’s got 150,000 employees. Wouldn’t it be fantastic if it had 200,000 and was running postal services under that great brand all around the Commonwealth?

“It needs to be able to compete against private-sector competitors, and it can only do that effectively if it has the investment it needs to get the technology that the competitors have,” he said.

The panel clashed over how privatisation would affect value for money for consumers. Dunn said Royal Mail had historically kept prices low across the market, but expected a sharp increase after privatisation that would allow its competitors to increase their prices, too. Graham, however, predicted that the new ownership would freeze prices after last year’s rises.

Ben Harris-Quinney, chair of the right-wing thinktank Bow Group, accused the government of “rushing out” the privatisation. “Research in July showed that almost half of the country were not aware of the privatisation of Royal Mail and 65% of those surveyed were against any notion of privatisation,” he said. “There has been no campaign. This has been a Westminster-bubble discussion that hasn’t engaged with the public at all.”

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Continue ReadingPrivatisation will threaten Royal Mail’s six-day service, warns campaign group